We (Procedural Arts) are also already clear on some of the things you ask about, even if they’re not perfectly articulated here — Michael’s role (key team member, part-time), the nature of the project (a commercial venture, not a “serious, literary work” per se — although I think it is possible to make a commercial product that has real artistic merit; it happens with regularity in the best movies, TV shows, novels, music, what have you.)

Regarding the sex appeal of investing in game development, I addressed that already in my comment above (this thread is getting long, I realize it’s hard to keep track of all that’s been said…)

Finally, regarding 3D in a browser — since Ian B.’s instigation, I have in fact spent some of my time brainstorming about this, including educating myself about what’s possible with Flash. Note all of my past projects have had 2.5D elements (Petz, Façade), so I’m very amenable to it, and I’ve got some ideas about what could work for The Party and the like. I’ll be better developing what I’ve called Plan B, probably resulting in it being presented alternately / alongside Plan A, graduating to Plan A-on-the-cheap.

Ian W., you’re talking some pretty radical web delivery solutions there; possibly too much to load on our plate in the near-term.

Note a few interesting quotes from a Gamasutra interview with Cake Mania developer Daniel Bernstein:
“advertising is back “in”. As a result lots of portals are retooling their game offering to re-focus back on advertising. As a result, downloadable try-before-you-buy games have been significantly minimized in prominence on those portals.”

“[P]roduction value is not the magic bullet, so you cannot overspend your competitors to insure a AAA title. There are plenty of opportunities for 1-2 person teams to make lots of money in this business. All it takes is some innovation and guts.”

He’s right, to a limited extend. You can do vector-based 3d in Flash 9 (which also has a really comprehensive IDE, almost like Java or C#) and convert “true” 3d models done in Maya or Max to vector using 3rd party middleware. You won’t be seeing Halo on the net, but I do believe expressive, 2.5D character animation is possible.

“That being said, and its probably wrong anyway, but TP would not be the kind of content that could offer a high “return” here, prestige perhaps but I dont think there is much of a party/groupie scene around Interactive Drama is there?”

Indeed, this is a big pull, and why getting film producers to invest in games, even really humanistic ones, is an uphill battle. I’m moving to LA, probably rooming with an indie filmaker buddy of mine and staying tight with my musician friends, so I’ll be reveling in that scene and trying to extend the medial branch, if you will. In the meantime, you really need a strong monetary case, which is why a free-to-play, ad-supported model is more lucrative.

I think you need to decide whether The Party is a serious, literary work, or a measured commercial endeavor to promulgate interactive drama to the masses. It might be useful for you to post on your pre-production work to this point and open it to evaluation.

My experience is that open-source game design works to a degree.

To further the business strategy discussion then a few more thoughts:

“This is the gamble investors/publishers would be betting on.”

Investors are not gamblers, they are investors. Investors make money (thats why they are rich ;), gamblers lose money, big difference. Investors are looking for opportunities at a risk/reward profile that suits their personal strategy. As an “opportunity” you need to do everything you can to reduce the risk side of the equation while increasing the potential rewards side (scale and diversification).

“My primary goal is to work full-time on projects that interest me, and make a living doing so.”

I am sure most of us can relate to this but it would scare an investor (again, my context here is typical angel/vc types), unless you are happy to relinquish control of leading the business. Earning a good living while doing what we love (and do without making a living anyway) is what many here strive for but it does not align well with investors who want to see big returns. Perhaps better to slightly adjust your message from “make a living” to “become market leader”…

“Michael may have different personal goals (probably does, since he’s committed to being an academic full-time).”

As Michael has been such an integral part of the story to date, as an investor I would want to have this clarified. Investors like 200% commitment or outside advisers. Better to clarify this sooner rather than later and what it means to the business, if you have not already done this. Friendships are best served by deciding roles and rewards before money gets involved.

“3D in a browser, i.e., it’s not possible yet” Disagree here, it can. I have seen it in Java and I am hoping it can be done with Action Script and Flash.

Which “segways” nicely into my thoughts on a web based delivery model. I see a number of very interesting possibilities for TP in the current context of web businesses. One is its intrinsic social nature, ideal for showing and sharing with your friends. The other is its nature as not only participation “sport” but as viewable content. TP meets YouTube meets MySpace.

Taking a freely playable flash based TP, users visit the (heavily trafficed) TP site to participate in a episode (are you planning on having more than one human character at any one time btw?), this episode can be saved and for example embedded on your MySpace page for your friends to watch and comment on. TP becomes TV, me tv. Monetization then naturally fits the in game ad, product placement, cut ads format of TV but in a much more compelling delivery format.

Sharing episodes creates a degree of “network effect” which could be further compounded by releasing content creation tools for creators to create content, then hosted on your site.

Possible problems; network latency issues, web service infrastructure required (not your area?), increased development overhead

On another track, while I am not an expert in this area, I have been thinking about Movie project financing. This seems on the surface to have an unacceptably high risk profile as an investment so I was thinking about what other intangible benefits can be gained from doing this? I would like to hear ideas about this but to me (shows how my thought process works) a big part would be status, parties and girls? The chance to get all 3 that is. That being said, and its probably wrong anyway, but TP would not be the kind of content that could offer a high “return” here, prestige perhaps but I dont think there is much of a party/groupie scene around Interactive Drama is there?

