Interview: Telltale's Connors On Episodic Gaming's Bite

As one of the only developers focused solely on episodic games, and one of the few focused solely on traditional-style adventure games, independent studio Telltale Games has a well-defined goal. Having recently hit its five-year anniversary, and boasting three major licensed series -- Sam & Max, Strong Bad's Cool Game for Attractive People, and most recently Wallace & Gromit's Grand Adventures -- across PC, Xbox 360, and Wii, the company has clearly made it work. But some episodic developers, like Penny Arcade Adventures developer Hothead Games, have stated their intention to ease off the model a bit. With that in mind, Chris Remo sat down with Telltale CEO Dan Connors to discuss the company's business model, its history, and its lessons learned: During GDC, Hothead Games said it would be backing off episodic somewhat. There are very, very few companies that have actually stuck with episodic gaming, and Telltale is one -- it's your entire business model. What are other companies who are attempting to do this doing wrong? Or what are you doing right? Dan Connors: I think it's the fact that it is the entire business model. We really weigh up front every decision based on what the opportunity that the distribution channel presents. We don't tend to over-bite on things. We tend to innovate in small ways each time. We've made improvements along the way, but the mistake that a lot of companies make -- and I'm not saying this is what Hothead has done -- as independent companies trying to start from the ground up to do this, is that there's this huge investment in making the perfect product. But then when it comes time to bring it to market, all the challenges of getting exposure, creating a marketplace, and creating a user experience that works don't leave any room to maneuver at that point. What Telltale did, which has always been very strategic, is always had content making it through the distribution channel into the marketplace to evolve from. I think that's been a huge differentiator for us, to be able to build it from soup to nuts to do this. It looks like you've at this point put more into the renderer for Wallace & Gromit, with new lighting and so on -- a bigger evolution than there might usually be for one of your games. Yeah, the render is definitely one area. We've been working on the same renderer since 2004, and the artists had really pushed it. We didn't decide until this time in our history to go after that part of the business because the product was delivering exactly what it needed to deliver, and the artists had the tools necessary to deliver on the experience. They did a great job with it, and of course, with Sam & Max, the writing, the joke telling, and the gags are really what we needed to nail. The art was beautiful, the renderer was just a little dated, but for the audience we were going after, it really didn't matter. With Wallace & Gromit, the look was really important to Aardman as well. They really wanted to feel like we were nailing their look, and they required us to push. So, it was a good time for the company to make that leap forward. And now, obviously going forward, you'll see it in all of our games. There will be this new rendering technology that gives us a bunch of new opportunities. It's interesting to contrast your release schedule -- which is monthly during a season, and I imagine doesn't leave much room to be improving tech -- with Hothead's on Penny Arcade, which is much more ambiguous. Theirs is actually a lot closer to what Telltale started with on Bone, and that wasn't as successful as your later, faster-paced releases. Well, I think that's one of the biggest parts -- defining episodic as something customers can believe in. The big complaint about episodic early was, "Sure, you'll do episodes, but I have no idea how they're going to be connected from a story standpoint, from a delivery schedule standpoint, from really anything. You're putting out one portion of the game and then you're pushing out another portion of the game." I think our ability to deliver on a predictable schedule was a huge part of saying, "We are the episodic gaming company." With Strong Bad, we didn't even skip a month. It was just five games in five months. That little extra month in the middle there while we still dealt with development realities -- the opening part of the development is the most difficult until we finally lock it in. We've kind of given ourselves a little bit of cushion there in the past, but ultimately our goal is to be out every month. What would you say to other companies trying to make it work in this space, either to Hothead or anyone else? I don't know that I would point out anything that Hothead did or didn't do because I don't know enough about the inner workings of the way they decided to go after Penny Arcade Adventures. Telltale has never stretched itself too far. We don't hope in the dark for something to succeed. We take very measured steps and measure progress and navigate our way through the emerging marketplace. This whole issue of digital retail and what that's going to look like and how that's going to be set up, that's certainly the Wild West. You really can't count on a lot of things to be 100% true. You have to figure it out. So, if you're betting on anything to save you, or to be the thing that generates X amount of revenue, it's going to end up being unpredictable, and you're not going to know. You have to be measured going in, understanding that that's the reality. That comes back to understanding how big the appetite is for your product, how willing that