Resurgence of the Middle?

Recently the news of Irrational games closing was met with shock and disbelief by developers and fans alike. The day the news broke many questions were raised about how a successful developer with a respected franchise could just shut down, with its lead developer leaving to create a smaller studio to make narrative driven replay-able games. At this moment that I would like to point out that Irrational Games and Ken Levine are just the latest notable casualties of the triple-A market. There is a long list of developers that have either crashed out or are intelligently self-selecting out of triple-A development and going back to smaller, leaner projects. And why not? In the industry today triple-A development typically means large development teams, large budgets, large delays, and often with oversight from risk adverse management concerned only with the bottom line and not the actual gaming experience. All of this means ultra-high risk for all parties involved, and large amounts of stress for the employees working on these titles. Perhaps a more pressing question is where does the trend of smaller, leaner projects leave the gaming industry?

The most notable departures are celebrity developers, those most visible, which have stepped away from triple-A. They aren’t alone however, as entire studios have shifted focus away from triple-A to work on smaller self-published games. This isn’t a new trend though. It’s one that’s become somewhat consistent as developers started moving away from triple-A development a few years ago.

A few of the more notable examples:

• Ken Levine (Irrational Games) – Consolidating to a 15 man studio

• Cliff Bleszinski (Epic Games) – Working on an unannounced title

• Keiji Inafune (Capcom) – Kickstarter for Mighty No. 9 (472% funded)

• Chris Roberts (Origin) – Crowdsourcing for Star Citizen (1945% funded)

• Richard Garriot (Origin, NCsoft) – Kickstarter for Shroud of the Avatar (191% funded)

• Obsidian Entertainment – Kickstarter for Project Eternity (362% funded)

• Double Fine – Kickstarter for Double Fine Adventure (834% funded)

The Trend continues

In recent years the growth in the mobile and social gaming sector has given rise to a number of new developers, including large developers such as Zynga and very small indie studios. Both groups have typically taken from existing developers looking for alternatives to the console/PC space. As a result the gaming industry has taken on an extreme shape, where you either work on very large triple-A products or very small mobile/social titles. But there is another segment that is beginning to emerge with developers like Ken Levine and Cliff Bleszinski.

This emergent group wants to target the core gamer, usually on PC, with a high end, quality gaming experience, but they aren’t interested in going to the mobile or social space and they do not want to return to today’s triple-A territory (possibly with the exception of Star Citizen with a budget close to $40 million). 

Why is this happening?

There are most likely two main reasons that developers are dropping out of triple-A development. One is the difficulties related to the management of talent and the general pain implicit in triple-A development. The other reason I would suggest is nostalgia, and the wish of many developers to return to their golden age. 

These developers want to leverage the successes and connections they have amassed over their careers. They seek to build small, experienced teams that have flat hierarchies, and take the project to heart without reservation. A well-known developer’s fame can help secure financing for their future projects, attract high quality talent to their development team(s), and provide marketing opportunities. Many of the most successful Kickstarter projects are often headed by very experienced developers who want to resurrect a franchise and bring it into the modern age of gaming.

As these developers know all too well, the more successful you get and the larger you grow, the more time you need to spend on “distractions” like marketing, franchising, and production issues. This translates into less time spent crafting the actual game experience. This creates distance between senior developers and the core product. Working with a smaller team provides a clearer and closer sense of ownership with the product and consumer. The motivation to spend less time on distractions and more time developing the actual game has resulted in many highly experienced developers seeking to return to their roots. They desire the opportunity to again work on a smaller scale to create high quality gaming experiences. Their success has led them into positions where currently they are too far removed from the values that made them into passionate, highly talented developers they grew to become. They need to return to their core values. They are validated through their past successes and experiences, but feel a bit hallow given the distance from the team and the product. They want to return to their roots and re-affirm their own success on the principles that got them where they are today. Due to these factors, developers and entire development companies have opted out of triple-A development. So what will these new studios look like?

A looking glass into the future

These super lean teams will resemble triple-A teams but without the heavy production methodology and formal processes required to deal with the size and scope associated with a typical triple-A title. Smaller shops that will be producing high quality content will most likely have to grow somewhat to realize their ambitious vision. They will distance themselves from other indie studios and mobile/social developer’s through the quality of their product and strength of community with a fairly direct connection to fans.

With smaller teams and much smaller budgets where does this leave these developers when you compare their funding against the ever escalating ceiling of development costs for games like Battlefield, Grand Theft Auto, or a MMO like Star Wars: The Old Republic? There is a huge difference between the size and scope of games today compared with just a decade ago. This is driven by the fact that fans are consuming more and more content faster than ever while simultaneously the cost to develop this content continues to creep higher. With that said, I’m not comparing these smaller teams to indie titles with shoestring budgets, some so small they seem impossible to develop and release a game on. So where does that leave them?

A new middle is emerging in the gaming market. Between the extremes of triple-A and indie development, we are moving into a more mature industry filled with more players. At one end we will have indie studios and shoestring budgets, while at the other we will have large triple-A studios that have budgets breaking into the hundreds of millions of dollars per game. The emerging middle, whose industry specifics are still being determined, will fill the void and help bring balance to a market currently dominated by two extremes. It will be interesting to watch the success and failures in this new middle, given that success often means a duplication of a specific business or development model. The funding models, budgets, and platforms that dominate this middle are still to be molded, but some established platforms like Steam, and crowdsourcing sites like Kickstarter, have already stepped forward as early pillars of the new middle.

Implications of the middle

There are tremendous advantages to having a new, healthy middle tier of game developers. They can be seen as a stepping stone for indie developers that encounter runaway success and are looking to augment their games with significantly more resources. Many indie studios are free to develop titles that are more creative and more diverse because they don’t have the level of financial risk that is associated with the release of a triple-A title. When one of these titles finds success, a new middle would allow them a space to aspire to without having to break the bank and incur huge levels of risk. There are already several examples out there with Markus ‘Notch’ Persson, creator of Minecraft, probably being the most notable among them.

Regardless of how the new middle evolves, one trend is certain: the triple-A game space, much like large Hollywood movies, has proven to be too scared to take innovative and creative risks. As a result, the middle now benefits from high profile developers, both individuals and entire studios, which are looking to create a more appealing gaming experience. In this respect, the gaming industry is truly in sync with the television and movie industry, as high profile actors are rejecting a stale movie environment for high quality, well-funded TV shows such as House of Cards and True Detective.

One can only hope the outcome for the gaming industry is as promising.