IGDA Leadership Forum: Don Daglow On Business Models, Finding 'Inspiration'

After 20 years in operation, Don Daglow's Stormfront Studios ceased operations in 2008, having lost a $20 million contract for a game before it could rise to meet the challenges of the new business models that have dominated the discussion of the present day. "This is the most exciting era of game development yet," said Daglow, a 40-year game industry veteran whose work has spanned 1971's Baseball through Lord Of The Rings console titles, at an IGDA Leadership Forum talk in San Francisco on Thursday. "Our world today has changed so much even in the last two years." Daglow compared the '80s console wars -- Atari, Intellivision -- to the prior generation. PC gaming sat to the side as a separate business. As console games got bigger and bigger over the years, developers would "start to complain more and more: it's a big business, only big companies can do it, only big teams." But now, there are more platforms, and more opportunities. "Suddenly it's a much more confusing world. But it's also a world that is very much more exciting because there are more ways to publish games." "When we think of publishing, we think of billion-dollar huge corporations." While that has rapidly changed, Daglow still sees publishing as encompassing five vital elements: financing, development, test, distribution, marketing. And he warns -- "the minute test fells off the highest functions, very bad things happen." And while today's competitive marketplace has led people to really scrutinize the business of their game up front, "I think that before that before you get to the analysis, the 'Oh, yeah, we could make 3.2% more money if we did this game over that game' ... Before we get to that stage, we need to say 'Why the heck am I building that game in the first place?'" "The minute the financial process, the minute the rest of these freakin' slides, make you forget what you love to do and why you do it, it all goes pathetically wrong," says Daglow. "When we think about these things, it's the means to an end -- it's a way to take the game we're passionate about to our audience."
 Story is becoming a big part of pitches, and while it's essential, Daglow thinks it's overemphasized these days. "Here's the problem I keep hearing: a significant percentage of ideas that get pitched to me... 15 pages into the pitch you get into game mechanics." It's a big problem if "you don't know what people do that's actually fun." "I believe that characters, story, setting... At the end of the day are passengers in a game... And once you have gameplay --whatever it is that's fun, whatever draws people back to your game." To select your platform, says Daglow, is a logical process. "Let's have the brain and heart start a dialogue here." When looking at platform, ask these questions: "How many hits has it had this year? This is where the heart and the head have some difficult conversations -- how many hits have come out of the platform this year." "Can my team compete? Realistically, what's the team I've got? Do the platform and my team align? It seems obvious, but out in the world I encounter cases of great dreams... But the team is just not there." "Hits from my genre? A cow will not do well in a horse race. If this genre hasn't produced a hit, is there anything that will lead me to believe that it will produce a hit?" "And then of course we have to come to the issue of money. Money can come from different places. Money is merely the way to still have food in your belly when you finish the game." And when it comes down to it, he says, "How much money can I lose and still be okay?" is also an important question. 
 However, only thinking about money in discussions of loss is limiting, he says. "You have to have that question be in terms of money, time, focus... and relationships. I've been married 34 years and marriage is a continual process of work and commitment. Every person's answers will be different, but the only way to get the answers is to be honest with yourself and have the dialogue." He analogizes it to many people's approach to casinos: they go into a casino knowing they have a certain budget of money to lose before stopping gambling. The same is true of game development. The Gatekeepers Current platforms, from the open web, to portals like Kongregate, to Apple's App Store, to the Xbox 360's retail discs involve certain degrees and types of gatekeeping. "If we can think about our gatekeepers, we can start to build a table where we start to think about the money part. If we look at the gatekeepers we can see some patterns in how the world works." "As you strip away gatekeeping, you strip away some hassles," says Daglow, in reference to things like the high cost and stringent requirements for developing console retail software. However, there are downsides. "If you think about how [Apple] promote[s] games, it's like an old McDonald's sign. If you have one of 20,000 items, what is the implied value of that game?" "if you have one box that plays 20,000 games, the box must be of incalculable value. But one game -- I may have poured a year of my life and my soul and my heart and being into -- I'm afraid it's only one of 20,000. That's the downside of the way that Apple and BigFish market games. The implied disposability."
 And some platforms dictate behaviors. On the iPhone, it's becoming more common to update a game frequently. On consoles, it's rarer. "Where do you feel comfortable, what feels right to you?" He also notes: "Less gatekeeping is more profit per unit... Except less gatekeeping means prices are lower so there's less money per unit. And there's less marketing because there's nobody to pay for that." Once you figure this all out, refer to those five questions from before, "and now you can really fill in the blanks and see how you're going to do this. What you're looking for here is a business model." "Different models have more upside, different models have more risk," he cautions. A big retail game promises players a rich and rewarding experience -- a fantasy. But "with virtual goods it's not about the promise, it's the reality." Players decide to make a purchase based on the reality of the game they're playing right now. "Marketing regular games is selling a fantasy, marketing virtual goods is leveraging reality," says Daglow. "This is not good and bad. This is a matter of saying, 'For my game this is right.'" The Problem "With all of that logic, there is one problem," says Daglow. "As long as you are being purely logical, and playing by the rules, and following that perfect chart, which allows for your passions and allows for players and their feelings -- but it's still a chart -- there are things you miss." "It's important to remember what happens when we color outside the lines." Daglow says that some recent innovations can be illustrative of how rulebreaking is important. "The Wii has a lot of problems now, but when it was introduced, [Nintendo] scrambled everybody's brain by becoming the best selling console." Rules people expected (like "best graphics win the generation" or "challenge in games is necessary" or "precision controls are necessary") didn't turn out to be true, or were at least arguable. Guitar Hero was another spoiler. Daglow points out that prior to its entrance to the market, conventional wisdom was that you could not sell thing in a nonstandard box size, and that peripherals were impossible to sell -- and that price points for a title could not break $59.99. For World of Warcraft, says Daglow, a key insight was "we have to have a great initial experience because if we chase away players, we can't grow." The game also didn't push machines -- it ran on lower spec computers than its contemporaries. , meanwhile, proved that "little kid graphics won't work in a game for adults" was not a rule. Also: "if you can't fail it's not a game" was out the window. Stay Inspired "If I pick one thing people have said to me, -- by very famous game designers, highly respected people -- [it's] 'I have to stop beating myself up about ideas that don't work', or 'I have to stop talking myself out of good ideas'," says Daglow. He has heard many people say "I'm having internal dialogue with myself and I'm talking myself out of stuff." 
Says Daglow, "It's so easy to have a self-defeating dialogue. Deeply respected game designers whose names are famous are having these same conversations."
 "Freeing the mad scientist in you is when you get the good moment that is not on the chart. That's when you get the Guitar Heros, the WoWs, that change the rules." "If I were to leave you with no other thing than this one thing -- when all of this logic brings you to an obstacle, that is not the moment to be stopped by logic, that is the moment to be seized by inspiration," says Daglow.