Chapter 12 – Lorne Lanning: Cofounder, Oddworld Inhabitants [2012]

Chapter 12 - Lorne Lanning: Cofounder, Oddworld Inhabitants

Date: 30/01/2012

Interviewer: Morgan Ramsay

Interviewee: Lorne Lanning

Source: Ramsay, M. (2012). Gamers at Work: Stories Behind the Games People Play (pp.209-250). New York: Apress.

After leaving the Hollywood visual-effects business, Lorne Lanning and Sherry McKenna cofounded Oddworld Inhabitants. Lanning had created a fictional universe called Oddworld, and believing in the power of video games as a storytelling medium, he set out to realize his creative vision. Immediately, he persuaded McKenna, a leading computer-graphics producer who had worked with talents such as The Doors, Michael Jackson, and Mick Jagger, to join him. Although financed by a venture-capital group, the investors sold its stake to GT Interactive, which became the studio’s publisher of record. Oddworld Inhabitants went on to sell more than 6 million critically acclaimed games in the Oddworld universe, generating more than $200 million in revenue. However, Oddworld Inhabitants suddenly ceased its studio operations after the release of its last title in 2005, as part of a conscious yet controversial decision to reevaluate the business.
Lanning and McKenna have worked together for more than two decades. While they maintain the Oddworld franchise, especially with the rise of digital distribution, the duo, alongside Pogo founder Daniel Goldman, have started a new company, Xmobb, to pursue opportunities in social media.

Ramsay: What were you doing before Oddworld Inhabitants? Why did you make the decision to start a video-game company?

Lanning: Before Oddworld Inhabitants, Sherry and I were in the film business, and we were doing visual effects. At the time, I was a visual-effects supervisor at Rhythm and Hues, which is today one of the largest visual-effects firms in the world. I quickly saw, from being in Hollywood for awhile, that owning your intellectual property was not going to happen in that town, regardless of whether the medium was television, movies, or whatever. I started looking at how computer-graphics animation could be used in a place where I could create and control the destiny of our own properties, and our own stories and characters. That was a massive driving ambition. I wanted to tell these stories because I didn’t want to be a miserable guy—another frustrated director in Hollywood and just complaining. I wanted to actually materialize my dreams.
So, I started looking heavily at what was happening in the game industry. Around 1992, being close to technology, chips, and how computer graphics worked, I thought the writing was on the wall. Right about that time, I convinced Sherry McKenna, who was at the time a superstar computer-graphics producer in Hollywood, that we needed to start a game company. A game company was the only place where we would eventually be able to use computer graphics to tell stories that we care about and not just stories that make money—stories that actually have some substance and relevance in the world. Twenty-one years ago, it was obvious to me that we were going to end up where we are now as a civilization, and I wanted to start telling stories that retooled the old myths and gave us some semblance of sanity. And that led to games.
I also convinced Sherry that the time was now. If we didn’t hit that window, we probably never would. The people in film wouldn’t be able to cross over in the years to come. As I put it then, there’s a lot of dumb money being thrown around, and they don’t understand necessarily who’s going to win and who’s going to lose, so we have to get in now before they figure it out. It took me two years to really convince Sherry. And then she had enough of me trying to convince her and said, “If you can raise the money, I’ll start the company with you.” She was never expecting that we actually would raise the money because we wanted $3.5 million. That was ridiculous for a game budget, according to conventional wisdom.
To me, it was obvious that games were going to have $50 million budgets. If you said that in 1994, you were insane. No one would listen to you. The more you understood how the entertainment business worked, how mass media worked, the more you could predict where games were going to end up. So we took that path, and there was no looking back. It has been a wild ride ever since.

Ramsay: You didn’t want to wind up miserable in Hollywood? How was Rhythm and Hues? Were you miserable there?

Lanning: Well, not with the company. I think the company was as good as it gets. John Hughes, Charlie Gibson, Pauline Ts’o, and Frank Wuts were the founders, and they ran a top-notch organization. They all have an incredible amount of integrity. I was really lucky to land there. Well, actually, I begged my way into the door. I took a 50% pay cut to move from TRW Aerospace to Rhythm and Hues because I wanted it that bad. They were really honorable people and prudent about how they were running their business. But I wanted something different. I wanted to tell stories.
I think I had the John Lasseter dream. I wanted to make those stories happen. I felt like that was part of what my life was about. The industry of Hollywood, not the company, was such that those dreams are very elusive. The more you studied what was happening on the ground, the more those dreams felt like they would never be. It’s like our impression of Iraq or Afghanistan. We have one view from being on the outside, and then there’s this whole other view when you’re on the ground. Being on the ground, I just saw what a stale town Hollywood was.
There are shelves full of books written about the dysfunctions of Hollywood, but really, it’s like a California town that had already been mined back in the 19th century. It was like most of what was really good was already gone. Now we have these industries—television, film, and music—that were very obviously going to die. As much as we want to view them as we do today, when you look at the music industry, it’s dead. Oh, we can say people are still making money on concerts and stuff, but just look at the revenue; just look at the charts of the financials from a Wall Street perspective. The music industry is dead. It had its heyday. Napster changed everything, and iTunes changed it more. The old ways had to change, and the people who held on to those old ways did not change. As a result, we saw the music industry just collapse.
The movie industry isn’t far behind. The budgets are just so enormous, and that’s a hit-driven business. You’re into a single project for hundreds of millions of dollars. It’s like, “Are you kidding me? This is a movie. This is entertainment. You’ve got more money here than multiple third-world nations combined, and you’re dumping all of that money into a single movie?” Bigger budgets mean you’ve got another level of bureaucracy. We’re seeing this inflation happen in the game business today, too. That inflation has changed and is continuing to change the dynamics of how people work. We’re seeing more checks and balances, more paranoia, more people in the loop, more studio notes, and everything else that ultimately adds up to less fun and creativity. Hollywood very quickly lost its appeal to me.

Ramsay: How quickly did you go from wanting to work at Rhythm and Hues to wanting to get out?

Lanning: That was after five years. There’s this old Japanese story. I don’t know if you’ve heard this. Did you ever hear about the samurai who goes up to the top of the mountain and talks to the old wise man in the cave? How do I know when my time has come? How do I know when my moment for greatness is here?
So, there’s this samurai. I’ll tell you the story, if you don’t mind. There’s this samurai and he’s feeling like, you know, “What do I do now. I’m at the top of my game, but I feel like I’m destined for greatness. I’m going to go talk to the old sage in the mountains.” So, he goes across the valley, across the plains, over the hills, up the mountain, and climbs all the way to the top. He gets into the cave, and he’s like, “Old wise man, how do I know when it’s my time to be great?” And the wise man says, “Well, here’s what you need to do. You need to go back down the mountain, go back over the hills, go back across the plains and across the valley, and get to the ocean. When you get to the ocean, start walking in. When you get your knees deep in water, keep on going until it’s up to your waist. When the water gets to your chest, keep on going. Eventually, the water is going to be up to your face. Keep on going. Do that.” And the guy’s like, “Are you serious?” And the wise man’s like, “Yeah, do that, and you’ll get your answers.”
The samurai just thinks this sounds crazy, but the guy is the old wise man in the cave, so he goes back down the mountain, over the hills, across the plains, across the valley, and finally gets to the beach. He walks into the ocean, and the water gets to his knees. He keeps on walking, and the water gets to his waist. He keeps on walking, and the water gets to his chest. He keeps on walking, and the water gets up to his face. You know what? He’s going to go for it, so he just keeps on walking.
A minute later, he can’t walk any farther because he’s completely underwater and about to drown. He comes up for air, and he’s like, “What the fuck?” He’s totally pissed off. He storms back across the valley, across the plains, over the hills, and climbs up the mountain. He charges into the cave, and he’s like, “Dude, you know what, wise man, why did you make me do that? I almost drowned.” The wise man says, “Yeah, but how did you feel?” The samurai replies, “I needed air.” And the wise man says, “Well, that’s when you know it’s time for you to make your move for greatness.”
The point of that story is that you know it’s time to make your move when you can no longer take what you’re currently doing. That’s the essence of that story. How did I feel when I as underwater? Like I was going to die, like I had no options. That’s how I felt. Like I was going to die, like I had no options, like I was trapped in a career. It had nothing to do with the people or the company. It had everything to do with my own dreams and ambitions. I wasn’t really making them happen. I was developing my skill sets. I was making a lot of decent money. I was on the cutting edge of imagery and computer-graphics technology. I was working with awesome people, but I wasn’t telling stories. Telling stories is what I wanted to do. At the same time though, I wanted to make a lot of money.
I’ve always believed that people wind up slaves to the economy. What would we be like if we didn’t have to work every day? What would we be like if we didn’t have to go have a job? What are all of the things that we’d want to do? What do we actually do because we have to make money? Because I grew up poor, that was always something that made me think, “I want to do what I want to do, and I want to make money doing it because I spent a lot of my life being poor, and I don’t like being poor.” So, that’s sort of the moral to my analogy. I needed more air and felt as though I had no choice but to make a change. When you feel that way, you do something. So, what I did was I convinced Sherry to start Oddworld.
Now, in the meantime, I had been writing stories. I was really learning a lot about what was happening in, let’s say, the red-pill reality. You know, like in The Matrix, the reality outside what people perceive in the media—what’s really going on. The more I learned about what’s really going on, the more I felt a strong desire to tell stories because, quite frankly, the blue-pill reality was really starting to piss me off. I just couldn’t believe the bullshit that people were being hoodwinked into on a daily basis.
I believe that stories have the power of change. Stories can help people who recognize certain difficult-to-perceive and even harder-to-believe landscapes of our world. Regardless of whether the subject is international banking, the war machine, or whatever, the more truth that’s revealed to us, as opposed to the bullshit we’re told, the more I felt underwater. And I had to tell stories because I felt like we were living in a dreamworld.
I really wanted to tell those stories. And I wanted to tell those stories through the most popular media, which had drawn me to film in the first place. I eventually realized, “Oh, film is not ready to make CG movies yet.” This is before Toy Story had come out. The film studios were not ready to take the chance. At the time, it cost at least $100 million to make a decent movie, and somewhere between $60 million and $100 million in CG, and that hadn’t been proven yet. Who was I to fool myself thinking that I’d be the one to get that money to do the first CG movie?
Combine all of these factors and the fact that I really need air. I was looking around, asking myself, “Where can I breathe? Where can I breathe what I’m about?” I settled on… video games? I looked at that, and I said, “I got it.” I mean, I got games. I had a paper route as a kid. In New England, I’d get into a little diner on my route to have some hot chocolate and play some pinball or whatever as often as I could. Anyone who had a paper route where they’d deliver papers at 5:00 in the morning while it’s 10°F below outside would understand. It was just so damn cold out. That got me really playing games—loving games—and then my dad started working at ColecoVision.
I understood why games were fun, but I wasn’t really a hardcore player. I was more interested in going out, riding motorcycles, and trying to get laid instead of sitting at home, playing any games that were out. I wasn’t quite a member of the game-playing youth culture, but I was always somewhat close to it, and I did enjoy games when I played. When the technology evolved to where I felt that what I had come to love—3D computer graphics—was able to become the medium for games, then I decided that was the time to take that chance and really go for it.

