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Opinion: Why Do Games Publishers Exist?
Opinion: Why Do Games Publishers Exist?
July 5, 2011 | By Colin Campbell

[In the age of digital distribution and social marketing, do we need these inflated, expensive, inefficient organizations? Business editor Colin Campbell gets ready for the revolution.]

Why do games publishers exist? Seriously. What is the point of these dictatorships? Why are we at the mercy of their ambitions and their avarice? Couldn't we just rise up and get rid of these ayatollahs?

Put it another way. The function that games publishers perform has little to do with games, and everything to do with publishing. What they actually do is no different from a book publishing house in the smoky Victorian cities of yore. They source content from the talent, repackage it, create a physical artifact, sell it to retailers and try to get the word out about their new thing, mostly via advertising.

And yet games require no physical form. Talent can -- and does -- create content that is sold directly to consumers who are able to "market" the product through super-connected social channels. (Exhibit One: Minecraft.)

Today, games make money for their creators without the aid of a publisher, or even of those other non-producing, value-extracting middle-men, the retailers. So couldn't we just lose them all together? Imagine how much money the retailers and publishers take out of the market in order to sustain themselves and their shareholders. Why?

Brothers and sisters let us rise up, stride heroically to the barricades, sing joyfully of sunlit uplands. The future is... oh wait... hang on... what the hell am I talking about here?

Games publishers aren't going anywhere. They control the nexus between the content creator and the content consumer. That technology has rendered them (theoretically) obsolete is irrelevant. This isn't about social and distribution technology, it never was. It's about human behavior and the nature of power. The idea of games publishers disappearing is a straw man.

Surely it would be useful to ask ourselves why games publishers exist in a world where they don't actually need to exist. Here are ten reasons I recently discussed with leading analysts. There are certainly more. Please add your ideas in the comments section.


A brand that's already connected to lots of consumers is going to have a far longer marketing reach that one that isn't. You don't have to be huge to have a long reach, but it helps.

Social networks are awesome. They are changing the world, but not nearly as fast nor as profoundly as their biggest fans would like. Even though we trust the opinions of our friends more than we trust advertising, that doesn't conjure a coming world in which billboards stand naked and TV networks implode due to a vacuum of advertising.

Mass market advertising still matters, even while social media creates and distributes cultural and entertainment hits. More, social networks are becoming mass-market vehicles as opposed to utopian examples of people-power. Large marketing-led organizations, like games publishers, are finally figuring out how to make their key advantages - size and expertise and consumer connectivity on a massive scale - really count.

We might look towards Minecraft as proof that you don't need a publisher to have a hit, but the most successful model for new platform publishing is Zynga which uses its money, its dominance and its branding to impose new hits on the market.

Cowen Group senior analyst and VP Doug Creutz, says, "If you're distributing direct to the consumer, you don't want to underestimate the importance of marketing. If you're trying to achieve real commercial success you're going to have to go with somebody that can spend the big money to get your message out there."


Markets tend toward monopoly, which makes it ever-harder for the small guy.

Unexpected hits that bubble up from the morass of garage-developers and indies are rare. And they are likely to get rarer. Why? Because as the market matures, as more consumers come in who are enticed by mass-marketing rather than by expert connectivity, it becomes more difficult to stand out from the crowd without the aid of big-money marketing.

As any business settles down after the chaos of formation, companies mop up competitors, bring talent into the fold, and begin to create notable market-share. In short, their voice gets louder, while the little guy's is muted. Any student of the games industry or the computer software industry will know that the feel-good aspirations of early pioneers is quickly overcome by the economic power of aggressive companies whether they be Microsoft, Electronic Arts or Zynga.


Big companies manage risk well. Small operations, taken as a whole, do not.

The success of games released by big games publishers is largely predetermined. It is possible to predict, to a reasonable degree of confidence, how many copies every EA game will sell for the rest of the year. Try doing that with games from indies that appear on iPhone. One market is predictable, the other is not. Quality is barely relevant.

Creutz says, "Why did Angry Birds sell a hundred million units when there are so many other games out there that are no better or worse from a quality point of view? Is Rovio's next game going to sell a hundred million units? This notion that you can be successful virally is not as convincing as the notion that you can take a not great product, put a lot of marketing dollars behind it and have it do reasonably well. That's a more likely scenario than a great game being successful virally."


