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The Pilot Paradigm: How to launch a new IP more effectively, and cheaper.

by Peter Kojesta on 02/24/11 08:36:00 pm   Expert Blogs   Featured Blogs

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The Pilot Paradigm:
 
How to launch a new IP more effectively, and cheaper.

Reposted from: The Exis Site

 The Traditonal paradigm

           
                Launching a new IP in the games industry is a daunting and expensive task.
Not only does it require the intense work of creating the game, but also the creative tinkering of the marketing and publishing teams performing market education. It is in essence, a massive gamble; we put tens of millions of dollars on the line , in the hopes that the players like our characters, our mechanics, and our creative expression.  The great risks inherent in this gamble stifle innovation, and damage not only the player, but also the developers.  This article will outline the Pilot Paradigm, a new way to launch an IP, which will not only save developers/publishers millions of dollars, but also give the player a vast array of new gaming experiences. This method works for companies of all sizes, from massive publishers to the smallest indie.

                The traditional IP model is broken because is it's so scary to the risk averse. It's extremely expensive, and dramatic failures almost always spell doom; if not for the developer/publisher, then certainly for the IP. Although publishers generally have the cash reserves to "eat" a few such mishaps, heads will roll, and shareholders lose faith.

                So let's break this down a bit. A publisher decides to spend $40 million on a game, only to have it sell 500k copies across 3 platforms, creating a $30 million deficit; this is a failure. Some double down and go for a sequel, chalking the $30 million loss to market education, while others just let the matter drop, moving onto the next AAA IP in the hopes that their catalog of upcoming sequels will sustain them; as it often times does. The issue is that "best guess" game/IP development consequences, and in the end, don't provide too much useful information on the failure.

                It takes large teams to create the AAA projects, and when the IP fails to take root, we're left with a bloated staff, resulting in layoffs.  Assembling these large teams to develop new IP's means that failure is a deep financial burden to the developer/publisher. Everyone knows this will happen, but nobody plans for it, causing the systematic layoff and restart cycle we're so use to.  Furthermore, It's often a pain to educate your market, and requires millions in marketing dollars. Cheesy viral ads, interviews with various gaming magazines, television advertisements , marketing stunts , and other hogwash meant to inform as wide an audience as possible about your obviously niche product; it's a shotgun approach, and it costs too much money for an unknown product.

                Lastly, the traditional model stifles innovation. $40 million is too much to spend to try out a "hook"; whether it's free running, a grappling hook, or some MMO crime game. Developers who work on these IP's get project fatigue, having just spent 3-5 years working on the same game. Project fatigue leads to a "clock-in" mentality, and eventually your best people get so frustrated they leave; contributing to churn rate. And why would they stay? They have far too little say in the IP, because the stakeholders are spending so much money that deviation from certain pre-defined roles could be catastrophic.

                This very thing ends up hurting the player. They often complain about too many sequels with tiny iterative changes, a lack of new and innovative ideas, and rehashed games. They get franchise fatigue, and stop buying Prince of Persia 15, or Laura croft 25; resulting in franchise "reboots".

  The Pilot Paradigm

         
                Now that we've discussed some, and I do mean "some" of the problems with the traditional model, let's consider the Pilot Paradigm. At its core it's a very simple idea, an idea that some developers and publishers may be on the path to adopting even now. I think it's important to identify it, so that it can be applied with purpose, as opposed to the random implementation that seems prevalent today.

                To understand this model, we must consider "Pilot Games", similar to "Pilot TV shows"; a proof of concept at final quality; released in order to gauge consumer interest. The idea is to release a series of smaller games via XBLA/PSN/STEAM and Facebook, in order to establish a baseline with your audience. Since development cost for these platforms is orders of magnitude less than developing for boxed retail, it's much easier to test your new IP.  

                Consider releasing 3 XBLA games in as many years, all high quality, and all set on the same IP. These "Pilot games" will allow you to test wildly different mechanics and take big risks with design and genre. The resulting market reaction will allow you to get, and to review feedback intensely; allowing you to refine your idea while being paid to do so (from purchases). This allows you to perform market testing without the massive financial risks, or the limited results of focus groups. The market tells you what it wants, because you've offered your product up for scrutiny; and the best part is that failure provides a wealth of information for 1/40th the cost of a traditional IP launch.

                So if failure provides information, what does success garner? Success with your pilot games is a green light from the market to try your AAA smash game/IP. You've established a winning mechanic, a likeable game world, or some masterful execution, and now it's time to "release wide". Your chance of success is dramatically increased by an installed audience, and the wealth of information gathered from a series of releases.