Ramsay: At Rhythm and Hues, did the company ever look at applying CG to other media, such as games?

Lanning: Yeah, they actually tried making one of their own games. It was after Sherry and I left. It was called Eggs of Steel, and, if I remember correctly, it didn’t do so well. At the time, we were trying to convince the company to do games. Games weren’t something they had envisioned, but they were listening, and they were curious. They were interested in exploring games as a revenue channel—an area to supplement the movies that they ultimately wanted to make. But games aren’t like that. You can’t look at games lightly. You can’t say, “Well, let’s do some games and make some money on the side.” It’s not going to happen.
I had the good fortune of knowing that then because I had made friends with people in the industry early. I remember the first guy who really opened the door for me to come in and look at his studio was Tommy Tallarico, who was at Virgin at the time. I visited the studio, and I saw how they were doing what they were doing. I was doing a lot of homework on the industry, and I realized this is magic that these guys are doing.
The Hollywood guys were telling me, “Ah, they look like crap. Why are you interested in games? The graphics suck. There are no stories. They’re just toys.” I was like, “Don’t you see the alchemy here? These guys are squeezing out 60 hours of entertainment with 56K of RAM on a budget of $500,000. You’re spending $100 million on a two-hour movie that someone might watch twice. Think about that. You have to start paying attention.”
Adaptation is one of our greatest skills. The world is changing underneath our feet at a more accelerated rate than ever before in known human history, and that means you have to be agile. You have to adapt. You can’t stick to beliefs that don’t really have foundations in repeatable sciences today. You’ll get run over too quickly. You could come out with a game back when Myst did, and you didn’t have to worry about being ripped off for a few years. Today, if you come out with something clever, Zynga is going to have you cloned overnight, right? It’s a different landscape today.
Hollywood, the visual effects supervisors, the art directors, and the good artists weren’t interested in games. There were a few, but most weren’t. They just didn’t get it, in my opinion. They didn’t see why games were going to be huge—unbelievably huge. They weren’t looking at games as the entertainment medium of the future.
Now, while games have had a lot of successes since then, they’re not the medium of the future yet. There are a lot of different moving parts that kind of fucked that up—one called the PlayStation 2—which was when we stopped paying attention to the development environment. We really screwed the pooch on the audience and the development community. Because hardware engineers in the game business didn’t understand the art of actually making games and they dictated the designs—in this case, I’m speaking specifically about Ken Kutaragi—they caused games to suddenly start costing a lot more. The culture was such that developers would tolerate rather than resist. If you came out with a movie camera like the PlayStation 2 in Hollywood, you would have been out of business in two minutes. No one would have used it. They would have told you where to stick it. But that’s not how the game industry operated.
The game industry was subservient to hardware manufacturing, whereas content-driven industries are not. In my mind, games weren’t really a content-driven industry. They were a challenge-product-driven industry. If you had a great challenge that made people have fun playing the game and it was a solid product, then you could win, you could sell, and you could stay in business and make more. In Hollywood, if you didn’t have a story that really engaged people, you didn’t have a movie. The game audience was really tolerant of certain shortcomings and not of others, so the audience didn’t care about graphics if they could get good gameplay. The reviewers thought they were graphics authorities though. It was a joke, right? We’d look at reviews, and we’d be like, “These guys think this is good graphics? They’re clueless.” So, there were different human-consumption patterns and desires that made one film or game succeed over the other.
Times have changed. Now, it’s hard to tell the difference between what we’re seeing. If we’re in a bar and we see a game on television, we ask ourselves, “Is that a game, or is that footage of a game?” The line is blurred. In the 90s, the differences between film and games were pretty obvious. But I guess I’m tripping on all of that to just say that games were so obviously the future to me. They were the future because of the ratio of how much content you could create versus how long an experience that created for the audience.
When I started, when we were doing animation, we were charging a million dollars per minute. That was the going rate for quality CG in Hollywood. At Rhythm and Hues, that was the rate. When you looked at the game Myst, most people were spending 20 or more hours in that game, and it had a total budget of $500,000. If you looked at a product where you spent a million dollars per minute to tell a story, that minute would forever be the same throughout history. But with a game, different people play different ways for different amounts of time. Some will spend more, and some will play twice. The economics of games is simply completely different. If you’re paying attention to that, you see it’s just a matter of time.
As computing power increases, image quality increases; therefore, our ability to tell stories with games will improve. The reason we had confidence in that was because we weren’t really looking at the industry as much as we were looking at human behavior. And you know why? We love good stories. We love good animation. We love cartoons. We like great stories. We like good direction. We like action. We like drama. We like love stories. We would want better stories and games, period. It was obvious.
Now, there was a whole bunch of know-it-alls who said, “Oh, you don’t understand games. Let me show you my metrics.” You know, all that bullshit. And it was like, “Dude, you don’t understand people.” So, we started Oddworld on that very human note at the time.

Ramsay: Before you went to Sherry, was starting a company your only option? Did you consider other options?

Lanning: We did consider other options. There were a few people that had asked Sherry to run game companies that venture capitalists were about to finance for another $10 million or so. There were a few different efforts by a few different visual-effects companies. Richard Edlund was thinking about starting up a game department at Boss Film Studios. James Cameron had just started a new studio in Hollywood called Digital Domain. They claimed they wanted to do games. There was a lot of Sillywood hype about the “information highway.” Silicon Valley and Hollywood were going to change the way we watch everything. Today, that has actually happened, but it didn’t happen as fast as everyone claimed it would then. We wanted to get involved with games at Rhythm and Hues, too.
You have to understand, CG was very expensive. It was an $80,000 purchase just to put someone behind a desk. You had $40,000 in software, Wavefront, and another $40,000 in Silicon Graphics hardware. If you wanted decent-looking CG, that’s what you had to spend. And that’s not including salaries and other soft costs. If you had set up a network—a capable network that could push many gigabytes of data, which was a lot then—you didn’t want to set that shit up from scratch, man. It was a lot of work, required a lot of brain power, and was very expensive. We were hoping to start doing games at Rhythm and Hues. Sherry was even asked to run the division, and I would work with her to get that going.
James Cameron had also personally asked me to work for him at Digital Domain. He was really interested and wanted to go for games. I just didn’t believe any of those kinds of outfits would be successful. I listened to their plans, and I just said, “It’s not going to work. If you don’t take games ultra-seriously, you’re going to fail because it’s not as easy as you think.” When film directors and studio heads look at games, they see toys. They go, “Ah, games must be easy.” But they’re not, right? Games are really hard. I’ve made movies, I’ve made television, and I’ve made photorealistic paintings. Games are the hardest. Games are really difficult because you’re dealing with technology that the end user can break. That’s not the case with any of these other mediums.
So, yes, we really did hope that we could start doing games somewhere else and not start our own company. At the end of the day, we said that if we don’t start our own company, we don’t think we’ll be successful. That was a pretty depressing realization because I just didn’t want to go through all the work of setting everything up, you know? Everyone dreams of having their own companies, but not many people are willing to do what it takes to actually pull it off. And I don’t give a shit what anyone says—that’s just the bottom line, and it’s way harder than everyone usually thinks it is.

Ramsay: Did you have any experience with startups before?

Lanning: I had experience in the art world, so that was my experience, but I was still a young guy. I started Oddworld when I was 29 years old. And previous to that, I was at Rhythm and Hues. Previous to that, I was in aerospace working on the Star Wars, visualizing Reagan’s Star Wars. Before that, I was in the art world in New York, and I was an illustrator who became partners with a painter named Jack Goldstein. I thought he was the best contemporary fine artist in the world. I felt fortunate enough to meet him, and then I felt fortunate enough to impress him, and then I felt fortunate enough to become partners with him.
As a kid from the street, I understood some basics, like you can’t run a business and piss everyone off—pretty basic stuff, right? Big, successful artists never learn that basic principle, so Goldstein made all kinds of errors in his career and in his relationships. I saw that those problems could be fixed, and I was bold enough to present solutions. He was, I think, tired enough to take me up on my offer to help him implement them, and we got started. We turned his art into a good business. For example, when I met him in 1985, his paintings were $15,000 a piece. I looked at what other artists were getting, and I saw that he was clearly undervaluing his work. A year and a half later, we had his paintings up to $60,000 a piece. I was running a studio—well, let’s just call it what it was, a factory that would manufacture ten of those paintings every eight weeks, and we were preselling them.
That was really my first startup. It was like an Andy Warhol factory operation. There wasn’t a business plan. There wasn’t an exit strategy. I didn’t even know what an exit strategy was. I didn’t know much about anything. I knew that people like these artists and their paintings, and they’re willing to pay certain prices. I thought, “How do we build a business around that?” I also understood that unless you’re Syd Mead or someone who has turned their art into a business, instead of just work-for-hire, you have to study the principles and science of business. In this land of capitalism, if you don’t study business, you will get screwed. I knew I had a lot of learning to do, but I understood the basics. You need to keep people happy, you need work that stands out, and you need to separate yourself with excellence. These basics served me quite well, but I was pretty clueless.

Ramsay: When you started Oddworld, did you think your past experience would help you?

Lanning: Yes, because I really believe in evolving your skill sets. If you believe in evolutionary principles like that, you think, “Okay, what tools are in my cerebral arsenal now that I can apply and do the things I want to do and be successful?” Regardless of whether you got in a fight as a kid and got your ass kicked, you walked away with certain lessons. Regardless of whether you got a speeding ticket or whether your girlfriend broke up with you because you were an idiot, you learned lessons. And regardless of whether those lessons are professional or personal, they usually intertwine because they’re really just lessons about life.
In the art world, I was lucky in a lot of ways. I was fortunate. I actually made more money than I thought was possible at that point in my life because I grew up as a poor kid. At the same time, I thought I knew more about business than I actually did. You hear people say, “If I could know everything I did when I was 18, I’d know everything.” But the fact is that as we get older, we realize how much we didn’t know. I think naïveté really allows people to take chances. If they knew what was really at stake or how hard starting a company was really going to be, they never would have gone forward in the first place. That’s true for me, too.
Oddworld was so hard that if I knew how hard it was going to be, I probably wouldn’t have done it. I probably would have been intimidated by the task and not believed that we could have actually succeeded. Just about everyone I know in the game business, including Peter Molyneux and Dave Taylor, says the same thing. If they knew how hard it was going to be, they probably wouldn’t have done it. If someone doesn’t admit that, I don’t trust them. That’s the truth. I hear people say things like, “We build games because we just love building games.” I’m like, “Oh, shut up. You’re just reading the script that you think people want to hear, but the fact is that you know you’re getting screwed by publishers. You know you’re getting a raw deal.” The chatter in front of the camera is so different from the chatter in the backroom. When I hear these people, I’m thinking, “Are you kidding? Who do you think you’re fooling? Building games is really fun? That’s just bullshit.”
I don’t know anyone who builds great games who honestly believes that the process of building games is fun. I’ve had this conversation with many of the well-known names in the business, and I’ve yet to have one disagree. Whether they’ll admit it to the world is another story. So, no, I probably wouldn’t have done it, but I needed air, and naïveté really helped me to jump out there and take the bull by the horns.