One way to significantly increase the set of distinct goals is to make them have predicate-argument structure, so you can aim to humiliate(x), or get-off-with(y). Now the number of available distinct goals is number-of-predicates * number-of-agents. (If the predicates are two-place, e.g. we can aim to encourage-enmity-between(x,y), then the set of distinct goals increases to number-of-predicates * number-of-agents * number of agents).

In Facade, with only two characters, there was no need to develop generalized beats that can be applied to a number of different characters – Trip and Grace both participated in all beats (except for the one-on-ones). With 8-10 characters in the party, we now have the opportunity to develop generalized beats. A beat that structures the response of the player humiliating character x in front of character y can now be a generalized humiliate(x,y) beat, giving us a richer combinatorial space for almost the same authoring cost as authoring humiliate(trip, grace).

Dirk, of course you’re right that more characters will mean more combinations of actions and events to manage.

However I’m not thinking in terms of “communicating a certain amount of information about a certain sequence of events”, i.e. storytelling. Rather, I’m thinking in terms of reactivity and narrative play, and letting a story emerge from the play. (Most approaches to emergent story end up falling short, because the reactions of characters in them aren’t fertile for narrative, and nothing much emerges.)

Instead of creating a 2-3 very deep characters, I’m suggesting creating 8-10 slightly shallower characters. It’s true that overall, more behavior and dialog will need to be authored in the 8-10 character case. But the overall complexity has been broken apart and organized in a different way; each character itself is simpler, and therefore easier to implement. The overall workload increase pays off in overall increased richness.

Another way to think about this is, an array of characters will share the burden, and work in coordinated ways, to entertain the player, instead of relying on just 2-3 characters to shoulder the burden and manage to stay fresh and interesting. More characters makes fresh and interesting reactions easier to create. Also, by spreading the work across more characters, you can get away with more inconsistency in reaction, which makes authoring easier. Again, it’s key that the reactions be narratively fertile and synergistic with one another.

This gets to why the question posed by the Gamasutra blurb about this discussion is off-base; they said “Stern’s solution to the problems outlined by Façade is to create a large number of pieces of content with which to make up the behaviours. But is that how the problem should be tackled, or is this exactly the kind of place where generative approaches are required to create more from a few simple systems?”

They’re confused about what “content” means here. When content is a large number of very small pieces, such as individual sentences performed in different ways to allow them to be spoken in multiple contexts (varying tension, varying mood, varying status levels, etc.), and when these pieces are annotated with information about how they can be used these different ways, and the system has some basic narrative intelligence to reason about how to coherently assemble the pieces together in real-time, then we are in fact talking about generativity. The Gamasutra blurb is wrong to think that an interesting narrative can emerge from “a few simple systems”; good stories need content — lots and lots of content. In fact, as the content pieces become small enough and well-annotated for reasoning about them, they become knowledge.

More characters than just two actually makes the design easier in some ways; each character can be a bit simpler, spreading the complexity around.

If, by “complexity”, you mean “computational complexity”, then I disagree with your statement. You can think of a given story as communicating a certain amount of information about a certain sequence of events. A writer can tell what is “basically the same” story, using some variance in the number of characters which act out the events (this works in parallel with adjusting the style of presentation, but we’ll ignore that here, focusing only on the number of characters). And try as you might, if you increase you story’s personnel, while holding all other parameters (i.e. the amount of “the rest of the information”) straight, you’ll always increase its complexity (one way of limiting this growth in complexity is by creative use of a type system, but that won’t prevent it). Any agent/actor/character you add to an interactive story will always add complexity.

Johnny Pi at Design Synthesis has a few answers of his own to the questions posed here.

Looks like Gamasutra, which occasionally reports on interesting blog discussions, linked to this post about 2 weeks ago.

A very visually-simplified version of The Party, yet retaining all the AI and voice of the original plan, perhaps could be pulled off for around $300K, if the team members worked for below-industry wages (which is okay by me, personally). If the product was commercially successful enough, it could become the be-all-end-all of the The Party — but if we wish, it could also serve as a super-polished prototype of the gameplay, with which we could seek further funding to make a fully 3D animated version afterwards. This approach makes a lot of business sense…

… if we can come up with compelling simplified visuals, and the interface within those visuals. First-person POV with real-time navigation, and expressive animated faces with voice, are features I don’t think we can give up. That doesn’t mean the product has to be fully 3D, but I don’t want to revert to a LucasArts style interface, or even a (better) TellTale interface.

Façade‘s rendering technique was an approach, but it has some serious technical constraints that make that exact technique not quite feasible for The Party, which requires more physical action. Perhaps Façade‘s technique could be adapted into something more feasible though… especially the faces.

Not that I found it a solution I’d want to use, but The Last Express had a innovative approach to this problem. You couldn’t move freely enough, it used cutscenes, etc. But a technique worth studying.

So is South Park, really.

Anyhow…

Scott, yes, I’ll keep working on the project however I can, thanks for the sentiment; my current mode of working self-funded while my baby daughter naps is case in point, I think. (She turns one year old a week from today!) But there’s probably a way to get paid, without overly selling out. We’re doing more schmoozing these days, so, we’ll see what happens over time.

