Getting Serious About New Opportunities

Let's face it, the games business isn't all fun and games, because sometimes the business of making games isn't as much fun as we'd wish. It's tough out there - business is hard, and publishers don't always want to be your friend. Wouldn't it be great if there were some other markets to prospect, and you could diversify, ignoring the general whims of publishers, cellphone carriers, portals, and the general gaming public at-large? But diversifying in the games business isn't very easy - we can't suddenly shift gears and start a resturant or consumer goods company. However, you can diversify by selling to others who have a need for game developers, besides the usual suspects.

Who is Doing What?

In an earlier issue of Game Developer Magazine, I authored a Soapbox piece that talked up the other markets are looking at games, including training, defense, government, health, and education. I'll refrain from the usual abstract discussion of cause and opportunity here, since it's not always too helpful to talk about a market in abstract.

What about specifics? Who among the industry is benefiting from this work? Arguably, the studio with the most success is BreakAway Games. It has made many early forays into the world of building games for the military and other clients. Its location in the Baltimore suburbs puts it a stone's throw from many government and non-government clients. BreakAway has built projects for Booz Allen Hamilton, The National Institute for Justice, and recently started a project for the Institute for Non-Violent Action which will be previewed at the upcoming Serious Games Summit.

Other projects of interest? My company, Digitalmill, is working with Persuasive Games on a contract to develop a series of games aimed at teaching principals of science and technology related to telecommunications, underwritten by a non-profit civic action group based in Denver, Colorado. MIT's Comparative Media Studies department is working on a grant from Colonial Williamsburg to mod Neverwinter Nights into a game about the American Revolution. Newly founded Destineer Studios in Eden Prarie, MN, and veteran studio Atomic Games of Austin, TX are both working on titles for the U.S. Marine Corps that grew out of an existing relationship Atomic had with the Corps. At least one of them will follow in the footsteps of America's Army and Full Spectrum Warrior and see a public release.

There.com has a large $1.5+ million dollar grant from the Army to work on an MMP project for training soldiers about to deploy to new cultures and war-zones. ChiSystems in Philadelphia is adapting game technologies for a similar project that is more single player oriented. A newly founded company in Britain is using game development approaches to build games that emphasize teamwork skills, both generally and for specific industries. UK developer Desq built a game that was used as an ESL tool in Hong Kong. The folks at VRPhobia.com are building games for use in treating phobias, by modifying Unreal and Max Payne, and combining those environments with counseling and VR headsets to create the virtual therapeutic environments.

Further interesting projects include MediaOptions' "Building Homes of our Own", which was underwritten by the National Association of Homebuilders. This sizable project has sold thousands of copies for the company, and is used in a number of schools. Carnegie Mellon University's Entertainment Technology Center working with grant funds has been building a game for firefighters and other first responders to train with. The FDNY will be using it in some trials soon. Going with a 'develop first' approach and self-publishing model, Newberryport, Massachusetts-based Muzzy Lane Software has built a strategic management engine that they can adapt to teach history at both a high-school and collegiate level. The early beta-testing of the game was covered recently by the New York Times. The company views the engine as a digital printing press for interactive history textbooks.

This is a sampling of projects military, non-military, and educational. They represent millions of dollars in committed development funds, and the majority shown here are funds that have gone to private development studios not just public institutions. While the university world - especially with their burgeoning game development programs - will be a key developer and recipient of grant funds, this isn't a market that is exclusive to those institutions.

At this point, we'll assume you've drunk the Kool-Aid. You're likely to be saying "Now what?", and asking how easy or hard it is to break into to this so-called 'serious games market' I keep yapping about. Well, nothing in business is easy, but a few quick lessons may help.

Lessons on the Serious Games Market

There are two major business lessons for the non-entertainment game market. Firstly, non-entertainment games have their own design quirks and requirements. The business methods are somewhat different, too, and the three biggest issues are:

First, I would argue since most games fail to earn out their advances, the majority of developers are in the work-for-hire industry already. Second, most non-entertainment clients are more amenable to allowing you re-use, without major objections, the IP you generate for your project. Clients aren't in the 'serious game' business needing to protect themselves from competitors - they're looking for you to solve their problem and move on.

Third, project sizes trend smaller and "cheaper", but this can be a blessing in disguise. Often you're keeping your IP, and the client isn't asking you to build something of current commercial quality (since only gamers have the hardware to run the latest games.) Frequently you will have extra time to create these titles, and the result is slower burn, ownership of code, and less stringent production requirements, so you can still maintain some profit margin.

What sometimes hurts all of this (and your chances for cracking the market) is the exceedingly long ramp-up requirements. It doesn't matter if you're working on a grant, government contract, corporate contract, or something else - things will just be slow. The business development requirements mean lots of unearned effort. Despite all the work to push them, games are on the outer edge of most people's comfort circles. Development costs (even if reduced) make it nearly impossible for clients to act impulsively. Often, projects in these venues will require many parties to sign off on them. You have to work extremely closely with the prospect to get to the finish line.

