Please 'splain, in tiny, little words, the video game industry to me.

Cafe Society
1

We’ve got platform developers, we’ve got publishers, and we’ve got game developers, right?

Who bankrolls game developement? Is it the platform developers or the publishers? And what exactly is the role of a publisher? Why don’t the big money guys (the platform developers, right?) publish and develop their own games. Or do they?

Do all publishers have a developement arm? I know Rockstar Games(publisher) has at least 2 development, um, departments. Is Microsoft Games Studios a developer or a publisher? And what is their relationship with Ensemble Studios?
It’s to convoluted for me to get my head around. Can you help me?

2

When you say “video game” industry, do you mean:[list=A][li]Console video games for the arcade,[/li][li]Video games for regular computers (PCs and Macintoshes), or[/li][li]Video games for home video game systems (e.g. X-Box or PlayStation)?[/list][/li]These 3 categories almost certainly have different business models.

3

I was thinking both computer and video gaming systems, since they share games.

4

**Who bankrolls game developement? **
Publishers, though sometimes the platform developers put up some money as well. And see the next question…

Why don’t the big money guys (the platform developers, right?) publish and develop their own games. Or do they?
They do. For example, Microsoft owns 1) a hardware branch that produces the X-Box platform, 2) a game publishing branch that publishes games, and 3) game development studios that create games.

The same is true for Sony and Nintendo.

**Do all publishers have a developement arm? **
I believe all the major publishers do nowadays, yes.

I know Rockstar Games(publisher) has at least 2 development, um, departments.
Rockstar Games is not technically a publisher. It’s a developer that is wholly owned by Take-2, a publisher with development arms.

Is Microsoft Games Studios a developer or a publisher?
Like Take-2, Microsoft Games Studios is both a publisher and a developer.

And what is their relationship with Ensemble Studios?

Ensemble Studios is an independent (i.e. not owned by Microsoft) developer that nonetheless works very closely with Microsoft–Microsoft has published all the games that Ensemble has developed to date.

What do these various entities do?

Developer : Creates the actual game.

Publisher : 1) Finances the creation of the game, 2) Advertises and promotes the game, 3) Brings the game to market either by dealing with a distributor or by distributing the game themselves.

Platform Developer 1) Creates and markets the hardware platform, 2) Licenses the right to develop games for the platform to developers (by selling development kits), 3) Licenses the right to sell games for the platform to developers (the platform developer generally gets a cut of each unit sold even if they aren’t publishing the game.)

5

A game goes through development in a development company (such as Bioware). It is advartised by the Publisher (such a company would be Atari or Interplay)… The publisher also takes on the cost of publishing the product (printing the boxes and pressing CD’s, distribution, sometimes product support and Q&A, etc).

The big money guys usually DO publish their own products. The icewind dale series, for example, was developed by Black Isle, which is a division of Interplay, and published by the same company: Interplay.

Microsoft is a publisher of games, although they do have a department that develops games such as their popular Flight Simulator series.

6

A good parallel is movies. You have firms that actually produce movies, and you have distributors, which are often different organizations but sometimes the same. “The Lord of the Rings” was actually created by an organization called Wingnut Films, but was bankrolled by a distributor, New Line Cinema, which also did most of the marketing. “Toy Story” was actually made by Pixar, but was produced and distributed by Disney.

Video games often have multiple “Developers” either because multiple developers cooperated to make a game or, in most cases, because other developers were brought in on contract to do specific parts of the game, such as artwork, voice acting, sound, or what have you. That’s got its parallels in movies too; for instance, many producers turn to firms like CGI to produce the special effects portions of their films.

7

I also seem to recall a lot of cases where one company uses an underlying engine made by another company, but adds their own features, maps, missions, etc. on top of that to make a new game. Of course, for all I know, they’re just different branches of the same company, though.

8

There are three categories a game can be considered to be in. First party games are games developed by the same party that owns or runs the system the game will run on. So when Nintendo makes a Zelda game, it is a first party game: it is intended to run on a Nintendo console, and the same company that is responsible for one is responsible for the other. Second party games are made by independent studios that have a strong financial and quality-based link to the first party. These companies are typically offshoots of the first party, but there is no reason why they can’t be independent companies. Rare is an example of this. It was a long time second party to Nintendo, but recently became controlled by Microsoft. Third party games are those developed independently of the people who control the platform the game will be run on. These games are often, but don’t have to be, released for multiple platforms (GTAIII was released for both the XBox and PS2 and PC, for example).

9

Licensing the game engine is one of the biggest businesses in the game industry. id Software, the makers of Doom and Quake series (among other things) have made most of their money not by selling their games, but by licensing their engines. Last I heard one of the Quake engines (1, 2 or 3, I’m not sure) went for 10 million dollars and 10 or so % of any and all money made by the game that uses the engine.

And in the case anyone is wondering, the reason companies would license engines from others is because it saves precious development time: when you don’t have to start from a scratch that’s a lot of time (and thus, money) saved right there.

10

So a company like Capcom (developer) who has an exclusive contract with a Nintendo (platform) can go belly-up when the platform (GameCube) tanks.
Althought I hear that GameCube is on the upswing now.

And why is Sega still in business but Atari lives on in name only?

The ultimate question should be: Why in the hell do I care?

11

Actually, you would be hardpressed to say the Gamecube “tanked” - worldwide it is outselling the X-Box, and unlike Microsoft, Nintendo is actually making money with on the Gamecube.

12

What happened to Atari.

13

Capcom only has exclusivity deal with Nintendo for five games (“the Capcom 5”). Capcom makes games for all platforms.

Miller posted an article to Atari’s fate, so I suppose that deals with that. Sega is still around because they decided to stop making consoles (which weren’t very succesful, even though their last, Dreamcast, was superior to atleast PS2 in many ways: this is what happens when you have bad marketing) and just concentrate on making games for other the other three consoles.

14

Atari is still around. CivIII gold, for example.

15

Atari’s name is still around. The company that uses it nowadays was called Infogrames just a year or so ago. It’s not the same company.

16

Oh! I didn’t know that. Thanks.