In Gamasutra's first coverage from last week's Toronto Independent Games Conference, Battlegoat Studios founders David Thompson and George Geczy lectured on the challenges faced by independent game developers.
In doing so, they drew on their personal experience during the creation of Supreme Ruler 2010; a finalist in the Best PC Game and Best Innovation in Gaming categories of the upcoming inaugural Canadian Awards for the Electronic and Animated Arts.
The Tricks That Publishers Can Play
A major theme of the talk was the importance of independent developers retaining their IP, with both venture capitalists and publishers discussed as important possible avenues of funding, as long as control of the project and IP are retained. The best time to approach publishers was concluded as being as soon as the project has a complete, working demo, with Thompson noting that it took 8 months from Battlegoat’s initial contact with Supreme Ruler 2010 publisher Strategy First until a deal was signed.
With publishers, however, they outlined the several different types of funding available, and how they could affect the contract signed. The more risk to the publisher, the more onerous the contract and the less rewarding the royalty rate. Cerzy in particular warned to watch for tricks in the contract before signing, observing several oversights on Battlegoat’s part with the contact they signed with Strategy First.
The contract stated defined sales as specifically to the “End User”, which allowed Strategy First to sit on the payments from distributors until sell-through reports were returned (“And roughly 90% of retailers don’t return sell-through reports,” Thompson complained.) “We had to give them 50 cents off the dollar just to get our money out of them,” lamented Cerzy, before further discussing a situation in which a lack of a contractual obligation on foreign licensing allowed Strategy First to sell the Russian rights for Supreme Commander 2010 for $4000. Thompson revealed: “as we refused to do the localization for less than $10,000, Strategy First resorted to taking money from other projects just to pay us.”
Thompson and Cerzy then explored the fact that it’s become harder, and more dangerous, for independent developers to sell a niche product or new IP to publishers due to their continuing consolidation. “Smaller publishers... are at the size where it’s dangerous to work with them, because you can never be sure that if they have one big failure that they aren’t using your royalty check to pay their wages”, Cerzy warned, adding that where possible independent developers should seek out the developers already affiliated with a publisher to hear their stories first.
Of course, they contended, it’s debatable if in the current climate you need a publisher at all. They explained that while he digital download route sounds lucrative, it has its own pitfalls, mentioning that while an online distributor like Ztorm takes only 10%, they offer no marketing, and the distributors that offer game portals can take as much as 60%. “You also lose the retail audience,” Thompson argued, though he conceded that the shelf space for PC games is dwindling.
Financing Options in Canada
Looking specifically at the opportunities available to Canadian developers for outside funding, Thompson and Geczy discussed the different provincial programmes on offer. With Quebec, British Colombia and the Maritimes all offering incentives to attract developers, they explained that Ontario had recently begun the Ontario Media Development Fund, but that independent developers not picky about relocation to had the greatest opportunity.
Battlegoat Studios, they recounted, were themselves solicited by Prince Edward Island. “They were willing to actually build and furnish our offices, and pay half our staff costs, provided we were willing to move there. But what is there on Prince Edward Island?” Gerzy riffed, “There is Anne of Green Gables and the Japanese tourists,” he conceded, after some prodding from the audience. The major downside, they noted, of the provincial funding is the extreme amounts of paperwork required to apply.
Telefilm Canada, another option for Canadian independent game developers, offer an unusual system of funding. “They offer you a loan, but if your project is unsuccessful you don’t have to repay it,” Gerzy explained, “We came up with the idea that we’d come up with two projects, and the one that we applied for with Telefilm would be a ‘Springtime for Louis Riel’ [a Canadian politician/rebel and founder of Manitoba] full of Canadian content that would be a failure, and we’d spend the money on our real project. But that struck us as a little too shady.”
Experience Is Invaluable
Throughout their talk Thompson and Cerzy drew on their own experiences offering the viewpoint that the more control and understanding an independent developer has of the processes outside of development the more successful they will be. It’s to this end that Battlegoat are now intending to control their own marketing and deal directly with distributors for future projects.
Though both options are highly risky and certainly out of the leagues of the first time developers at the TIGC, Battlegoat’s experience and eloquence was highly appreciated.