Auteurs Make Horrible Economists: The Subtle Costs of Creative Control

The intention of this post is not to pick on auteurs. Nor is it a commentary on the quality of work auteurs produce. That's a subjective conversation best had over beers. You won't solve it, but at some point you'll be drunk enough to forget what you were talking about.

This post is about a more empirical issue: the economic cost of being an auteur. Stories about auteur-led projects are rife with anecdotes about decision bottlenecks and wasted work. So what? If the end result is great, who cares how inefficient the production was? Why should we restrict the creative process of game designers with decidedly non-artistic concepts like budgets or ROI?

Well, if your studio is just you then you shouldn't. Make the art that feels right to you and hold onto it until it is absolutely the best thing you can make.

But, if you are going to spend someone else's money on development - on a contractual basis, as an employee, or even when using Kickstarter - you have an obligation to be responsible with that money. And if you are going to hire someone to help you make a game/movie/product, you are responsible for that person's livelihood and, in many cases, the well-being of his or her family. And in those scenarios, budgets and ROI are supremely important.

Bottlenecks Destroy Value: A Simplistic Economic Example

Imagine a bridge that sits on a major commuter route. The amount of time it takes each car to cross the bridge is equal to the number of cars on the bridge. So if 20 cars are trying to cross the bridge at once, it takes each of them 20 minutes.

Now, imagine that you and your coworker both commute over that bridge everyday. You can carpool or you can drive separately. If there are already 38 cars on the bridge, it doesn't really matter to you whether you carpool or drive separately because the difference in your commute time would only be a minute. The marginal personal cost (MPC) you incur by driving yourself is only 1 minute greater than if you were to carpool  (40 minutes vs. 39). And, really, who cares about +/- 1 minute?

The other 38 drivers, that's who. In addition to your MPC, you incur a marginal external cost (MEC) on them. If you and your friend carpool, you both increase the commute time of the 38 other drivers by 1 minute. In other words, your action consumes 38 minutes of someone else's time. By deciding to drive separately, you consume an additional 39 minutes of someone else's time. In mathematical terms, every car that someone adds to the bridge incurs an MPC of n and an MEC of n-1, for a total marginal social cost (MSC) of 2n-1.  And that assumes that every car only carries a single occupant. If the other cars have additional passengers, the MEC and MSC go up.

This is what economists call an externality: the economic impact your actions have on those around you. Externalities can be positive (you repaint your house and the value of your neighbor's house increases as a result) or negative (you paint your house black with pink polka dots and the value of your neighbor's house decreases). The central idea is this: when you incur an economic cost against someone else, you are destroying value. And if you incur X cost against Y people, the total value you destroy is X*Y.

That concept is ludicrously simple. You might even feel insulted by the fact that I bothered to spell out an equation that basic. But I want to drive home the point that a short delay across several people can add up to a massive waste of time. And it's amazing how often this idea gets overlooked in the real world.

Decision Bottlenecks Are Just As Effective At Destroying Value

Let's apply this same principle to a game production setting. You are an auteur and you want to make sure everything that goes into the game meets your full approval before it's actually integrated into the build. In other words, you are the canal through which all decisions flow. And you're a real stickler for details: you want to go through everything with a fine tooth comb.

So, let's assume that, on average, it takes you 30 minutes to review a potential submission for a feature or an art asset. And you can only effectively review one thing at a time. Five people need you to review their work before they can submit and move on or start addressing your feedback. No big deal. It's going to take you 2.5 hours to get through it, but that's your job as the creative lead. You're being productive and things are totally awesome.

Except they aren't. The marginal personal cost for each task you review is only 30 minutes. But you're exacting a massive external cost on your team. Remember: these guys can't move on to something else until you've approved their work. So the first person in your queue loses 30 minutes of productivity, the second loses an hour (waiting to meet with you and then meeting with you), so on and so forth, to a grand total of 7.5 hours of time someone has spent waiting for or sitting in a meeting with you. Your bottle-necking just consumed almost a full day of productivity across those five people (or around half a day if you're crunching.

What if your typical daily queue is more like 10 people? For every day of work, you're now losing 27.5 hours of productivity. What if your queue is 5 people, but an average of 3 other team members need direction from each of the people who want to meet with you? In that case, you're eating up 30 hours. Every day, you are destroying more than a day's worth of productivity.

Now, let's extrapolate:

Productivity Destroyed by Decision Bottlenecks (given in 24-hour Days)

So, if you're bottlenecking like a maniac, and your project goes on for 3-years (which is on the low end for many of the highest profile auteurs in the industry), and you have a five-person queue at any given time, you destroy 234.38 days of productivity. Not working days, 24-hour days. You've wasted a total of 234.38 FULL DAYS of someone's life.

