Interview: McFarlane Talks 38 Studios, Revitalizing Game Toys

Todd McFarlane is a name that is extremely well-known in the game industry -- both as a visual artist and Spawn creator who has lent his talent to games, and for his toy company, which has produced a number of action figures based on popular properties. Here, in an exclusive interview, McFarlane discusses the progress his company has made in rebuilding its video game figure business, after the successful introduction of Halo 3 figures earlier this year. He takes in the changing retail landscape since the initial launch of the McFarlane Metal Gear Solid toys in 1999, as well as the changing media environment that dictates new opportunities for hits. He also discusses 38 Studios, the MMO developer founded by ex-baseball player Curt Schilling, which is currently at work on an MMO title for which McFarlane is producing the concept artwork and offering general creative input -- including how McFarlane, based out of Phoenix, Arizona, collaborates with the game studio's artists in Massachusetts. The talk even reveals a bit of the game's heretofore-unknown design philosophy. Selling Figures: More Complicated Than It Used to Be I don't know if you recall, but I talked to you last year at the GameStop Expo, and at that time, you were talking about how you were moving back into video game related products with the Halo line. That clearly was successful, because you've got Halo Wars, and you're also moving into Guitar Hero and Call of Duty. So can you talk about the status of those products -- how you feel about them right now? Todd McFarlane: Well, as you know, a lot of the big Fortune 500 companies have a tendency to sort of lean on the big summer blockbuster movies, and it's interesting that the video game industry, as it continues to bring in more and more money, has sort of been thought of as a bit of a stepchild. And even when I first got Halo and I was walking around to the big retailers, there was a bit of an uphill battle to get them to recognize that the equivalent of the Batmans and the Iron Mans and the Hulks of the summer blockbuster -- maybe not as many people, per se, but in terms of the buzz that those create amongst people -- that every genre has its equivalent thereof. And I go, "Why, you don't have to play video games, but for you to turn a blind eye to something like Halo or Grand Theft Auto, or Guitar Hero, and say there's not a huge group of those people, I don't think you're doing your homework." It was interesting that we started getting more and more placement when a lot of the toy buyers went and talked to their electronics guys, and their video buyers. And then they came back, and they go, "Those guys said we'd be an idiot if we don't bring this stuff in," because they understand that there's a core group of people that will come in and support that product at arguably a better rate than whatever their bottom-dweller toys are that they have on their aisles. One thing we talked about before was originally, you guys were one of the pioneers of some of the video game toys, ten years ago. You had the Metal Gear Solid toys, and there was kind of a roller coaster effect. There was a big boom of video game toys, and then a big bust. Do you think things are a little on the upswing again? TM: Well, here's what always happens, is that once something's successful, you get a lot of quote-unquote "imitators" that come in. So once Metal Gear Solid worked, then what a lot of other smaller toy companies thought was, "Oh, you can just pick any video game, put it in plastic form, and it would sell." Some of the retailers bought into that. And the fallout was that the B games, or the B minus games don't work at the same level, not unlike a B minus movie up against something big like Batman. You still have to cherry pick the big guys, the A plus sort of ideas that are out there, and the games that are out there. And if it's not there, you've got to walk away from it. To do anything less -- so what happened was there was a bit of a glut once we sort of said, "Hey, you can make a few dollars." It seemed like there was a rush, and then a lot of them failed because to me, they were B and C plus titles, and didn't sell. And then the retailers turned around and went, "Forget video game stuff." And they threw, literally, the baby out with the bathwater, which is what I was trying to resell them when I went back going, "Look, I'm not going to come to you with 20 video game titles. I'm going to try to come back to you with some of the top video game titles. And other than that, I'll bring you football, baseball, some other stuff. So let somebody else bring you the eighth best title." It's like having the license to the eighth best movie. It's not going to work at like a fraction of what the number one, two, and threes are. Are you seeing a response at retail side now? When we talked last year, it was a little bit dicey. You weren't quite sure how things were going to go with the Halo 3 figures, but... TM: Right. What I've seen is -- and it's kind of an interesting shift is that -- and again, nobody's quite saying it out loud what I believe to be true, but I'm going to more and more meetings where some of the mass retailers are using the word "collect", we need "collectors" in our store. And as the economy's gone down, I think they're seeing the value that people like you and I can bring into their stores in non-traditional buying periods. And again, Halo's a perfect example. They brought it out, they were chasing sales, because the game comes out in September, we don't drop the toys for six months later. So it's six months after the fact, in a period when