[MUD-Dev] Evolutionary Design

Derek Licciardi kressilac at insightBB.com
Sat Jun 15 14:47:39 New Zealand Standard Time 2002

From: Dave Trump

> Mostly the later.  Everyone I've talked to about making a ORPG,
> including other computer experts, says the same thing: Why would
> you want to make a game?  The vast majority of games dont make
> money.

> This is certainly true of the bjillions of doom/warcraft/deer
> hunter clones out there.

> What's worse is when you encounter a suit and tie financial type.
> They hear "...GAME..." and they think "No chance to make money."
> Then they hear "...play it over the INTERNET..." and they think
> "Another dotbomb."  You get 2 foots in your butt as you fly out
> the door.

> Until the day when most of the loan agents and venture capitalist
> around have played an ORPG or at least have a nefew that has, this
> industry isnt going to see the explosive growth we are all waiting
> for.

Hopefully it doesn't take that long, but your point is certainly
supported from our experiences.  My take on the whole situaiton is
one part investor education and another part publisher problems.

For games like Atriarch, I suspect their publisher woes come from a
simple financial problem of which they have no control over.  I, as
a publisher, know and understand that my $2M investment in a PS2
game will make such and such a return.  I have numerous databases of
previous investments that I can use to compare to and support my
logic with.  Along comes a company with an MMORPG, that I've heard
is a genre that is difficult to get into but makes money hand over
fist.  Even though the perception is that of money making, I have no
database that I can refer to to support my claim that the $2M
investment would be better spent in a MMORPG.  Without a doubt, they
fall back to what they know and besides, with a PS2 game its most
likely just a garage studio begging for a publishing deal that I can
rape for about 80% of the entire project.  After all ~20% royalties
to the developer is standard practice in the industry.  So would I
rather put my money in to a project I can have 80% of or would I
rather put the same money into a project that already has $6M
invested in it, knowing that I can't get better than say 30% of the
project because of the projects previous capitalization?  Its pretty
simple for a product-focused publisher to NOT see the small piece of
a long-term revenue stream being greater than 80% of a 3 month boxed
sales cycle and hence Atriarch has trouble finding publishing.  Not
saying this is totally why, but if I had to guess competing with
traditional console and PC game funding hurts the MMORPG funding
prospects of many a developer.  This won't change until publishers
learn how to be a service company and understand the value of an
MMORPG as a service.

For projects still looking for investors to fund the development,
its a different story.  Publishers are completely out of the picture
until you get to the "I only need $2M to finish this stage".  If you
have a huge motion picture license this might not apply. (ie Matrix,
Star Wars, LOTR) For the rest of us its a harsh reality.  So we hunt
traditional sources of funding.  Typically our friends and family
can't front the cost of development because the budgets for MMORPGs
are now 2-3x greater than budgets for new single player games.  VC
could help but as my previous post states, they just don't get it at
this time.  Interestingly enough, as more VC gets involved, I think
it could mean the leveling of the playing field between developers
and publishers.  No longer will publishers be dealing with
shoestring budgets for developer side legal help.  They'll be
dealing with seasoned wall street investors that won't be pushed
around when cutting a publishing deal for a product.  The problem
still remains as Dave Rickey said, "$400 million dollars a year, and
no way to explain to the un-initiated how it works?"  VC ==
unititiated and once we solve that problem, I believe the industry
is going to take off like we have never seen.


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