Greg Costikyan Interview

Greg Costikyan talks about his new game company, Manifesto Games, and about what difficulties smaller development teams face in today's ultra-competitive gaming market. We also had a chance to get Greg's unique perspective on where the industry is headed.

Xtreme-Gamer: In the past you've written extensively about a growing list of problems you see facing the game industry. In particular, you've focused on what you see as the large corporate publishers becoming more conservative and stifling innovation, while smaller developers are being driven out of traditional retail distribution channels. Do you see any signs that the situation may be improving?

Greg: Yes, at least to the degree that some developers are finding other channels for their work--e.g., the casual downloadable market, and the mobile market. Both of those markets have constraints that are, I believe, rapidly choking off the potential for innovation there as well, however--for casual games, the increasing percentage of revenues demanded by portals and their fixation on "pick three" and word games, for mobile games the limited space on carrier decks and the consequent gravitation to licensed IP.

And of course, Nintendo talks a good talk about supporting innovation.

Ultimately, as I've argued, however, we have to try to foster an audience aesthetic of prizing innovation in se, and build a distribution channel independent of the current one.

Xtreme-Gamer: Your website proclaims, "PC gamers of the world unite! You have nothing to lose but your retail chains." What exactly is it you are suggesting should be done?

Greg: Today, the narrowness of the retail channel is such that ever-spiraling budgets are mandatory, and the risks of development so high that virtually nothing but franchise titles, licenses, and "me too" imitations of last year's hit can possibly achieve funding. As the Scratchware Manifesto says, "An industry that was once the most innovative and exciting artistic field on the planet has become a morass of drudgery and imitation."

As Warren Spector says, "We must kill the publishers, or we are all doomed."

A typical publisher wants a game just like some other game that already sells. We want innovation.

Xtreme-Gamer: More and more 'indie' developers and small publishers are moving toward a digital download distribution model. How do you see this trend affecting the market as a whole over the long run?

Greg: I believe that we're facing a divorce between the PC and console markets. Remember that not long ago, they were separate markets, with separate distribution channels (console through toy stores, PC in software outlets), different publishers, and different developers. It was CD-ROMs and widespread adoption of graphic cards that created the current merger. But ever-dropping PC sales at retail, disgruntled PC gamers who are, in the final analysis, getting Xbox's sloppy seconds, and developer search for alternates to the current industry model will, I believe, breed a new PC market, primarily online--and the major publishers' participation in that market will be essentially limited to PC ports of games developed primarily for consoles. My expectation is that within five years, the major retailers will pretty much drop support for PC product.

Xtreme-Gamer: You have described the industry as being unfair to developers. Instead of rewarding those who succeed, you said it penalizes them with development budgets so high and royalties so low that there can be no reward for creators. Do you see this as primarily being driven by greedy publishers, or are the publishers themselves at the mercy of the retail chains?

Greg: Yes, it's primarily driven by greedy publishers. Mind you, greed is good; it's what fuels the free economy. The problem is that developers have so little leverage in the current situation, and are generally motivated by love of what they do, meaning they are willing to accept terms that are basically onerous to keep developing games. Publishers are large publicly traded companies, and are far more interested in keeping their focus on the dollar. This isn't a problem of the game industry alone, to be sure; indeed, typical contract practices in the music industry make the game industry look like a paragon of virtue.

Xtreme-Gamer: Do you think that gamers themselves bear some of the blame for the current situation?

Greg: Sure. But again, that's true of other entertainment media, too; corporate rock sucks, n'est-ce pas? And yet people buy it. But you can't change everyone--and I don't think you need to. I'm comfortable with trying to build a smaller, niche market based on what you might call "ludeastes": people with considerable experience with and understanding of the ars ludorum, who prize individual vision and novelty in games.

Xtreme-Gamer: Gamers tend to be a demanding lot. With expectations of ever more sophisticated 3D engines and cutting edge features, has the gaming community set the bar so high that it is nearly impossible for indie developers to create successful titles?

Greg: Define "successful." If you mean 1m unit sales, perhaps. Katamari Damacy is considered a "disappointment," Psychonauts is a "failure." From a sales perspective, but they're both great games, and my guess is that Katamari Damacy, at least, was developed on a modest enough budget that it's in the black. The problem is that everyone is reaching for the shiny, the 1m+ seller. Screw that; we need the equivalent of the midlist.

Xtreme-Gamer: Fair enough. So how would you define "success."

Greg: Talonsoft, a publisher of computer wargames (before it was taken over by Take Two and ultimately closed down) was able to eke out a profit on titles that sold as few as 15,000 units. You might well say "that was a different era," and it was--but there is no a priori reason that you can't do the same today--assuming you control your development costs.

From what I've heard--and this is hearsay, not hard numbers, Diner Dash, a casual downloadable game, was developed for less than $250,000, and has sold something like in the hundreds of thousands. That actually makes it highly successful by the standards of the casual games industry---but even unit sales at that level would be considered a "failure" by the standards of the conventional market.

What is "success?" From a financial perspective, success is achieving a return-on-investment higher than what you could get by parking your money in t-bills (and how successful is a function of how much better than that you do). In the conventional industry, it is hard to get attention and shelf space at a budget of less than $10m, and that already means you need at least a half million unit sales to hit breakeven (and likely more, once you add in the cost of advertising and promotion).

Good-oh, whatever, I'm not interested in playing in that sphere, because those same budgets breed a risk-avoidance mentality that makes it essentially impossible to do anything interesting any more. Instead, I want a market where, like Talonsoft, you can break into the black with 15,000 unit sales, by controlling your costs--and where there's an audience that's receptive to that.

Today, the casual downloadable market shows that this is feasible; but I'm not interested in pick-three puzzle games or word games, nor in sacrificing so large a portion of the consumer dollar to big portal operations. What we're trying to do is to say: If you can sell games to people who have not historically bought games via direct download, how hard would it be to sell games to people who actually consider themselves gamers? The sort of people who, according to CGW's surveys from a decade ago, typically bought 8-12 games annually?

From another perspective, of course, the financial definition of "success" is utter nonsense. Psychonauts may not have provided an RoI to Majesco, and Katamari Damacy may not have generated revenues on the scale of Halo 2, but they were both fine designs and games of considerable artistic merit. Their creators have every right to feel proud about them, and to hell with the market.

Xtreme-Gamer: There has been much talk over the last few years about the "shrinking" PC gaming market. Given the difficulty of gauging the volume of PC game sales by way of digital distribution, do you think the market is truly shrinking?

Greg: No, particularly if you include MMO subscription numbers in the mix.

Xtreme-Gamer: Greg, you and Johnny L. Wilson have created your own game company called Manifesto Games. Where do you see your company headed in the future?

Greg Costikyan: We will overthrow the existing order and establish a brilliant new future of innovation, gaming goodness and public virtue, in the process building a company with revenues exceeding that of the US treasury. But what else would you expect an entrepreneur to say?

Xtreme-Gamer: Thanks for taking the time to answer our questions.

Greg: My pleasure.