Telling Tales

Telltale was formed in 2004 with an eye towards building a business model for the emerging digital distribution market that we saw on the horizon. We believed that the episodic model could succeed with the assistance of digital distribution, which was a catalyst to make it happen.

We left LucasArts - Kevin Bruner was a co-founder - and we set up Telltale. We went out and got angel money in 2004 and produced the first Bone games, and really started working on our production pipe.

Then we launched, in partnership with GameTap, Sam & Max Season One and after that we raised our series B funding, and with Sam & Max that was the first time that anybody had released episodic titles on a monthly basis. We really believed from our original vision that being able to come out on a regularly scheduled basis was the key to calling ourselves episodic - because you'd get that audience that returns for their monthly dose of product.

We followed that up with Sam & Max Season Two, then Strong Bad on WiiWare, and now Wallace & Gromit on Xbox Live, so over the last five years we first set up a company and raised money, then we built a production process that allowed us to release one product a month. We licensed in progressively bigger titles, and we've opened up our distribution channel.

We've gone from 10 people to 65 in that time, and now we're going after another tier of licenses. We're going to continue distributing into the channel we've established, and we're also focusing on working on mechanics, and starting to evolve the Telltale gameplay in interactive storytelling, and better executing the episodic model.

We've got three seasons behind us now, there's a whole lot of data about users that we have - what the right price point is, what the right size of content is, how to marry that to the online community and what Web 2.0 offers - or 2.5, or 3.0, or wherever we are. I know that hardware is going to start playing a bigger deal in terms of what Xbox Live is going after but we'll continue to evolve the product out holistically so that it takes advantage of everything that digital distribution and being online allows you.

I think the biggest thing we've needed to be fluid about is the fact that early on there were preconceived notions of what episodic meant, but that hadn't been delivered. We responded to those preconceived notions, and now - after we've done a couple of seasons that were about making sure that every game was really large and self-contained - we're more redirected into making sure that every game is connected and leads to the next one, and engages consumers over time.

We had an original philosophy that everything needed to be standalone, and now we're moving to thinking that the season is the season, and most people that will enjoy it will purchase the whole season. We need to deliver a whole season-long experience that keeps them engaged for the whole six months and doesn't lose them at any point, and doesn't tire them out. That's the challenge.

The thing that's got us the most converts to what's good about enjoying a season is that everything month you get something new, and in-between episodes I can talk about it to my friends and anticipate it. We're going to be doing even more to support that, because when we did the subscription model, or the purchase model of the full season purchase for USD 34.99, the people that bought in at any point generally played the whole season, and had this day they looked forward to and expected the next part of the game.

Individual selling of self-contained episodes every single month is a different task, because people just aren't as invested as the subscriber is. Seeing that audience, and seeing the experience they've had, I think they're the ones that have experienced episodic gaming at its best. I would say that at this point about 65-70 per cent of our business is from the full season subscribers, so they're really buying an experience over six months.

It's definitely when one goes out, there's always one that's ready to go out and one that's really close. Everything else is already designed, and there's an uber-story that's connecting them all, so we have to have that season design going on as well.

At any one time there's usually three episodes in development. The big time and cash investment is in the franchise - the first thing you do is build out the franchise assets, so making Wallace walk, making Gromit walk, casting the voice actors, animating them, building all the environments that will reappear - that's the bulk of the work upfront.

By the time we get to the fifth episode is about two months, which is pretty amazing, but you have to have the design in place before you start.

Our credibility stems from our relationship with the franchises we already work on, so primarily there's a large groups of license-holders for whom the integrity of the license is more important than anything else, and right now games don't offer them a way in - but they know they're going to need to make their franchise interactive at some point.

They also know they're going to make their franchise digital at some point, and we're a web company, so we offer both of those things to anybody that's sitting in a franchise and wondering how to evolve it into the future.

Telltale brings a game mechanic that can work for their franchise and allow them to reach the interactive audience, and it brings them onto the web so they can become part of that conversation across the web, or on Xbox Live, where license-holders feel they need to be if they're going to evolve.

That's a big sell for us, but to the core of your point, we go after license-holders that are interested and believe the stories and the characters are the core of their license - and we have to believe in those characters. We'll go in passionate, loving Wallace & Gromit, or Sam & Max, knowing how we're going to do it, and provide an avenue that doesn't exist for them - if you're not Spiderman... there are probably 30 or 40 licenses that get made into huge titles, and then everything else is just canned.

This is the fun of the whole thing - the concepts are being fleshed out, and the motivations are becoming more understood. I would say that if we're going to do 32 episodes of Sam & Max, on the 32nd episode you better really care about those characters, and you better be really interested in their situation, and you better be really into the story.

Because no matter what the gameplay mechanic was, 32 times in you're not going to want to do it again. I think in building an episodic television model for games, yes - storytelling becomes an important focus for us, and therefore our investments go into better storytelling - so storytelling evolves.

That doesn't mean you couldn't have a great feature film game that is a great storytelling exercise as well, but their goal and the experience is one where they're still investing in other things, like physics and rendering - they have higher priorities than storytelling, so the best brains on the problem are solving those problems, and they'll get to storytelling when they do.

It's really Telltale's differentiating factor, that every piece of our investment has been in production efficiency and cinematic and storytelling technologies. We're going to continue to evolve that way, because that's what's important to us.

Episodic itself means you have to have a great story, and episodic is a model of storytelling, like Sopranos, like Lost - it's like a new medium into itself, which is interesting.

Yes - the steady stream of content is constant lifeblood into the studio. You always have something out, you're always monetising. You're realising on your investments quicker, and you're not investing as much before you start seeing the revenue, so in that sense it's safer. You're not putting as much at risk, you just have to do it. If you slip a couple of months, that pushes out your cash flow for a few months, but that happens to everybody, right?

For us it is about getting to this point where we're doing an episode every month, or two episodes every month, and they're generating that kind of launch cash flow for us, and that would be a very safe business model. You monetise before you're finished with your investment, and you just continue.

You have to build up your audience, and build up product, but if you bring in storytelling and build enough great storytelling relationships you can keep doing that, you can repeat it.

I think in general the games business has always been risky - publishers and studios have been going under even before the economic collapse, because it always was. 3200 products at Christmas, and ten winners... and the losers lose big money.

Oh yeah.

No, because I think there's still that point about people needing to understand what it is, and Telltale is always going to define its own kind of game. When we talked about our vision statement early as a company that, whenever people sit down and play a game of ours, they know it's a Telltale game. It has some set of qualities that is Telltale.

So we want to be there and have people around us that are doing similar things, and we want to learn from them and that validates things. I will say that we've been hearing from a lot of big publishers that have ideas for their franchises, asking how we'd like to work with them.

Is it, but we're not a work-for-hire studio either, and that's a real hard thing for them to get their brains around. Telltale has built a business - we're an independent developer and publishers, we're going out and licensing, we're funding the products and we're monetising them.

For economic health of the company, those are three critical pieces, so we just need to find relationships that will let us work in that context, or at least some of them.