We’ll try to get the ear of media moguls and “post-economic” types… Dreamworks? Actually my idol is the other Steven — Steven Soderbergh. He broke big with the low budget indie sex, lies and videotape — my favorite film, btw — and now does a mixture of commercially viable work (Ocean’s 11/12/13, Erin Brokovich) to fund his personal work (Traffic, Full Frontal, The Good German which I can’t wait to see).

Also, I never plan to bet the farm on any one thing; I’ve seen too many cases of people starting companies, putting all their eggs in that basket, and all the work gets lost if the company dies.

Waaaaay ahead of you.

All of my comments here are motivated by the fact that I’d really like to see more interactive dramas, more Procedural Arts products of any kind really. And I worry that it we may not see those works under the conditions you’re putting on them. The sweet spot between $200k and $10mm you mention is really the domain of small-budget console games, like licenced property games, heck even Wii games and big hits like Guitar Hero fall into that category. I’d really challenge you guys to think about what you could legitimately do with $150 or $200k, not as a Plan C or D, not as a crippled version of The Party, but just in general, as a constraint. Because I know you could get that kind of money easily, tomorrow.

I think you just need to keep working on the project however you can.

You need an agent of some kind, or one of those Guggenheim-type investors who will believe in the project as an art form, or for a research lab to shell out some funding for the advancement of narrative. You need to meet a visionary with deep pockets who will do the business end of it for you. You could move to LA and meet somebody at a party. I think it’s absurd to expect commercial gaming numbers for the type of project you envision, yet I also think that you could find funders who would support your work on the project for several years, and would support necessary development costs. Dreamworks. Why not? I shouldn’t be commenting at this hour, but frankly, I just think that you should be clear in your mind that what you’re primarily doing is the project. If you do something as interesting as Façade, and you release your work incrementally and consistently, I think you’ll eventually have someone picking up the phone for you to take and reject deals. But don’t bet your farm on what the street thinks of it until then. Doesn’t matter. I know a parachute of money would help the project but the project isn’t the parachute of money. The project is the project.

Essentially, we’re seeking a middle ground between today’s typical $100-200K budget AAA casual game sold for $20, and the $10-20M AAA hardcore game sold for $60. Surely there’s a sweet spot in there.

Also, from your first comment, I agree that $500K is still an enormous budget for a casual publisher; as I mentioned above, while I found it encouraging to hear about Bookworm Adventures‘s case, it still seems the rare exception.

Now on to your other devil’s advocate points! :-)

Why bigger? Well, really richer is the term I’m using. To get people to pay for a product in large numbers, I do believe we need a richer experience than Façade was, not just a better-executed one, for the reasons I described in the post above. My view is, the intersection between business goals and aesthetic goals is in product quality. We need to make high quality products; the aesthetics need to be very good in order to sell copies.

Still, regarding “bigger”, The Party I think would still be in the domain of a “short” story, at least compared to the length of time players expect from $30 games; I’m estimating it’ll have 10 hours of entertainment in it (12-15 runs, 30-40 minutes per run). Note those 10 hours will be of a different nature — denser, tighter, less repetitive — than 10 hours of 50 of grinding through levels in a typical $60 game. In fact, we think a game that takes a short amount of time to play will be good for sales, as we describe in the Atlantic piece.

More characters than just two actually makes the design easier in some ways; each character can be a bit simpler, spreading the complexity around. (But because of the increase in richness in total, the overall content-creation will require many more person-hours.)

From a purely aesthetic take, do I want to make “bigger” products than Façade? Generally speaking, no; I like the “short” form, right now I’m personally not interested in making dramas that are feature-length per run-through.

I don’t think you really answered the question about what Procedural Arts’ principle goal is. Is it to make consistent money as a business to provide a first income for you, and a supplementary income for Michael?

I do want to make this a full-time job, for at least The Party, and therefore my primary income, yes. For me personally, it doesn’t have to be consistent over the long-term; I’d be okay if the project ended after The Party was over, took a break, then tried to get another one of the ground. (However the quality of the products and ease of their production may be enhanced in the long-run if we try to keep production going continuously, to keep a production team together.)

Is it to provide an idealistic antedote to games innovation, even if that means a more informal, on-and-off development strategy? Is it a creative outlet for otherwise occupied professionals?

My primary goal is to work full-time on projects that interest me, and make a living doing so. Interesting products, to me, are innovative ones. Michael may have different personal goals (probably does, since he’s committed to being an academic full-time).

You seem to reject the strategies I would first think of for developing a business (consulting or for-hire work, in-game ads)

Actually, if you think of Procedural Arts having started in 2000 when Façade first began, my income over that period has been from for-hire work; Zoesis, USC/ICT and some freelance gigs. On average, I do part-time for-hire work, part-time interactive drama work.

What makes you think you can have both (or all) of these things at once, right out of the gate?

Based on the above, we’re not right out of the gate at all.

Also I haven’t rejected in-game ads, it’s just not Plan A.

why don’t you consider doing something fast for cash

Did that; the for-hire gigs above essentially funded Façade; now we’re ready to raise more money. :-)

challenge yourselves to make a compelling, commercializable interactive drama within [$100K].

That’s Plan C or D; it may get to that, we’ll see…

Do you think publishers-as-investors would give us a worse deal, in the end, than conservative private investors would?

