Around The Block With Brian Fargo

[The veteran game developer and Interplay founder explains how game designers need to have business sense along with design sense, the risk in bringing a fantasy-themed, new IP like Hunted: The Demon's Forge to market, and why a reliance on focus groups fails the industry.]

Industry veteran Brian Fargo has been in games for around 30 years, and he says that a combination of game design sense and business savvy has been able to keep him going amid the rapidly-evolving video game landscape.

Fargo is the founder of Interplay, established in 1983, where he worked on games including The Bard's Tale and Wasteland. While at Interplay, he also led the company in the publishing of memorable games like Black Isle's Fallout and Fallout 2, and BioWare's Baldur's Gate.

In 2002, Fargo went on to found a new studio, InXile Entertainment, which largely broke away from classic PC role-playing games and has focused on publishing more mass market titles like Line Rider and Fantastic Contraption.

Currently, InXile is at work on the fantasy action game Hunted: The Demon's Forge, a title that unabashedly embraces fantasy elements like swords, spells and demons, published by Bethesda Softworks and due in spring this year.

In this wide-ranging interview, Fargo explains how game designers need to have business sense along with design sense, the risk in bringing a fantasy-themed, new IP like Hunted to the retail market, and why a reliance on focus groups in the games industry fails to recognize "the randomness of the entertainment business."

You're kind of an interesting figure. You're from this old school class of game veterans.

Brian Fargo: You know, I've always been in an interesting wedge because part of the issue is that my roots are definitely in game design and being a programmer. So, when I'm with the [creative] guys on that side, the business people in the industry see me as the creative type. And then at the same time, I've had to run a public company, I've bought companies and sold companies, and done all the things along those lines, and the creative people go, "He's a business guy." [laughs]

Many people look at me as weirdly between the two worlds.

Some people in the industry say that game designers these days can't afford not to be business-savvy. Is that something that you can relate to or agree with?

BF: For sure. I never thought of it any other way, right. Before I was into games, I was always a business guy. I was selling Amway as a kid, whatever. I just always thought about the numbers. It depends. If you're going to be trying to run your own business in any way, shape, or form, then absolutely [you need to know business]. If you say, "You know what? I don't want to deal with that business stuff. I just want to be an employee and focus on just the creative side," then not necessarily.

But if you can negotiate a deal that gets you twice as much per unit, that one little action changes everything. You only have to sell half as many to make the same amount of money. Ultimately the game quality and the business economics come together at some point. So, yeah, in order to survive, you have to have some business acumen. And then there's a lot of scenarios out there that you have to wade through to figure out what's real and what has potential to make money.

Hunted: The Demon's Forge

So then how has your own business experience and knowledge affected the design decisions in Hunted: The Demon's Forge?

BF: Well, I guess for one, I think it's more difficult than that now. Because remember, we don't just do triple-A games. We do have PSN titles. We have iPhone titles, iPad titles. We have a website with Line Rider. We have a casual games site. I've done that so I can keep myself involved in everything, so I can understand why the DLC works, why does PSN work. Because each one of the worlds is its own microcosm of economics, right? You can have the same game on one system for free and then on another for a $1.99 and on another for $9.99, and it's the exact same title.

So, it's about understanding why that happens and why it works. I try to keep myself involved in everything out of, I don't know, intellectual stimulation, to just want to stay relevant at the same time. And thank God I have.

But as far as the business decisions, on Hunted -- I've always wanted to have what can sell. I mean everybody has a creative idea. My grandma has creative ideas, but can they sell? I'm a student of the market. Looking back at all kinds of data, I read all the industry stuff. I read your website. I read everything. I keep a sense of things. So, at least when we're kicking of a title, I feel like we're making a nice educational guess as to where there might be an opportunity in the marketplace.

At one point we decided, "You know what? There isn't a great fantasy action game." Not really, right? And there's some elements of dungeon crawls that collide that the old schoolers, kind of like myself, and there's some elements we can take from that and re-introduce in a different format.

So, I look at all those things and say, "Here's what we want to build," hoping that it fits into a place within the market. Once we decided that we were going to deal with a publisher, within the business side again, which is you've got to negotiate the contract, work out the milestones and how you recoup, again, that's the business side.

But it's not affecting the game design or the quality, etcetera, other than we're going to have a budget, and we have to make a game with that budget. So you have to create a corporate culture that everybody's very cognizant of what they're spending and tracking that and things like that. But once we're underway and we know what the budget is and we know how we're going to get there, then creatively there's no day-to-day business decision from a creative standpoint, because the die has been cast before we started.