                But once you've released wide, there's a few things to consider for continued success. First and foremost, if your AAA game hits, know when to stop. Take 3 to 4 years before you even consider a sequel, have a disruptive release schedule. This not only prevents franchise fatigue (Laura Vs Starcraft), but absence creates respect and honor in our market. This may be difficult if you have yearly numbers to meet, but investors are smart and will see the long term performance of your new stratagem. Another great benefit of this is employee retention; I've seen too many amazing developers fired because there was no new project for them; or because the balance sheet needs to show specific results at fiscal close. But now, these developers can be rotated back to the Pilot games. They've just spent 3 years working on a AAA game developed from a pilot they were heavily invested in. Instead of being fired, they can break into smaller teams and go to work on another series of dramatically different, innovative, and creatively expressive pilot games.

                Furthermore, there's a few marketing thoughts to consider. Stop chasing "viral", instead, embrace stupid shit.  Stupid shit created Joy, and Joy is viral by nature. To really reach your audience, it's critical to choose a front-man, and stop hiding behind the corporate seal. Everyone knows that movies take hundreds of people to make, but Hollywood knows that large audiences don't really invest social capital in a "company" , they invest in people. Our "Blizzard rocks" mentality is limiting. If you look, you'll find a larger audience willing to say "Chris Metzen rocks", or "Samwize Didier rocks". Game developers should overcome their shyness, and consider a thoughtful approach to interacting the with their audience; channel your inner Gabe Newel. It's possible to become publically known without being forced into the cliché "Rock-star" roles of 90's developers. And while we all know it takes a large team to make great games in many cases, Your audience is more interested in identifying a few key people. if you're uncomfortable with that, join another species; humans are social.

 Summary          

                To summarize, There are several business and sociological trends which can be taken into consideration regarding this method of IP development; and subsequently the players approval  or disapproval of it. Players have shown that they enjoy compact gaming experiences with the sustained success of XBLA and PSN. They have proven that they enjoy shorter, more directed games with very creative and experimental approaches to gameplay. The player spends less money, and often gets a very satisfying game; which  is  really at the heart of this matter. For a player to pay $60 on a boxed product and find they're wholly disinterested in it, is a problem in my view. It's a problem for the gamer, and a problem for the developer because they risk future sales. Furthermore, this risk of developing large scale titles forces publishers to limit experimentation ,thereby further limiting the player's choice.

                We often hear about a lack of innovation from players, or industry media telling us that large swathes of people from Developer X have been laid off, and how less than 10% of games pay for the other failed 90%. This is  a result of copying the worst aspects of Hollywood, the hype and "sequel-itis", while ignoring their best aspects. TV Networks will do a pilot to see if there is any chemistry with the audience, or if the project can be successfully developed, but we don't release pilot games to show off our interesting new mechanic/visual theme; we just make massive assumptions about what's "cool" and "fun" and then plow into a 40 million dollar project. The end result is more redundant experiences for the player, and embattled publishers who are financially enslaved by the need to make franchise soup, again and again.

                Proof of this sort of test marketing/development is very apparent in the comic book industry. I've worked with comic book developers, and their business model now mirrors the "Pilot" or "Pre-LC" (Preview-Downloadable Content) ideology. They basically float a story/comic to see how the audience reacts. If the idea hits, they usually prep it for the TV and film markets. The end result is such that the consumer/reader gets the media experience they find fascinating, and the comic publisher manages to save a lot of money while providing said content.

                This idea of being able to spend less  money to launch an IP isn't some sleazy business move; it allows larger companies to become highly agile in their creative process. Instead of betting $40 million on one game, they can bet $2 million in 20 new ideas and find out if people are interested; the ones that hit move forward, the ones that don't are killed; it's like game development death-match.

                Now here is an important thing to take-away, to the player, this is not ramping up an IP. It basically translates to publishers releasing many more, smaller, experimental games. The player only benefits from it. They spend less money to see if they're interested, and it injects some "indie" spirit into monolithic publisher practices. The games/ideas that prove themselves to the audience  will get the huge budgets and releases.  As the financial risk is reduced and then spread across multiple projects, the desire to take risks on each individual project increases, much to the benefit of the player.

                An obvious comparison is episodic gaming. Although this method is not exactly the same, it does have similarities, and players have proven that they're willing to adopt episodic gaming for the right games/ideas. Mind you, episodic gaming is really just a short release form for sequels, hammering away at what worked in order to cash in; this is not allowed in the pilot model. New games based on the same IP must change things up.

                 If you consider the fact that many developers/publishers are starting to release smaller/amended/test versions of a game via Facebook, I think a strong case can be made for this ideology.

Some Notes:

                For a compact version of the above article, check out the associated flow chart, I've included it in multiple layouts. Also, If anyone wants to discuss this in person, Exis has a booth at Game Connection at GDC this year to show off our fun Xbox360 downloadable game Majestic-12 (Among other things), feel free to find me and lets chat it up!

 

Organic chart

vertical chart

horizontal chart

 

 

Peter Kojesta

Founder - Exis

http://www.ExisInteractive.com


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