It still takes certain skills to move a product from the point of creation into the consumer's hands. These skills have been hard-won by games publishers over a long period of time, and are not easily learned from a Bluffer's Guide.

At some point, the creator who focuses on distribution and marketing actually becomes a publisher, which is something he or she might not be very good at. Outside agencies can be hired in, but they require expertise in order to be managed effectively. In short, developers are generally not very good at publishing while publishers, with much larger resources to buy in expertise, learn to become developers, though not without a lot of trouble and expense.

Jesse Divnich, VP and analyst at EEDAR says, "The best way our industry operates is when developers do what they're good at and the publishers do what they're good at. We can see that a lot in Take-Two and Rockstar where each exploits its own strengths."

Creutz adds, "Publishers are really good at what they do. They know what channels to hit, they know how to make good trailers, they know how to generate buzz and excitement. Medal of Honor was not a great game by any means but they still sold five million units of it. Why? Because they did an incredible job of cranking the hype machine."


Bricks-and-mortar is still important, and the publishers like it that way.

Retail is a by-the-numbers business that cares little for innovation. It's perfect for established systems that flow smoothly from one SKU to the next, oiled with money. Publishers may despise retailers for selling their used games over and over again, but they like that retailers represent stability and that they offer a competitive advantage over arrivistes.

Creutz explains, "Having a dedicated retail partner is great for them. It's a competitive advantage because they have enough clout that they can get favorable terms and favorable shelf placement, whereas a small guy can't, right? So they understand that business, they have an advantage in that business, so as much as the used game business is a thorn in their side, they don't want bricks and mortar to go away."


Digital isn't really an open retail environment. It works on an economic model much like traditional retail.

There are new discovery technologies and UIs appearing every day. But we are still a long way from where we need to be in order to fully replace the world in which retailers and marketers tell us what content to consume.

If you go to the App Store, Apple's store window offers you a relatively small number of options to choose from within a huge universe. That is necessary. Amazon tells you what to buy based on the choices you already made. Microsoft's Xbox Live gives you a tiny number of choices on any given day.

This is no different from the model that dominates retail in which the retailer chooses what you buy based on its metrics and expectations, and on its own self-interest. Large companies can and do influence that self-interest by offering the retailer benefits.

Jesse Divnich says, "When you log into Xbox Live you have maybe five or six different squares on your screen that are available for marketing opportunities. Typically two of those go to something Microsoft driven. And then two of them go to DLC. Another one goes to a new demo. It's hard to gain visibility on Xbox Live, especially if you're not a big player."

Digital-retail marketing favors companies that have already sold you something. So you're much more likely to be targeted via Facebook by a Zynga than you are by some little company that just made a really cool game. The 'open' nature of digital distribution still favors large-mass organizations.


Talent leaves big companies, but sooner or later, it always comes back.

It's a familiar story. Talented individuals quit Big Corp to strike out on their own. They make good. They get bigger, their ambitions expand, they start to think about cashing out. They sell the fledgeling company back to Big Corp. And so it goes on.

What this cycle means is that although big companies suffer talent-drains, often due to their risk-averse nature or soul-destroying mission-statement culture, they are able to re-inject creative excellent through acquisition.

In turn, the talent realizes that money is required to create the kind of ambitious projects that light their fire. But they are not willing to take on the risk involved in creating mega-budget games.

Neil Young quits EA to launch NgMoco. NgMoco gets bought by DeNA. Bungie cuts ties with Microsoft and cozies up to Activision. The Infinity Ward guys break free of Activision and jump into bed with EA.

Mike Hickey, senior research analyst at Janco Partners says, "Going off on your own and raising $40 or $50 million to self-develop your own game is a considerable challenge. It's one thing for guys to go off and make casual games, but if you want to make big games, you still need the big publishers to back you."

Creutz adds, "If you you want to make the next Halo, the next Grand Theft Auto -- and the guys who really have the big talent want to do those things -- you aren't going to get there without a lot of help."


Cross-platform, trans-media opportunities require complex companies with wide-portfolio interests.

Even if a small company managed to persuade VCs to invest in their great new game - as if it were a technology start-up - and spent the money wisely on marketing and distribution, it would still be missing out on opportunities that publishers realize as a matter of course.

