Q&A: Stardock's Wardell Talks Distribution Revolution With Impulse

In this wide-ranging Q&A, Gamasutra talks with Brad Wardell, founder of publisher Stardock (GalCiv), about how its new distribution platform Impulse could breathe new life into PC gaming. The series has a unique opt-in subscription and microtransaction model and MMO developer services, and details on its exclusive publishing deal with Gas Powered's forthcoming Demigod. Can you introduce us to the concept behind Impulse? Brad Wardell: Impulse is going to be our new digital distribution platform. We've been doing digital distribution for years and years on our own stuff. We had Totalgaming.net for games, and Object Desktop for non-games. What we've done with Impulse is we're consolidating it on one platform, so you can literally manage all of your games or all of your applications and tools and utilities all in one place. Historically, we've just put our stuff, or if indie developers wanted us to distribute their stuff, we'd let them, but we didn't really push it. Now, with Impulse, we're going out and getting major third-party games and applications put on here as well. By the end of the year, you should be able to get most games on Impulse. Is this going to adhere to a genre strategy? Is this all going to fall in line with what you're known for? BW: No, it'll be all games. You'll be able to get to them on the Internet. For example, players would have a choice between various publishers like THQ or Sega, etc. So it's sort of a Steam competitor, then, but more broad? BW: Yeah, exactly. It's more broad. We like Steam, and I'm currently playing Team Fortress all the time, but we've talked to a lot of publishers and developers who do not want to replace Wal-Mart at retail with a digital front. They want there to be more avenues for them. I know there's Direct2Drive and GamersGate and other things like that, but in terms of a consistent platform where you can just manage and run your games and be a part of the community and that sort of thing, that's what Impulse is bringing. We're starting to go out and get not just game content, but non-game content as well. What kind of stuff? BW: Well, for example, we just signed Gas Powered Games' Demigod. Stardock is going to be the worldwide exclusive publisher of that, at both retail and digitally next year. I believe we're going to have most of the game publishers on here as well, we hope, by the end of the year. Demigod will be coming out in February next year. But when it comes to non-game related things? BW: Oh, non-game? I can't talk about it yet. Just broadly, I don't mean specifics. What kind of content? BW: Like paint programs, antivirus, disk defragmenting... What about media content? BW: We're not going to be doing movies or music for that. We have a lot of work with the PC OEMs, and we don't want to try and compete with the any of the things that are going on there. It would make it much harder to get it distributed widely. The main reason we wanted to talk to you guys about this is because I know you guys have been covering how the PC game industry is going from here. Impulse has integrated into it support for what is called mini-subscriptions and micro-expansion packs. Currently, a lot of people think that a subscription model is the only way to go, with some sort of MMO, but what we think is that a lot of games will come out with support for people purchasing additional content. That itself isn't that new, but that includes also having optional subscriptions. You could, for a few dollars a month, subscribe to something where you keep getting new maps, new characters, and new items, but it wasn't required and you weren't forced to subscribe -- and that's the critical part. A lot of people will go, "Why do I have to be nickel-and-dimed in every single game I play?" But if you get into a game and really like it, then here's an option to get new stuff out of it, rather than the current model, which is "Publisher gives developer big advance. Game gets made. One patch is made, then expansion packs." That's it. Then all the people who are into the game are basically abandoned after that. It would be subscription-based -- so it would be a monthly charge? BW: You would be able to do both. You would have that option. You could either buy the subscription and get all the content as it comes, or you can pay another price and get just the content that you want to get. It sounds potentially like the microtransactions model, like buying swords and stuff for a game. BW: The thing that's nice about subscriptions is that the developer then has a steady stream of revenue coming in, so they can then start to plan out. The problem with microtransactions on their own is that they're kind of hit-or-miss. And microtransactions lend themselves a little bit more to abuse than subscriptions. For example, we're well-known for releasing free updates with new features. We don't want that to go away. We're going to continue to release... like with Demigod, we're going to be doing free updates for that for a year. We don't want someone paying five dollars for horse armor or something like that. We want people to get that sort of thing for