Ramsay: When you were convincing Sherry to jump on this adventure with you, what was that conversation like?

Lanning: She thought I was stupid. Well, she didn’t think exactly that. Sherry McKenna was the “it” producer for computer graphics. She has more Clio Awards than anyone. To this day, she has won more Clio Awards than any other single individual in television.
Her career started in the music business with The Doors, who were her kid buddies, and she was helping manage their business. When Michael Jackson or Mick Jagger wanted computer graphics, or when Steven Spielberg wanted to do the Back to the Future simulator attraction, they went to Sherry to produce all of that stuff. She was used to winning awards, being a hotshot, and being interviewed by HBO and all of these things.
She was making a fortune—literally hundreds and hundreds of thousands of dollars a year—and there I was trying to convince her, “But wouldn’t you like to make more? Wouldn’t you like to not be paid by the hour?” I pulled out every trick I could think of because I honestly didn’t think I would be successful without her. I was an artist, so I was still an asshole. I’m not saying that I was early Steve Jobs, early Bill Gates, or Mark Zuckerberg in The Social Network. But you’ve got to be an asshole to just have your dream, be a dick and ignore everyone, and pursue it. Later, you might grow up and realize what an asshole you were. I wasn’t an exception. So, Sherry loved movies, and there I was trying to show her Sonic the Hedgehog and why we should start a game company. She was like, “Are you crazy? Why would I care about making stupid games?” That was probably a verbatim quote. I said, “Because let me tell you this story.” I knew that she loved stories, so I told her the story of Abe. I told her this big, long story. I was working in her division at Rhythm and Hues, running the whole theme park division, which was called Special Projects. I was a strong advocate of that division and a strong advocate of having Rhythm and Hues recruit her from Universal. She had a relationship with these people anyway, but I was trying to move things along. I had worked on a project with her, and I was telling her that she should come to work at Rhythm and Hues. But it’s not like this was unfamiliar territory. There was history. She had hired the people who founded Rhythm and Hues when they were working in coal mines in Pennsylvania.
So, she thought I was nuts, and then I told her the story of Abe. She fell in love with the story, and she was like, “My God, this is so awesome. Let’s make a movie.” I was like, “No, let’s make five games.” That was where the Oddworld Quintology got started, years before we launched the company. These stories were very close to me. These weren’t something that a focus group sat around and cherry-picked. I had a pretty good idea of what I wanted to do, but I also wanted to bring in the influences of some creative partners, a team of designers and artists.
From that point, those original concepts were shaped into what I should say was more palatable and less extreme. I thought that the world was ready for quirky dysfunctional victims of the dark side of globalization—how appropriate that is today because look around us, man! I got Sherry to at least agree that if we could raise the money, we would start the company. I think she agreed just to humor me because I think she didn’t really expect that we would actually get the money, but we did. She had given me her word, so it was too late to back out. That’s how our adventure began.

Ramsay: You’ve mentioned several times that you grew up poor, that you were a kid from the streets. Can you tell me about where you grew up?

Lanning: I should say lower middle class, right? Not quite ghetto, but lower middle class. As a kid growing up in that environment, I was always afraid that we might not able to afford rent, and we might be out on the street. My dad was in the US Navy. My parents got divorced really young because he was always out to sea. He was in the submarines. My mother worked as a nurse as a single mom, raising two kids and just trying to get by. We were living in a low-rent neighborhood around the city of Meriden in Connecticut, and there was crime all around us. People were just feeding on other people. Not literally, of course. That’s what I mean by lower middle class. It was a school of hard knocks.
Meriden was one of these rust-belt–type of cities, even though it was New England. It was an old silver-mining town that had since seen the heyday of its industry. There was a lot of racial tension and, in my opinion, a lot of bigotry, racism, and old ways of thinking in New England. The city where I lived had about an equal violent crime rate to New York City at the time. This wasn’t new to Connecticut. New Britain, Bridgeport, New London, New Haven, and Hartford—these were hardcore cities. These cities aren’t what you’d think of as Connecticut, but they’re there. Ask anyone who went to Yale what the neighborhood was like.
I saw people who were just absolutely miserable to each other. They were resentful and criminal, and I thought a lot of that was related to the economic realities that they lived in. To me, it was always pretty clear that most people were always fighting over money. I didn’t want to be like that. I didn’t want to be living so hand-to-mouth that I had to be mean and miserable to other people and not use my brain. No disrespect to the lower class. In fact, I feel a great compassion toward people of lesser means because I think under capitalism, they’ve really gotten the shaft. And I’m even saying that as an entrepreneur.
If you and I were living in medieval Italy, we would be Catholic. We wouldn’t have a choice. When you live in the United States, we don’t have a choice but to play the capitalism game, but the capitalism game is failing us. That was very obvious to me 30 years ago. Its failure hasn’t even fully materialized for most people to really understand just how badly it has failed and what’s to come, which is, in my opinion, not going to be pretty. All of these influences aside, this is the game that we play. He who has the gold rules. This is the golden rule of capitalism.
As a result, we have to understand the economic realities of how money works and how the supposed free market works. If we don’t understand that language, we’re not going to get very far. Coming to understand how it worked did not mean that I was a devout follower of its faith. I always resented how it worked. I always felt like it was a game that didn’t bring out the best in people or yield the best results. Learning about it in school, I just went, “I don’t believe it. I just don’t buy how one company becoming a monopoly and crushing others is good.” I never could ignore when the richest people, like Rockefeller and Carnegie and J.P. Morgan, pressured others in the most wicked of ways. I never could buy into the notion that when you’re in America, if you become one of them, you’ll become enlightened and start building hospitals—that becoming a billionaire somehow makes you more human. That’s our American myth. Having known a lot of billionaires, I don’t think that’s the case. I don’t think you become more human by becoming more greedy.
Now, I’m not opposed to people making great amounts of wealth. I’m on a course for that myself, and I convince investors that is necessary every day. But how we go about it, and how we define ourselves in the process, I think, can use a lot of refinement. In our culture, we still worship the richest guy. But, come on, is that all? Is that really it? Is that how shallow we are? Is that all the fuck it’s about? Take a look around you. Did I see his sailboat? Fuck his sailboat, and fuck him because the guy’s a turd. When I look at the Rocke-fellers, the Carnegies, and the J.P. Morgans of the world, I see turds. When I see Oprah, not so bad. When I see Trump, who cares? I just see ego. That’s all I can see. I don’t see people trying to make the world better for anyone else. I see them trying to celebrate their greatness so that everyone agrees with them. I just don’t buy that part of the picture, and I never did.
For me, I’m walking in a capitalist’s shoes, but I’m not really a follower of the faith. This isn’t the talk I give to investors, but this is the truth. I’m never going to lie about that. I just think humanity needs to wake the fuck up and stop being selfish little douche bags. I honestly believe that, and I believe that, as storytellers, we have the capability to try and effect that type of change. If I said my work was about anything, I think that’s what it has been about: trying to effect that type of change. There’s going to be war, so let’s be good soldiers and at least try to shape it for the better, rather than just sitting on the sidelines, bitching and moaning like a lot of artists.

Ramsay: When you finally convinced Sherry to go along with you, she wanted you to get funding. Did you put together a business plan?

Lanning: Yeah. Before we continue, imagine this. I was driving forklifts in the South Bronx in one of the worst neighborhoods in the United States to pay for my education at the School of Visual Arts in downtown Manhattan. The School of Visual Arts wasn’t cheap, but I paid my way because I wanted a good education. I didn’t just get to go to college on someone else’s dime. I worked really hard just to step through the door.
Although I was an artist in New York, I was also taking classes in business. The School of Visual Arts had a wide variety of offerings by really interesting people. I was taking classes with Wall Street brokers, venture capitalists, and finance people on how to raise money and how to put together business plans. I think being an individual of lesser means really drilled into me the difficulty of the road ahead. How hard is it to make something happen?
I asked myself, “Who do I love?” I loved Walt Disney. I loved the work of George Lucas. I loved the work of William Hanna and Joseph Barbera. I loved the work of Jim Henson. These guys had to figure out business, as well as master their crafts. I read as many biographies as I could about Hollywood moguls, early studio heads, and successful businesspeople, like the Carnegies and Rockefellers. I read whatever biographies I could get my hands on because I really wanted to understand how to succeed in the world. More importantly, I wanted to succeed with certain dreams, and I was under no illusion that my dreams would manifest themselves easily. Through all of these resources, I had learned the language and the structure for raising money.
When Sherry heard me say that I’ll put together a business plan, I don’t think that she really knew what she was in for. I pulled out the reference material for successful business plans. I copied those templates. I had been doing a lot of research. I’ve always believed in research, research, and more research. I had the data, but she had the experience to put everything together in a way that people would understand.

Ramsay: How much of a financial burden did you expect to undertake?

Lanning: Well, I learned something from the New York banking world, which was “never invest your own money.” If you have good ideas, there are enough people with money who don’t have those ideas. If you can’t convince them, you’re probably not going to make your idea successful anyway. I believed that you shouldn’t invest your own money because it makes you less smart in the business because you’re more scared. Fear doesn’t manifest the best results.

Ramsay: You don’t believe in having personal skin in the game?

Lanning: It depends on how many other parties are involved and how many parts can break. For example, we delivered games, and at times they couldn’t find their way to the shelf. It had nothing to do with us. Had that been our money, we would have lost it all, and not because the game wasn’t good. We would have lost it all because the distributor fucked up and couldn’t get it on the shelf.
When people come to me and ask about whether they should invest their money in something, I advise people to understand what they’d be getting into, how many parts can fail, and how much control they have over those parts. There are a lot of ways that a great product can fail, and it can have nothing to do with the developers.
I think that it’s better to not invest your own money and put your whole life on the line. I think if you do invest your own money, it’s the nature of capitalism that you’ll become a larger target. You’re like a wounded gazelle. The predators will think that you can’t walk. There’s power in being able to walk away. The good news is that there’s enough greed out there that you can always bank on greed. You can always know that if you have a story that stands a good chance to make people money, then you should be able to get someone who doesn’t have any ideas to pay because that’s what they do: they fund other people’s ideas.
What we invested in Oddworld was time and sweat. I took a 50% cut to my salary to start the company, like I did when I went to work at Rhythm and Hues. I felt like I was investing a lot, even though it wasn’t my life savings. It wasn’t like I had much anyway. I think that people who do that are taking major risks with their own money. It doesn’t always lead you to make the best decisions, so you really have to believe in what you’re doing.