Certainly, this example is simplistic. Professionals will find ways to be productive whenever humanly possible, and people generally have more than one thing to work on. I'd be surprised if even the most controlling of control-freak auteurs really bottlenecked every decision that badly. But, if you want to be an effective manager and leader, these are the sorts of death-by-a-thousand-cuts time sinks you need to be aware of. You don't get centralized decision-making for free.

Down with Auteurs?

No. I'd be ignorant to say that auteurism is only downside. Clearly there is value in a having a single vision drive a project. Some of the best characters and series have emerged from auteurs. My point isn't that auteurs are terrible, destructive people. But, if you are going to take or endorse the auteur-route, you need to be sure you understand the trade-off you are making. The more control one person maintains the greater the marginal external cost to the rest of the team.

And let's be fair: the opposite risks are true to distributed decision making. People move faster but it can be harder to maintain project coherence. Any development strategy carriers trade-offs in time, resources, or quality. You can't have your cake and eat it too. My point is not to say that auteurism is invalid, but to point out its risks when pursued recklessly.

People often site Miyamoto's famous quote, "A delayed game is eventually good, a bad game is bad forever." There's a logical fallacy in that statement. Yes, on an infinite timeline a delayed game will eventually be good, much as those monkeys will eventually type Shakespeare. But, on a finite timeline, the sunk costs of a delayed game can become financially irredeemable, especially in the very finite window after launch that publishers care about. And that's where the auteur theory breaks down. 

Genius is only apparent with the benefit of hindsight. Peter Molyneux famously took 10 Amiga computers from Commodore International when its representatives confused his company, Taurus, for a networking software company called TORUS. That is one of the legendary entrepreneurial stories of video game development, and it helped launch an industry luminary. But it's only a great story, and Molyneux only looks like a daring genius, because it worked. If he had been caught deliberately misrepresenting himself and his company, or even been punished in a civil or criminal court, he would have looked like an asshole.

The same is true of auteurism: you are only as much of a creative genius as your last game was a critical and commercial success. If your game fails, you can go from a genius with exacting standard to an out-of-touch, high-maintenance, pretentious artíst just as fast as Polygon or Destructoid can post an exposé about it. As much as this industry - professionals, journalists, and fans alike - loves and adores its heroes, it loves schadenfreude even more. We revel in the bloodshed of a fall from grace like Lisa Bonet in Angelheart. If you're the creative figurehead for a project, you are also the avatar of its failures. Nobody takes any of the claims Molyneux makes about his upcoming games seriously anymore. Denis Dyack has become a pariah.

The time wasted by decision bottlenecks is expensive. The opportunity costs begin to skyrocket.* Pair that with the reputation for exacting standards and scrapping/replacing existing content that is common for auteurs, and it's not a surprise that many of them regularly take 4 or 5 years between games. That magnitude of sunk cost is hard to recover. Making games is already a high-risk business, and indulging such a large need for creative control is gambling the fortunes of the publisher, studio, and employees on the convictions of one person.

That cost carries disastrous consequences when auteur projects fail. To reiterate my previous statement, as a studio head, manager, or lead you have a responsibility to the people who invest in your project. If you don't deliver on that responsibility, your creative prowess will only carry you so far. Silicon Knights is gone. Junction Point Studios is gone.

Putting aside the damage done to the reputations of people like Dyack and Specter, their teams were negatively impacted as well. Employees bear their own opportunity costs. They forwent other employment opportunities that might have provided more stability. The employment options they might have after a studio closure may not be as profitable as those they turned down to work at that studio in the first place. And to reiterate my previous statement again, as a studio-head, manager, or lead you have a responsibility to avoid disrupting your team's lives and those of their families. Your vision is important, certainly. But is it MORE important than someone's family?

Business is business. Some amount of failure is inevitable. Every employee in every company bears risk. But, if you want to be an auteur, keep the economic costs you incur in mind. The career you impact might not be your own.

Justin is a video game producer, consultant, and earned his MBA from Northwestern University's Kellogg School of Management. He is currently laying the groundwork to start his own studio. His mission is to leverage my degree to improve the day to day experience of making games through better processes. He write about that at his full blog here: http://breakingthewheel.com

Follow him on Twitter: @justin__fischer (two underscores!)

His LinkedIn profile can be found here

*An opportunity cost is defined as the return available from the best alternative use of your resources. This is the key difference between accounting profit and economic profit. Your accounting profit is your cash-in minus your cash-out. Your economic profit is your accounting profit minus your opportunity cost/s. For example, a venture capitalist can invest in you or in a bond that yields a 10% return. If she invests in you, and you provide a 7% return, you have destroyed value for her even though you turned a profit: she would have made more money with the bond.

In the auteur example above, if your resources are employees who are sitting around waiting for you to give them feedback, the best alternative use for those resources would be to have them actively produce code/content/etc. Wether the value destroyed by inefficient use of resources is offset by the value created by a potentially superior product that sells better is probably too abstract a question to answer definitively. The important takeaway is that it's not just accounting profit that you should worry about.

SaveSave