free. But if they want to get significant new content for a game that they love, here's an option to do that. So we're talking about something more significant than a single item? BW: Exactly. You don't want players to feel like they're being nickel-and-dimed. But at the same time, for people who really got into a game, they don't want to feel abandoned after a year, which is the current PC model. Well, for years, I thought it would be nice if console games... it wasn't feasible up until the current generation that it could support something like that. BW: Yeah, they didn't have that. But it's an idea that I, as a gamer, personally had years ago, the idea that "Why can't we get additional content for these games that we love so much?" They're kind of self-contained. BW: And yet make them optional, so you don't have to. If I want to play [a game] and I like the game as-is, I shouldn't have to pay for a subscription if I don't want to. But if I really get into it, and it starts giving me more realms to explore, more castles, and more armor -- all kinds of cool stuff -- I'm willing to pay for that. You know... it doesn't take that many people to make it worthwhile. I mean, even if you only have 100,000 or 150,000 people subscribing, or even 10,000 people subscribing, you're making $100,000 a month. That's enough to have a dedicated team constantly enhancing the product year after year. Well, the same thing is true of Nexon, who do MapleStory. They're totally microtransactions, but I think it's something like three percent of the people who play actually buy a lot of items, but that's enough to give it a huge profit, basically. BW: Exactly. There are some people who just play for free. BW: Right. But it's a win-win for gamers and a win-win for developers, because the current PC game model is just not that stable. The whole "spend millions of dollars on a game and then one expansion pack..." Even if it's a hit, it's really hard to recoup it, especially in an age with World of Warcraft and things like that. There's been a lot of discussion lately about piracy and how that affects the market. BW: Yeah, I wrote an article on it. I'm familiar with it. I see it both ways, kind of. Obviously, I agree that not putting in the aggressive copy protection is better for everybody, because it's cracked anyway, and it just creates a really unpleasant experience for people who actually pay, rather than creating a barrier for pirates. BW: Exactly. Not to mention that an increasing percentage of PC users have laptops, and if I can't play a game on my laptop, I'm not buying it. And if I'm going on a trip like this, I'm not taking a bunch of DVDs with me and my games. Every little bit matters to me. You just want to install on your laptop, and your desktop, and just... BW: Play it whenever I feel like it. If I'm paying $40, $50, or $60 for a game, don't treat me like a criminal. Speaking of which, if you have installed multiple times, how do you manage the save file across multiple installs? BW: The save file? You know, like your progress in the game. Is that something you've looked into? BW: It depends on the game. Demigod is going to have a persistent universe, so all your characters and stuff are server-side. But what I'm saying is that it's not the platform that does that. It's the individual implementation from a game point of view. Going back to the piracy thing, I think it must be an issue, though. BW: Oh yeah, piracy is a huge issue. But there are ways to solve it. I don't like piracy. It drives me crazy when I see my stuff up on some torrent, -- especially when some people go there and criticize the game -- but the solution isn't to make it harder for the users who bought the game. That's the thing that's insane. That's not stopping the pirates. That's just making it inconvenient for the users. The last time it came up for me was with Starforce, which really was a PR nightmare for them, more than anything. BW: Oh yeah, because it would install hidden drivers on your machine. No game or piece of software has a right to install drivers on your machine without telling you what they are. That's really a problem. And that hurts their sales in the future. But here's the thing. What we do with our games, like Sins of a Solar Empire, we've already released two updates for it, and we have another update coming out. We can control who gets those updates, because we have every serial number that we've actually shipped that's out there and is connected to a person's e-mail address. So sure, pirates can get your game, but at some point, it's more convenient to just buy the game. If you support your products after release, you keep getting people who will convert over because it's just too much of a hassle to pirate. And the people who don't are not a lost sale in the first place, because they never would have bought it. Do you have any research besides your success that suggests that supporting the game after release does increase its sales? BW: It would be so hard to do a truly scientific study on that, but I think common sense says it does. First of all, every time you do an update, you get some media coverage of it, so that's almost like free