Ramsay: So raising money for Oddworld, you didn’t have to sell your home or take on a second mortgage?

Lanning: No, I would never do that. I would never do that because in capitalism, that will be used against you. And I don’t mean to be like the capitalist dog here, but the truth is what it is. I mean, read any good business book. Read Trump’s books. I can’t stand Trump, but I’ve read all his books, and I don’t think he’s a bad guy. The point is that what he’ll always say that if you don’t have the power to say no, you don’t have any power.
So, if people know that you mortgaged your house, and you’re going to be out on the street, they will take advantage of that. That is how this system works. I don’t give a shit who says the opposite. I’d love to have that debate. It’s like come on, man, it’s pretty well damn understood. And if you have weaknesses—whether it’s publishers or movie studios or venture capitalists—they’re going to take advantage of them. That’s their job. If you really understand how the system works, you get that that’s their job. Now, you might have people within those organizations who have more credibility, who have different ethics, but at the core of this system, that’s what it’s about. That’s what capitalism is about: taking advantage of little guys. And the more that someone has a vulnerability, the more people are rewarded for exploiting it, and that’s just the way it is. I always saw that pretty clearly, so I was never going to put my life on the line, and then go out and ask other financial types to jump on the train with me because I knew where that would lead. I’d seen it at low levels and read about it at high levels. So, when I read about people making it, I think those are the fairytale stories. You know, there’s one in a million that actually pulls it off.

Ramsay: What were your sources of funding for Oddworld?

Lanning: Well, at the time, it was sort of a pseudo-venture capital company that got created just for the purpose of creating a public company. They wanted to ride the same wave that Rocket Science was riding. If you remember that, it was riding that wave on the “information superhighway” that was the talk of the town in Hollywood, Silicon Valley, and Wall Street at the time. So, that was a group out of the Midwest that was basically run by the children of billionaires. The children were in their 40s and 50s, and they were more interested in making their own mark. They created this capital firm and started acquiring some companies. We rounded out their story quite well, so they chose to invest in us.
Their plan and our plan were not really the same, but that was what it took to get this company started. It started with that group. That was the only game venture that firm ever did. It was just a small group with a fair amount of money that had big ideas, and we kind of hit them at the right time, so we were able to get funded.

Ramsay: How much capital did you take?

Lanning: $3.5 million was what we raised.

Ramsay: What did you have to give up?

Lanning: At the time, 49% of the company, which people thought was unheard of. They thought you would absolutely give up more than 51%. We were in the negotiating room to sign the deal, and Sherry said she was willing to walk if she didn’t have 51%. Their negotiator didn’t believe it, so we started to walk. I was following her. He changed his mind and wanted us to stay! So, we had 51%, but it really came down to the fact that we had to walk. And if you’re not willing to do that, you’re going to be vulnerable.

Ramsay: You walked out of the meeting…

Lanning: Well, we tried! We tried to walk out, and we got stopped. Then it was like, “Okay, then. Let’s be friends, and let’s do this.” There were a lot of lessons learned after that, like about how various people can hold grudges, and you don’t even necessarily know it. That caused a few rifts down the road. But again, it was also being financed by people who didn’t really understand the game industry. They thought they understood Wall Street, and maybe they did. I don’t know. But I know that they didn’t understand the game industry. There were some unrealistic expectations.

Ramsay: Let’s go back to 1994 and Rocket Science…

Lanning: Okay, so that was a big story in the game industry because it earned a lot of money in a really short time in the public market. But the whole story was “Hollywood meets Silicon Valley,” and they had some guys from Apple and some well-known production designers like Ron Cobb and a few others. They were going to reinvent how games were made.
They did a Wall Street story and made a lot of money. And it kind of enflamed what I would say was a frenzy at the time—a bubble with people thinking they could start new game companies with 3D stories, take them public really quick, and make a lot of money. That was what our original investor was actually pretty clear about. I mean, that was just what the plan was. And for us, we didn’t so much care about that plan as much as we wanted to build the company, and we wanted to build intellectual property. That was the misalignment. One was about how do you take it public, do a fast IPO on a good story, and just get out. And the other point of view, which was ours, was how do you build a great product, build a great company, try and have some fun, and make people money while you’re doing it.

Ramsay: How much influence or control did they want?

Lanning: Control—full control. That’s why we said we’re walking out if we don’t get 51%. That really is due to my partner. I mean, my partner’s got balls of steel, she does. I probably would have been too wimpy on that front. What she said was, “Okay, if I don’t have the ability to run the company, I don’t want your money.” It was really that simple. When it came to production, they really had to have faith that we could do product. So, that’s how we got initial control of the company.
But I thought that by the time we delivered the product, these Wall Street types in these entities, which get created just to do public IPO plays, would be long gone. They didn’t seem to have much interest in the process of making the product. I think that was kind of way beneath what their level of interest was. They were only interested in how quick can you create a timely story, how fast, and for how much can you turn it.
So, at the control level, they wanted full control of really nothing more than that. I mean, this was the basic model out there. It’s not like a publisher that needs a game or a like a film studio that needs a film for a quarterly report. When you’re going for independent financing, it’s all about the money. It’s not so much about the company or the product. They need the controls to be able to make the types of deals that oftentimes people who are passionate about the product can easily stand in the way of and screw up.
What happens at contractual levels is that financial partners of that nature only have a singular interest in profit. They need the controls to make whatever financial decisions they want to make and move however they want to move. As a result of how the business financing world operates, they will always want those controls. Even if you’re established, it’s still the guy with the gold who’s going to want those controls. It wasn’t so much about product. It was more about destiny and the ability to have decisions made without the need for a common agreement.

Ramsay: As cofounders, how did you split your responsibilities?

Lanning: I demanded that she be the chief executive officer because I didn’t want to do that, and I didn’t think I’d be good at that. She was clearly far more skilled and versed in managing partners—whether they’re financial partners or clientele partners—and that’s half of the game right there.
If you want to build something—a company or a product—and you’re passionate about it, you really need someone who knows how to deal with those partners. Those partners can easily and very quickly become overwhelming. They can divert a lot of time and attention away from the product you’re trying to build. I mean, there’s a whole slew of things where the partnerships need to be managed very skillfully to stay positive.
Everything in life is about trying to reduce friction, right? You want to try to make things happen easier. So, you need someone who manages the client very well—whether it’s a financial investor or a publisher or a film studio or an advertising agency—they’re all the same. Now, the difference is that pure cash investors don’t have the vested interest in needing that film or needing that game for their distribution business. So, pure cash investors have their interests and it’s very specific; whereas, if you’re making a game and financing that way, you can be late and maybe not penalized because they’re too afraid to piss you off because they really need that game.
But in the other space, in the financial space, it can be just more sterile and clinical and more upfront. The management of those relationships is critical, and I think the more people you talk to, the more that you’ll hear that the people who succeed usually figure out a way to really manage those partners well. For me, my interest was creative, and Sherry was one of the few producers who I knew didn’t think that she needed to get involved with that fun, creative process, too. Producers like that can be a real pain in the ass. They’re like, “Oh, let me tell you what color I think it should be.” And I’m like, “I’m not really interested, dude.” When there’s that type of chemistry, it can be fractious and not result in a great product or a great company. There had to be a very clear delineation. It was my job to take out the compass and see which direction as a business we should go. I was really the vision of the business. Sherry was the implementer of that dream, and then I was more of the design director in the trenches.

Ramsay: How did you find that venture capital firm?

Lanning: They found us.

Ramsay: How did they find you?

Lanning: What happened was we were still in the film business, and we had put together the business plan for the game company. We sent that to our attorneys to bless some things, and word started getting around that we were looking to start a game company. We got contacted by a group. I remember they called me at my apartment on a weekend and said, “I heard that you guys want to start a game company. We have a million dollars to start a game company.” I said, “Well, that doesn’t work for us because we need $3.5 million.” And he said, “Do you have the numbers to back that up?” I said, “Yeah.” And he said, “Fax them to me.” I did, and that was the beginning of that negotiation.

Ramsay: I wish more investors would call me out of the blue…

Lanning: It took a lot of prep. You know, my first thing in life is fishing, like fly fishing. Everything’s really about tricking the fish into thinking it’s exactly what it wants, right? The timing and the stars had kind of aligned, but we had invested a lot of time and energy so far in just putting together what in that investor’s words was the best business plan he had seen in that space so far for startups. We didn’t have the sophistication of a big publisher or anything like that yet. We were still kind of naïve on the business side, but we had some perspective and at least some clever ideas.

Ramsay: Since both you and Sherry were in the film industry, did you look for any outside advisors from the game industry?

Lanning: We did, actually. One reason we thought we had possible chemistry with our initial investor was they had bought another company that made games. That company made games the old way. They were a 16-bit company, and we were a 32-bit company. Things were going to start going 3D, and games were going to start having stories and all that.
I didn’t have all the answers, but I knew quite well that games were going to be really hard. I knew they were already much more complicated than almost anyone in Hollywood would acknowledge. People were constantly underestimating the game industry. One thing that was clear about Rocket Science was they didn’t have the secret ingredient that was really going to make great product and make audiences happy. At the same time, they underestimated what it was going to take. They raised a ton of money, but they really didn’t recruit seasoned people who knew how to build games. But we were very concerned about what we didn’t know about games.
A favorite saying of mine had been “I don’t want to learn from my own mistakes. I want to learn from your mistakes.” I hoped that I didn’t even have to make the mistakes. Ultimately, that was kind of naïve, but it’s true. I’ve had enough hard knocks that I recognize nothing comes easy, and everything is likely to be more difficult than you thought. So, I was actively engaging people who really understood the basic pipeline process of building games and the science of gameplay. To a large degree, I was often very disappointed with the creative solutions that class of people was coming back with. But we were seeking the help, and we sort of got it.
In terms of the package which came with that first investor, the chemistry between the two companies wasn’t stellar. I think that adds more friction to the process, especially when you don’t necessarily know what you’re doing. We had a dream, and if you don’t know exactly what you’re doing, you tend to be a little more intense about it. You know, you tend to be a little more concerned, passionate, and like “no way I’m going to let this fail.” You know, “I’m going to make this happen and really dig in.” That can be exhausting. Without that, we probably would have a much harder time succeeding.

Ramsay: In that meeting with the investor, what would you have done without Sherry’s experience?