EA is dedicated to making sure its IP carries across to as many platforms as possible because that's good marketing and it's a smart way to increase sales. But very few companies are able to create games for mobile, social, console, PC and tablet as well as enjoying long-established links to toy manufacturers, sports companies, movie studios, book publishers and the media.

Mike Hickey says, "Trans-media offers powerful development of IP over an increasing number of platforms. A publisher can help with initial awareness and sales but also provide new sources of capital and expertise to develop that IP for mobile, console, PC, maybe even film. A lot of the margin comes from partnership opportunities where they can realize a talented group of people with a good vision of a game and provide them capital and expertise to take that to fruition, to take it to the market and beyond to new markets."


Right now, new IP is flourishing as new platforms emerge. But it won't last forever. Old IP is waiting its turn.

New platforms spawn new IP. Even in the traditional games market, we welcome this phenomenon with each new console generation. And more so with platforms like mobile and social which have spawned an amazing proliferation of IP, gameplay paradigms, art-styles and characters.

However, older platforms tend towards conservatism. Consumers who adopt early and favor innovation are also happy to play that which is familiar -- check out the 3DS roster. Less daring consumers who jump on board later in a platform's life are more than happy to buy the brands they know, whether that be something relatively new, like a Zynga, or something very old like Disney.

Mike Hickey says, "For big publishers it's not just about creating new IP, it's about taking the existing IP and putting it into new channels."


Big companies don't like change, but they are capable of making the move when they have no other choice.

What's interesting about the way the world is changing is not so much that it will sweep away incumbents, but that it will offer them a challenge that some will be unable to meet.

The decline of physical distribution and the rapidly changing nature of consumers and of marketing are trends that no publisher can afford to ignore. Equally, they require skills that these companies have not developed in the past, but which they badly need now.

Games publishers, like all companies, are necessarily ruthless about replacing the obsolete with the needed. Managers who wish to last will be required to make the changes necessary to stay employed.

The people who manage the publishing companies will go, long before the publishing companies themselves. And so there are many in the games industry who must be quietly relieved that our dynamic industry isn't changing quite as fast as it might, that the revolution is counted in years and not days. Games companies are able to become whatever is required of them in order to survive. They have no more choice in this matter than we do.

[You can follow Colin on Twitter @Colin__Campbell . As well as being business editor he works for a marketing agency that supplies content to companies.]

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Tyler Blankenship
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You will hear the same answer from everyone. They exist to pay the salaries of game developers. However, there are certain situations where a development studio can generate enough money to publish their own games.

Ivaylo Kovatchev
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Marketing drone is marketing. Nothing to see here.

Florian Putz
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Funding anyone? Who would fund a 100 million $ project like starcraft, if not a publisher? I dnt see much of an alternative for the AAA market. Or do u want every game look like minecraft and terraria? Publisher are not only publishing, they are also producing. If u would get your funding from some other 3rd party, what difference would it make in the end?

Rodolfo Rosini
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"Institutions will try to preserve the problem to which they are the solution." Large game publishers are just another example of this

E Zachary Knight
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This. A thousand times this.

You see this in the current state of book publishing where the Kindle and other ereaders have turned the traditional model of book publishing on its head.

You see this in the music industry where the traditional labels are weeping and wailing and gnashing their teeth at new technologies that make their old business model obsolete.

To a lesser extent, you see this in the movie and video game industry.

Philip Michael Norris
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To a lesser extent for now, of course. But how long will it hold out?

Bart Stewart
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It also shows up in government as bureaucracies and (as Carroll Quigley pointed out) in civilizations. Any organization that does not constantly work to reform itself to remain focused on solving the problem that brought it into existence will transition to self-perpetuation as its primary goal. The perpetuation of the original problem is a means to that end.

Retail will be propped up until digital gets a convenient replacement for the advertising/marketing function.

E Zachary Knight
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Youtube, Hulu, Netflix and many many other avenues of self distribution of film and television are doing their best to do to film what similar services did to books and music. But because the traditional movie production companies have a strangle hold on the largest source of film revenue, theatres, they are having a tough job of it.

In 5-10 years or so, we will a larger shift to internet distribution and the shrinking of theatre releases.

