Let’s suppose for just a minute, that you are a developer. You’ve had some successes and a loyal following, but lately, you’ve taken some jobs that haven’t turned out so well. You’ve drifted away from your roots in order to keep your independent studio afloat with much needed capital. The last project you worked on turned out pretty well. People liked it, but there were a lot of technical issues that marred the experience and emerged in a number of reviews. Going into the relationship with the publisher, you were either overconfident or unable to negotiate a better deal, and let part of your funding hinge on an 85 Metacritic score. You missed that mark… by one, measly point.

You’re unhappy. You know what the contract said, but you feel, deep down, that the publisher should have cut you some slack and, maybe, paid out some of the bonus as a gesture of good will. No matter how hard you try to rationalize it and let logic prevail, you’re a little bitter.

Thankfully, there’s a new trend called Kickstarter that is getting some traction. Double Fine and Tim Schafer and, now, inXile and Brian Fargo meeting with huge success seeing “unmarketable” projects take off with a huge influx of cash.

“Why not us?” a voice whispers in your ear. “That loyal following would heap money on us.”

And, so, you mention your interest publicly. You’re on the road to a huge Kickstarter pile of money and a game with no strings attached. No one will try to make you change it. No one will focus test your design. It’s yours, and no publisher can take it away from you.

Unfortunately, you’ve forgotten one thing. You’ve got two other projects in progress with two different publishers. How will they react?

Enter Obsidian.

While we are unable to independently confirm this, a report on Kotaku indicates the Irvine, California based studio’s rumored next-generation project with Microsoft has been canceled. While there could be any number of reasons for this, such as missed milestones or a difference of creative vision, when I heard the rumor, I couldn’t help but wonder, “What do publishers think of developers striking out on their own?” Could Microsoft have killed the project because of Obsidian’s public Kickstarter aspirations?

Developers going outside the standard model, pitching projects directly to gamers, unbalances the equation. No longer are publishers the arbiters of good taste, determining what the public will and won’t buy, what we crave and what we loathe. Their power is eroding under the crashing waves of backer payments small and large. What’s more, one thing has resonated with the advent of successful crowd-sourcing by quality developers. The message is clear, “We don’t need publishers.” Tim Schafer and company were a bit more tactful than that, though, when they proposed their Double Fine Adventure project.

“To finance the production, promotion, and distribution of these massive undertakings, companies like Double Fine have to rely on external sources like publishers, investment firms, or loans.  And while they fulfill an important role in the process, their involvement also comes with significant strings attached that can pull the game in the wrong directions or even cancel its production altogether.”

Brian Fargo was a bit more pointed in his hilarious pitch video for Wasteland 2 and writeup on their Kickstarter page.

“This is probably the last chance for a Wasteland sequel.  We have tried to pitch this game multiple times to game publishers, but they’ve balked. They don’t think there’s any interest in a solid, old school type of game.  This is our shot at proving them wrong.”

And then there’s Obsidian. They merely promoted possible Kickstarter ideas on their website, taking the first steps on the path to a life without publishers. And while that may seem attractive, their reality is an ailing studio currently being kept afloat by “dirty, unwanted publisher money.” One can’t help but wonder how a publisher, who has put a significant amount of money into a studio, must feel about their partner shouting, “damn the man!”

If this is the case—if publishers really are seething at the idea of Kickstarter-funded games—could this be setting up a war? Will we see successful Kickstarted developers locked out of publishing deals? Maybe we are going to see new clauses in contracts emerging that prevent developers from crowd-sourcing for a period of time surrounding launch of a publisher-funded project?

One thing is certain, the Kickstarter phenomenon is only just getting started. When Double Fine rocketed to success, there is no doubt that every third-party developer perked up and wondered, “what if?” Could Obsidian’s rumored disconnect with Microsoft be the result of the developer publicly wondering “what if” themselves?

We knew it would change the landscape, and the story is still developing. You can be sure that we’re keeping a close eye on how the industry dynamics are shifting in response.

 

Update: RipTen has received independent confirmation from a source with knowledge of the situation, confirming the cancelation of an unnamed Obsidian project, as well as the reported layoffs. No publisher was named.

When asked to comment on the matter, a Microsoft spokesperson reported that, “Microsoft does not comment on rumor or speculation.”

16 COMMENTS

  1. I don’t predict the end of the traditional publisher relationship any time soon like some people have been claiming, but crowd sourced funding has certainly captured their attention, and I wouldn’t put it past some firms to feel a little threatened. I also wouldn’t jump to the conclusion that Obsidian is being punished for daring to suggest alternative funding streams though (at least not without some corroborating evidence). Good projects get shelved all the time, but if it’s true I think it would be a fairly boneheaded move on the publisher’s part. You would think they would be eager to encourage developers to seek at least a portion of their funding from alternative sources since it eases the investment burden on themselves (of course without some contractual wrangling it might also reduce some of the return from the project they see as well). I wonder if in the future publishers might embrace the crowd sourced model and require that developers raise a certain percentage of independent funding by themselves before they commit to bankrolling the rest of the project’s development, marketing and distribution?

    • Want to be VERY clear (as we were in the piece). The Obisdian RUMOR only got us thinking about how publishers might be feeling threatened by Kickstarter. 

      BTW, I love your idea that publishers may require some level of investment but wonder how the community would feel about that. If I understand your point correctly it would play out like this.

      1) Dev pitches game to Pub
      2) Pub tells Dev, “Come to us with X% from the community”
      3) Dev goes the Kickstarter or other crowd-sourcing route and succeeds
      4) Pub says “OK”… then wants to do their usual “tweaking” for marketability, possibly diverting the project from the crowd-sourcing pitch
      5) Gamers get burned by completed project =/= pitched project…

      And then… do gamers get their money back because the finished project wasn’t what they funded? Do they get jaded and slow/stop their out-of-pocket crowd funding?

