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Figure 29. Qualitative systems model of creativity in the games industry by Tschang (2007).
The objective of the model building exercise here is to include the interactions between developers and publishers as well as between developers themselves. These are both tied to the innovation processes of the developer firms as well as to the way in which the market for games takes shape.
Thus all these factors are included in the qualitative systems model built on the basis of interview data on game development firms. The following sections build partial models of the effect of gatekeepers, the emergence of demand, the entry and innovation processes and the effects of information and knowledge exchange among the firms. In the final section the partial models are brought together to construct the complete model.
181 Table 21. Summary of empirical data on competition.
Firm Founded
Employees
Platform
Subcontractor Developer Publisher
Competes for Competes with
View on competition
Success factors
Project selection based on
Alpha 2004 35 Mobile ● ● Deck
placement
Two international companies
Competition against low quality developers
Small size, Risk taking ability, Originality
Market potential, Competitive situation, Feasibility, Perceived risk, Available resources
Beta 2002 27 Mobile ● ●
Skilled labour, Publishers developing their own games
No one Sets upper limit on price
Quality, Total service package
Feeling, Budget, Legal matters
Gamma 2000 24 Mobile ● ●
The souls of the end-users, Deck placement, Funding
No one
Group effort against international big companies
Timing
Market potential at that moment, Technology constraints
Delta 1999 100 Mobile ● ● Deck
placement, Skilled labour
Several international companies
Neck to neck with international heavy league players
Quality, Brand, Reputation
Competitive situation, Size of the niche, More art than science
Epsilon 2000 170
Online, mobile, handheld,
console
● ●
Race with competitors to new countries and applications
Few global and several local entertainment and media providers
We do our thing and we are not that interested in what others do
Timing
Commercial potential, Good will
Zeta 2002 9 PC,
online ● ● Publisher
attention Not specified
Imposed by international publishers
Originality
Available resources, Originality of content and story
Eta 1995 25 Console,
PC ●
Consumer mind share, Skilled labour
Other forms of entertainment
It is about owning a segment that is large enough
Business competence, Quality
Interesting characters, Usability
Theta 1995 13 Console,
PC ●
Skilled labour, Publisher attention
Not specified
International publishers are very picky
To do something different, but not too different
Resources, Funding, Team excitement
Competition was often seen as imposed by international publishers. On the other hand, competitiveness was measured against international established companies, either as an individual firm or as a group effort by Finnish firms. Competition affected the firms differently. At one extreme competition was seen as setting the upper limit on price, i.e. the project budget, whereas at the other extreme competitors were seen as irrelevant as the interest was in the firm‘s own
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operations and not in what others do. Quality, originality and timing were named as the dominant success factors.
We begin by approaching competition from the viewpoint of game titles, i.e. products. Selection of game titles entails three rounds. The first is the phase in which potential game ideas and concepts compete with each other within a game developer firm. Only a fraction of game ideas is developed to the stage where they can be sold to game publishers. The second round is that of game concepts and demos competing for publishing deals. Here, too, only a fraction will survive. The third round is selection imposed by the consumer market. As most published games are financial disasters, the bulk of the game titles will make losses and only a small number will end up as hits with large sales. The interest here is in how some game ideas progress to be developed to the concept stage, some of them to the demo stage, a fraction of those to a finished game and finally a minority of the finished games end up as hits.
6.2.1 Selection imposed by developers
The criteria for game concept selection by the developer firms are often described as more of an art than a science. The interviewees used words like feeling, excitement, intuition and consensus to describe the decision process. This is well described in the following quote.
“We do not have any scientific method or scoring system. Somehow consensus arises if consensus is required. The founders are more equal than others, but we have also developed ideas put forward by others. And if the team gets excited then we start doing it.” (Theta)
However, besides such soft things a necessary condition for the game concept to be developed further is the faith in its ability to generate sufficient revenue. In addition to low market potential, game concepts may be discarded because of encountered or anticipated technical problems as well as due to lack of funding to cover the estimated budget. These reasons override any greatness that the content might otherwise have.
“We have killed projects if we have felt that even though the idea has been good but for some reason these kinds of games do not sell at the moment or that the developer cannot do it or there are technical problems for which the game will not run properly. So we have killed quite many projects after starting them and even after we have spent money on them. There is no sense in doing a game if you don‟t believe that there is business. That is a raw fact. If you don‟t believe that it will bring you money then it will die no matter how great a work of art it is.” (Gamma)
The creation and selection of new game concepts is very much guided by games currently on the shop shelves. It is of prime importance for the developers to create game concepts that differ from established brands in strictly defined genres.
