Alex Champandard summed up my entire previous blog post as:

Essentially, making self-published games requires the skills running a business — and not everyone has, or wants, those.

He should know: He has the skills for running a business as well as deep programming skills. Just look at AIGameDev.

Here is the other side of the coin, from Cat Valente, via the excellent (not game related) Making Light:

Funny thing is, if this future came to pass and the market were nothing but self-published autonomous authors either writing without editorial or paying out of pocket for it, if we were flooded with good product mixed with bad like gold in a stream, it would be about five seconds before someone came along and said: hey, what if I started a company where we took on all the risk, hired an editorial staff and a marketing staff to make the product better and get it noticed, and paid the author some money up front and a percentage of the profits in exchange for taking on the risk and the initial cost? So writers could, you know, just write?

And writers would line up at their door.

This applies to game development as well as to writing. It is basic economics.

So not everyone is going to be self-publishing. We’re just going to move away from the pure publisher-developer constellation to a more diverse situation.

And naturally it is a huge oversimplification to even talk about a “pure publisher-developer constellation”. Things are already diverse, they’re just getting more so. The future is already here, it’s just badly distributed, to quote William Gibson.

Ever notice how whenever there’s a new profitable market segment, the leaders in that segment do not resemble the leaders of the older segments? MMOs, Flash, free to play, social…

The rise of social games means more developers need to get comfortable with the concepts of marketing, selling and profit.

Seth Godin makes a strong argument in Purple Cow and Free Prize Inside that design = marketing. (In fact he says everything is marketing.)

In fact, the rise of social games is just ONE of several factors that put pressure on developers to change their attitudes to development.

Or rather, the rise of social games exemplifies several forces that have been growing over the last few years.

Lower barriers to entry. More platforms. Direct access. Disintermediation (insourcing, if you like). The common factor is the internet.

A lot of changes, and changes are scary. A lot of new skills to learn, and so a lot of new ways of failing.

(David Barnes from Facebook Indie Games, who writes about similar topics, kindly bundled these tweets and commented on them here.)

This all ties back to a whole bunch of somewhat related topics I have been thinking about over the last couple of years.

This Economist article (for subscribers only, sadly) explains that blockbusters have grown bigger, not smaller as many people expected due to the effects of the Long Tail. This was one of the most interesting articles I read in 2009. Dave Edery referenced it in his talk at GDC this year. Basically, in media these days, you want to be huge and number one, or tiny and quirky (like a tiny purple cow). You don’t want to be second best. This goes for TV, movies, music, newspapers, books – and games. There are a lot of interesting conclusions to be drawn from that.

At GDC this year, as you may have heard, there were some quite vocal reactions against Zynga and Farmville. What caused those reactions? I say it’s fear, fear for something new which is not the something new that some of us were hoping for, or striving for.

That doesn’t mean Zynga is the future of games. But everyone in the industry is now aware that Farmville’s 70 million monthly players, not to mention its revenue and valuation, are remarkable. (There are, of course, other numbers that are as impressive as that iconic 70 million, and other markets that are as interesting as Facebook – see, for example, Nicholas Lovell’s provocative post.)

This February I was at Casual Connect in Hamburg, my first time at Casual Connect. It was weird: the majority of sessions were about game design AND business. Which makes total sense in the casual / social / free to play space, but which probably confuses and scares a lot of game designers out there. Are we no longer cool? Are we going the way of the adventure game designers? (Many of my adventure game designer friends are actually doing quite well – some of them in social games.) Did I waste 20 years thinking about storytelling in games?

Changes on the internet, over the last 5 years or so, have revolutionized every single aspect of game development and publishing, and are continuing to do so. I held a presentation on this in 2007, and things have only accelerated since then. You can develop your game using open source software (itself developed and distributed over the internet), then market and sell and distribute it over the internet. Players can buy it and play it over the internet and you can converse with them over the internet.

One of the biggest changes caused by this is disintermediation. Basically, getting rid of publishers. Because from one perspective, developers have been outsourcing marketing and distribution. As I said about a month ago:

We’re in the middle of a major transformation of our industry that was essentially caused by the internet and the various disruptions it has enabled. One of the questions small developers should be wrestling with right now is whether to self-publish. I know I’ve been thinking about this a lot in 2009. Developers building up expertise in marketing, PR, financing and other business areas that we traditionally have no experience with is going to transform the games industry (in fact it’s probably happening already). I’m not saying everyone should do it, and in fact there are good counter-arguments – there is a reason why there are developers and publishers. But I think the status quo has been out of balance for a long time and that things are now moving the other way, towards self-publishing.

But that is a big, big leap for people who tend to think of themselves as artists and engineers. And you can bet a lot of institutional knowledge – the way things are done – no longer applies. And some of that knowledge is encoded in how companies are structured, in how they work. (When a older, bigger company is disrupted by a younger, smaller company, it’s the differences in company culture that cause this as much as the technology.)