The same thing can be said about video games and retail. as retail's influence on consumers decreases, the strength of traditional publishers will shrink in kind.

Philip Michael Norris
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Guess the same could also be said about our (USA) news. Fox is extreme right, MSNBC is far left, and CNN is sensationalism at best. Again, a stranglehold on a media.

Maurício Gomes
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Large publishers exist because the walled garden model of console development make them necessary.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Cartrell Hampton
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Agreed. (:

Cordero W
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It's the game industry's fault for making so called AAA games cost so much, anyway. It escalated too fast. Now if someone makes graphics similar to what you saw on the PS2, it'll be considered mediocre at best. So now we have to generate little tricks to give it artistic value and mostly make sure it's HD for it to even look good to consumers nowadays for those who don't have big money publishers.

Jeffrey Crenshaw
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The problem is that publishers are like steroids: even if you choose not to go through one, the playing field is made artificially difficult for you to try and stand out in when other developers use them. We "need" publishers, sure, but this is a need they have manufactured over the years. We need them like drug addicts need drugs. Like a child who refuses to grow up and move out of his parents' house needs his parents. The tasks of marketing and distribution could easily be outsourced without letting a few centers of power in this industry own the whole damn thing.

"I like how it's vogue to hate on pubs now." When was it not?

Alice Rendell
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If the publisher was removed I wonder who would actually take their place? The game developers are likely to not be marketing/business experts as well and you need someone with these skills. What's the point in making the most amazing game in the world if no-one has ever heard of it? You need the creative vs business battle to keep the balance, the key is in keeping it balanced. Too much business and you don't have a good game, too much creative and you don't have a business.

sean lindskog
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Yeah, you need marketing. But the question is, what relationship do the developers have with the marketers?

1. The developers work for a publisher who does the marketing.

2. The developers hire a marketing company

3. The developers have a marketing department.

These all play out pretty differently, and 2 of the 3 don't require a publisher.

Evan Combs
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You don't need a publisher to hire a good marketer or a good business oriented manager to balance out the two sides.

@Mata: When a company fails at going outside of their understanding it is usually a failure of being open and trying to fit it into their world instead of letting the people they hire to form their own culture and practices from scratch. It is kind of like putting Windows 7 onto touchscreen device it doesn't work because it isn't made for it, but when Microsoft started from scratch they create a good product in Windows Phone 7. When you expand into new areas you have to start from scratch otherwise you are setting yourself up for failure. Most large corporations want everything to be interconnected which only works if you already have a good understanding of everything. When they try to thrust that interconnection onto something new they end up failing.

sean lindskog
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"Unexpected hits that bubble up from the morass of garage-developers and indies are rare. And they are likely to get rarer. "

The trend seems to be going in the opposite direction, if you ask me. Unexpected hits are getting more common all the time.

Colin is right that publishers are still relevant for large, expensive AAA games. But more than ever, the market is opening up for small to mid-sized developers who choose not to work with a publisher.

Kim Pallister
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Florian hit on a key point missed in the article. Funding.

Funding and distribution of risk across multiple titles. Even in the digital distribution space there's room (and need) for those functions.

Chris Lewin
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Publishers exist because of the huge economies of scale inherent in activities like marketing, localisation, legal, testing and R&D. While a lone programmer/designer can (and often does) make an innovative product, the number of hats such an individual is forced to wear means he/she is not as efficient as they could be. At their best, publishers take care of the non-creative work and allow their studios to get on with what they do best.

Cordero W
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The problem is letting the studios DO what they want. You go to a publisher, propose a game, and hope they like it enough to put money into it. Problem? There's certain genres that they rather invest in more. Back in the nes, snes, genesis, and PS1-Ps2 era, they were doing all sorts of things.

Jane Castle
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They were doing all sorts of things because it cost much less to develop titles. Now with their AAA only or bust mentality it is impossible to take on such risks.

Sad state of affairs really.....

Luis Guimaraes
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Gamasutra, there's an relate article in the featured section which's link isn't working. It just redirects back to the blogs page.

Jeffrey Crenshaw
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It says " NOTE: Blog entries awaiting initial Gamasutra approval." for that article. I can already tell it's going to get dozens of comments :].

