Oddworld: Spending $30m on games, not Ferraris and private jets [2012]

Oddworld: Spending $30m on games, not Ferraris and private jets [Hosted by GamesIndustry.biz]

Date: 01/10/2012

Author: Matt Martin

Source: http://www.gamesindustry.biz/articles/2012-10-01-oddworld-spending-USD30m-on-games-not-ferraris-and-private-jets

What did Lorne Lanning say to Electronic Arts when it wanted to acquire his studio, Oddworld Inhabitants?

“Fuck you very much.”

And with that, he left the games business.

Now Lorne Lanning is finally doing what he intended all along – to make games for the fans. That hasn’t been easy in a past where a much-loved franchise was hampered by the demands of the games business. Lanning is still wound up about that, still wound up by the terrible business practices that never worked in favour of the developer. The business practices that squeezed the most amount of work out of a developer for the least amount of rewards. Less than a console generation ago publishers were driving the sports cars while developers were eating out of bean tins.

“Our agreement is, you won’t be seeing our profit being spent on Ferraris and shit like that,” Lanning tells GamesIndustry International. “Our profits are going back into games so we can ultimately raise to the point where we can grow our audience, who are expecting new content.”

So Lanning is back promoting a collection of Oddworld games that have been given the polish, remake and HD treatment alongside partner Stewart Gilray and his guys at Just Add Water. Lanning likes this team so much he refers to them as “Oddworld UK” which must please Gilray, a fan of the Oddworld games since day one.

Those releases are already performing well, with Gilray revealing that the PC and HD PlayStation 3 versions of Oddworld: Stranger’s Wrath have already passed a quarter of a million sales. This is a title originally released on Xbox in 2005 that sold 600,000 units. With that original release Lanning was vocally disappointed at the lack of support from publisher EA. But Lanning’s plan for his franchise and company spells out a much more interesting future than it faced seven years ago.

“On the micro-publisher level it’s very simple. We fund our own products,” he says. “We weren’t able to do that in the boxed product days, we’re only able to do that in the digital distribution landscape.

“Rather than having to have 1.5 million units in the opening week or suffer death, now if we have 50,000 sales and we’re still in business. People are still employed and we’re able to keep making content. When we released box product we would get 20 per cent of the revenue. After that 20 per cent paid back the entire development budget, if it was still selling at $60 we would start seeing $7 a unit. Because of the bricks and mortar, the plastic, the manufacturing, the gas involved in taking games to the store, the store itself and all those extra costs – not one of those costs makes a better game for the player.”

“If you’re the gamer, where do you want the money of the game you’re buying to go?” he asks. “I want it going to help make more games. But the majority of that money is not going to games in the boxed product market.

He continues: “Now we’re on a digitally distributed landscape, instead of a $60 price point we can offer a $9.99 price point. At $9.99 we get $7 per unit. At this price you’re getting a game for one sixth of the price and we’re still getting money to make more games. The player is truly funding our games. We have a few hundred thousand people we can depend on as fans of Oddworld who will buy our games. If we can get that number up to 3-5 million and with the increase of what that brings to the developer, then we can start funding our own $20 – $30 million triple-A games. That’s our goal.”

$30 million triple-A digitally delivered video games won’t happen in the near future, and can’t happen on the current generation of consoles. Not built by an indie, at least. And Lanning is honest when he says part of his current re-releases are not only down to the love of the games, but also testing the market. Besides, Oddworld Inhabitants doesn’t have tens of millions of dollars in the bank to fund new projects just yet.

“There’s truth in what we can afford at this time without having to cut the baby in half. Without having to bring in partners that want a piece of the baby,” he says.

“Right now it’s 100 per cent ours. We’re testing those waters and every time it’s proving successful. And then with JAW, everything they’ve done is true to the brand. With Abe’s Odyssey they wanted to make it better. With Stranger’s Wrath HD that was a bigger bet. Financially it was a bigger bet and it paid off. All that money now has gone back into new titles.”

Lanning is clearly enjoying being back in the games business again, with digital distribution the springboard for his return. But it was also the learning experiences from his bitter partnership with EA that inspired full independence for Oddworld Inhabitants.