I guess my thought is that you can’t avoid dealing with publishers even if you also deal with conservative private investors. You could literally self-publish — this is what gameLab is planning to do, cos they’re tired of losing all the money to the portals — but that’s a whole business unto itself, and not a trivial one. And conservative private investors typically want 5-10x return, as Ian W. mentioned early in the thread… rough stuff.

So, let’s say you get a private investor to front the $2mm. You still need to market and distribute the game, and for that you need the portals. They’re bringing their marketing and distribution system, as well as maybe DRM and the point of purchase, not to mention the millions of people who come to those sites. So, let’s say you negotiate up from the 20% royalty rate on account of having self-funded the development. Let’s say you negotiate up to 50% royalty. The $30 price you’re talking about is probably not going to fly for downloadables … it’s just 50% more than the average cost. So, I’m going to assume $20. That means $10 per sale, or 200k units to recoup the $2mm investment (or double your numbers). 200k, as I said before, is a “AAA” level success, and that success only seems to recoup the investment … it doesn’t profit you or the investor. That sounds like a pretty risky investment to me: basically you have to have a home run to break even. Just to be clear: when I talk about break even, I’m referring to whomever fronts the development costs.

A true distribution deal would be something like what Manifesto Games is offering right now — they’re offering 60% royalty and you set the price, but they’re also not really marketing yet (they’re just getting started; this will change), and they don’t have nearly the traffic of the other portals (yet). They do offer nonexclusive deals though. Still, to get the numbers you’re talking about, you need serious traffic, and I don’t know if the promise of press and richness is enough to hook investors at that level of commitment. You’d also need the distribution/marketing plan to get the investors on board in the first place, so there’s a potential chicken/egg problem.

I think I agree that a retail PC distribution deal might not make sense, but you should consider talking to the folks at, say Activision Value Publishing. They do a good job with the titles in this range and they get them into Wal-Mart and stuff.

I’m not trying to discourage you, but I just think the leap you’re assuming investors will be willing to take is a much larger one than you seem to think it is.

I think we need to distinguish between a publishing deal and distribution deal. Your numbers above are for publishing+distribution deals — with the aside that if you bring your own development money, it changes the deal.

In my estimate above, I imagined a distribution deal, not a publishing deal: “I’m guessing our conversion ratio will be higher, more like 5-10%. Let’s say we charge $30 for the product, and manage to find a distributor who takes only $10; we profit $20 per sale. If the production budget were $2MM, we’d have to sell 100K units to break even [for the investor]. For each 100K sold, if the conversion rate is 5%, we’d need 2MM downloads. If the game is really good, I’d hope we could get 10MM downloads; 10MM downloads [i.e. 500K units sold] would mean $8MM profit for the investors.”

In that estimate I’m imagining a private investor who funds development, not a publisher (not a game company); technically I suppose this is self-publishing. I’m imagining a distributor who takes 33% of $30 per sale ($10). The remaining 66% gets divvied up between the investor and us, Procedural Arts (PA); let’s assume the investor needs to fully break even before PA even sees any revenue royalties. When I said we’d have to sell 100K units to break even, I mean for the investor to break even. Let’s imagine PA gets, oh, 15% royalties computed after the distributor’s share is taken out (ie, 15% of $20 per unit). That means that for every 100K units sold beyond the initial 100K to allow the investors to break even, PA gets $300K.

I’m going to assume digital distribution only — a reasonable assumption I think, especially since I’m imagining we’d release The Party 2-3 years from now. Therefore your boxed PC retail numbers above, in which royalties are taken from the wholesale price (50% of the retail price) isn’t a scenario I was imagining. Maybe there aren’t many cases so far of digitially-distributed non-low budget PC games (Half Life 2 being an odd exception?). That said, I could imagine an additional retail distribution deal, beyond the digital deal, which generates much less profit for PA per sale.

In your phrase “d/l break even on a $2MM investment requires “AAA” success with a consistently higher negotiated royalty“, are you meaning break even for the publisher/distributor (the investor)? Regardless, due to the rich content, unusual nature and press-generating nature of our products e.g. The Party, I have confidence that each product would sell more than 200K units out of a pool of 65 million customers (effectively a AAAA title). This is the gamble investors/publishers would be betting on. (Again, Façade‘s modest 500K downloads isn’t a good predictor of this.)

Do you think publishers-as-investors would give us a worse deal, in the end, than conservative private investors would?

(AAAA — isn’t that a type of French sausage?)

For casual games, the current baseline deal would be a publisher advancing 100-200k for development, selling the game for $20 on a 1-2% conversion rate with a 20% royalty rate. According to the casual games lore, a “A” d/l title sells ~80k copies. A “AA” title sells ~130k copies. And a “AAA” title sells ~190k copies. One complexity here is that individual portals sometimes take out different costs, but if you ignore that for now, a “AA” title might generate 520k in total royalty revenue, minus the advance, so figure 300-400k in profit best case. Of course, if a developer their own development funding to the table, then they can negotiate a higher royalty rate. However, many portals use the advance as a way of insuring that they can influence the development to insure perceived success (not always a bad thing, or a good thing). So it’s always give and take. If you assumed a 50% royalty rate on “AAA” numbers, that’s what… $2MM or so, which is the number you started with. So the way I see it, d/l break even on a $2MM investment requires “AAA” success with a consistently higher negotiated royalty, or roughly double those sales at a more modest royalty rate (say 30%). I’m not sure how easy it would be to negotiate the higher royalties. I think the main advantage bringing one’s own development cash to the table would provide is the ability to keep all the IP — the portals usually make developers hand all that over to get the advance.