“The typical reason is that if there is a lot of competition. If there are big competitors then it will not pay off to do it. For example, it is not a good idea to do a football game because there are big licences and brands like EA Fifa against which it is quite impossible to compete.” (Delta)
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It seems to be quite a paradox to come up with an idea that would be internationally appealing to the masses but not yet implemented by anyone. As such international appeal of a new idea cannot be determined prior to the actual launch it is a matter of faith and intuition. Thus, a popular strategy is to be original enough to differ from existing brands but similar enough to justify market potential.
”Q: Do you try to avoid such strictly defined genres?
A: Actually yes, but it feels like even the slightest innovative twist that we offer seems to be too much, unfortunately. We have tried some new approaches lately so that the high concepts would not be totally alienating.” (Theta)
The balancing of originality and familiarity is a common strategy in cultural production in general.
The replication of familiar elements in games has received criticism: ―If we are to see games accepted as a contemporary art form, game designers are going to have to stop using ―market pressures‖ as an excuse for their lack of experimentation‖ (Jenkins 2005, p. 321). This, however, is an unfair assessment as there are countless aspiring game development firms working on innovative ideas, but they cannot get their products to market as publishers are unwilling to take the risk. In addition, a fundamental difference between games and most art forms is that game development is extremely expensive. Game development entails more than one artist and mere material costs.
6.2.2 Selection imposed by publishers
Game development firms do not encounter a faceless market. Instead, they form and manage relationships with publishers, and also with operators within the mobile sector. Such relationships require a lot of work to create and maintain and this is a very conscious effort.
“The product has to be in good trim. If it has been for some time and then you have some history, a certain reputation and brand that we absolutely have. It is very important that you have long experience in working with the same channels and you can show that it has been profitable for both sides.” (Delta)
When publishers are making the decisions on which game concepts to finance they have limited knowledge of each potential product. Deals are made without the ability to make an objective assessment of the merits of a particular product. This is because often the product does not exist prior to the deal and the publishing deal is made in order to turn a demo into a game. There may be a minute of the game, some animation, some documents describing the game concept and the enthusiasm and track record of the people pitching the game. This means that the reputation and trust that enable the creation of such contracts are a valuable asset for the firm. This also means that the publishers are inclined towards making deals with people they know and with firms of whom they have prior experience of successful projects. This is illustrated in the following quote.
“At the end of the day we are selling intangible stuff and when we are talking of a product that cannot be seen then it is a matter of credibility. The product has to be credible and the firm has to be credible so that you can deliver. One way is not to promise too much and deliver faster or better and then you get a good reputation. Image is important, also how you present things. We have
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always paid attention to how we present the product and how we talk about ourselves and how we take care of our network. We have been building PR with the press and relations with publishers and device manufacturers and that has been very deliberate.” (Eta)
Such relations do not emerge as a result of demand in the market turning into a favoured position.
After all, there is no real demand for games in the sense that they are not essential to life, as are food, housing and clothing. On the contrary, the market is created through the continuous development of relations with publishers or mobile operators.
The demo is usually presented to several publishers, in order to find one to finance the rest of the project and to make a contract on how potential profits are to be shared. As royalties are paid only after the publisher has earned back its investments, it is fairly rare that the developer will actually get any. Most games are financial disasters and the publisher ends up losing money on them.
However, the first challenge for a developer is to get a publishing deal.
“You go with the package to the publisher and if the developer has been able to finance the project that far that they have some material to present to the publisher, then that is where it usually ends.
Like you can show the idea and how it runs on a screen and you have one minute of the game done.
Then they say yes or no. At that point the publisher comes to finance the project. In some cases the developer can develop the game further but the risks increase all the time. Even if you have a completed game it is possible that no one will want to publish it.” (Theta)
This applies mostly to the PC/console sector, whereas in the mobile sector the operators have a gatekeeper role. In the mobile sector the publisher makes a contract with the operator and this usually entails sharing the revenue by certain percentages from the first sale onwards. The main differences are that operators do not invest in the development of the game and mobile publishers negotiate deals with several operators to reach a larger customer base.
According to Jenkins (2005, p. 322) the power of the gatekeepers within the games industry has had an impact different from that of the film industry. Filmmakers around the world have been able to experiment and to create the language of cinema through an emergent process whereas within the games industry the number of platforms has been limited and thus all the games have had to pass corporate scrutiny. Jenkins (ibid.), however, reports the lowering of this barrier because of the proliferation of open-source game engines, for example, which makes it easier for independent game companies to reach the market. This, however, is a somewhat idealistic view as there are no signs of the struggle of the independent developers getting easier. Some of the interviewees stated that in recent years the publishers have increased their demands on what the demos have to include before any discussions can begin. Thus, the cost of demo development is rising and the barrier to entry may actually be getting stronger.
The publishers can afford to impose such demands on developers because there are so many aspiring firms willing to make great sacrifices to get a publishing deal. As long as there is a permanent oversupply of enthusiastic game development firms, the publishers can make them compete fiercely and select their favourites. In the games industry the oversupply of cultural labour