toys are not really selling very well, and they came and they won. And they're waking up to the fact that you can have your big summer blockbuster during the summer and Christmas, but your 365 day store, how do you continue to get revenue? And they're waking up to the fact that us geeks, who are now old and have got money in our pocket, can actually be not only good to them in the electronic aisle, but can arguably be good to them in the plastic goods aisle that we call "toys" right now, so... Because like I said, these are guys that when you talk about collector stuff, they used to roll their eyes, and now they're saying it out loud, first in a conversation of going, "There's incremental business to be had there. We shouldn't turn a blind eye to it." Now, you talked about the toys dropping six months after the game. Was that by design? Or was that due to just the way things shook out, and from here forward you might try to be more simultaneous? TM: There were a couple factors. One, they kept shifting the game date a little bit, and we needed to know when we could drop it and when we couldn't. We had to get assets. You go to management when they're putting out a big game like that, their number one focus is to get the game out. And we have our needs, and they're -- it was more of, "Let's just get our game done and then we'll help you out," which has been tremendous, both Microsoft and Bungie. But they had a big task, which was to get priority one, which was the game. Now, it works out OK, because you have to sell your toys so far in advance -- just like video games -- so far in advance that even if I could have had them ready for October, right after the game launched, there's no shelf space, because they'd already made their buys months and months earlier. So by the time they were saying, "Yeah, we can give you the stuff," it was -- bizarre as it may sound -- it was better to come in after Christmas, because then the shelves are going to clear out. All the big Fortune 500 guys don't retread until next summer and come out with the big blockbuster. So there's a bit of a wall, so they're a lot more flexible, bizarre as it is. Even if they has said yes to Halo toys when the game came out, it would have been a couple inches here, a couple inches there, because to them, we're selling them movie toys. But because of the delay in getting it out after the fact, into the next new year, they go, "Eh, you know, we'll give you two, three feet. Put your product out there, we'll let it ride for awhile. What the heck, we don't have anything sort of going," and boom, it caught. So then it opens the door now for it to be on the shelves during summer, and through Christmas again for this year, and into next year. So they're understanding that it's arguably a 365 day business that they should be paying at least a little bit of attention to giving space to, and not ignoring it like they were in the past. You can see that with games too right now, in the sense that, every game used to push to hit in the holiday. But certain games are been moved into spring and even summer. And you can see that they are building success by releasing games in different periods throughout the year. And games can have a chance to shine they didn't used to have. TM: Yeah it's interesting because I deal with stuff in Hollywood, and TV, used to be the same way. You had to come in. You had to sell during the summer. You had to make a pilot. You had to get it out. And everybody put out their new shows in November, right. And then a couple of things fell out accidentally, those happy accidents, and they found out that some of the reruns that were coming in January and February were way outperforming the original stuff. And now, they go "If you just put out good quality products people will come." I mean The Matrix, when it came out and struck a chord in every... that was a March movie. That wasn't a big summer blockbuster. Huge movies have dropped in like in February, March and April, even in September, October that we the audiences responded to. And now they go, "Oh! OK." Again, they still are not going arguably draw in at times the money, the well conceived big giant budget movies are. But instead of just ignoring those months, I go, "why not?" You got Halo and Grand Theft Auto and Call of Duty and Guitar Hero coming out. OK, what's in between all of those? And somebody is going to come out and going to have a surprise there, and then they are going to go "Wow". So it's really -- it's always been about content. I don't care whether you are in Hollywood, TV, films, music, whatever, it's all about content. You've got a hell of a game. You drop it anytime we will find it, right. Last year, you said that when you got back into games figures with Halo it was due to someone at your company who recommended Halo said that "You really want to take a look of this." It wasn't so much like biz dev-y kind of a situation. It was someone who is passionate about Halo and wanted you to see it. TM: Right. How you are moving on to the other products like Guitar Hero, Call of Duty? TM: What's interesting... because Guitar Hero was one that I was pushing. And because I got three kids, every time they had friends over or they were at somebody else's house. It's all they were doing, playing this game. So I started poking around with that one and with Call of Duty. And it was interesting -- and some of my sales people said, "Now, Call of Duty is better than Guitar Hero." It depends what's the definition of "better". To me better is wider demographics because then that's more people you can arguably sell a product to. Call of Duty is a brilliant game, but it is still a