Lanning: I would have believed them—everything they were saying. She was wise enough not to, you see. I would have been a sucker. I would have been a chump.
It’s funny because the more you engage with financiers, the more you understand that they play by certain rules and behave accordingly. They’ll tell you what you want to hear, and they’re not going to tell you about all the bad things that could happen. They’re not going to tell you about their interests, which they don’t think you’d be interested in, which might throw your motivation off, or which make you question their commitment. You’re going to be told what you want to hear.
So, if you said, “Look, I want to control the company,” and they go, “You got it.” But you’re like, “Wait a minute. My attorney’s saying that if you have this much stock, then you have control.” And they say, “Yeah, but we don’t want to exercise that right, so you have it.” You have to be like, “Well, talk is cheap. On paper, I need it.”
So, I was naïve enough at the time that I would have bought into basically that bullshit, and that bullshit is common. That’s standard practice for almost everybody, and that’s why people spend fortunes on attorney’s fees doing deals. I would have fallen for it, and you never would have heard of me—at least not through the game channels, because we would have failed miserably.

Ramsay: You were 29 when you started Oddworld.

Lanning: Yeah.

Ramsay: Some entrepreneurs around that age had families when they started their companies. Did you?

Lanning: No. I’ve never had kids. I’ve never been married, but I live with Sherry. I’m straight. That’s not my issue. But kids were never part of my plan. I wasn’t wired that way. Some people hear that and ask, “You didn’t have kids? How could you not have kids?” Well, once I sort of deprogrammed around 17, I started realizing that these ideas I have about the life I think I should lead, they’re not actually my ideas. They were given to me by the system we live in. Once I started thinking for myself, I don’t think that I ever wanted kids. I think raising kids is a really important job, and people should do it well, but I never had those families.
I knew people who started companies and families. If they could do it successfully, I really admired them. If their families suffered, I guess I judged them more harshly. If you’re going to make the big step, the big commitment… I mean, anyone can go out and start companies, but the big commitment is birthing a human being, right? If you’re going to make that commitment, you need to be really serious. And if you’re out there trying to start a company and not paying attention to your family, and your kids are getting raised like shit, I think that’s a sad testimony.

Ramsay: After you received your $3.5 million, what did you do? What was the first thing you did after getting capital?

Lanning: The first thing we did was go after the right talent.

Ramsay: Who were your first hires?

Lanning: I believe the first hire was Steve Olds. Steve was an incredible—and still is an incredible—production design talent. We were very much about design, having a creative culture, and really trying to be the best at design. I went after the guy who I thought was pretty much as good as anyone could get. I had worked with him at Rhythm and Hues. He’s amazing. Then we started rounding out the computer-graphics team, and we brought in some people. We also bought all Silicon Graphics workstations and really expensive seats—you know, $40,000 for software and $40,000 in hardware for each seat. The systems, networks, and all that back at that time were a lot more complicated and a lot more expensive than they are today, at least to set up and manage and get running, right?
We really started putting in our computer-graphics team first. It was hard to get game talent. It was hard to find people who shared our ideas about what games could be and who knew how to build games. Games, in general, seemed, for whatever reasons, kind of stuck in certain patterns. It’s similar today, just on different levels, in the console market.
If you were around film directors, composers, screenwriters in that way, you’d know they were really thinking people. And, I mean, Hollywood’s full of shit. There’s a lot of bullshit down there, but there are also a lot of smart people—intellectual, smart, philosophical thinkers—and they’re usually the talent. Hollywood’s not full of them, but there’s a lot of them.
Then you went over to the game industry, and you’re trying to find like-minded game designers and programmers. Who we were finding had reference points which weren’t Chomsky, Virilio, geopolitics, or international relations; instead, their interests were porn, sports, and video games. The industry had a reputation for being that way for a certain reason. People were just that way. It was pretty shallow and proud of being shallow. It was an interesting time. In hindsight, in a business like games, you have to balance your creative with your technical, but if you don’t have the strong technical, you’re dead. You don’t have a chance no matter how great your creative.
Oddworld was driven from a top-down producer creative model that was hiring technical. We needed to make sure that we really had equal partnerships with great technical. But we didn’t start doing that until our new company, which is more mature and wiser, hopefully.

Ramsay: You got right into building a development team, not management?

Lanning: That’s right. We didn’t focus on a management team at the time. We were focusing on—you’re absolutely right—a development team because games were getting more complex.

Ramsay: You had the idea for Abe long before you started the company. What were the reactions of your first hires to the concept?

Lanning: They were excited because we were focusing more on the design, and the art team was taking advantage of Hollywood skill sets, so they were more driven by characters and story. Those things interested them more than gameplay, but they were excited by the possibility of what gameplay could be if we had more characters and stories. They were kind of bearing with gameplay, but they really cared about telling stories with computer graphics. At some levels, that’s problematic, right? You need everyone really sharing the same dream. They thought it was risky, but it was kind of exciting. And the computer-graphics industry was getting tired because there was a lot of disappointment with being service companies to the advertising industry and to the film industry. If you know people and know sectors, they’re always complaining about the client. And having been there, I’d say most of the time for good reason, but that’s life.

Ramsay: How did you get those first few on the same page?

Lanning: You know, I don’t know that we ever did. I just directed really strongly, and I don’t mean that so much in the positive way. I mean that in the physical way. I just was relentless, and honestly, I was kind of terrified that it wouldn’t work. I felt like I was learning every mistake the hard way. It was really scary at times. You’re way behind. Things aren’t coming together like you had hoped. You go through all these experiential anxieties, mini-failures, crises, and it’s kind of a voodoo science building games and computer graphics.
We were trying to stick great production design, great computer graphics, and good gameplay together. Great production design is its own thing, but great computer graphics and good gameplay were like… Oh, it was a nightmare, man. It was really hard. What were we? Crazy?

Ramsay: Who published the Oddworld games?

Lanning: That was GT Interactive.

Ramsay: When did you start pitching the game to publishers?

Lanning: Well, here’s what happened. We’re in the Central Coast, and we thought that with our investors, we had a game company.
We thought that we were building a game for the Sony PlayStation, and we were using their development systems and this and that. At that point, we were relying on the other parties to handle relations with Sony and give us good advice. So, one day, we received this letter from Sony, and it says we need to have our license verified, signed by the senior vice president at Sony, Bernie Stolar.
Bernie Stolar launched the PlayStation, he was the chief executive officer at Mattel for awhile, and he was president of Sega. So, Bernie, he’s a big guy in the industry. And we have this letter, and Sherry goes, “Huh, I wonder if that’s the Bernie Stolar I used to be really good friends with when we were kids?” So, she calls and leaves a message. She asked Sony, “Can I talk to Bernie Stolar?” And, of course, they’re like, “No, Bernie’s a big guy, and you can’t talk to him.” So, she says, “Well, okay. Just tell him that Sherry McKenna called.” And then a little while later, Bernie called. So, all of a sudden, the guy running the US PlayStation division was old pals of best-bud nature from back in the day. Bernie was like, “You’re doing what? You’re building games now?” And she’s like, “Yeah, we’re building for the PlayStation.” And he’s like, “No, you’re not. You don’t have a license.” And she’s like, “What’s a license?” And he goes, “That’s it. Get on a plane, and get up here.” Sherry and I got on a plane, and we went up to Sony, and he said, “Well, what are you building?” We showed him, and he loved it. He completely fell in love right away.
We then started talking about how we could become a first-party title because we weren’t with a publisher yet. We were still with our initial investor. And so we were going to be like a Crash Bandicoot or something like that. Bernie was starting to hook that up, and we thought we were going to be doing a first-party Sony game for the PlayStation. Then all of a sudden, Bernie calls up and says, “I’m leaving Sony, so, you know, sorry.” And it was like, “Wow, are you serious?” And he goes, “Yeah, but this is the company you should go to.” He turned us on to GT Interactive, and he said, “They have a lot of money. They need great games, and you have a great game, so that’s the company you should be with.” They flew out to San Luis Obispo from New York, saw what we were doing, and made a deal. They bought out our first investor right there, and our first investor right there doubled his money. He wanted a lot more, but things had become a little fractious between us. It was kind of like, “Look, we want to be with them as partners, and we don’t want to continue the relationship as it is, so why don’t you take the money and run?” That was an interesting episode.
Then we were partners with GT and started doing business with New York. They relaunched Abe’s Oddysee, and they actually did it. It was really fun working with them.
GT was run by a guy named Ron Chaimowitz. He used to be the president of CBS Records in Miami, so he was a music guy, and he had helped build the careers of people like Gloria Estefan and Julio Iglesias. So, Ron Chaimowitz had been in the real entertainment business for a long time and was kind of a serious player. When we met with him, we really liked him, and they fell in love with Abe. They really gave him great support. Their people in marketing and all that really got behind it, and they were building that new company, so there was a whole energy of new and exciting possibilities.
So, we were riding that whole wave, and it was kind of fun at the beginning. We were starting up. They were going to take on the industry. They had a lot of money, and they had one of the few guys that seemed to really understand talent and how to work with talent. It seemed like the rest of the game industry didn’t care about talent. It didn’t understand the value of good creative. It was very technically-centric.

Ramsay: When you said that Bernie turned you on to GT Interactive, was he actually going to work for GT?

Lanning: No. I think he went to become president of Sega for Nakayama. Nakayama was the head of Sega out of Japan and kind of the guy that built it. He was sort of a cowboy Japanese, and I don’t mean with the hat. I just mean he seemed more American than Japanese in the way he did business. Bernie basically started running Sega for Nakayama in the United States. Sega was coming out with either the Saturn or Dreamcast. I don’t remember which came first. But he went over to Sega, and we were still on PlayStation. It wouldn’t have made sense to go with Sega, although we certainly considered it. He was telling us where we should go—where he thought we would do the best—and he had a pretty good idea at the time. We took his advice and wound up in New York, while he wound up at Sega in San Francisco.

Ramsay: Do you know what Bernie said to GT to get them interested?

Lanning: I think what he said to GT was simply, “There’s a product you should see.” Bernie was the type of guy who’d say, “There’s a product that you should see. It’s what you need, and you should buy them. They need their investor bought out. You should do it. They’re smart people. I’ve known them forever, and this is the deal you should do.” And a lot of people would listen to him. So, if you can get those kinds of recommendations, you’re in Fat City. It happened pretty easily with GT. I mean, it was complicated, but it was good stuff, and we’re still friends with some of the best people that were there to this day.

Ramsay: Who contacted you from GT?

Lanning: I think it was Chris Garske. I don’t know that Chris is in the industry anymore. Last I heard, he might be chilling in Hawaii, but he was a senior vice president and chartered us. He was out there finding titles, signing them, and doing acquisitions and stuff. There were a couple of guys in addition to Chris. There were Kurt Busch and Rick Raymo, and they worked for Chris. You know, they all were great. They all loved Abe. They were cool people, and we were thrilled to be with them.

Ramsay: What was your first major challenge after getting the publisher?