However, all told a d/l games portal might convert 1% of their monthly visitors across all their games. As a developer, the trick is getting well featured at a portal so your game(s) are more frequenly sold when a game is sold. For reference, I pulled the following monthly unique visitor traffic (approx) from the top five portals (via the IGDA casual games listserv)

Yahoo! Games: 20.9 million
EA Online: 14.6 million
AOL Games: 11.5 million
MSN Games: 10.7 million
Real Arcade: 6.7 million

So, if you add all those up, that’s around 65 million people. There’s probably some significant overlap, but we’ll ignore that for now and assume that 65 million people a month visit these sites, and if 1% convert then that’s 650k purchases from the top five portals, which means that a “AA” or “AAA” d/l title is the equivalent of around one week of top portal sales (of course, they don’t all happen in a week, but that’s an interesting way to think about it). So, really being a standout title is harder than it looks. The d/l market is super noisy. Of course, as you argue, your games have a much better chance of standing out.

Ok, on to PC numbers. We’re only going to talk about PC figures, since they don’t have the complexity of console license fees. Again according to IGDA sources, developers usually get 20-25% royalty on net receipts, but the trick is what counts as net receipts. For the purposes of this response, we’ll assume the best case scenario. Ok, so assume a $2MM budget, as you suggest. I’ll treat that as an advance. The best way to negotiate royalties is based on the wholesale price, which is typically 50% of the retail price. Most publishers will also deduct cost of goods from the wholesale price (the cost of replicating CDs, printing boxes, etc.), usually $1-2. So, assume a $30 retail price for a boxed PC game, and a 25% royalty rate, and a $1.50 COGS. That’s $3.38 net per unit sold. At that rate, you’d have to sell almost 600k units to make back the $2MM. However, it’s common to negotiate a sliding scale royalty rate, which means that the royalty increases at certain sale thresholds, usually 150k and 300k. So, if you slide to 30% at 150k units, and to 40% at 300k units, then … let’s see… that’s roughly 450k units to break even. That’s a pretty damn favorable sliding scale though.

So, those are my answers. These figures are all off the top of my head here, but I think they’re not entirely fictional either.

(1) The rhetoric of your pitch focuses on making a Façade-like interactive drama, but a bigger one. More characters, more agency, more interaction, more generativity, more animation, “massively casual.” Why bigger? Why not make a smaller interactive drama, having more in common with the short film, the sketch act, the prose poem, or a similar form? The answers already provided make it seem like the justification is a commercial one, but I think that it’s really a decision driven primarily by aesthetics, not by business. I’d like to see you admit this so we can stop pretending that the aesthetic decisions have business motivations at their foundation.

(2) One of your questions asked what options there are for financing projects like this. However, the responses seem to make it clear that your minds are really set on independent, project-based financing in the $1 to 2MM range. The “concession” in this thread was the possibility of a “lighter weight” $500k option. I think even this figure might be irrationally large. There are a lot of comparisons and justifications made here in relation to the casual games market, but $500k in that space is an ENORMOUS budget. The largest-ever $700k budget mentioned above for Bookworm Adventures was put up by a very large casual games publisher for a new version of a proven title. Even those folks having success at project-based indie financing for casual games have a much more proven track record.

I think of gameLab, for example, which is raising much, much less than you are talking about ($100-200k) via this method based largely on their proven record selling literaly millions of copies of casual games. Diner Dash sells for $20, 1/3 less than the retail price you suggested above for The Party. “Standard” downloadable royalty rates start at 20%, and don’t get better than 60% under the best of circumstances, still short of your 100k break-even estimate. You’re also estimating a 5x average conversion rate on downloads with no real justification for it.

What makes you think the numbers you’re talking about are even remotely reasonable from a business perspective, for anyone save the idealistic or “hobbyist” arts benefactor?

(3) I don’t think you really answered the question about what Procedural Arts’ principle goal is. Is it to make consistent money as a business to provide a first income for you, and a supplementary income for Michael? Is it to provide an idealistic antedote to games innovation, even if that means a more informal, on-and-off development strategy? Is it a creative outlet for otherwise occupied professionals? You seem to reject the strategies I would first think of for developing a business (consulting or fore-hire work, in-game ads), which makes me think that idealism is the primary goal. But you also have a budget that accounts for full-time work, which makes me think income is the primary goal. What makes you think you can have both (or all) of these things at once, right out of the gate?

I might point out that my indie studio, Persuasive Games, has spent over three years getting to the point where we’re doing more of our own work than other people’s work. And we still do for-hire work to put money in our pockets and to fund independent titles (I sometimes call it the “Robin Hood business model”). We can cite the same numbers you can for free downloads (Disaffected! has also had at least 500k), and something probably approaching 10 million plays for our recent “Arcade Wire” newsgames, which make money for us through the preplay ads.

From this perspective, why don’t you consider doing something fast for cash (serious games, a P&G style for-hire soap opera game, etc.) to raise $100k of no strings in-the-clear money and challenge yourselves to make a compelling, commercializable interactive drama within that budget.

