Coming In from the Cold: An Interview with Red 5 CEO Mark Kern

Mark Kern is the CEO of Red 5, a relatively new company formed by ex-Blizzard and World of Warcraft alums, with aims to create a new type of original MMO. The company was founded in 2005 by former WoW team leader Mark Kern and former art director William Petras, and signed a deal with Korean-headquartered publisher Webzen for the exclusive worldwide rights to publish and distribute the company's as yet unnamed MMO.

Shortly after the announcement of an $18.5 million investment from Benchmark Capital and Sierra Ventures, Gamasutra interviewed Kern about MMO success factors, deal specifics, the Project Offset engine, and what it would take to beat World of Warcraft.

Gamasutra: How is the partnership with Webzen working?

Mark Kern: It's working really well. I think Webzen shares a lot of the same focus that we have in terms of the quality of the experience, and pushing MMOs and different genres. We've been really happy with Webzen.

Gamasutra: And they’re partially financing the game? I guess that’s in addition to venture capital?

MK: They're not doing any equity based financing. So basically they're publishing the first game and they're funding development of the first game.

Gamasutra: Ah, okay.

MK: Benchmark and Sierra are basically allowing us to build our infrastructure, and I mean that in two ways: One is from a technology perspective, where we're building a reasonable client server platform, and then the other is in terms of creatively, where we're building, hopefully, one of the top studios with the best talent in the industry to build on-line entertainment.

Gamasutra: So are a lot of your people going to be in Korea, or...?

MK: No, we're based out of Aliso Viejo here, though Webzen is in Korea.

Gamasutra: Yeah, and I noticed that one of the people mentioned as forming this was from Blizzard Korea, so that's another reason I asked.

MK: Yeah, Taewon Yun was director of operations for WoW in Asia. He co-founded that office in Korea. He came and really had a lot of influence and input on our business model for Asia and how to adapt World of Warcraft to be compatible with an Asian audience. So we're really grateful that he's on board with us. I think it makes us one of the few companies outside of Blizzard that knows how to do an MMO and make it appeal globally.

Blizzard's World of Warcraft

Gamasutra: So you're also using the Project Offset engine, right?

MK: That's right.

Gamasutra: Are you the first?

MK: I believe so. We are the first to license the Offset technology and we're actually using it as a jumping point to create a highly customized version of the Offset engine that is able to work well with MMOs because, as you know, MMOs have pretty unique requirements on the graphics side of things.

Gamasutra: Right. Is your game going to be coming out before the one that they're making?

MK: I don't know. Have they announced a release date yet?

Gamasutra: No.

MK: And neither have we, so I have no idea.

Gamasutra: It's a mystery.

MK: Given that they're not doing a MMO, then I assume that they would be out before us.

Gamasutra: The stuff they're doing with it looks really nice. I haven't seen it in motion though.

MK: Oh, the motion blur is incredible. So, we're using that in a couple of places in our game and it really helps sell certain effects.

Gamasutra: What made you choose that engine as opposed to any other?

MK: Well, primarily they were local to us, so that made cooperating from a technological standpoint very easy to do, and also, I think that the offset engine, unlike the Unreal type engine, is a little earlier in development and we're kind of early adopters. But what that allowed us to do was to really sort of take it in a direction that works with an MMO for our needs versus having to dismantle something that is big and monolithic and already complete.

Gamasutra: With the round of venture capital funding, how much say are they going to have in the final product - what do they want out of you?

MK: Well, as they've said all through discussions, they don't have any opinion on the game itself. They're really banking on the team and our experience and they're leaving the creative part up to us so, it’s been a really great relationship so far where they have a lot of input on the operational side of things. You know Sierra has a... I don't know if you know this, they have a tremendous background in databases and networking technologies. And Jeff Loomans actually has tremendous operational experience. We're really finding his presence very helpful, because these games are so intensive on the back-end, it’s nice someone like Jeff and Sierra on board. And for Benchmark, Bill [Gurley] is really plugged into the consumers phase, and it’s obviously probably one of the most important VCs about MMOs and online games. He had a lot of input for our future stuff, and a lot of ideas, and we have healthy banter back and forth.