Working at a small games company, I think a lot about this stuff. About my experience, about what I instinctively think is the right way to make games, about how to make big leaps. About my fears of the unknown, of failure, of being laughed at. Even though it’s not all that hard and lots of people have done it before.

Reading the two Seth Godin books I mentioned above made me realize a lot of people in a lot of industries are probably going through that. I don’t buy all of what he says, and I am not quite sure which conclusion I am going to draw from them, but I recommend reading them. Fodder for a future blog post, or a bunch of caffeine-fueled tweets.

“We’re moving on,” said CEO and creative director Raphael Colantonio. “We do have some reserves, some cash that allows us to wait for a while, to find deals and reassign staff. But the right deals – that’s really important, to keep the vision of what our objective is as a company, and what our identity is.”

“To some degree, although it sounds like a bit of a paradox, all these publishers cutting things right now – I think it will eventually benefit the independent developers.”

“Those companies will be looking for projects, and if they’re looking, rightly, to lower their costs it makes sense to work with independent companies – they’re always cheaper than anything they can produce internally.”

One plausible theory I heard is that it makes good business sense to contract now and hoard cash, so as to be better prepared for when things get better again in a year or two. It is no surprise that EA and THQ, big public companies, do this first. (I am also hearing rumors of a hiring freeze at Ubisoft.)

This means that companies that don’t lay off people may wish they had in a year or so, and may then become prime takeover targets – for EA and THQ. I wonder if Blizzard Activision might lay people off to be seen to do the right thing and to get rid of dead wood, even though they might not need to do so because of the money they are making with WoW.

In any case, as Alex pointed out on Twitter recently, working for a big, publisher-owned development studio is no longer a guarantee of safe employment (if it ever was).

This evening I noticed three industry friends twittering about being sorry for their friends’ loss. I was worried – what was going on? Was this referring to people I know? As it turns out, yes: I just found out that Electronic Arts has announced massive layoffs.

As you may remember, the project I am working on at Arkane Studios in Lyon is being developed together with Electronic Arts. And from what I hear, that project is being heavily cut down. Which means that people I have come to know and like and admire at EA are being laid off. (Some of those people are in Lyon right now. Some of them are on holiday here.) And people I have come to know and like and admire at Arkane are probably going to be in a difficult situation. Nobody knows exactly what will happen, but it can’t be good.

(For what it’s worth: I don’t blame EA. That’s like blaming the weather.)

Naturally, this affects me as well. I have only just found out about this (at 9 PM) and so have not had an opportunity to discuss exactly what this will mean for me, but right now the most likely outcome is that I will be staying in Vienna, and will be available for free-lance work again in the near future. Luckily I am a fairly cautious person and have not made too many irreversible decisions yet.

Oddly, I felt pretty neutral about this until I started thinking about the people I’ve been working with, and until I got an email from a friend and co-worker at EA. Then it hit me.

I wish everyone affected a lot of luck and strength, particularly Raf, Arkane’s CEO, who will have to deal with this crisis. If anyone can do it, he can, but it won’t be easy.

I am going to start clearing out the fridge of my little hotel room, starting with the beer.

Update: Well, I should be back in Vienna on November 10th. I got the chance to see a few EA (in one case, now ex-EA) people before they left. In general, today was a bummer. I’ve really grown to like the people at Arkane, and Lyon as well.

The disbarment means that Thompson is no longer licensed to practice law and may not apply for reinstatement.

Of course, I doubt this will impress a major league troll like Mr. Thompson. His buffoonery makes Jörg Haider look like reserved, reasonable person. (Why yes, there’s an election here in Austria this Sunday. How did you guess?)

(Thanks, Tobi.)

[...] I hate to think someone this powerful can put out this kind of nonsense in an interview, and confuse professional investors, that might have been interested in the digitally distributed future of the games business. Some developer (or publisher) pitching a digitally distributed strategy might have just been ‘thrown under the bus’ today by Mr. DeMatteo.

Where to start? Sheesh…

It’s a good read, summing up some of the problems with the current distribution system and the current state of digital distribution. Go Dave!

(Via Harvey.)

Videogame specialist Sega Corp. says it sold more than 300,000 copies in 20 days of its $9.99 Super Monkeyball game, in which players guide an orb around mazes by tilting their iPhones. “That’s a substantial business,” says Simon Jeffery, president of Sega’s U.S. division. “It gives iPhone a justifiable claim to being a viable gaming platform.”

Indeed. Another internet-related distribution channel for games. Yay!

(Via The Unofficial Apple Weblog.)

The big question for a lot of people in the German-speaking industry will be: What took them so long? They kept buying studios and not releasing games. My impression is that they were way better at financial wizardry than at producing games.

When I was discussing doing work for them I mentioned my doubts about public companies buying lots of studios. The guy I talked to said: “Maybe it reminds you of JoWooD?” and I said: “No… Phenomedia” (which still exists, wow).

Anyway, luck and strength to all the people trying to make good games there.