The big winners in this area will be those who find ways to get through the variety of project gauntlets and organizational politics, and actually get projects moving. Publishers are no darlings either, but they bring a level of experience that can eventually expedite things. In this market, expect to answer a lot of basic questions - even after a project is given a go-ahead. In fact, in terms of turning leads into work, 'serious games' have a low ratio. Given the leap of faith needed to commit, most possible clients will be dissuaded from jumping, once they are made aware of details of the task. It's the price of working in this field.

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Pitching Methods For 'Serious Games'

Convincing clients starts by realizing that games are not a proven mechanic to most. You won't have quantitative information that will be absolutely provable and easy to sell. It can get 'chicken and egg' here - the client wants data you really won't be sure of, until you build what it is that they want. Instead, you're left sounding more like a lawyer, building a qualitative case for their client.

I've compiled some good talking points along those lines in Table 1. There are others, but these help make some good comparative advantages for games, and they try to touch on things clients might have more comfort with. Keep an eye out on the many efforts underway now, for good examples to cite in future meetings.

You can hone a set of slides using the points in Table 1, adding in demographics on games (always impressive to the uninitiated), and your background. You should especially list technologies you have built for games which might be useful in other applications, not just the games themselves. Right there, you have the outline of a presentation you can give to any interested party on short notice.

Finding those parties can be tough, especially when starting cold. You really need to get yourself in front of people. Look locally for chances to meet and show off your company. Chambers of Commerce/local business gatherings, technology, training, and E-Learning conferences are all good places to start networking for opportunities. Partner as much as possible, because the majority of the business development in this field is akin to the consulting business - it's word-of-mouth advertising. Partners can also package you in with their own larger sales efforts to big companies. It's all down to raising your profile and getting connections you can leverage to bring attention to services. Your Web site should have a page outlining your company's ability to build for non-entertainment uses - maybe with a demo or prototype based on some of your core technologies.

Local universities are also important. They're the largest recipient of grants, and many of them may have partnership opportunities for game developers where your skills and their research can be combined.

You can also apply for grants and other RFPs (requests for proposals) yourself. The U.S. federal government's SBIR (Small Business Innovative Research) grant program can be a great proving ground for you. SBIR grants are increasingly looking to accept game-based approaches. The problem with RFPs and grants is they require lots of good proposal writing. Download some other SBIR grants, or attend a SBIR grant workshop that most agencies hold which provides a free bootcamp on obtaining them. SBIRs have three award phases (each progressively harder to obtain), going from $100,000 for stage I to over $1M by Stage III. Right now, I know of at least 10 projects underway or built with SBIR funding. This includes safety games for young and mentally disabled kids, assisted living training, biodiversity, and even one project to build a science teaching educational platform.

If government contracting is something you want to pursue further, one of the best things to also do is to contact your local state economic development office, and your local congressional offices. Believe it or not, the bureaucrats in those places really do want to help bring home the bacon for local companies, and can help you a lot with information, contacts, and advice. Maryland and Baltimore's Economic Development Departments are great examples of local government groups that have been successful with assisting their local game development communities.

What Are Others Doing?

Developers who are making things happen in alternative markets are doing so because they're more aware of the potential of these markets, but also more aware of the pecular issues involved. This requires you to be as inventive and creative in the business aspects of things as you will need to be in the actual development of the game.

It starts by paying attention to incoming requests from potential clients. As the profile of non-entertainment uses of games rises, it's important not to be too dismissive of more unconventional enquiries, even though some can sound like they're from Mars. Many bodies are also looking for new models to create further upside to their efforts, so they can stomach lower-budget projects that more plentiful. For example, BreakAway Games' government-funded trainer for municipal governments allows them to provide low-cost modifications and customizations for an affordable fee to those local governments - this could double or even triple the total value of the project. For the Virtual U project I worked on, and for Simulearn's Virtual Leader, it's been found that selling the game (or giving it away as part of a comprehensive training seminar built around the game) has been a better revenue model.

In terms of commercial crossover work, publishers have for now focused mostly on military titles like Real War, Full Spectrum Warrior (THQ), and America's Army (Ubisoft), which is headed to consoles in 2005. In the future I suspect other non-military titles, especially in the business-sim and education markets will also hold crossover potential. These models will see the games be available in one form in their first 'serious games' form (and often released for free to their intended audience), but then upgraded and tweaked for commercial success by their publishers. But always protect the brand you've built first, as losing control of its intended purpose just to make extra money in the commercial market could damage the goodwill the game developed in the first place. Make sure it's complimentary to the mission of the project.

Folding it Back to Entertainment

The games industry will always be about entertainment first. Diversifying into games outside of entertainment means a lot of work, but it doesn't mean you throw the fun out. It's often one of the critical factors driving customers to consider a game-based approach. The opportunity here isn't just the interesting projects you can work on - although that should be a big factor. This is also a chance to find work you can leverage back to the entertainment side of games. Already two major military funded games have homes at publishers. Technologies R&D-ed for 'serious games' are also finding their way back into the commercial market. So the diversity of work needn't only benefit your bottom line - it will expand your horizons, and your capabilities in the core gaming market as well.

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