Gamasutra: Have you found that using the words “World of Warcraft” is helping you get recognition?

MK: Well, I don't know. We've been kind of stealth up until now. So you guys and this round of PR is our first kind of coming out for the company to the developers and public as a whole. Obviously, I think it will help - I think it gives us a real advantage in that we have a track record and we've been there before. We've had that long, hard education of how to make an MMO, which very few people know how to do, and until you've been through a trial by fire like that, I don't think you really know what you're in for - so yeah, we do benefit from that.

Gamasutra: I was more talking about that in terms of venture capital people who often don't know about games at all.

MK: I think there are probably two camps. There were those that felt like this was a great opportunity to make WoW 2. Which is not what we wanted. And others like Benchmark and Sierra that realized that this is part of a broader phenomenon that we wanted to help create, and those are probably the venture capitalists that we responded to the best.

Gamasutra: This is a bit in the past, but what prompted the group of you to leave Blizzard?

MK: Well, originally I left, and I left in April of last year, and I did it because it was six months after the WoW launch when the beta for China was underway and I needed just to take a break from the really rigorous development schedule of WoW and the amount of work it took to get that thing off the ground, and to be with some family. I had a new son. I spent some time with my family to reflect on what we had done and what Blizzard had done, and what I wanted to do and the lessons I took from that.

It really just turned out that I felt like there was this immense opportunity as a game maker. This is truly the ultimate gaming platform. And I don't mean from the standpoint of a business model or anything like that. I mean what you have here is something way more powerful than a PC, way more powerful than PlayStation in terms of pure computing power on the backend, right?

World of Warcraft

Gamasutra: Yeah.

MK: So everyone says that this round of consoles is ruled by graphics; after that, gameplay is going to rule, and what we can do with cycles on the CPU with things like AI and emerging story, and simulating entire worlds and giving people virtually an alternate life and experiences that are tailored around them maybe even on the fly. These are the potential things that I wanted to explore at Red 5 and that we're using the funding to research here.

Gamasutra: How do you feel about that alternate life kind of thing? Because some people really seem to - some people I know in fact - seem to really have a lot invested in, and perhaps too much sometimes.

MK: I think it's an individual choice, right? I think with anything you can take it too far. Everything should be done in moderation.

Gamasutra: But yet, it seems to me a game like WoW is designed to keep you playing as much as possible.

MK: Actually it’s designed to provide you with, how should I put this - bite-sized entertainment. You can get a lot of entertainment out of WoW in just an hour or two of game play. That wasn't true of games like EverQuest before. You could often put an entire evening into it and see nothing for it except an endless night of corpse runs. So I think that it's ironic that a game which has tried to narrow and focus the entertainment experience has such a powerful grip on people. I think that it is really not so much the game, but the individual who is looking for more and more of those experiences.

Gamasutra: That is interesting. How many Blizzard team members wound up coming with you?

MK: Eight or nine.

Gamasutra: And you've been staffing up as well?

MK: Yeah. During the pre-production phase, we haven't really been staffing that aggressively. We're up to about 30 people now. Now we're transitioning to production, so we are really trying to get the word out and let people know we are creating this creative Mecca and we would like them to be a part of it.

Gamasutra: Do you have a desire to beat World of Warcraft, or is that not in your scope?

MK: No. I don't think it's necessary to beat World of Warcraft. We're not going head to head with WoW. We're not doing a WoW 2, like I said earlier. We're actually more interested in expanding the genre now that WoW has kind of opened up gamers’ eyes everywhere, and across genres, gamers can see why a game like WoW would be cool to play with a persistent world and a live team that’s continually adding content. We're really trying to make games that appeal to different parts of that gaming audience.

Gamasutra: Can you say anything more specific than that?

MK: (laughs) Unfortunately not! I think it's also important to note that we are only interested in completely original experiences. We want to create our own worlds and our own stories here at Red 5. We don't do work for hire and we don't do licensed games. This is a unique opportunity. We have the funding and the business model that work to be a stand alone independent content studio and we are really excited about it and pushing it just as far as we can.

