Australian Game Industry Under Threat - May 15th, 2005

The May 12th 2005 edition The Sydney Morning Herald has an article on the Australian games industry. Here are some quotes from the article, entitled “ Australian game industry ‘under threat’ ”:

"For our industry right now it's either fly or die," Evelyn Richardson, president of the Game Developers' Association of Australia (GDAA), said. "We don't have much time."

“The GDAA is calling on the government to inject $A50 million over three years into the Australian industry to help it compete against game producers in Canada, eastern Europe and Asia.”

"For the new Playstation 3 and Xbox 2, project budgets are expected to soar to $US15 million to $US20 million and employ 120 full-time staff for two years."

The crux of the report is that without government help the industry will be swallowed up by big multinationals.

Give me a break.

If the industry can’t survive without government help then it doesn’t deserve to survive.

The article might have had some merit if every game produced was a Triple A title for the PS3 and Xbox360. You know, like how every Hollywood film is a special effects laden $150 million blockbuster. But it’s not like that. The games industry includes budget and triple A handheld games, downloadable casual games, budget and triple A console games, online games, budget and triple A PC games, edutainment games, web games, mobile phone games, etc, etc. I see plenty of potential for smart local developers to pick their niche and make a good living at it. Just like Hollywood, not every filmmaker is a Spielberg or Lucas. And hey, if you want to make a blockbuster then go for it, but you have to start somewhere.

The other thing that irks me about the article is the assumption that every Xbox360 and PS3 game will require budgets of $15 to $20 million. Good luck trying to convince a publisher that your super addictive puzzle game is going to cost $15 million to make. And if you don’t think there are going to be super addictive puzzle games on the Xbox360 or PS3 then you’re smoking crack.

But hey, let’s go with the assumption that puzzle games have been made extinct. Let’s assume that the average Triple A golf game costs around $8 million to make (not counting Tiger Woods’ fee), do you really think that pumping up the polygons on the trees, courses and golfers is going to cost an extra $7 million? If you do, then you definitely are smoking crack.

Oh, and why do you need 120 full time staff to make a triple A game? Hello? Hasn’t anyone in the games industry heard of outsourcing? There is no way that each and everyone of those 120 staff will be fully productive from the first day until gold master.

I’m not saying that the Australian games industry isn’t under threat. In fact, I think it is. The threat to the Australian games industry isn’t the large multinationals or lack of government funding. No sir. The biggest threat to the Australian games industry is the Australian game development companies.

You see, a lot of these companies have grown organically over the years and, believe it or not, many have never made the transition to become real businesses. So many companies are badly run and hemorrhage money like you wouldn’t believe.

If Aussie companies want to compete successfully in the world market, then they have to pull up their socks and start acting like real businesses. They need to change. And soon.

Here is a short (and by no means complete) checklist of things required:

· Management with people skills who understand that treating staff with respect is just as important as treating publishers with respect.

· Management that know how to run a business and have accountability.

· Management with the guts to bite the bullet and fire staff who aren’t productive and are hurting morale.

· Producers with people and scheduling skills and the ability to delegate tasks.

· A great company culture that starts at the top. A culture that values the work they do and strives to create the best game in the world, even if it is a pre-school kids TV show license.

· Outsourcing. Seriously, if you want to make a triple A game, then it is not good business sense to have huge staff on the payroll. Not only is it financially risky, but you’re also creating a culture where people really are just a cog in the wheel. Have smaller, smarter teams that communicate well and outsource the grunt work.

Well, that’s my opinion. Let me know what other things you think Australian developers need in order to compete on the global stage.

John