advertising. Two, some number greater than zero of people who want to pirate it who don't want to go through the trouble of trying to find yet another update are going to buy it. So it's certainly not going to cost you sales. Therefore, it has to increase sales. I'm just thinking about the cost of developing the update. BW: It doesn't cost very much. Like on Demigod, we're going to do a full year of updates for that, too. Gas Powered Games has converted over to the way we're doing things. When you're doing the budgets for your game, you know this far out for a game that's not coming out for a year that you're going to do a full year of updates for Demigod. How does that affect the budget? Do you decrease the budget for the initial product, instead having a full budget over the course of the product's lifespan which includes all the updates? BW: We just increase the budget overall. So the main game doesn't lose anything. You just add a little bit on the back, and you're going to make it up in extra sales. That's really interesting, because it sounds so counter to the mercenary way that a lot of things in the game industry are run. BW: Yeah, but everyone says that the PC game industry is dying. Maybe they should change course. It's a discussion I've had. I think when people say the PC game industry is dying, they mean that the way we've done the PC industry for the last 20 years is dying, and they sort of equate those. The way we've been doing it is the PC gaming industry. It's not. It just has to evolve to survive. BW: That's what Impulse is about, putting in the features necessary to allow to evolve to the next level. Integrating extra content into a microsubscription and microexpansion packs, letting people get to their games however they want. If I buy a game at the store, let me download it through Impulse, so I don't have to worry about losing a CD... not having any sort of copy protection, and it will be so seamless. Some of our games have activation. Galactic Civilizations II does. But nobody notices it, because they're downloading it through this anyway, so it's not a big deal. You're talking about how you'd be frustrated if you couldn't play your game on your laptop and PC, yet you're talking about activation. So you'll have to activate once, and then it will be okay? BW: Yeah, once you activate once, you're set. So the impetus is just to have a user-friendly service? BW: Right. You said you're working with other publishers. Do you have a set of standards they have to adhere to, or do you just say, "Your rules are your rules?" BW: It depends. We're getting more comfort with the way we're doing things. I can't speak for any particular publisher, but generally speaking, even what's on Steam usually is not that draconian. Sure. It's almost like a philosophical question, getting people to understand their audience. It's a big problem in all markets right now, I think, is the disconnect between the audience and the people who supply the content a lot of the time. BW: We're hoping that Impulse can provide a game development platform for developers, so, for example, where Steam has specific features [via SteamWorks] for first-person shooters, we're going to have persistent universe support and that kind of thing for strategy games and so on. So support for game developers... pro or indie? BW: Both. Sins of a Solar Empire and Demigod will both be able to make use of the matchmaking services, and you'll have a persistent character in Impulse that you use between games as you build up your stats, and you'll have friends, and that kind of thing. So it's sort of a metagame. BW: Exactly. But it gives a reason for people who are into one kind of game to try out another game and that sort of thing. Are we talking like an Xbox Live sort of thing, where you have a name and points that you earn? BW: It's a little bit more than that. The community thing isn't in yet, but you'll be able to have your own blogs, talk about your own experiences, setting up clans, and that sort of thing right within it. You can work with other people, play games with other people, and give tips and tricks to other people within it. One of the things Demigod is going to have in terms of a persistent universe is that you have this world full of arenas that you keep conquering, but it lasts between games. It's kind of like what you were talking about earlier, where it's not just on my local machine. I'm part of a virtual world. I'm just trying to get a handle on how much is tracked between different games. BW: It'll depend on how much each publisher wants to participate, really. Valve has Steam, but Stardock's Impulse has the advantage of Stardock being an actual game publisher as well. Obviously, Valve can do it on Half-Life and their own games, but we have Gas Powered Games' games in there, and Ironclad's, and they'll all have the seed of something that others can grow and make use of. So say you buy one of your games at retail after this service is launched. Will it install this service as part of the retail disc? BW: Yeah. We want people to make use of this because for one thing, it will let you re-download the entire game. So from a support issue, if they've