Mature game. Whereas Guitar Hero, I am seeing again my eight year old kid playing it. And I am seeing my high school senior and some of her college friends playing it. So it's crossing a spectrum there. And I also knew walking into the room -- with the retailers, the Mature logo on there does matter to them. And so, I knew the Guitar Hero would also be very easy for them to say yes to, because it is very benign. No mom's going to phone them up saying, "How dare you have this on your shelf." With some of the shooter games and the violent games, they could arguably make a phone call and go (makes whiny noises). But it's a mix and match. Again, I don't play a lot of games so I get my... my geek dudes that work for me, go "Hey! What's hot?" The reality is it's not like there are 20 of [these properties]. To me there's four, five that would really work on a mass level. I do think though that there are, sort of, the second tier versions that would work exclusively at places like GameStop here. Where I think your audience is big enough, that I could go get a license, make this stuff; sell it only in your store. And we would both do enough business that it would be worthwhile to go and chase down those ones that I normally wouldn't chase down, because it's not going translate in big enough numbers on a national level. But the geek factor? You can pump out the geek factor. You just got to put it into the stores where us geeks are shopping at. And I think GameStop is sort of one those prime spots, which is one of things we are talking to them about. Look at the figure business in Japan. I mean, of course, they have figures based on massive properties like Star Wars and everything. But they really go after, the sort niche properties that are really enjoyed by a passionate fan base. I couldn't tell you what the economics of going after a niche property with a really passionate fan base versus a broad property that only a percentage actually make the leap to buying toys is. But there's probably... TM: You hit it on the head. The toughest part about that equation is that ten years ago when we were selling Metal Gear Solid, there were lots of stores -- Spencer's was supporting it. Musicland was supporting it. Tower, Virgin and a bunch -- Babbage's before they got consolidated. So there's probably about ten or twelve accounts we had. They were all doing very decent business. And now, some of those businesses are gone. I mean they just don't exist on the planet anymore. Some went into bankruptcy. Some basically got merged. Some there agenda's just shifted. Like GameStop, who used to buy a lot of our stuff, went into, "Oh, no. We are just selling games." And they kicked the stuff out for a while. Now we are just trying to inch our way back in there. So, I believe what you said to be true... but it's just that the number of places that you can pull it off realistically are [counted] on fingers right now. And that's why GameStop to me is one of those. I got a meeting with some of their higher up there to sort of go "I don't think you guys know how versatile your stores can be." Which is what they are trying to grow at in terms of being able to do that little niche stuff that hits the core of what they are in that store for. Just like a comic shop, you think about is a comic shop, right? They have their flat product which is the comic book. They've got their flat product, which is the games. But if they are buying X Men, they might be able to sell them an X-Men poster, an X-Men statue or X-Men toy. OK, all things X-Men if they like it, right? So why wouldn't it be true on some of their favorite games they are walking into your store. They know what their top ten games are they are selling, probably not dramatically different than on national level. But there maybe a couple at the bottom of that top ten that are again more geek-centric. And we just go, "Let's put some ancillary product in there so people can walk in and walk out." Because once they bought the game, what else are you going to sell them with that property? You sold them the game, the games over. So now they are just coming in and do you have anything you can back-fill it with. 38 Studios: An Update Right. Something I want to talk about a little bit is if you are prepared to -- I know I brought this up last year -- is progress at 38 Studios. How far they have come in the year since we spoke? Because things are still a little hush-hush on that front? TM: Oh, yeah. As a guy who's involved in it literally every day, every week, we've come a long way. I mean there's a lot of progress that's been made. There's a lot of movement. Again, they pump it into me from Boston. And besides doing the hundreds, if not thousands, of drawings we have to do for all the characters, the backgrounds -- I mean, the conceptual stuff, arguably, that's just one step. The real step is making it move. And there's tons and tons of animation that's starting to come through the pipeline right now, that we're starting to do separate from building all the levels. Because again, everybody's working on their own little piece of it. But for me, the piece that I was really the most interested in wasn't the drawing part of it. I've been there. And I told Curt [Schilling], "Once we draw them, then buddy, they'd better move." We've got to move this game. It's got to act and animate slightly different than anything they've ever seen before. And so again, I found I've made a career -- it's not about reinventing the wheel, because again, there's a core base that has certain expectations. What it is, is taking the engine of whatever it is that you're building, and if you liken it to a car, just painting it