For anyone wondering, the title is "Why Producers Matter (Much) More than Designers", the blurb is "My study of over 850 games over a twelve year period found that the individuals in the producer role had a much greater effect on the critical and financial success of the game than the designers, or even the developer as a whole.", and the author is a professor. It's going to get bloody.

Luis Guimaraes
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Thanks Jeffrey, I also read that and wondered how it got featured without approval... I wouldn't blame Gamasutra if they're keeping it away for a while not to kill current trendy pages, like this one. Or maybe, just waiting the kids to go bed before starting the carnage...

I would guess that probably there is useful information in there regardless of it's "baity" title. The fact something could be too generalizing doesn't make it absolutely and completely wrong but, simply, too generalizing.

Matthew Doyle
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To use a Dune quote, "Fear is the mind killer." Sure, being risk adverse as the big AAA game publishers are keeps them from making too many mistakes, but this fear leads to a lack of innovation in games. This is why 90% of the games we have today are "me too" titles. The big publishers have turned developers into cogs, working tirelessly on the exact same game they made at Studio A the year before, with a different title. And worse, its the same game someone else is making over at Studio B. Making games is supposed to be an art form, isn't it? Not an assembly line production designed to maximize profit. There has to be a better way. Part of the problem is that it seems that so many game developers measure success as having worked on multi-million dollar "me too" projects for the sake of doing so, rather than having more creative freedom to try out new and exciting ideas, and being your own boss. So what if your game doesn't have cutting edge graphics financed to the tune of 10 million, and a slick commercial on TV. Why does commercial viability have to be the measure of real success? This is why publishers exist. Because we allow them too. We accept them as "needed" and "the norm." Most of us are happy in this paradigm, and refuse to find a better path. "QQ!" is the response of some of our own brothers, as is "if you don't like it quit." These poor souls have become assimilated, happily toting the party line of their corporate overlords.

As someone who ran his own indie studio for two years on his own dime, and failed to get published even with a widely favorable demo, I have never liked the current system. We pitched to the likes of Midway Games, Eidos, and Atari among others. (This was like 7 years ago.) Every single publisher's essential response was, "great demo and great idea, but we can't risk giving a start-up 4 million dollars." So, despite the fact that we had a healthy fan following, a killer prototype, a completed design document, tons of great concept art, and despite the fact that we had been interviewed by nearly all the major game sites, and despite having been included in an issue of PC Gamer, the big publishers just couldn't be bothered to risk it. And I know there are hundreds if not thousands of similar stories out there of good indie teams with great demos trying to find publishers and failing at every turn. Publishers have become more than just a necessary evil to make and market your game. They have become the overlords who decide what games and game genres even exist sadly.

Evan Combs
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I think a lot of the time people forget that the publishers weren't always there and there was a time before EA and Activision. The first publishers didn't have any publisher to fund them, they found funding through other means.

The problem really comes from it being all about the money for most people. It was pointed out in the article, talent leaves BigCorp, talent starts upstart, talent sells upstart to BigCorp to make $$$$. There is no pride in starting small, and building your company up to AAA level titles. It is all about making AAA from the very beginning then selling out to make millions. That thought process requires publishers. A thought process that starts small creating games for services like PSN, XBLA, and Steam and moving up as you can afford it does not require a publisher. All it requires is a small team and a loan from a bank. This path takes patients because it is unlikely you will be successful early. Most people don't want to be patient, so they are forced into a path that requires established publishers.

Duong Nguyen
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Publishers/Large multi-studio conglomerates are the natural evolution of consolidating companies to leverage economics of scale and organization. Same thing happened in publishing, movies, music, internet search, etc. every industry, why wouldn't it happen in games? Their not inherently bad nor can't they co-exist with small development houses and indies, they are just part of the larger eco-system.. Sure they do use their scale at times to bully small players but that's their competitive advantage and as long as it stays legal that will always happen..

Joe McGinn
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Mostly they exist from momentum, there are only two practical realities not instantly replaceable:

- Retail distribution if you are still making boxed product (won't exist in any form 10 years from now, probably sooner)

- Publishers have the money, so they fund game development

There are more logical ways of finding game development than these behemoths - see the movie industry.

Neeraj Kumar
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Nice read.