Lanning: Well, getting the game done. It was like impossible, man. There was a lot of friction at the studio. We had sort of different cultures. We had inherited some people from another company.
Company cultures really get shaped by different people with different interests. So, our company culture was one where we just wanted people who wanted to do great work. At the other company, there was a different culture, and great work was not the mandate. We never really sung well together. But because the investor owned the other company, when it came time to wrap that company up, we were in a position where we were depending on them, so we basically absorbed a lot of the staff.
There was a lot of risk there, and it was tough to get the game done. They weren’t used to working with some maniacal director who wanted what he wanted. They were used to building games the old way, so there was a lot of friction. And the first couple of games kind of got done that way with that team.
There were shortcomings on both sides of the fence, but there were ultimately no bad people. Sherry had always said from day one that you have to hire the best people; you have to hire people who are smarter than you. Even though it’s very logical that, yeah, that’s what you should do, that’s not what most people do. Most people are threatened by people who are smarter than them. So, you have some cultures where people don’t want people who are smarter than them on any level, and it breeds different political situations within a company. The bigger things get, the more difficult it becomes, and the more contention there can be between the staff. People start resenting other people and not feeling like they’re pulling their weight. You’ve got people resenting people for feeling like they’re too demanding, unrealistic, irrational, or whatever. We’ve all, I think, been accused of everything. Ultimately, you have to make some really hard decisions when you’re building an organization because, at the same time you’re putting your heart and soul into it, you’re just trying to survive. It was really hard to do that at Oddworld. It wasn’t a big company, but still, you’re talking $400,000 to $500,000 a month, up to $700,000 a month, for 11 years as your burn rate. You have to make sure you’re always paying people, so there’s a lot of pressure to get product done.
Just getting that product done was a killer, partly due to the split in culture. Some people look at life and say, “I’m going to build the best game I can until I drop.” And other people say, “I want to build the best game I can by 6 PM.” So, you could imagine how people who were really intense and worked really hard felt when other members of their team didn’t seem to be pulling their weight. They got resentful, and there was a fair amount of that.

Ramsay: Were there any particular conflicts that were impactful?

Lanning: Well, internally, I think it’s typical company culture stuff. Externally, it was always really challenging. There are a lot of pieces to the machine that can fail that you have no ontrol over. So, for instance, we built a game, right? At the distribution company we were in love with, some things started going south. I don’t know the stories of what was happening inside the organization, but there were clearly tension and increasing dysfunction to the point where when our second game released, the distribution company was having its… challenges.
We knew through independent channels that they misplaced like a million games on forklifts in a warehouse somewhere. As commercials are running, as airtime was burning, there were no games on the shelves. There’d be like one in a store. We were dumbfounded. We were going, “This can’t be happening.” You kill yourself to do something, you run the ball all the way to the 99-yard line, and when you get there, bam, they just totally fumble. And you’re just like, “You’ve got to be kidding me.” Shit like that happens. What I’ve found is that’s more common than not, and that’s a lesson. I call it “idiot tax.” We just hadn’t paid our idiot tax yet. I was just like insane with confusion. Our ad dollars are being spent, and our games aren’t on the shelf? I mean, it was just like suicide for the title.
Ultimately, it sold about a million and a half units, but it didn’t do nearly what it could have, should have, and was supposed to do. What you find is that people don’t go, “Yeah, you know we fucked up. We lost some games on the floor.” You know, everyone’s covering their ass, right? That’s the corporate world. So, no one’s admitting to it, and instead, they’re saying, “Yeah, the game’s just not selling too well. Sorry.” And you’re like, “What?” I mean, I was having people on the phone call every Wal-Mart, every K-Mart, and every “you name it.” We just zeroed in on what the United States and Canada had at retail, and we put someone on the phone, and we documented every game that we could track in the United States. All total, we found like 1,500 games.
Now, we knew other companies out of Texas that were in the same position. We all were like, “What the hell’s going on?” And we’re all being told we’re all losers because our games aren’t selling well. We knew differently. That kind of shit is common, you know. Honesty is an endangered resource in the world. It’s not an abundant resource. When things fail, it’s very difficult to find out where, why, and how something is failing because it’s very unlikely you’re getting a straight story.

Ramsay: What were some of the things that you could have done differently that would have changed the outcome?

Lanning: Let’s see. I’m 29, so the younger you are, the smarter you are in your own mind, right? The older you get, the more you realize how much you don’t know. You know, there’s a tipping point where you start going, “Wow, I really don’t know that much.” I thought I did. It’s hard for me to assess what things I would have done differently. One of the absolute key things I know I’d do now is never make a hire out of fear again.
When you need someone in a noncritical role—say you need the lawn mowed—yeah, okay, just get somebody. But when you’re talking about high-tech engineering or hardcore marketing or business or game design, you can’t just get anybody. You need great people. I think, personally, a lot of my lessons were about making a number of hiring decisions out of fear because I just believed anything to do the job. Sometimes I would see the person I wanted as a talent-to-be, as opposed to what was right in front of me.
So, when we want something really bad, we have tended to see what we want to see, and that happens in the hiring process as well. You know, you want the person you’re interviewing to be the solution you’re looking for. If you don’t have a great filter for checking and balancing your own desire against what you’re really dealing with, you start compromising in a way that’s going to be very painful. I’ve heard Jeff Braun, who was the cofounder of Maxis, talk, and he’s full of lots of little bits of wisdom. He once said, “Hey, you can run a lot faster tied to ten guys than you can to five when one isn’t running.” I know I’m butchering that statement. You’ve probably heard it before. What he would say is you can move a lot faster if everyone is running together, but if one’s slowing you down, they fuck everyone up. I think that’s totally true. I’m not pointing the blame at any specific people—these are lessons learned.
When you’re building a team, if you were playing a sport, you’d ask yourself, “What did I hire that guy as quarterback for? He can’t throw.” And you look like an idiot to everyone. But in a business, you go, “I can’t do this or that. It’s not as easy to tell.” I think those are the biggest lessons in hiring. I actually forced my partner to compromise. She believed purely in only hiring the best. So, she would have taken it out more on a limb, and risked waiting for the right chemistry, whereas I was too afraid to burn too much money before I had the right people secured. There’s all that normal angst that comes from wanting to start something, having a window, and having limited time and money, but fear will kill you.

Ramsay: Would you say that fear led you to make brash decisions—quick decisions with less consideration?

Lanning: I guess so. I’m not sure that’s the word I would use, but I agree in principle, yes. I’m trying to articulate that in a better way. I have a friend of mine who’s a union psychologist. He says most people’s issues come from having unrealistic fantasies. And we might say less consideration, but I would say “unrealistic fantasies.”

Ramsay: Your expectations were higher than they should have been?

Lanning: Yeah, and misaligned, I guess. You know people do it in relationships all the time. One of my partners now, Daniel Goldman, has a dating analogy for every possible thing you could think of that relates to business. So, your friend comes back and says, “Wow, man. I met this girl, and I’m just totally in love. I want to get married.” He’s saying all this stuff, and you’re just like, “Wow, she sounds really special.” And then you meet her, and you realize she’s a witch, or this guy’s a jerk, or how can this girl be so in love with him, or vice versa. That person has an unrealistic fantasy, right? Their friends are looking at them going, “Dude, you just don’t see it.” I think that’s kind of like hiring. You want this date to work out, so you’re kind of looking at it blindly with hope. Hope is clouding your judgment.

Ramsay: What was the most serious case of this fear-driven decision-making? Your game eventually came out, and it was extremely popular and you were very successful. What actually went wrong?

Lanning: That’s a good question. Let’s take James Cameron as an example. If you talk to anyone who’s worked with him, they’ll say they can’t stand the guy. They just can’t stand him. They think he’s a miserable, whip-cracking, slave driver—an unrealistic, ultra-perfectionist who doesn’t care about your time or your energy. But the guy makes great movies, right? But he’s afraid. Anyone who can’t stop making it perfect all the time is afraid. I don’t care how much money you have. It’s a different type of OCD. That fight-or-flight ability actually has its value. There’s something to be said for just being completely relentless—for absolutely refusing to fail.
With what little I knew at that time, I can’t say that I would have been more mature in those areas. I wouldn’t have failed for other reasons—the maniacal drive and refusal of failure, which actually helped us through being terrified to death of the saber-toothed tiger that gets you up the tree. If you have that fear and you have the passion, then you tend to knock it out of the park. I mean, all your best actors are totally insecure. All your best musicians are totally insecure.
Being an artist is living with that never-ending dissatisfaction with knowing everything is never done right. Most of the great talents that we’ve recognized through history weren’t satisfied with their work, and that dissatisfaction compels them. They lose sleep just trying to make it better and better and better. If you don’t have that—if you don’t have as much energy as it’s going to take—you’re probably going to feel more comfortable. The guy who’s hungry is going to prowl more. He’s going to find more nuts than you’re going to find. If you’re getting lazy, cushy, and resting on your innate talents, that young whippersnapper who’s paranoid and aggressive is probably going to eat your lunch. When you get into a comfort zone, you’re dead.

Ramsay: Was Oddworld the only property you developed?

Lanning: Well, the whole concept of Oddworld was the planet Oddworld. So, Abe’s Oddysee was just an episode that took place on that world. I always looked at it, and convinced Sherry to look at it, like it was Star Wars. We were building Episode I, Episode II, and so on. We would build our universe like a Middle Earth or the galactic universe of Star Wars. We’d have our own theme. Middle Earth had wizards, dragons, and good versus evil. Star Wars had samurai in space. We were going to have The Muppets meets The X-Files. We’re going to have the dark side of globalization with a kick to the funny bone. I wanted to create this twisted brand that really represented the sort of unspoken truth of the world we’re living in and try to make it humorous and ironic. Irony can be great humor, rather than just jokes for fun. It will tickle the funny bone with some counterculture. I wanted to do what great filmmakers did: tell stories in a new medium that lots of people spend lots of time with, and try to tell the stories I wanted to tell. We did four titles in the Oddworld brand. We started on a few others, but we never delivered them. We never got them done and out the door. There’s a lot of undeveloped material in that universe, lying in wait. To me, it’s kind of like the Mexican bandito who has the two belts across his chest with all the bullets in them, right? Those bullets are like the characters, worlds, and stories of Oddworld, but I don’t necessarily have the gun it takes to go out and shoot. I started a new venture to get that gun. One day, I’ll go back to Oddworld and really do some damage.

Ramsay: Would you say what you’re doing is similar to the Hollywood production model where every movie is an individual company?

Lanning: No. Every movie is a company in Hollywood to protect against legal liabilities. That’s why every film has a new company created when it starts. But the way we were thinking of it was actually quite the opposite. We were thinking of it more like how Lucasfilm was looking at Star Wars, and how Jim Henson’s company was The Muppets. We wanted to invest in one company that would make and keep developing a universe. The Hollywood model isn’t about that. In Hollywood, you set up the company for the production, and you tear it down when the production’s over.

Ramsay: Did you look at developing any properties outside of the Oddworld universe?

Lanning: Not really.

Ramsay: Were you ever worried that you’d get burned out on the Oddworld universe?

