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Creating sequels or updates for live-operation games makes a lot of money for game companies. But over time, the revenues can trail off, and the need to create an original game becomes evident. At GamesBeat Summit 2021, I asked a panel of experts how to do this right.
Our panelists included Shawn Layden, the former chairman of Sony Worldwide Studios; Marty O’Donnell, cofounder of Highwire Games and a former leader at Bungie (the maker of Halo and Destiny); and Ante Odic, the senior vice president of product development at Outfit7, the maker of Talking Tom and Friends. Outfit7 has more than 15 billion downloads and more than 400 million monthly active users. Clearly, Talking Tom has had a tremendous run, but even Outfit7 is trying to invest in new intellectual property as well.
O’Donnell was the composer and audio director for Bungie on the Halo games for Microsoft. When Microsoft bought Bungie ahead of the launch of the original Xbox, it acquired the rights to the Halo intellectual property. Bungie ran with that franchise for a decade, producing a huge hit for Microsoft. But eventually the team tired of Halo and wanted to go off on its own to create a new intellectual property that it could control and own, O’Donnell said. Part of the team stayed at 343 Studios to guide Halo under Microsoft, while Bungie spun out to focus on Destiny. That wasn’t a particularly easy or pleasant business. O’Donnell split with the Bungie team and eventually started Highwire Games, which is working on Six Days in Fallujah with Victura Games.
“Here’s the thing,” O’Donnell said. “There’s nothing more important in the game industry than the intellectual property. The hardware is like appliances, and we’re the food that goes into the refrigerator. So that’s what’s important about it.”
Odic said that his company has been doing new versions of the Talking Tom games across new genres like endless runners and pet care categories.
“Now we are thinking about expanding and creating new IPs and going into completely new directions for mobile,” Odic said.
O’Donnell said he comes at it from a creative standpoint.
“I believe that the driving force is to come up with something new and creative, and that’s what’s exciting to the people who are working on it,” he said. “And that’s what the fans want to see. Even though the fans really want you to keep doing what you’ve already done. They’re really not going to be happy with something that’s repetitive. They really want something new so to me the driving force is the excitement of having new creative and new things to work on. I am never going to be motivated by business.”
Layden weighed in with his own view.
“That’s the dirty little secret of the video game business is that it is a business, after all, and we need to create an audience,” Layden said. “We need to create a revenue stream and cash flow in order to continue to create new and exciting games for people to play. From a first-party perspective, when you’re winning the console business, and you have a vertically integrated hardware layer and an OS and then the game to go on top of that, it’s super-important to continue to stress the importance of original IP.”
To O’Donnell’s point, Layden said that making the same type of game over and over will continue to appeal to the same audience.
“We won’t be able to break out gaming into a wider and larger business,” he said. “We talk a lot about how the video game business is the largest entertainment business in the world. But we really don’t punch above our weight when it comes to society and culture. And I think that’s because we don’t bring a diverse enough audience into enjoying gaming. And that’s why original IP is important. That brings out new types of games. We hope to bring in new types of players, new types of fans, for the gaming business, and thereby continue to grow that pie ever larger. So that’s really the importance to me about original IP. It’s the chance to appeal to new people, new fans who haven’t yet come to the beauty that is gaming.”
Talking Tom, by contrast, has already gotten to those wide demographics that console companies would love to get to.
“But I agree with both points from Sean and Marty, because we do manage to attract a lot of users in, but there are still some game genres, mechanics that are out there for other types of users that we don’t have yet,” Odic said. “They don’t enjoy our games yet. We a business. We are in gaming because we are passionate about games, and we really also as a company want to create some good content for people to play as games. That’s why we want to create new IP that expands our reach.”
When he was at Sony, Layden worked with 13 studios around the world, and every one was different and had a different approach.
“It was really important for us as a first-party structure to allow every studio to be its best self, to create the games that really excited the teams and allowed them their creativity,” Layden said. “Greenlighting is a very difficult process. And it’s kind of different for every studio you work with. What you’re trying to do is to elicit the best idea. You find the best risks and take them.”
First, best, must
Layden said Sony’s simple approach was “first, best, must.” Are you making the first game of its kind, like Parappa the Rapper? Are you making the best game in a genre, like Gran Turismo in racing? And are you supporting corporate initiatives like the launch of the PlayStation VR, where you must pave the way with new content?
“If you’re going to make the third-best racing game, other studios can do that,” he said. “You’re going to try to do the best possible work as a first-party studio with another category called ‘must,’ which meant we had to support new innovations coming out of the hardware group. We do something like PlayStation VR. Now, it doesn’t make sense for a lot of third parties to jump into a new platform, which has an installed base of zero.”