Gamasutra: This is just speculation because I know it's not your aim, but if someone were to beat World of Warcraft, what do you think it would take, as one of the people that created it?

MK: Oh! Well...

Gamasutra: I know a lot of people are trying.

MK: Genre to genre?

Gamasutra: Yeah.

MK: OK. Like if I were the maker of epic fantasy-based RPG-MMOs, first of all you are in an arms race. That is important to recognize. When Blizzard was developing WoW, Blizzard didn't just have to beat EverQuest, the leader at the time, but they had to beat EverQuest plus four extension packs. So you kind of get into this vicious cycle where you have to out do the last game over and over again. I think it's at astronomical heights now. So, if you are going to go into that arena, be prepared to go big or go home, and spend a lot of money doing it.

Sony Online Entertainment's EverQuest

Gamasutra: Well, I think a lot of people are going to try. It will be interesting to see how they do.

MK: Yeah. I think it's going to be really interesting. One thing I want to talk about, there’s kind of this lag. We saw some MMOs come out after WoW in the last year, but they haven't enjoyed quite the success level that would indicate that Wow had a huge impact on growing the market.

Gamasutra: Right.

MK: I think that's because it takes so long to make these games, that if you wanted to apply the lessons of WoW, and you already had a game in the belt but it was supposed to come out a year after WoW - it's too late. There is only so much you can do. I think the really interesting MMOs are the ones that have really sort of taken the lessons of WoW to heart and are going to be coming out in the next year or two.

Gamasutra: How do you feel about microtransactions and things of that nature?

MK: I think it's really interesting. I think that this is a really broad field. Different games are going to demand different business models. The important thing is that you tailor the game to the business model. I think that companies, particularly in Asia, that try to transition from a subscription-based model to a virtual items-based model have had enormous problems, because the game just isn't built to handle it and player expectations get in the way.

Gamasutra: There’s also the issue of whether it is “right” to do so, given that sometimes it can inspire gold farming, or…

MK: Oh yeah. There are certainly a lot of negatives involved, and I think that as a gaming purist, I cringe at the thought of your success at the game being directly related to how much money you spend to succeed.

That part does not interest me. If we were to do something like virtual items or microtransactions, I think we would want to avoid that and keep the game fair and balanced for all. That said, that doesn't mean that that model won't be a success. I mean look at games like Magic: the Gathering [the collectible card game] which is inherently built upon how much money you can spend to build the best deck. There is another side to that though, in that you can play a sealed deck of Magic with your friends and be on equal footing. You don't have that ability about an MMO. There are no neutral servers yet, like an item-based MMO where everyone is on the same footing and everyone doesn't have to buy their stuff.

Gamasutra: In addition to that, MMOs in general have a very high barrier of entry because once the game is open, there are people that have been playing the beta or what-have-you, who will have a greater wealth of experience. It's a tough world for newbies and whatnot.

MK: Well, I think part of it is we have to get away from the first level thing. Why is level the only indicator of success in an MMO? I don't think it has to be.

Gamasutra: Yeah. It would be interesting to see something that is a little bit more skill-based. Do you think that that would ever really come about?

MK: I think a lot of genres are possible and some are more adaptable than others. What would be essential in that case is that you retain the value proposition in your character. The idea that the more time I put into my character, the more value I accumulate and the better I will be. If you make something entirely skill-based, that's kind of at odds with that expectation.

Gamasutra: I suppose that's true. I guess the character investment is really a big part of it. I'm surprised that, aside from like Second Life, there hasn't been a real social networking component to it. Like a MySpace MMO, if you know what I mean.

MK: Yeah. Well, there are some early indicators of success in that area if you look at Gaia online or Habbo Hotel.

Gamasutra: Ah, yes.

MK: Or even Neopets, though that doesn't really have much in the way of persistence. I think there is interest in the social component there, but you do need something that is a little stickier, I think, to keep people around.