Now, Hunted is a packaged product. It's based on new IP. It's been in development for about two years as I understand.

BF: Correct.

It looks to be one of these higher-budget triple-A products. So, some people would say that's a pretty big risk these days.

How do you think that you mitigate the risk of this not being a commercial success? Obviously, you concern yourself with that as a designer / business-savvy guy.

BF: Sure. Well, there's a certain part of me that is driven by emotion. I won't disagree there. There's something about making those big titles, which is a lot of fun for us. The "big production."

We want to make stuff that people walking down the street are talking about. We want to make our Avatar. There's a part of that that gets us charged up and excited to go to work in the morning, so I won't deny that.

But that said, the risk... I mean, the bigger risk, frankly, is on the publisher, right? I mean, these days, to put out a title, by the time they spend production, manufacturing, marketing, they're between $80 million to $100 million. Huge risk. So, in this particular case, I'm on the development side now.

As developers doing a triple-A game, the upside is you get your costs covered. There's not a lot of money to be made as a developer getting straight-up advances. Publishers are not going to allow you to get rich off of just straight-up advances. You're having to count on the recoup. On the upside, you have your downside covered.

But it's hard to recoup [on big-budget games] because of the cost. On the other hand, we love the PSN model or XBLA model. It costs much less for development and you can actually recoup, which is why we try to have a mixture of those two models.

And the other part of it, and to look at it from a business strategy perspective, is that a lot of these guys who work on these kind of big titles, that's what they want to do. These are very expensive artists, they might be from film or television, and they come in and they help us make these games look phenomenal.

Well, using them to come work on a little XBLA game with a budget of a fraction of [a big-budget game] is not always a slam-dunk to get [external] guys like that. But it's really easy for me to walk down the hall and go, "Guys, this doesn't look right. Can you help?" And they come in and they make it look better than it would have otherwise. So there are some benefits to having the people in one house.

Today you've got social network gaming emerging, you've got cloud gaming and DLC, the packaged business... What are some of the most prominent changes you see today in the video games industry from both a design standpoint and from a business standpoint?

BF: Well, I guess maybe the first thing is it's amazing how quickly the business is changing in terms of how you need to think about it. I mean, social gaming feels like it was out of nowhere. To me, the big changes with that and free-to-play [are interesting] -- wow, what a change.

The guys at Turbine had spent $40 or $50 million dollars on Lord of the Rings Online. Now it's free, and players can buy things when they want them. That's a major, major change in the way of thinking. We did a game called Fantastic Contraption a little over a year ago. We did the first one, and you could sell it for $9.95. And we sold, I don't know, 60 or 70,000 pieces. One year later, we have a sequel, better, and that [pricing] model's done. It's completely gone. You can't charge $9.95 anymore. People don't expect that.

The hardest part is just how quickly things change. And the iPad came along, too. So, there are these big game changers in the last 12, 18, 24 months, and it drives you a little crazy just trying to stay on top of how fast it all changes. And nobody predicts it. Nobody predicted the iPad would do what it did in such a short period of time. And then comes Angry Birds out of nowhere, and now these guys are making a fortune. I'm sort of watching all these different things.

What do you think is the most interesting of those developments, or the most relevant to InXile?

BF: I think the most interesting is the social gaming part of it. It changes the business model, and people are now making money from advertising or selling goods on a free-to-play basis. And the people who are playing these things are doing it in sort of bite-sized chunks.

We are dabbling in that space, nothing really announced right now, but we are playing in that space because you have to know a little bit about it. And the good news is you can jump in and experiment without spending a ton of money. Now, if you want to have huge success, it's difficult to go against the Zynga guys, but that's not something rational people would try to approach from a head-on perspective.

I imagine that you've seen this kind of weird debate between the social game companies and proponents of "traditional" game makers. Maybe you put yourself under the label of one of the more "traditional" game makers. It's morphed into this ethical debate. People in social games at GDC Online argued whether Zynga was actually a "game company" or just trying to make "digital crack cocaine."

BF: Is it the Skinner box and the rat hitting the pedal, right? [laughs] I'm fascinated by all the debates. I mean, look, it depends on how pessimistic you want to be. You could argue that any game is a big Skinner box, rewarding you with maybe better graphics or good dialogue or payoffs, versus something that allows your farm to grow faster.

So, the truth is, people, as usual, they're going to demand more over time. These little applications that people are getting away with that are pretty superficial and more like the rat and the pedal, that's all fine and dandy. What it's done is created a new kind of way of playing. People will start to demand more, more and more, and pretty soon, I think you will start to see the marrying of more traditional game elements for the purists with that sort of mechanism.