damaged one of their CDs, we don't want people to think like, "Oh no, my CD is scratched." Once they get on here, then from then on forever, they can re-download the entire game and not have to worry about their CD. Even if they lose their serial number, they only need their username and password on this. Even if they lose that, they can get that e-mailed to them. That's sort of bridging the gap between the retail present and the online future. BW: Right. We make no distinction where you buy. People who buy Galactic Civilizations 1, back from 2003, in Germany, they'll be able to download this and be able to download all the latest versions of Galactic Civilizations from scratch. They don't need their CD anymore. They can just toss their CD. They just need the key. BW: They just need the key that came with it. Going back to the question about discussing Impulse as a development platform, you talked about attracting indie developers and maybe pro developers. Are you just talking about using this as a distribution channel for them, or also...? BW: A little of both. On the distribution sidethere's professional developers and professional publishers. We'll use Gas Powered Games as an example, because they're a professional developer, right? They make their game, and then someone like Microsoft or THQ in the case of Supreme Commander, or in Demigod's case Stardock, publishes it. But historically the developers are cut off. They're at the mercy of the publisher. With Impulse, though, they can actually generate money by using Impulse to sell their game. Because we have an affiliate system, which is something that no one else has. Let's say if Gamasutra had Impulse. When you install Impulse from Gamasutra, it would print to the registry the Gamasutra affiliate ID, and every time someone ever bought a game or anything from Impulse, Gamasutra would receive 15 percent of the gross on it. What's nice is that developers, even the ones that have publishers, can essentially push their own game and still make 15 percent of the sale, which is nice, because historically, they're locked out. You can tell people to go to Best Buy, but there's no affiliate system for that or Steam, or what have you. There's no affiliate. Even today, if a publisher puts their title on Impulse, anyone can try to sell it, just like if my title is at Amazon.com, there's nothing stopping anyone from trying to get people to buy it from Amazon.com. Yeah, I guess my only question is... you're talking about Gas Powered, how they're published by THQ, and obviously THQ has a relationship with Impulse, but what about for the theoretical publisher that doesn't have a relationship? BW: Right. In that case, if they don't have their game on Impulse, there's nothing we can do, but it creates an incentive for everybody to put their title on Impulse, because it's a way of generating higher amounts of revenue. Let's say for example THQ used Impulse as their store. They would get the 70 percent royalty because they're the publisher, and then they get another 15 percent as the affiliate, so they're making 85 percent. That's better than the typical e-commerce solution. If you went to Digital River or whatever, they can't even match that. When it comes to development, you're not offering any tools or anything? You're just trying to attract developers to distribution? BW: Demigod's going to be the first one to make use of this... The flagship? BW: Yeah, flagship of additional services that are going to be able to apply to developers. If you want a persistent universe, if you want to provide subscriptions to your users, if you want to provide mini-expansion packs, we can do that. In fact, we already have that on the desktop side. It's like, here's my software, and then I can have this extra content that just pops in here because I'm subscribed to Object Desktop. It pops up every month, and I can try that out. Right now, because we can support that right out of the box, a developer or publisher who goes "You know, I'd really like to do this. I'd like to be able to provide this,"...we're the first platform that can seamlessly do that kind of thing. It's interesting, because right now there are so many strategies percolating around the industry, and so many platforms, that I don't think anyone knows how things are going to shake down now. BW: I don't know if there's one way it's going to work, but I think most people will agree that they've played at least one game in their life where they would say, "You know, I would pay a few dollars a month if that game kept going and going year after year." Especially if it's optional. I want to stress that. You don't want people to feel like they have to pay for some service to get to play the games. That's why free updates are so important. You have to say, "We're doing free updates, but for the hardcore people who want to see new stuff being made..." That part, you have to say, "All right, what are some new things that you guys want to see?" You talk to your community, and they'll tell you what they want to see, and you make it. At that point, obviously you weren't holding back stuff, because the users themselves are the ones who came up with it.