with a hell of a paint job they've never seen before. So it's still a car, but they just go, "Wow! Look at that one's way cooler than that one right there!" So we're still going to have magic spells and knife thrusts and all the things that you're expecting, boss fights and all that. But the question is, can we make ours feel better than the other guys? And the stuff that I'm seeing relative to what's out there in the open market, the answer is absolutely, right now. Whether that will matter enough to a new audience, we'll see, but the goal we set out, which is to make the gameplay and smell better than a bunch of stuff that's out there, from my perspective... Because I look at what the other guys do and go, "Wow, they don't do that with horses, they don't do that with birds, they don't do that with trees, they don't do that with shadows, they don't do that with cool stuff, which is the fighting and the spell casting stuff." They're not doing what we're doing right now. So we'll see. I think that it's interesting when we talk about a genre in particular -- MMOs have a very, very dedicated fan base -- because I'm not really a big MMO player, and I see games like Warhammer Online. And to me it looks pretty much exactly like World of Warcraft, like nigh-indistinguishable from World of Warcraft, and I wonder what's the point? Now, I know that the dedicated audience for that genre, just like any genre I might care deeply about, can really pick up on the nuances of what's different, and to them, it'll be a big difference. But when you're trying to appeal to a broad enough audience to make these games successful, I do wonder where -- I guess, sort of where the rubber meets the road on that issue. TM: It's an interesting question, because here's your delicate balancing act. When you're dealing with the fantasy world, you can't stray too far away from it because there's expectations that people come to the game with, right? You can't say, "All of our elves now are going to be twelve feet tall," right? Because everybody goes, "Oh, elves are usually kind of small and wimpy." And wizards usually cast spells from their hands -- they don't shoot them from their ass. And fairies usually fly... Yeah. TM: I mean, they come with that. The question is -- and we're not trying to say we want to get away from that. We don't want to get that silly, but we're saying, "You're going to have a fairy, and she's going to fly." Then can we make our playability be a funner experience, a cooler experience than what the others are presenting to you, and will that be enough of a difference to say, "Hey, I'm a player. I'm playing fantasy anyways, why wouldn't I want to play with the fantasy game that's the funnest to play with, or looks kind of the coolest?" That becomes a criteria. So I agree with you, if you're getting too close to what is already a number one game, which is World of Warcraft, and you're just doing a bad knockoff of it, if I'm a gamer, I'd go, "Why would I take the bad knock off for something I'm already doing?" Not necessarily a knockoff, but a game that seems... It may be a great game, but if it's largely indistinguishable to any but the most hardcore, then I'm not sure I entirely see the point. TM: Yeah, I guess the argument is kind of the same with car racing games. It's still people in cars racing around, and there's ten of them out there, right? And you just go, "Doesn't it seem like you only need one?" But everybody sort of jumps on for a different reason. I think the fantasy genre is sort of the same. I mean, you're going to see it with the war genre, too. OK, it's still a guy walking around, shooting at bad guys. And even you could have gone back earlier with the first person shooter games. OK, the backdrop's different, but it's still a first person shooter game. So now, the question is, how much can you entertain us? Because this question goes back to action movies. We still know it's good versus evil, boy's going to get the girl, and there's going to be all this stuff. But you know, Iron Man's still going to win at the end of the day. We still go in droves, right? The question is, given that we already know what the end is, can you put enough of a sexy paint job on this thing, so you entertain us and give us a bit of a whoa factor to it that we just go, "Wow, that's pretty cool!" given that we knew you couldn't kill off Iron Man, because you've got to come back with a sequel, right? Exactly, and it's the difference between Robert Downey Jr.'s Iron Man versus Christian Bale's Batman. They're both big superhero movies, but the characters couldn't be more different, and that's sort of where the appeal lies. TM: Right, right. So again, but the question you're asking, we will come under scrutiny for that. I mean, everybody's going to ask, "Why another fantasy MMO game? Why do we need that in this space?" And we're going to have to be able to deliver a game that will defend our position as to why we should be there. You're based out of Arizona and the studio's in Boston. TM: Right. So how's that collaboration? Is that a tough collaboration, or do you have that pretty sorted out at this point? TM: We're linked up, so again, I do my video meetings with the character, the environments, and the animation guys every week. And then again, they can send stuff, too. So distance is -- I mean, I travel to Boston too, right? I mean, I do my jaunt into there on a regular basis, so... But technology allows you now, that other than being able to touch the person next to you, other than that, there's no reason that you have to be in the room. I'll take my own example. I live in Phoenix, my toy development company is in New Jersey.