As we’re talking about the challenges of getting a commercial indie production off [...]

I think your instinct about conversion rates is on point, in fact other business models and audience segments – the rate of free2play game users who buy in-game items, indie hardcore gamers at Manifesto, console digital distribution channel consumers – already show conversion rates much higher than casual download-able titles.

I think you’re being too dismissive of ad-placement. Ads are part of contemporary culture, so including them in a game with a contemporary cultural setting can certianly be conducive to your autuerism. Actually, its possible a lack of ads might detract from the impact of the game. Its up to you to balance the budget with your primary investor and negotiate a deal where you get enough money and enough creative control, a tricky balance but do-able.

I think re-factoring your pre-production work to suite a 500-700k “casual drama” with a shorter development cycle is the best of all worlds, and would enable you to capitalize on your technoloy as middleware, and seek bigger funding for an more autuer-ish project, before the end of the decade. Faust should have had such a good option.

It’s great that you are putting lots more distinct goals in The Party. I myself, like you, would prefer not to be told explicitly what the goals are. Ideally, the player looks at the situation, uses his real-world knowledge to figure out the available goals, chooses one, tries it out, and, if it works, achieves that rare sense of elation that computer games are, on occasion, capable of eliciting. (Facade was certainly capable of eliciting it).

But I wouldn’t want to be *rewarded* for achieving one of these (self-imposed) goals – I would like to be *recognized*, but recognition is different from reward. I don’t want the system to give me some lame prize, I just want to feel that someone is watching, someone is noticing, someone cares. I want to feel that the system (or ideally the other characters) are treating my character as a person, and *noticing* what he does. Reward is patronizing, schoolmarmish, and implies a difference of maturity or status between the rewarder and the rewardee. Recognition, by contrast, is a relation between equals. [c.f. the master/slave passage in the Phenomenology of Spirit, etc etc]

The hook is agency plus great characters in a scenario fertile for raucous entertainment. But in simple marketing terms, a way to describe this hook could be something like: “Wine, cheese, adultery, murder… with friends like these, who needs enemies?” But all interactive drama products claim this kind of thing; see my latest post. The devil is always in the details, and that’s where any piece of entertainment like this will succeed or fail. You could give me yet another story about a group of guys trying to pull off a crime, or a boy meets girl love story — the kind of stories we’ve seen over and over — yet, they continue to be compelling if told well (in our case, played well), with something special about it. (This is true as well in the traditional gaming world; even the tired genre of shooters can be made to feel fresh.)

The details about The Party — what will make it excel where other interactive stories fall short — are partly described in my posts here, partly kept under wraps by us, and partly in the process of being developed as we speak.

the vast majority of casual game players prefer quick easy-to-learn mindless and addictive games. The largest audience for casual games is middle aged women playing puzzle games. Even my mom plays solitaire on her computer probably 1-2 hours/day. I have shown her a bunch of other games but she keeps coming back to Solitaire. Why is that?

Great question. My instinct is that an interactive story along the lines of Desperate Housewives (a hit TV show that appeals to middle aged women) made “casual” — where each play-through is short, the interface is very easy to pick up, the game itself is easy to play, the characters and dialog are very good — would be something new, yet appealing. Your mom and others like her will keep coming back to Solitaire because it’s a fun simple game, and that’s totally fine; many people like something simple and fun like that from time to time. But in theory, there could be something fresh and new that she’d enjoy in addition.

(Hey, when playing The Party, if you need a little quiet time, you can go off into a room and play Solitaire! Actually having card games or other party games in The Party are features we’re considering — true mini-games.)

On the topic of making the interface very easy, and responding to Ian W.’s suggestion of game settings, and inspired by some suggestions others have made to us: we may want a mode of the game where navigation is very simple, perhaps Myst-like, where you single-click to travel from room to room, to avoid requiring you to use the arrow keys to navigate in 3D space (even though it’s pretty easy to do).

Ian W. writes, I think your figures are perhaps optimistic. … My primary concern would be that, to me, your core audience/user is not one that typically downloads *and pays* for games.

True, out of every 100 downloads casual game players make, only 1 or 2 purchase. But maybe it’s because they’re downloading Bejewkanoid 6: Bookworm’s Revenge, and are not sure this puzzle game is worth another $20? Or is it because casual game players just like to sample, and never buy?

Again, my instinct that something fresh, compelling and, the key here, a game with real substance and agency, will raise the conversion ratio to 5%. The bet here is that quality mixed with novelty will make all the difference; that’s the risk an investor would be taking. Knowing exactly who the audience is makes sense; I think to really understand that, we’d have to focus test a solid prototype and learn who our consumers will be.

Truth is, if the product is high quality, it’s going to include both casual players and traditional gamers. You’re right that many Façade downloaders were traditional gamers. If our audience is a mix of both, that does suggest we’ll need gameplay settings for both, as alluded to above. This is a cross-over product.