Lanning: Nope, I’m still not. I got burned out on releasing games, and not seeing them get the distribution or the exposure that I thought they were entitled to. I got burned out on being on a treadmill, and then finding out that my efforts weren’t adding up. And those factors that are making them not add up are completely random at various times and beyond your control in various ways. You can’t change them, so I got tired of that. I have a favorite saying: “I don’t have to eat a gallon to know it’s vanilla.” A couple of spoonfuls, and I get what it is. If someone’s a shitty partner, it only takes a couple spoonfuls. I don’t need to hang around, tasting it with other people.
If you get burned two times, okay. If you get burned three times, you’re kind of an idiot. What are you thinking? What were you expecting? We’re very resilient when it comes to it. If we put our mind to something, we’re going to do it, and we’ll make it happen. But at the same time, we’re not stupid. If you’re fighting that battle, but not really winning anymore, then you go, “What’s the world look like now?” You reassess everything.
With Oddworld, we never ventured outside the property because it was absolutely what we loved and still do. As I said, I’ve got a lot of undeveloped material, and I’m very passionate about it. I would like to get to it. I mean, it’s my intent to get to it someday. The world was changing so quickly though that he idea of still building box product games with triple-A budgets that, well, that world became less and less and less sane. I shouldn’t say “sane” as much it was just becoming less rewarding and more difficult with worse terms.
The world was changing, so I thought it was wise to just back up and wait a minute. I might be doing this thing, and we might have this company, but really, how is the world changing, and do we want to try to change this company to fit the world? Or do we love what we intended this company to be, and it’s a different time now, so should we reprocess the new landscape? How has it changed? How do we take advantage of it now? How do we facilitate the thing that we love? It took us a few years to really start figuring that out, but we’re, I think, very smart to have just said, “Instead of staying on a treadmill that’s going nowhere, why don’t we hop off the treadmill, cut our expenses, and realign? We’re going to do a few different things.” That was just before one of the worst financial periods in this country’s history. Then those projects became more difficult to realize. Everything became more difficult around 2007.
We would never grow tired of the property, and that’s why we didn’t sell it. That’s why we still have it. We want to return to it.

Ramsay: I asked because… Do you remember what Nolan said when we were in Napa? He has “five-year ADD” when it comes to companies.

Lanning: Yeah, he’s also not a content guy. If you’re just building businesses, I totally understand that. The company we just started? I have no desire to be here after five years—none whatsoever. Oddworld? I never want to sell it in my life. They’re completely different motivations.
I know Nolan, and I respect Nolan, but he’s not a storyteller. To him, it’s just business. I mean, he’s Nolan Bushnell. He’s legendary. What I mean is that he’s a creative visionary business guy, but he’s not a content guy. There’s a difference. Film directors, writers, novelists, animators—they really care about the work. Other people—businesspeople—what they tend to care about is the business. And a lot of what they do is interchangeable. For some guys, it doesn’t matter that they’re making toilets or golf bags. It’s business. They get off on the business; that’s what excites them. Maybe they get off on high-tech business, but when you get into content, you’re really passionate, and you love that content like Henson and Dr. Seuss.

Ramsay: I get that. But how successful was the first title?

Lanning: I think Abe sold 3 million units or so. We didn’t get sales like what you’re seeing today, and not like what the Crash Bandicoot series sold. But it certainly put us on the map. And then just last year in 2010, Abe sold like another half-million units.

Ramsay: Was GT surprised or impressed?

Lanning: Well, we were favored. We certainly became golden kids in the stable, but they had Doom, Unreal, and Total Annihilation. We spent maybe about $3.5 million to $4 million on Abe. That was an enormous amount of money for a game. For it to be a success, they had to put like another $4 million into marketing it. That was fabulous exposure for us. If it wasn’t a decent hit, they would have been really disappointed. At that level, they’re investing in it to be right. They want them all to be hits, but they know their numbers. They know they’re only going to get a percentage of winners.

Ramsay: How did they react to your success?

Lanning: The short answer is they weren’t surprised, but they were happy that it worked out. Here’s the problem with success. So, here’s a perfect condition. They’re thrilled—too thrilled—because what happens immediately is they go, “Okay, you know what? You did really well, but these other titles? They didn’t.”
A lot of their other titles didn’t do well, and as a result, they, as a corporation, had a lot more financial pressure now to do better. More pressure and shorter deadlines got put on their successful properties. There was a lot of pressure to produce another game like Abe in a year, and deliver it in nine months. All of a sudden, we had to deliver a better game than the game that took us three and a half years to develop because we refused to deliver anything less than a better game. We had to deliver a better game in a third of the time. And that’s a curse. So, the conditions are beyond you. The conditions of the people that are financing you can cause all different types of pressure to do things to help their business, and they are not necessarily the best things for your company.

Ramsay: What was the original deal with GT? How many titles did you create?

Lanning: They got half the company, so we were kind of half-owned by them. So, they could say, “We really need you to do this, and we love you.” But on the other side of that, if we didn’t, they we’re going to hate us. You don’t have a lot of choice, really. If you buck that system, you need to be in a stronger position. So, we did that game, and we did it on time. But that was when other elements started falling apart, like losing all those games in a warehouse somewhere.

Ramsay: Tell me about the warehouse incident.

Lanning: Well, it was kind of elusive. It was something that never got officially exposed. A lot of people knew what was going on. People inside the distribution company were aware, and they would let you know off the record that they knew, but it’s not something that ever became news or anything like that. And it’s not something that ever got cleared up, so it created a lot of tension. I was a really pissed-off guy. I killed myself for nine months. I was just really upset about it.

Ramsay: What got lost?

Lanning: Our games were part of like a million games that were lost in a warehouse. We don’t know the details. All that we know is that they weren’t on the shelf. So, apparently, it was like a warehouse in New Jersey. But it’s just things that happen, and you suffer.

Ramsay: Were the cultural struggles still the status quo? Lanning: Yeah. I’ve actually learned so many lessons since then. I mean, I don’t think I was a mature manager. I was very, very demanding and emotional. There are many ways to screw things up, so I certainly had a lot to learn. In some ways, I think if you internalize your crises and reflect on them in what I would call a healthy way, you figure out where you’re the problem. It’s like, “Wow, she left me, but how was I really a boyfriend?” You have to really process where you think you might have been at fault.
I think I’ve matured. I hope I’ve matured a lot since the days when I was raising that money and being completely fried. Working 80 hours a week year after year, feeling like some spoke would break out there, and knowing that we’ve got to keep that pace… It just gets worse. It doesn’t get better. That’s what most of the development community, I think, would tell you. I think that even the most successful guys who have been in the game business for a long time know that it’s been a really rough road.

Ramsay: During the production of the first title, how many hours were your employees working?

Lanning: How many hours? It was different. People who really were passionate? You couldn’t get them to go home. Other people couldn’t be counted on to stay past 6:00 PM. So, it was different depending on the individuals, and then there are labor laws that you have to abide by if you’re paying them. I mean, we paid everyone exempt wages, so they didn’t get paid overtime. We always paid well. Some people really killed themselves, but to others, it was a job. I told you how many hours I worked, but I absolutely refused to not deliver. You know, I refused to fail.

Ramsay: People really killed themselves? You’re talking about work, right?

Lanning: They didn’t literally. Yeah, I’m talking really hard. There were no suicides or anything like that, but I know companies where that has happened. They come in the morning, and there’s a guy hanging there. Hollywood has seen that. Sherry worked at a company, Robert Able & Associates. They were legendary in the computer-graphics business. And they came in one morning, and a guy had just burned out. He was hanging. I know, amazing, sad… Work is bad enough where everyone’s working that hard, and then one of you is dangling. It’s like, “Oh, my God.” But, you know, Bob Able was a maniac. I mean, he was like, “It’s all about quality.” He wanted everyone to work all the time. He was like Cameron, except maybe not nearly as well-known.

Ramsay: When you found out that the first title was selling so well, how did you feel about that success?

Lanning: Validated. Until that time, I just felt like there were a lot of ideas, but you didn’t have proof, and any bozo could say, “Yeah, but you haven’t done any better.” And the fact was you hadn’t, right? So, you know how that conversation goes. I mean, people have at it every day in every bar. When you’ve actually knocked it out of the park, you’re validated in a certain way, and then you’re looked at a little differently. You get a different reception. And I don’t mean that in a star way. I just mean that in a credibility way. If you can walk in the door and your credibility precedes you, that’s so much nicer a meeting than when you walk in the door and they’re going, “Who’s this guy?” Right? That makes a huge difference in business.

Ramsay: Were you cautious or overconfident about your success?

Lanning: I was always cautious. I mean, I always felt like failure is just around the corner. That was something that was very deeply ingrained in me. I mean, I never got therapy. I probably should have, but I ultimately started to realize that I took shit way too seriously.

Ramsay: You? Taking things seriously?

Lanning: Yeah, I know, right?

Ramsay: Isn’t that similar to what you said about making fear-based decisions?

Lanning: Well, yeah, but we’re talking about history. I’m claiming to be a little wiser now. I mean, I don’t believe fear makes the best decisions. You know, as biological creatures, we have this fight-or-flight response mechanism. If we’re living in fight mode all the time, it’s just going to wear us down. It doesn’t mean that you’re not going to win the fight, if it’s going to be a fight that might aid you a lot. But eventually, it’s just going to wear you down; it’s going to become really tiring. I think that fear-based decisions might keep you alive, but they’re nothing to live on.

Ramsay: What expectations did you have? Obviously, it was to have a better game in nine months, but what were your expectations?

Lanning: I thought we would see sales that would give us more ability, and that ultimately means royalties. When you don’t sell well, it puts a lot more strain back on the next day. Your next year is going to be that much more difficult. You’re going to be insulted if people go, “Yeah, but you didn’t sell as many units this time,” and you’re just like, “Fuck off, man.” You know? You really start getting pissed. You get resentful because you believe you should have had a certain success that you didn’t have, and rightly or wrongly, there’s a tendency to point blame elsewhere. I felt justified many times. It’s maddening.
If you feel like you did what you were supposed to do—you made good on your agreements—and someone else drops the ball, that affects your entire performance then and over the coming years. If you have a high burn rate, and you can get a triple, you can hit a home run, and it really affords you some flexibility. With a little breathing room, you’re in a much better space. You’re much more well-equipped to go climb those next mountains. Whereas if you don’t have that success, it’s kind of like starting over again. It’s hard because now you just don’t have the fruits of that success, and everything in this world costs money.

Ramsay: Did your cautiousness, in retrospect, ever lead you to miss some great opportunity or opportunities?

