THQ Partners' Walsh: Partner Programs Bring More Creativity To The Industry

Major console/PC game publisher THQ (UFC Undisputed 2010) has done publishing and distribution deals for other companies for some time, but it's adding its recently-revealed Partners division for "more focus." The division, tailored to larger firms who may want to self-fund some or all of its game's development and lean on THQ for distribution and marketing, will "provide select developers and publishers access to THQ’s global retail and online publishing network". So says THQ Partners president Tim Walsh, who tells Gamasutra that developers and publishers will benefit from having a central point of contact, "Hopefully I'll be able to work with some of the larger studios and developers who are considering a partners type of agreement," says Walsh. The brand-new division is just starting to explore its options, but in the long term, Walsh hopes that based on each party's resources and what they bring to the table, individual deals will be tailored to be "win win" for both parties. The model for THQ's partner program is obviously EA Partners. Like THQ, Electronic Arts had long acted as a publisher and distributor of third-party titles, but established EA Partners to work with larger companies such as Valve, Epic and Harmonix/MTV. These companies retained IP ownership of their games and took a larger cut of the profits, but relied on EA for its distribution muscle and worldwide retail and marketing reach. (Some subsequent EA Partners deals are closer to a conventional publisher/developer relationship or a hybrid.) Walsh says it'll broadly be similar for THQ Partners -- partner titles will differ from other titles in the THQ publishing portfolio "only in the sense of where they come from," he says. "We want to give recognition to the source, especially if it's existing IP." "The economics of the video game business have evolved so that it's possible now for development teams to secure financing for their development... if someone has done that, they may want to consider a partners-type deal, because they're going to be able to retain more of the margin," he says. "At that point they also want to control the look and feel of the game," Walsh adds. "If you're one of those companies, then we have a program that allows us to get your products to market, leveraging our global sales and marketing team." Given that the economics of the game development business are shifting such that working with a partner-type program is not only viable, but even desirable for many companies, how might the landscape shape up? "There are plenty of groups out there with IP and with development teams -- more than enough that, even if all the major publishers had partners programs, we still wouldn't be able to get to the point where there'd be a shortage of high-quality projects," says Walsh. "Longer-term, I think it's an evolution of the market," he suggests. "As things get more and more digital-oriented, retail is going to become just one revenue stream. Over the years, as that continues to evolve, at some point development teams will say, 'well, look -- we don't need to own our retail distribution channel." Many companies are likely to find they're better-served outsourcing such an expensive piece of overhead to a partner, says Walsh, with the added bonus of being able to focus solely on creating games as content. "I see that definitely as a pattern, not so much in the near term, but maybe medium-term," Walsh suggests. "Maybe the case will be that there ends up being just a few global retail publishers that everyone uses." And those few global retail publishers capable of offering such programs are already rivals, so there'll be little effect on the way they compete with one another, especially because there's plenty of room for everyone: "You can only have so many titles in a partners program," Walsh points out. "It's limited -- you don't want to become just a distributor, so there's a natural limit on the number of titles that any major retail-level publisher would pick up." The big question, then, is what THQ is seeking in its partners. "I think it's a development studio that has the ability to build their own content, have their own production teams -- they may or may not have a global brand management function, and they have a slate of properties, whether it's one, two or three titles a year, and they have plans going forward for several years," he explains. "That's ideal, because for me it gives us a chance to create a relationship, and for them to get to know THQ. And as time goes on, you just get better and better at execution." For the fiscal year, Walsh says THQ hopes to pick up two or three partners that have that sort of profile, in addition to "one-off" global and regional deals. "It doesn't have to be someone that has a long-term type of strategy," he points out. "It could be the case that there's a game being published by a Japanese publisher, and they're looking for European distribution." Walsh says a good side effect of the partner format is an expansion on the creativity on offer in game development: "When you rely on a publisher to make the decision on whether or not to invest in the developer or the IP, even the large publishers only have so much that they can invest -- they have their own stable of sequels, so the number of completely new games and IP is limited, because there's just not that many spots." So if a company can simply focus on backing and creating its own idea, and then still have access to a global publishing network, "that allows new ideas to come to market," Walsh says. "That's what's really exciting about it."