Ian W.’s suggestion about web-based delivery is a very good one. It’s something I’ve never seriously considered, because of the technology issues involved in delivering realtime 3D in a browser, i.e., it’s not possible yet. However, I could imagine making a simplified web version of The Party (sort of like how Masq does it), yet still retaining the natural language interface. It could be the same core AI as the full realtime 3D version, with the interface webbified. In fact that theoretically could align with the lower budgets that casual game publishers could enable. It’s an interesting alternative, although now we start to chip away at the high quality bar that I believe is required to achieve significant sales… But what we lose in fidelity of the experience we may greatly open up the market, and perhaps the tradeoff is worth it, at least in terms of starting a business…

That said, I’m not sure how much of a barrier a download and install really is for players; many casual games require a download. We got the Façade download to 167MB; The Party download would probably be more like 750MB, but we’re talking 3 years from now, when that might seem less of an issue. Also, we could potentially do something fancy where you only download the first 100-200 MB at first, and the rest is loaded in the background as you play the demo.

VCs are looking too, but again, you would have to change your outlook to go this route and think in much bigger terms conceptually.

It seems less likely VCs will end up being our funders, but we’ll still try pitching to them and see what happens.

I would want to know who exactly your audience is, right down to names and contact details of some target ones (yes I am serious, investors will do this). From that we can work backwards and determine if this audience is real or a chimera, define what these people do, what they buy and how. Then we can define a strategy that fits your target audience (as opposed to fitting the consumer to a defined strategy). The reason I mentioned a web based product is because it fits what I believe would be your potential audience. If The Party required a large download to a PC and was heavy that would loose a large potential section of the audience. It would be a very large barrier for the user, not insurmountable of course but it is wise to clearly focus on each and every potential barrier and try and find a way to eliminate them. I have heard this called “frictionless selling” meaning no obstacles between trying and buying.

Angels would be good if you could get them. In this case I would define a strategy of targeting strategic investors, that is around 5 angels who can contribute their expertize, network, contacts and prestige in addition to between $250 – $500k each. Look at what areas the business is weak and target an angel for that area. Connections to publishers, Industry recognition, large finance network for further rounds, wealthy friends, legal expertize, marketing genius in this area. A lot of potential investors already know (about) you. I am sure everyone reading is already thinking about at least one potential.

You probably noticed that in the first post I wrote I linked to Susan Wu of Charles River Ventures (WP eat the link though) and a couple of days after that I see that they invested in Raph Kosters new virtual world company. So VCs are looking too, but again, you would have to change your outlook to go this route and think in much bigger terms conceptually. you are right about funding size, above $1MM it is probably just as *easy* to raise $3MM (a typical VC A series is between $1 and $3MM currently).

Clearly there are a number of exciting potential avenues to explore in terms of revenue opportunities and you need not settle on one, in fact a diverse stream of opportunities makes for a more compelling opportunity. Build a social community around the episodes and keep users involved by allowing them to share their experiences with other players, then monetize that.

On playing:

Some thoughts on playing, at the risk of sounding like a drama novice, you mention that some players felt “lost” and that some did not. I think this points to the need to have options for different players, like game settings, that could be as simple (though not in terms of the extra work involved) as guided/ non guided, with hints/no hints. Cater for different personality types.
I think you always need to give the player rewards in order for them to stay engaged, this is basic human behavior (I am sure Richard can tell you all about reward and learning) It is the context and manner of reward that is important here, clearly gold coins don’t really work ;) but in a social context what does count for reward, if like me you are socially challenged you will consult your wife and she might tell you acknowledgment from other characters, perceived increase in status, learning new social skills, appreciation from others etc are all types of social reward. These types of element would be very much at home and break new ground (although I think the Sims has them too).

Finally, The Sims, 25 million sales and no real market segment opened or clones, can someone please tell me also?

When I said “you are not in the world of best selling games,” I didn’t mean you personally, or questioning your experience in the commercial game world. I was referring to your game concept from a corporate/publisher perspective. You are essentially creating a new genre and that’s always a hard sell. As with the creation of any new genre (and there have been a bunch to learn from), simple and clear is almost mandatory. There have been lots of successes as well as failures in games that have tried to do something different and for the first time. It’s good to know why.

Also, I was hinting at the need for a bit of non-intellectual levity, and being something of a devil’s advocate (thanks for responding). I think the theory and ideas here are awesome and inspiring (it’s why I’m reading this thread). I also think its important to remember that this is about entertainment – whether its a novel, a movie, a tv show, or a game. What is fun and compelling about the Party? What’s the hook?

Regarding business stuff, you said, “- Today’s casual games are lightweight arcade, puzzle and tile-matching games. A game with deep characters, AI and a language-based play mechanic will be perceived to have more value.”
I’m not sure that’s true. Certainly a prevailing thought among casual game publishers is that the vast majority of casual game players prefer quick easy-to-learn mindless and addictive games. The largest audience for casual games is middle aged women playing puzzle games. Even my mom plays solitaire on her computer probably 1-2 hours/day. I have shown her a bunch of other games but she keeps coming back to Solitaire. Why is that?

“- Do a scaled-back version of The Party as a lighter-weight casual game — still heavy on the AI and character depth, but light on animation, for a production budget $500K or so.”
This makes a lot of sense.

We’re seeking angel investors first and foremost. Ideally we find project-based funding, meaning that investors profit on their investment based on product revenues and content IP, like how indie film investors do — not so much as a long-term investment in the company itself ultimately profiting years later by some kind of exit strategy as Ian described. We are also talking to VC’s, who would require a long-term company-growth plan, but it’s unclear our business is big enough to interest them, even if it would end up being profitable for them.