The original Stranger’s Wrath was planned for Xbox and the PlayStation 2, with Oddworld developing the version for Microsoft’s console and EA intending to take care of the PlayStation version. But the PS2 version was cancelled during development, with Lanning still feeling this was the beginning of darker plan. EA withdrew marketing and promotional support for the game because it wasn’t a multi-format title, and the game sank at retail, shifting 600,000 units “on a title that really needed to do 1.6 million to break even.”

According to Lanning, with Oddworld Inhabitants losing money on the development of the project, EA wanted to step in to acquire the team.

“When you say that to us we go ‘fuck you very much’, quite frankly. That’s not a sustainable model, that’s a hostile acquisition,” he says. “That’s why we had to strive to get independent. Rather than get into bed with someone we knew was a horrible bed partner we said ‘let’s stay virgins for longer’.

“If we have a hope on this digital landscape we’ll be able to go directly to our audience and learn more about them, more from them. Let’s make a really intelligent re-entry into the market place and show that games to people who didn’t get exposed to them. And then if that’s successful we’ll have the money to start building brand new stuff.”

So Oddworld is back and making some initially decent sales with the remakes, but there’s still an element of gambling in the projects it takes on. There’s one more version of Oddworld: Stranger’s Wrath to come, due in November for the PlayStation Vita. While there’s no doubts that the Vita hardware is attractive to developers, the system hasn’t sold to expectations, and there’s a chance that once again, a unique and original title like Stranger’s Wrath will sit on a console that doesn’t have any players.

“What I would say to Sony’s credit is the way they’ve made getting on there so much easier than it was getting on the PlayStation 2 or PlayStation 3,” offers Lanning. “We hope it succeeds but we don’t need it to succeed. It’s not do or die. They’ve helped us tremendously just by allowing PlayStation One classics on the PS3. I can’t tell you how wonderful that’s been because it’s helping to pay for all of this.

“If we can help Sony, whether it succeeds or not, it will not have been a pound of flesh that hurts so bad it’s going to make our future products suffer. If it finds a wider audience than people it didn’t reach before then to us it’s worth it.”

The economics of the digital markets favour the developer so much more than they ever did in the past. When I first interviewed Lorne Lanning for GamesIndustry International over six years ago, he was a man who you could politely described as ‘disillusioned’, or more accurately, ‘pissed off’ with the business.

“Disillusioned or aware, I don’t think there’s much difference. There was no incentive to build great product. How many games developers that you know of are actually building products? The reason is all the incentives have been yanked away,” he says.

“The only reason we’re really able to get away with it and not be cogs in some enormous machine that does not care about us, is we’re able to retain the ownership of the brand,” says Lanning of his return to games. “We can blow that by treating the audience with disrespect. Or we can grow and nurture that even if it’s just remaking the games we already have. With a great band you want their music but you don’t give a shit who the record label is.”

“We closed down Oddworld for a couple of years but I was spending a lot of money on flights to see Valve and picking the brains of the smartest guy in the business, Gabe Newell. Just trying to learn. If this is going to work as the games business going forward, how do we not get in bed with the IMF. That’s your big publishing landscape. The owners are flying jets, do you think they care about the customers just one fucking per cent? Not at all.”

Lanning’s gone back to his day-one philosophy of games development and he’s glad of it, because it’s clear from looking at the triple-A landscape studios have been torn apart by bad deals they signed off in the past.

“What we care about is we wanted to create something that would mean something to us and we believed would appeal to the audience. And the only way to sustain that integrity was to drive our own ship and not have to depend on a partner who could do to us what happened to us. And we weren’t alone.

“If you look at the deals that triple-A developers are in today, at the deal stage before you even know what titles are coming out from that studio, if it has great success the publisher has the clause to buy that company at the value before the success. If they have a failure the publisher has the ability to toss them to the curb. So there’s no real winning solution. Just look at what happened to the guys at Infinity Ward. How many billions did that property make? How many lawyers did they have to pay to get their rightful millions?”

“If fans heard me vent and were just like “you’re a pussy, you’re a complainer”. You know what, you don’t know the half of it. I don’t mean to be condescending to fans it’s just true. The real dirty shit we can’t talk about because there’s laws and all-powerful leaders.”