You can kind of see where that's going because that's what Zynga's doing. They're hiring people like Brian Reynolds and more of the more "traditional" designers so they can inject these games with that expertise.

BF: I try not to dwell on the past too much. It's not too helpful. One thing that I find interesting is that 10 years ago, you could make retail games for $2 or $3 million. Four million dollars wasn't a big deal. Now with these goods, these things can [cost] $100 million. It's made publishers crazy. Whole careers are on the line. Whole companies are on the line. Creating products creates this intense pressure.

And so with the smaller stuff, you get kind a return to the roots. One of the things I do like is that part of the industry reminds me of the late '80s -- Small, creative teams trying to figure out how to make a buck. You didn't have these huge costs and risks.

The costs and risks turn down because you're kind of able to creatively try some different things. We've had huge success on the iPhone and just for a fraction of the cost of what we had to spend on these other things.

And so that is the downside of the triple-A. There's a need to feel like there's this science [game makers] need to apply. There's so much money at stake, the investors better hear about the science of how you're going to make a success.

The truth is, it's same old entertainment business it used to be. The same old instincts apply. Everything else, the way you develop games, is pretty much the same.

But the truth is developers don't want to hear that. No one wants to devote hundreds of millions of dollars and say, "It normally comes down to instinct." If you think about the film business, let's talk about the '70s. I just read an interview with [former Apple CEO] John Sculley -- [current Apple CEO] Steve Jobs doesn't believe in focus groups, okay. He doesn't believe that consumers are going to tell him what people need. He's going to tell people what they need. He says they can't imagine these things that he sees.

So, in the '70s, the people like [film producer] Bob Evans who ran Paramount, whether they release movies like Bonnie and Clyde, Chinatown or Godfather, or whatever the movies were during that time, these were guys who ran these groups and said, "That's a good idea. That's a good idea. That's a good idea," And they did it, and their batting averages were what they were.

Now you have the "science of Hollywood," and its batting average is no better than what they were back then. But who wants to hear that? Again, I don't dwell in the past, but I do miss that part of the business where you had the early EA, for example. It was Bing Gordon, it was Trip [Hawkins]. It was all these guys. You could go and have these conversations, and they say, "That's a good idea."

[InXile is] fortunate because we did get a little bit of that with Bethesda. Todd Vaughn [VP of Bethesda] and these guys are hardcore, and so, I can pitch them a concept, and they can go, "We get it. We love it." Boom, off we go. Love that. But that's becoming harder and harder.

So to sum it up you think the industry relies too much on focus groups?

BF: Absolutely it's more rare [to rely on instincts]. What stinks about it is that if they have success, then everybody is going to go "That's the way to go. We need more instinctual guys." If it doesn't work, everybody's going to say, "Told you so."

But the truth is that it's just the randomness of the entertainment business. The approach isn't the only reason why a product succeeds. How hard is it to pick a product out in this business? They killed Steven Spielberg's game! We'll kill the Steven Spielberg project. It's just that tough.

It's interesting because you've had this past where you've been involved in these kind of groundbreaking games like Bard's Tale, Wasteland, Baldur's Gate and Fallout. Do you ever feel like that you have to live up to these big titles that you released in the past?

BF: Well, I mean, yes and no. Look, on one hand, I've had recent success, Line Rider and Fantastic Contraption. So, it's not like I'm just focusing on those [previous accomplishments]. On one hand, I'll go on a press tour and I will talk with young guys on the blogs -- they've never heard of Interplay, forget Baldur's Gate. So, on one hand, I had to adjust. I was shipping games before these guys were born.

For those guys, there are no expectations. On the others, I don't know. There's certainly a "it better be good" kind of concept, but I just have to do what I think feels right. I look at the product, I have my own way of looking at things, my own sensibility of things that are important to me. I just keep applying them and hoping they line up with what people are wanting to see.

I think Hunted: The Demon's Forge definitely feels like something that I've been involved with. You'll feel my thumbprint on that game and it's going to have a lot of personality and a lot of depth. And at the same time, I'm recognizing it's the year 2011, so it's not about the feel like something that shipped in the mid-90s.

Some people beat on their own drums better than others, but I gave starts to Treyarch and BioWare and Blizzard and Black Isle. [My publicist] said we should probably get that out a little more at some point [laughs]. I don't really talk about that stuff, but I'm still in the frontlines doing things.