      It’s an interesting theory, though. One way or the other, I’m interested in seeing how it plays out.

    • Want to be VERY clear (as we were in the piece). The Obisdian RUMOR only got us thinking about how publishers might be feeling threatened by Kickstarter. 

      BTW, I love your idea that publishers may require some level of investment but wonder how the community would feel about that. If I understand your point correctly it would play out like this.

      1) Dev pitches game to Pub
      2) Pub tells Dev, “Come to us with X% from the community”
      3) Dev goes the Kickstarter or other crowd-sourcing route and succeeds
      4) Pub says “OK”… then wants to do their usual “tweaking” for marketability, possibly diverting the project from the crowd-sourcing pitch
      5) Gamers get burned by completed project =/= pitched project…

      And then… do gamers get their money back because the finished project wasn’t what they funded? Do they get jaded and slow/stop their out-of-pocket crowd funding?

      It’s an interesting theory, though. One way or the other, I’m interested in seeing how it plays out.

      • Yeah who knows how the logistics of it might work. Rest assured publishers will probably find some way to ruin Kickstarter for everyone eventually. It’s what they do.

  2. There’s a room for both. AAA titles cost 20-30M to make, sometimes more. Until Kickstarter projects start generating that kind of money, publishers have little to worry about.

    • Agreed, however, there is limited manpower. If publishers contract with a developer, advancing capital on a project, there is an expectation that there will be a certain level of devotion to that arrangement.

      Even if it isn’t logical, the perception COULD be that the developer is using publisher backing to do the project they would rather be spending time on.

      Additionally, a large part of that cost is packaging, marketing and PR. The Kickstarter model, at least right now, is doing a lot of that generation, creating a captive and attentive market.

      Certainly, I don’t expect to see Kickstarter funded console games anytime soon, and you probably won’t see developers that ONLY or PRIMARILY develop for consoles dipping their toes in the crowd-sourcing waters anytime soon.

      The issue is with developers that have a history of making games for PC AND for CONSOLE. If they can make a “no strings attached” PC game without publisher intervention, that is also fully funded with sales goals met up front, it’s likely to be infinitely more appealing than a console game. 

      As I said, though, this might be largely an issue of perception. Both of the instances I cited in the piece are different flavors of “we don’t need you, publishers.” That has to sting just a bit, I’d think.

      • Limited manpower? There are more than enough developers to go around. Some will be attracted to Kickstarter, with smaller budgets but more creativity, and others will continue to rely on the big budgets that only publishers can give them.

        Kickstarter addresses a new, different market: low-budget titles for niche audiences. I just don’t see the two conflicting. It’s not like developers will be fleeing to Kickstarter en masse, leaving publishers high and dry. A few might, but there will be plenty of others in line eager to take publisher’s money.

  3. I think that both this story and my cutscenes piece speak to what’s really going on in the industry. These AAA games are taking untold piles of cash (metric-fucktons of cash – apologies to Bulletstorm) and maybe, just maybe, they’re not all that worth it. 

    Now, I’m not saying that games like Skyrim, Batman:AC, Mass Effect, or Assassin’s Creed aren’t good. Quite the contrary. But there comes a point where the law of diminishing returns sets in. For example: I’m big into home theater. I know people who have spent tens of thousands of dollars on sound deadening and acoustic panels and other components to get a negligible ‘upgrade’ in sound or picture quality. Most of the time you can’t tell the difference, they just like spending the money to thump their chests and egos.

    There are some downloadable games through PSN, XBLA and the App Store that I’ve bought and had just as much fun with as the AAA titles that took years and teams of hundreds of dedicated developers to create. 

    I don’t care what anyone says: gameplay is PARAMOUNT. Everything else is merely window dressing or support for the gameplay. Screw it, I’ve tiptoed around it long enough. My GOTY last year was “Where’s My Water?” by Disney Interactive. Yes, I put well over 120 hours into one play-through on Skyrim. Arkham City was awesome. AC: Revelations kicked ass. But you know what? I had more unabashed fun with “Water” than any of them. It didn’t have mind-blowing graphics or even a storyline. But the gameplay was there so much so that I’ve beaten the game, erased my progress and re-beaten it at LEAST 50 times since I bought it last October (I think that’s when it came out). 

    Obviously different gamers prize different things over others. But from where I’m standing, the industry either needs to innovate more gameplay and less grandiose for smaller budgets, or face more lay-offs like the spate we’ve seen recently. Then of course it could also be chalked-up to the ‘dumbification’ of certain segments of the playing public. I mean, why else would FPSes like CoD sell millions of copies each year to dudebros with little more than new palette swaps and slight tweaks to the story? 

    It’s late and I’m tired. G’night.

  4. The real problem with the industry is that the publishers have the upper hand over developers and are taking complete advantage of the situation.  In exchange for their $$$ Publishers take possession of the IP (if they don’t already own it) and receive ALL of the profits and the developers are left with just enough to pay salaries and not a whole lot more leaving them no choice but to accept yet another deal on the publishers terms.

    Kickstarter is offering a potential escape from this vicious cycle by allowing developers to make games exactly as they would like make and profit from them.  

    Crowd-sourced funding won’t put big game publishers out of business but as more developers successfully get their projects funded that way (and if those projects turn out to be hits) the weaker the publishers’ bargaining position will become or at least they may feel that way.  History has shown that big business is not afraid to stifle innovation to protect it’s advantage so it’s not far fetched to believe that game publishers will put pressure on developers that go that route.

    Now this is all speculation and we may just end up with separate publishing models that will coexist peacefully and cater to different markets.  I don’t have much confidence in that happening though.

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