Lanning: Yeah. It’s hard to quantify, but I know moments were lost. I know that I would be too passionate to seize an opportunity at a certain moment or too resentful—you know, basic failings of man. I can’t remember. Oh, there’s one. I really fucked that one up. I walked away from a film deal just because I, let’s say, lost faith in wanting to be on a cycle that I didn’t necessarily think could win—again, parameters beyond our control. Rather than get into something that you’re going to resent, it might just be better to avoid it in the first place. But even now, I can’t tell if that was a wise decision or a passionate decision. It’s hard to tell.
I remember one of the smartest guys I ever met was a criminal psychologist at an extraordinary level of great success. I used to enjoy talking to this guy. He was an older cat, and I asked him, “How do you know when you’re doing the right thing?” And he said, “Well, that’s a great question. I don’t know, but I think it’s really easy to know when you’re doing the wrong thing.” I thought that was a great answer. If you tried to always do the right thing, you know it’s a lot harder to know what might have been different.

Ramsay: There was a possible film deal for Oddworld?

Lanning: Not for Oddworld. For Citizen Siege, which was the company in the Oddworld universe. Oh, I’m sorry, you asked me before whether we entertained other properties. Actually, I designed and developed a new property for film, and they wanted it to be a game as well. It actually got funded as a game first. Citizen Siege wasn’t finished. The project was greenlit by EA in 2005, and then we walked away from that funding. We said, “Well, let’s make the movie first, then let’s come back and get funded as a game, and then let’s use the database together.” I was proposing this whole clever story that was maybe too clever for its own good at the time. It confused a lot of people, like attorneys who were trying to figure out how database rights would work between a game that was using the same data sets as the movie, and shit was just getting infinitely complicated purely on legal fronts. I had been working on it since 2004, and then we decided not to do it as a game. Instead, we then spent like another year doing preproduction, script writing—all that stuff to do a movie—and we had the full movie package. I’m still incredibly passionate about it.
In 2006, possibly 2007, we actually signed a film deal. We had the deal, but I guess you would say there was a creative difference. Without getting into specifics, I personally lost the faith that a good film could get made. In hindsight, I felt like I didn’t want one to. This was another passion project for me. I mean, this was another property like Oddworld. And I didn’t want to see it get mangled just due to the climate, or the conditions, or the business terms, or partnerships, or whatever. I felt too passionate about it to put it out there and risk it, so we backed off, decided to assess the landscape longer, and let the option expire.

Ramsay: Speaking of films, Hollywood used to think of games more as promotional tools, and you know, that might still be the case.
Lanning: Well, games would be used to ride the visibility being given to a movie. So, really, the games wouldn’t really be used to promote it as much as the games were like parasites on movies. And “parasite” is a negative word. I don’t mean it that way, but the game would be riding the back of the marketing campaign of the movie. Publishers would finance those games. They would pay a lot of money for the license because they believed exposure was everything. Then they’d make a crappy game, hoping that people just liked the license and would buy the game.

Ramsay: Who would approach whom about the license?

Lanning: It depends. You know, with something like Lord of the Rings, the publisher went after the movie. With something like The Matrix, I think it was Dave Perry who figured out how to get the Wachowski Brothers to give him the rights, which was amazing. In other cases, there are executives at studios, and their job is to go out and milk a property. If they’re going to come out with a new film, their job is licensing, right? So, they want to go get as much money as they can to stick that brand on whatever they can.

Ramsay: So, the tables are turning. Instead of filmmakers looking toward games, game companies are looking toward movies. Now, there are game companies that want to extend their properties to the screen. Lanning: Yeah. I mean, that was eventually going to happen. Historically, there have been a few attempts at that. One was Chris Roberts and Wing Commander. Two was Square and Final Fantasy: The Spirits Within. Square thought they could do it, too, but they did horrible jobs because they didn’t understand the film audience. They understood the game audience, but because they made good-looking cinematics for games, they thought they understood the film audience. Well, they couldn’t have been more wrong.

Ramsay: Did you explore any other media for the Oddworld universe?

Lanning: Yeah, television a little, but more for Citizen Siege. As a television series, well, as a live-action movie, Sam Raimi’s company Renaissance Pictures wanted to do it. As a television series, J.J. Abrams’ company Bad Robot was interested in doing it. Citizen Siege is a pretty rich, intense property. But Oddworld as a television show? I mean, we’ve always imagined that it could be a television show. We always thought and designed the characters, thinking that some day they could have television shows, but we never actually really developed for that medium.
We designed a whole Oddworld film, and we have hundreds of production paintings for that. Raymond Swan was doing some incredible work, the writing was developed, but we didn’t do it. The financial climate was so bad, the terms were so bad, and the property was so intimate to us that we didn’t try to take Abe out and shop it. We tested the waters a little bit, and t was pretty rough out there. Given the average licensing suspects, there’s film, television, or video games, so there weren’t many other places to take it. Dark Horse wanted to do something with comic books. But I think we were always just too distracted with trying to get things done as a struggling developer.
Almost all developers are always sort of in the mindset that they’re struggling because building games is hard. With Oddworld, we left a lot of dinner on the table. You know, if we had more business acumen and more experience, we would have been able to enrich the business in different ways, and exploit licensing and merchandising in ways we didn’t. We just didn’t have the focus or the energy. So, we didn’t develop in any other media.

Ramsay: Do you still own Oddworld Inhabitants?

Lanning: Sherry and I still have Oddworld Inhabitants today. Between the two of us, we own it 100%. We still own all of the titles, so if anything happens with Oddworld, it still comes back to us. That sounds like we’re really clever in business, but the game industry grew up so fast around us. We found ourselves in a place where we didn’t believe we could continue to be successful with the way the industry was changing.
We were looking at manifesting our other dreams as films and other media, and then the financial collapse happened in the West. When we shut down the studio, we saw the writing on the wall. How were we going to compete with Activision and EA against their frontline titles? How were we going to get a decent deal that isn’t completely unfair? We just said we won’t. We’ll retool our business to move in other directions. We’ll hold onto the property because we think the property is more valuable than anything we can get. We did something that a lot of people didn’t understand. Why did you shut down your studio? Why didn’t you sell it? Today, it’s actually doing great, and we don’t do anything! New generations are finding our games. Their parents are passing them onto their children. They sell on Steam, PlayStation Network, and in other stores every day. I didn’t think that there would ever be nostalgia for video games.
I was a really early vocal proponent of digital distribution when a lot of other people were saying it would never happen, but even I didn’t understand how digital distribution would bring us back. You know, Mark Rein and others were saying a lot of bullshit about what a joke digital distribution was, and I was saying that it was the key to the future. I didn’t quite get that digital distribution would actually revitalize old titles—that it would create classics out of properties that seem to have come and gone. Digital distribution has been a wonderful thing, and shutting down Oddworld has worked out wonderfully.
We were naïve, even though we raised venture capital to start the company. Even though we bought the venture capitalist out before the first product was released. Even though Sherry was a brilliant manager, and handled the client and the bank. We were still, in my opinion, relatively naïve, even though the world saw us as successful.
Naïveté is a very powerful tool for starting businesses because if you knew how difficult it was, you might not have done it. You might not have believed in what you wanted to do if you understood all of the obstacles that you were going to encounter. You might not have believed in yourself if you understood how smart you would have to be, and how many ways you could fail. The number of ways you can fail is so enormous. But living through the process certainly gives you perspective. We learned a lot.

Ramsay: What are you doing now?

Lanning: We found another partner, Daniel Goldman. Daniel goes back with Will Wright to the original SimCity. He did the Windows versions for free because they couldn’t afford to pay him. Daniel started his first venture when he said, “Okay, I’ll do the Windows versions for free, and then I’ll have some royalties.” Daniel did very well. He built his first online network in 1983. He started Total Entertainment Network, sold it to EA, and it became Pogo. We’ve got a guy who really knows his shit on the technical end and as a co-creative partner. So, together, we founded this new company, Oddmobb, which is more of a business than I’ve ever really been involved with before. It’s exciting because there’s a lot of learning again.

Ramsay: Did you invest your own money this time?

Lanning: Yeah, we put our own money in this time, but we have a different track record now. We have more financial freedom, and it wasn’t like if we put it all in and failed, we would lose our house or face any of the really hard realities. There was enough buffer there so that we could self-fund, take a chance, and prove to people—in the most difficult financial climate most of us have ever seen in our lives—that it would be worth investing in. We needed people to get it. We believed in it enough, and we still believe that we would make good on it enough that we actually put in some substantive cash, sharing more than myself. Sometimes you’ve got to do it.

Ramsay: You said the new company is more of a business than you’ve ever been involved with before. What do you mean?

Lanning: This new company is more about business. It’s less about my personal vision and telling my stories. This may sound a little silly, but I look at it like this: “Hey, man, if you’re psychic, why don’t you guess the lottery?” Do you ever hear people say shit like that? If you really think that you get what’s going on, then why don’t you really capture it? Why don’t you really get on top of it? We were looking at changing the course of games. We were looking at changing the course of movies. We even got a movie deal, and the financial crisis happened. Some things didn’t turn out to be as they appeared, and we left it on the table. Trying to raise money during a financial crisis was very enlightening because you see a lot of things that you otherwise wouldn’t see. There’s very little dumb money out there, so you need stronger stories. You need a better understanding of the marketplace and the big possibilities. Investors want a significant return on their money.
As things tighten up due to economic crises, as the banksters are ripping us off, and as you try to raise money in this climate, you’re asked a million complicated questions. If you don’t have the answers, you’re not viable. It’s a much more challenging climate to raise money in. It forced us to ask a series of questions and investigate answers that we never had before. Obtaining investment was a definitely more complicated game in 2008. We were financed in 2010. There still hasn’t been an economic turnaround. In my opinion, we have to be headed for a collapse, but we’ll see.
I’ve been expecting the West to be right where it is. I think the more that people look under the hood, the more that they expect it as well. We’re not out of the woods yet. But it was a phenomenal experience, having to go around and sit with venture capitalists, billionaires all over Hollywood, and people who built mega successful businesses, and get their two cents, their feedback, and insights at a really clinical business level.
When you’re in a hit-driven business like video games, if you can convince them that you’ve got a hit, you don’t need all of the other business shit down. If you’re Britney Spears, you don’t have to convince them that you can run a record label. You just need to convince them that you can give the boys a boner that night on stage and make the girls love you, too. If you can do that, they’ll take care of the business end. But when you’re building real businesses and not hit-driven media businesses, investors are more careful about the firms they back. There has to be more substance to the business story. It requires a different level of discipline. If you were a Stanford or Harvard MBA, you might have known a lot of this stuff before you got out of school. You wouldn’t know what you know from learning the hard way. Some of the most naïve people I’ve met came from top-tier business schools. The point is that you have to be seriously well-versed in business as a clinical science to really grasp how to raise money in a dry climate. You have to really grasp how to raise money when you’re not telling someone, “Look, we’ll give you the hit you need next quarter because you need a hit next quarter.” That’s Hollywood, and that’s the game business. Instead, you’re going to investors saying, “Let me tell you about a business that you have no vision for. You don’t need a hit next quarter or this Christmas. This is something you might not have even been thinking of, but let me tell you why you’ll get a great return on your investment.” That’s a different argument, and that needs to be a lot sharper.