He added, “When you have that new nascent technology coming out, it’s incumbent upon the first-party teams to stand up, take the hit, make the games, and explore your creativity, without worrying about what the return might be on that investment. You’re building a new market. You have got to take a few losses on the front end. That originality and IP allows companies to create these new markets to generate these new fans. And, and the road to getting there is sometimes is a two- or three-year model. I won’t say the names here, but I’m talking 12 years to get some out. So you never quite know how long a piece of string when you start pulling on it. And sometimes it can be a lot longer than you expected. But nevertheless, if you stay the course and keep true to the vision, you will be more delighted with the outcome.”
O’Donnell noted that creative fatigue can set in with teams that have worked on a franchise for a while. But another team could pick up the torch and move it forward.
“When we came up with Halo, it was really, really exciting. And then we were bought by Microsoft and became the first-party team,” he said. “We had a really good run. Creatively, we worked on that for 10 years. New people came in and the team got bigger and bigger over time. It was a good time for that original team to move into some new IP to get creatively energized. We handed it off to 343 Industries.”
He noted that 343 Industries did a good job at reinvigorating Halo. But even three years of work on one game can be a long haul for a creative team, he said.
“When you are first coming up with something, you don’t think of it as a franchise, you don’t think of it as having sequels. You are just excited about the thing you’re doing. And if it becomes successful, that success ends up sort of breeding this idea that now you have to do it again, and do it kind of the same,” he said. “And that is not what motivates you to begin with.”
As Bungie started looking to make a new IP, it talked to both Microsoft and Sony. But those partners pretty much wanted to own the IP. So Bungie went with Activision to make Destiny, as Bungie retained the rights to the IP in that deal. O’Donnell’s advice is to always try to hang on to the IP rights. Layden agreed, saying, “The landscape for that is starting to soften up. For young people with new ideas, try to hold on to them as long as you can.”
Odic said his company helps teams stay fresh by enabling them to work on new genres for the Talking Tom IP, as well as try new games based on new characters.
“Even if it is a casual game, there are so many complex systems and new technologies,” he said. “When you go into the new area, you need a completely different mindset and different kinds of people that need to do a lot of research. They need to be aware constantly that they don’t really know what they’re doing. And be careful not to judge based on previous experiences. So creating new IP becomes a very interesting time for us.”
The A-team or the C-team?
I asked Layden where studios should put the “A team,” on the new IP or the sequels.
“One of the dirty little secrets of PlayStation Worldwide Studios was that we let each team independently create their destiny,” he said. “There wasn’t so much of an A-team or B-team thing across the constellation of worldwide studios. I’m sure in each studio, they were managing their own talent stacks trying to make every new game a good combination of veteran expertise and young excitement. Everyone here is right about how do we continue to water the tree of creativity. people. People don’t want to work on Police Academy 9. But at the same time, you have something like the 25th iteration of the James Bond franchise and every movie is new in its own way because you let the team that’s building it not be too beholden to whatever legacy has come before.”
O’Donnell noted that as a studio gets larger and has multiple teams, it’s hard to combat the perception that one is the A-team and another is the B-team or C-team.
“That’s a tough thing to manage inside a studio,” O’Donnell said. “I don’t know how some studios do it. But certainly, if you’re on the B-team, you’re going to be motivated to get on the A-team.”
Layden noted that Quantic Dream made three games for PlayStation, but each one of them is a standalone story. They have similar gameplay, but each has a different creative vision.
“They weren’t built around sequels; they were built around a cohesive story that they were telling with a beginning and a middle and an end,” Layden said. “A lot of people go to that model, depending on what is in the creator’s vision. Some people go into it thinking how many sequels can I get out of this thing. It’s down to that creative process. And you just watch it unfold with each creator you come up with.”
O’Donnell said that the original Halo was intended to be a self-contained story, a single game. It was Halo’s success that made the team think seriously about a sequel.
“Sometimes these things happen accidentally,” he said.
Odic said teams can find new genres, mechanics, and characters. He said it’s OK to let teams go a little bit wild with their creativity. These can lead to new successes that take the pressure off the main franchise to keep performing.
“My slogan is to be nice to the goose. And the goose is the team that lays the golden egg,” O’Donnell said. “And being nice to the golden egg means you’re just going to make sequels that that are dead. But if you’re nice to the team that makes the lays the golden egg, that’s the only way to get really good, new golden eggs. Certainly, you don’t want to stab the goose and try to cut it open. But all I would ask for publishers and developers is be nice to the goose, because that’s how you’re going to get more eggs.”
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