Daily Reaction: Why We Need Big Publishers Like Activision, Ubisoft and EA

August 6, 2013Written by Dan Oravasaari

Call of Lemons

Recent discussions regarding the ability for developers to circumvent the need for big publishers has led many to wonder if they will be around in the coming years. With that, the Daily Reaction crew of Sebastian Moss and Dan Oravasaari discuss the (lack of) feasibility of a market working without them.

Dan: Over the last few years we have seen an enormous growth in the amount of developers being able to produce and release a game completely on their own. A status-quo that once said that you need to go through a publisher to get your title released on console has been changing. The PC and Mobile market have been the leading force behind the change in what is considered possible and now the last bastion for publishers has finally slipped, with Microsoft and Sony allowing self-publishing on the upcoming PS4 and Xbox One. Could this change in perspectives really lead the way to us seeing big publishers slowly fade away?

Xbox project co-founder and Microsoft veteran, Ed Fries sat down with [a] list daily and said:

Who knows if there’ll be big publishers in the future? There don’t have to be. Maybe the world of the future doesn’t look like that. Maybe it’s just lots of small developers, getting together and then breaking up into little teams all over the world, that’s where great games are going to come from. Big publishers were formed because games were really expensive, there were big distribution issues. Walmart didn’t want to deal with a hundred companies, they wanted to deal with four or five. A lot of those things changed with digital distribution. Maybe what we’ll see in the future isn’t like what we’ve seen in the past. What does that mean? There are winners and losers all through that.

Ultimately, Fries does have a point in the growth of independence for developers, as they will be able to find assistance outside of the standard publishing pool. The best examples of this have to be the popularity of pub-funding, that has already pushed a handful of developers to start work on some interesting games and development kits, that once cost as much as a car, are now being released for relatively low prices. Both of these allow anyone serious enough about producing a product to find alternate sources of funding and curbing costs at the bottom level.

Sadly, none of this will really be enough for all developers to become unshackled from finding a publisher to produce a game. The reason really is that none of the systems in place are really capable of sustaining development of projects that require $100 million+. Crowd-funding itself is inherently flawed as a bypass for big development, as only a small portion of the demographic will actually invest, meaning that you will never really be able to reach funding targets to allow AAA development. DevKits are becoming a cheaper tool to acquire, but they are still only a very small portion of the required budget to fund a major project.

While it does seem like things will inevitably become more rocky for some publishers, I do not think that they will be going anyone anytime soon. Most of the major AAA titles that we see push the market require a great deal of assets, both visually and technically, to compete, not mention the need for advertising and ability to translate to push a product in multiple territories. The number of gamers available is not a limitless resource, and developers know this, which means that they will have to do whatever they can to get as much of the market as possible.

This need to one-up the competition has forced many developers to fall under the umbrella (ella eh eh) of publishers, simply for their name alone. Countless gamers outside of the ones who are probably reading this now, know very little about what development team made which game – it all falls down to EA, Ubisoft, or even simply Sony or Microsoft. The lack of education in regards to the industry from the standard gamer is so low, that moving away from a known brand could mean certain death for many developers.

Seb: Yeah, no, this guy… no. There will always be a need for big publishers because people want big games, and that’s not going to change. Simple as, end of, finish the discussion and go home.

Just because a lot of small studios can exist (and do), doesn’t mean that that is the only outcome. That’s like saying YouTube shorts will replace Hollywood.

I’m seeing a bunch of sites picking up this interview and running with it as an actual plausible prediction of the future, while throwing in extras like “look at Kickstarter”. Agh. Look, Kickstarter is all fine and dandy for some things – but it really, really helps if you are already a renowned developer, and, even if you are, you still won’t get enough money to make a mid-sized game, let alone a AAA one ($20-100 million at the moment) + $100million or more on marketing. You’ll be lucky if you get $5 million.

Yes, publishers are losing their monopolistic control – developers will be able to self publish on all major platforms (although publishers are still often used by small developers to help with porting, marketing or online services). Yes, publishers will lose out on a few smash hits like Minecraft or Angry Birds, and have a tough time in some markets like Facebook and iOS. But that doesn’t mean the end of publishers.

The core money earner of big game publishers is, surprisingly, big games. And they’ll continue to make millions upon millions, while costing millions upon millions. We’ve talked about the AAA business model before, and it is broken, it does have plenty of problems, and unfortunately it seems the solution is tons of sequels. But that works, people buy them, and it funds financially successful blockbusters year after year.

However, let’s pretend this prediction is correct, some disaster brings down Ubisoft, EA, Activision, Take Two, Bethesda and the rest all at the same time. Here’s what will happen:

A developer self publishes a smash hit, selling millions and making the studio more money than they need. So they buy another studio in the local area making a game to help them release it and share fans. It’s another big success, so they use that money to hire people and work on more games, most of which are successes. They grow and grow, getting bigger and bigger, until they’re pumping out several blockbuster titles a year. And, as if you haven’t already guessed, they’ve become a big publisher.

Here’s the thing, it’s fun for sites to predict doom, it gets people clicking, it gets people scared – and that’s the lifeblood of journalism – but it’s just wrong. The market is changing, some developers will close, some publishers will close. But there will always be a demand for big games, and the only way to make those is with big money, and that’s where publishers will come in.

Publishers will change, the publishing model will change. But the need for a publisher for certain games will always be there.

Do you think publishers are in trouble? Will self-publishing lead to developers becoming the new big publishers? Or do you think the industry will continue on the path it already is on? Let us know in the comments below, email us at [email protected] or dethrone us at Seb and Dan.