Company News Elevation to trade shares?

[Saint_Proverbius]

Tags: BioWare

Per <a href="http://www.nytimes.com/">this article</a> on the <A href="http://www.nytimes.com/">New York Times</a>(which is a Communist rag, BTW), <A href="http://www.elevation.com/">Elevation Partners</a> is thinking of going public. You may remember them as the guys who semi-snagged up <A href="http://www.bioware.com">BioWare</a> and <A href="http://www.pandemicstudios.com">Pandemic Studios</a> recently. Anyway, clippage:
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<blockquote>The potential for a public offering aside, Mr. Pachter said that Pandemic and Bioware - with Elevation's money and insights - could well succeed in driving a change in how the video game creators are compensated.
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Historically, small bands of game designers formed studios that developed a handful of games each year. If the studios are fortunate, they enter partnerships with the major game publishers, which provide money to produce the games as well as market and distribute them.
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The game industry is highly dependent on hits, and major titles can cost up to $20 million to develop. The publishers have to shoulder that financial risk, so it's not unusual for a distributor to take 75 percent of sales, after recouping its costs, Mr. Resnick noted. The focus on hits also makes publishers reluctant to back new titles and types of games when they can rely on sequels of best-selling games with built-in audiences.
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This dynamic means that the creative talent - the programmers, engineers and designers who make games - tend to have relatively little control or reward, particularly compared with creative talent in the movie business. </blockquote>
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I'm not sure the answer to this problem is going public. I don't see how having to appease investors every three months or face devaluation or possible take over is a win in this industry. He can bring up movies all he wants. Movies take about a half a year to make once shooting starts - two quarters. Games take three to five times as long to make. It's kind of hard to compare the two once you start trading shares.
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Spotted at: <A HREF="http://www.shacknews.com">Shack News</A>

 

[Excalibur]

!00 bucks say this is the death of bioware... they have gotten to big for their own good, just like every company... which rises, must fall.

 

[Zomg]

Nothing facilitates creativity and long-view thinking like being beholden to public ownership, lemmetellya.

 

[DarkUnderlord]

The potential for a public offering aside, Mr. Pachter said that Pandemic and Bioware - with Elevation's money and insights - could well succeed in driving a change in how the video game creators are compensated.

So does this mean game developers are going to be paid in monopoly money now?

 

[Kuato]

perhaps trying to be like EA, once they go public they can look forward to shipping rushed titles based on the finest marketing research at least favorable times since they will have to forecast revenue too far in advance to be able to readjust for updated relevant data. Instead of moving written in stone in release dates they will have to compensate by throwing more people on the fire, which increases the burn rate and confusion levels(slowing production down) while simultaneaously lowering morale since high burnrates=employees deathmarch to layoffs.

yeah good luck guys

 

[DemonKing]

It's kind of sad but this is a commonly repeated move for independant companies that make good - sooner or later so much money is waved in front of their owners' faces that they sell up and while they're in the Bahamas sipping cocktails on their yachts the quality/originality of the company heads sharply downhill.

Case in point - Peter Adkinson who founded Wizards of the Coast. They got so big with Magic the Gathering they bought TSR (creator of D&D). A few years later he sells up to Hasbro and now we end up getting nothing but D&D-themed RTS titles, console fighting games and MMPORPGs.

 

[Jaesun]

with Elevation's money and insights

Goodbye Bioware.

 

[LlamaGod]

who at bioware made the decision to join them?

oh well, more people to inflate Obsidian before their eventual death.


Eventually it's only going to be the corporate big-wig type companies making us "rpgs"

 

[Rat Keeng]

Since I'm such a radical non-conformist, I'm gonna go ahead and say that this is the greatest move by Bioware ever, and that they will make many awesome genre-reinventing games for years to come.

 

[Proweler]

Frigging idiots.

Half the aspects of an game are asthetic and impossible to dersribed in terms of stock revenue. Go figure where the mangers will cut first.

Bah.

 

[Antagonist]

I don't understand some of the uproar. Since when Bioware has done anything remotely innovative (except for the NWN's server/client) in the last couple of years ? Even before they started flirting with the big bucks they hardly ever took any risk with their games so I guess it will be Bioware-business as ususal in the future.

 

[Drakron]

Well I think its the fear someone else joins that stupid idea.

No matter what they say, they are simply replacing the Publisher control with their Investers control ... if the publisher puts down money for the development of a game and have some control over it, you think the investers would not want the same type of control?

Its stupid to think otherwise, what will happen is investers will simply NOT invest of anything that represents a risk so the developers will have even less control.

I think the diference is that the developer instead of complaining about publishers will remain silent since they are not going to complain about the people that are paying their salaries.

Then again ... its BioWare "lets outsource the artwork to 3rd world countries to lower costs" corporation.

 

[bryce777]

Well, they just becoming a publisher. Going public just means you are getting funds by that means.

There is nothing big to it.

Now that you have big budget games, to be truly independent, you need big money so it is the logical step in what they are doing.

I find it hard to get an erection about bioware news, but at least they should be able to more or less make the game they intend to make with no excuses about crazy publishers like vivendi...which has to be a good thing.

 

[Drakron]

Actually no ... they are not a publisher and that makes the whole thing even more stupid.

Only thing they do is having a larger funds for their games (without depending on the publisher for it) but there is a catch since the publisher still will want royalties.

 

[Saint_Proverbius]

Well, they just becoming a publisher. Going public just means you are getting funds by that means.

