Don Daglow

Apple is a hardware company. Bees buzz, birds fly and hardware companies want to sell hardware. What Apple has done – and I think it has worked fabulously for them – is they’ve said “look at our hardware, look at all the software you can get here. And there is tonnes of it and, because there is tonnes of it, it’s cheap.” So isn’t that fabulous for the consumer? When I’m going to buy hardware, I turn to Apple, I open my arms in a warm embrace and I say “oh, I love you Apple, because you give me tonnes of applications and they’re all cheap!”

But then, of course, I have another personality and that personality is as a games developer. And when that personality kicks in then I look at it very differently. This is a market that is so saturated with stuff that there are a lot of fun little titles that are worth playing but, because of the nature of it being such a garage operation, you have pretty darn good stuff that is free or very inexpensive so the economics of how you create a premium brand product and charge a price that will actually pay for a significant team, as opposed to have an individual, and then have a long enough tail to sustain a team – that’s a very hard thing to do right now. Very hard.

Apple is a hardware company. Bees buzz, birds fly and hardware companies want to sell hardware.

We’re in a case where Apple is calling the shots on its platforms and I don’t think, on platforms like Apple and platforms that have to compete with Apple, that’s going to get better – I think we’re seeing the way the world is going to be. So people have to work in business models that are either based on extremely low cost, to create opportunity to make money and build the next game, or they’re going to have to find other ways to monetise virtual goods and things like that, so that you can support a team rather than one person and a distributor.

Right now we’re about ten people but, in the Facebook space, you don’t know how big your team is going to get. You can have all these guesses and estimates about how the numbers are going to go but the Facebook space is different. In the console space, sales [departments] makes projections, marketing [departments] makes projections - you build your game and, if the game is looking better than expected and it gets good retail and press response to previews, those estimates go up and you may get a little more money. It’s basically a negotiated thing, you put your game out into the world and then you see what happens and that’s that.

Here you get the core of your game, which has to display the fun and has to immediately display the premise or the reason why people want to play, you put it out there and the you just go into the most intensive schooling you have ever had in your life. Now instead of sending it off into the ether and praying – and there’s been many nights when I’ve thought “ok, well it’s out of our hands now please people love our game, please people love our game, please people buy our game!” and you do that prayer – now we always wished that somehow we could influence the outcome and we got our wish because now we go into this intensive study process where we expand the game and tune it based on what people are actually doing. So we don’t know how big our team is going to be later because it all depends on how those numbers go.

I think that for packaged, console user expectations are so high that budgets are going to be significant and the bigger your budget the more accountants you have and the more lawyers you have involved, and costs actually grow disproportionately when that happens. So I think that there are a lot of reasons why you have to have a company with significant cash on hand to play in that world.

Now the downloadable console space – that area is in flux. Whatever you think of the way the world works today, don’t wait to tell people six months from now because the market is going to be different. We’re certainly seeing some squeeze in access to distribution compared to what we had before. We’re also seeing some erosion of price in places. But it is a place where a good game, that maybe even a single programmer did, can still break through. So I don’t think we’ve choked off the innovation in that area, but I do think that – like everything else – it’s getting tougher.

Because this console cycle did not evolve the way everybody expected, the infrastructure was built for this generation based on the PS2 and Xbox generation, and the Wii disrupted that – the economics never supported it so everybody stuck it out in the hole, in effect, and that has chain-reacted really negatively through the industry in terms of the number of projects, risk taking, the number of jobs lost: all those factors.