audience is to buy a product digitally, and what is the right user experience that the consumers are going to like the fact that it's digital. For years, with digital distribution or even episodic, it's always felt like it's the kind of thing that the industry has wanted to do without any known benefit to the consumer. The one thing we've been able to do over the three or four seasons is see the things that users are responding to and enjoying. But it's all been just small steps, as we were kind of talking about earlier. Had we spent all our money trying to just get one thing out like Bone, we wouldn't be talking here today. We would be all over. All of your games are licensed, but as far as I know, except for your Ubisoft relationship, you actually fund everything yourself. That's unusual for a licensed development partnership. Yeah, except for the case of Ubisoft, which has been a really good relationship for us. CSI obviously is a great franchise, and we build five episodes as part of that, so it works really well inside of our model. We'd love to be doing an episodic television series that we were licensing and publishing and distributing through Xbox, Wii, and PSN. You'd like to own a television series? We would love to have a franchise like CSI of our own. As part of the business there, there's a real big challenge in turning television shows into games. I think what Ubi has done with CSI and the way they've been able to make that franchise work has been a real success story, even though for gamers, it's not the biggest interest game that comes out every year or whatever. But it's been able to tap into an audience that isn't necessarily gamers and introduce them to games and introduce them to an interactive experience. That's of great interest to us. That's always been the vision of the company, which is, as more and more [people] get used to interactivity and there's more and more channels for interactivity, turning things that they love as franchises into interactive experiences is a huge goal. Doing something like that with, who knows, Cold Case or a detective franchise or our own internal detective franchise is a great interest to us. But going back to your original question, yeah, we go out, we do licensing deals, we fund, and then we publish through the digital channel. That's something that as an independent publisher is possible now. Three years ago, I think you'd have to be really brave. Then, there was the casual independent publisher, but I think the core independent publisher is now possible, so long as you're investing the right amounts of money for the return that the current marketplace is offering. Are you funded all with VC, pretty much? How much of that do you still use at this point? Well, we have great investors with Granite [Ventures] and IDG [Ventures]. They're very engaged with the company. They're there for us to help support us and get things done. I think as we continue to work our way through the marketplace and see what it looks like, Telltale is in a position where it's really well-placed. The channels are starting to become even more and more viable with XBLA doing one billion this year or something and PlayStation Network and Home really starting to work out. And obviously, we've been big fans of WiiWare. As we chart these opportunities, there are going to be opportunities that really take big marketing budgets and big R&D investments and big licensing expense to get off the ground. So as we continue to tier up, financing is always something we think about. There are a lot of different ways to get money in the industry; you just need to think about the ones that service the business model the best. It was recently your fifth anniversary, right? Yeah. I don't think we officially incorporated until June, but we had our website up in May or late April. So, I think that's what we're marking as the fifth anniversary. But I mark it as the day we walked out of LucasArts. Do you remember when that was? That first bloodletting they did. It was around the 10th or 12th of April. So that was a quick turnaround for you. Yeah, yeah. It was the funniest thing. We left, and E3 was coming up, so we sat down and said, "Let's get this going. We gotta make this happen." We had this huge sense of urgency, which we've always had. You look back on it, and you think it was kind of crazy, it was kind of unfounded, but it's been that rush of energy that's gotten the liftoff for the company. "Okay, we'll write our business plan, we'll bring it to E3, and then we'll raise money in June." Something like that. God, that first business plan we wrote was just... You look at it now, and it just was so sad. We were passing it around. We got a lot of great feedback from a lot of great people, and I don't think we raised a cent until the following January. We said, "We'll finish the business plan, then we'll go out for a week and talk to VC, then we'll close the round and have the money by July, and we'll be off." And that was the way we worked. But we certainly didn't know what we didn't know at that point. It was an interesting time. Then Telltale Texas Hold'em was the first thing live that following February, so 10 months in, we had the toolset built and the engine running and digital distribution up. Five years goes by fast. Well, especially when you're releasing a game every month. Yeah, well, I thought it'd be easy street by now, you know. [laughs] Yeah, right. An easy five years! Because when we were starting out, they say, what is it, 90 percent of companies don't make it past the first year? So, you'd figure by the fifth year, you must be done, right?