There is nothing big to it.

Now that you have big budget games, to be truly independent, you need big money so it is the logical step in what they are doing.

The problem is that money isn't free. It comes with hefty, HEFTY strings attached. Like I said int he news post, games take a long time to develop - especially CRPGs. BioWare's already a little quirky when it comes to dev times versus good design decisions.. Imagine if they have to answer to shareholders every three months now when they didn't have to do so before.

That's the big problem with game companies. Many of them are public, and games take a while to develop. Even hardware tech companies don't have the problems game companies have with shareholders. A video card company can make a decent chipset and release various products based on that chipset every few months to make shareholders happy. They can whip out chipsets every nine months to a year. They can constantly stream out a product line to show off even the most technologically illiterate investor.

Game companies keep their products secret from everyone for a few months of development. Then once announced, that product is at least a year or so away from release. It's really hard to deal with shareholders in situations like that.

 

[Bluebottle]

Didn't Bioware release quite a bit of modular content for NWN, or was that handled by another developer?

I could see modular content being one way of appeasing investors in the short term, but i'm not sure what this would really boil down to for us. There is the risk that focusing manpower onto follow up modules for an existing product would squeeze the creativity out of developing new products.

 

[bryce777]

Well, what I should have said is they are cutting out the publishes. Which is a very good thing.

That money comes with tons of strings, much more than stock revenue. They have accountability to stockholders, but they at least have basic control of their company as well, and I doubt they are going to have a riot unless they start losing mooney. i don't think some crazy rebel chair will get appointed and then destroy the company or anything just because they go public.

 

[Davaris]

Sorry! Double post.

 

[Davaris]

The problem is games are costing more and more to make every year, because the players want better graphics. So to stay in the game, these companies are banding together so they can afford to make the expensive titles. Unfortunately this means less titles will be made. Also to be profitable, they have to appeal to a wider more casual audience. In the long term that means more sporting games and first person shooters and less RPGs.

 

[LlamaGod]

I like how you have to go back to old games now to have multiple creatures on the screen, when back then people talked about how future technologies will let you have so many more creatures.

The current state of graphics is pretty asstastic, even if people think its pretty.

 

[Kuato]

The problem is games are costing more and more to make every year, because the players want better graphics. So to stay in the game, these companies are banding together so they can afford to make the expensive titles. Unfortunately this means less titles will be made. Also to be profitable, they have to appeal to a wider more casual audience. In the long term that means more sporting games and first person shooters and less RPGs.

I couldnt disagree more, the "graphics" argument is a complete falacy Blizzard is making one of the greatest selling games of all time with graphics that look almost a decade old and created by one of the smallest teams compared to most games. The actual Truth is games are not being developed very efficiently at all, Mostly because of an almost headless chicken phenomena in the Industry, Execs want something to show for the money invested for almost at every minute in development and they want it turned around faster and faster. Developers are spending more and more time and energy to make the monthly/weekly/daily dog and ponie shows and less time actually working on a game. the real reason expensive Graphics are an Issue has less to do with Consumers and more to with stuffy execs that need something that makes them look good demoing to Higher ups, So when you say you are making a game to appeal to a wider audience what you are actually doing is in fact and ironically making a game for the smallest audience.

as for rpgs not appealing to a wide audience
FFVII 9.8 million units
FFX 6.6 million units

 

[DarkUnderlord]

FFVII and FFX are RPGs?

 

[dunduks]

FFVII and FFX are RPGs?

By teh standurtz of wide massez, they are.

 

[Drakron]

The problem is games are costing more and more to make every year, because the players want better graphics.

Sorry but that is wrong.

Games production costs rise every year not because of graphics but because production costs rise.

So to stay in the game, these companies are banding together so they can afford to make the expensive titles. Unfortunately this means less titles will be made.

Not unfortunatly.

The problem is the market gets flooded by near identical titles because in order to stay "in the game" they push out games as fast as they can with as mass appeal as possible.

That leads to lower sales because even with the market becaming larger every year there is no much reason to take game X over game Y since they are near identical.

That is why niche market is becaming very visable investment but when the market focus shift they can became at risk.

The fact is there are too many game developers houses doing too many similar games and the market cannot support then, the worst is when goes down another just pops up so nothing changes.

Also to be profitable, they have to appeal to a wider more casual audience. In the long term that means more sporting games and first person shooters and less RPGs.

That is wrong.

Years ago RPGs were the market focus and FPS were not ... the market focus shifts based on titles released and audience taste ... just like movies and music.

The reason FPS continue is they are more effective tech demos for engines that anything else.

The problem is that years ago we had a more diverse game profolio and we could find quality titles from all game genders and things now get waterdown to "FPV action RPG lite" due to fads and does not help to make the market focus shift.

A example of that is Final Fantasy titles were its higher selling one was FF 7 (a PS one title) were FF 10 sold less (despite being a PS2 title) but FF X suffered from higher production costs (voice acting, 3d graphics) to please the market but had fewer content (no map wandering, airship avaible on late game, fewer spells, etc ...).

 

[Drakron]

FFVII and FFX are RPGs?

By teh standurtz of wide massez, they are.

Dont you guys start, Final Fantasy was not a "wide massez" game since it was to be Square final game ... its popular in Japan since that and became popular in the west with FF 7.

Now they are dumbing down the series for the "wide massez" and that reflects on sales, fact is as Square did pushed the market they are now being driven by it and nobody sould be happy about that situation.