Who would these angels be? It’s interesting; I’ve been trying to understand who are the folks are that invest in indie films. Indie films seem like a bad investment — very risky, probably at best will break even or make very little on the investment, more likely will lose money. I’m guessing the investors do it for a variety of idiosyncratic reasons: maybe they personally believe in the project (e.g. an important documentary), or it’s just fun for them to participate, experience some of the excitement of being in the film industry, hope to sleep with actresses, that kind of thing. Not sure how desirable game developers are, though.

In our case, we’d need to find wealthy individuals who want to see new forms of interactive story get made. Such people probably exist, but it will take work to find and woo them. It’s probably going to take a while.

In reality I’m not sure Façade‘s half million downloads really mean much from an investor’s perspective, sadly. They’re certainly not good in terms of the casual game industry’s model: only 1-2% of downloaded casual game free demos get converted into an actual purchase! But I think comparing The Party to casual games like Bejeweled, Diner Dash or Bookworm Adventures is really apples and oranges, even though we’re targeting similar customers, for several reasons:

- Today’s casual games are lightweight arcade, puzzle and tile-matching games. A game with deep characters, AI and a language-based play mechanic will be perceived to have more value. The Party would be a massively casual game, with about 10 hours of value (a 40-minute game, replayable 10-15 times).

- We’re not going to create a demo with one hour of free play. Our demo will probably have 3 minutes of replayable free play — the first few minutes of a 40-minute, replayable comedy-melodrama — just enough to hook the player. So we’re already outside the normal casual games model right there.

- We should get many, many more than only a half-million downloads of The Party, if we get it on to one or more high traffic portals, that doesn’t require BitTorrent, and especially if the demo is far more entertaining to play than Façade is.

- Because of the nature of the product, I’m guessing our conversion ratio will be higher, more like 5-10%. Let’s say we charge $30 for the product, and manage to find a distributor who takes only $10; we profit $20 per sale. If the production budget were $2MM, we’d have to sell 100K units to break even. For each 100K sold, if the conversion rate is 5%, we’d need 2MM downloads. If the game is really good, I’d hope we could get 10MM downloads; 10MM downloads would mean $8MM profit for the investors.

 
We have a more aggressive version of the production budget, that is actually closer to $1.25MM. But, I’ve been told it’s actually just as easy to raise $2MM as $1MM. This is why we’ve upped our budget, to the more production-comfortable $2MM. However, if need be I think we can shrink the budget to $1.5MM.

Our overall objective is to be enabled to produce a bunch of interactive dramas and comedies, while retaining full creative control, or close to it. The technology and tools are a key part of this process and therefore are a very important part of our business plan. We can include long-range plans of how the tools could be leveraged in other ways, e.g. serious games or technology licensing, but at first, entertainment products created in-house is our primary mission. We need to generate enough revenue to make this sustainable, e.g. either to continue attracting investors, and/or become self-sustaining. We must retain the technology IP on all projects, but are willing to give up content IP, at least for the first project and maybe more.

Based on my experience and work style, the core of the production can’t be virtual. You’re right that the community would be interested to pitch in and help, however, as much as I’d enjoy that, I’m skeptical how well that would work out. This work is too difficult to farm out and expect adequate results; also my authorship style is far closer to auteur than delegator. To ensure the highest quality I need to very closely direct the production, in-house. (A few things can be farmed out, such as environment modelling.)

We point to The Sims as proof of a huge market for games about people, but really The Sims is something of an anomaly. There haven’t been any successful clones of it; it hasn’t created a new genre, really. It’d be interesting for someone to study why that is.

I’ve described our Plan A, that we’ll continue to pursue unless we discover it’s not going to work. Here are some alternative plans we may switch to if needed, some of which match your suggestions above.

- Don’t try to raise the full production budget at once; first try to raise about $300K, from a single angel. Use that to polish the tools and build a solid prototype — a minute or two of robust play. Iterate and focus test that until the test results are good, and then use that to raise the remaining full budget. One drawback I can see here is that if you do two rounds of fundraising, you may give up more equity in your company that if you did one round.

- Do a scaled-back version of The Party as a lighter-weight casual game — still heavy on the AI and character depth, but light on animation, for a production budget $500K or so. Casual game publishers have already shown interest in us, but our production budgets are currently out of their reach. It is encouraging to hear about the $750K budget for Bookworm Adventures. (But who’d pay $30 for that game, I don’t know — even I, a Scrabble-loving Boggle player, feel I wouldn’t pay more than $20 for it.)

- Explore a more traditional game publishing deal. Right now we’re not going for this, but we may try it.

- Explore in-game ads of some sort. There might be a good way to integrate ads; aw hell, let’s just rename it to The Tupperware Party.

- Do some serious games work, to get some seed funding. This would probably work, but it ultimately delays The Party by several more years I’m guessing.

- SBIR’s. Worth a shot.

- Art grants. May be worth a shot.

1) cut costs to the 1.2mm to 1.6mm range, using techniques Ian and I have suggested.

2) develop a demo you can use to broker a deal with DoubleFusion for dynamic ad-placement of in-game objects (you’re cringing I suspect, but its really possible to make it work for the game, rather than against it, if you sprinkle some post-modernisms into your comedy, which is about where the contemporary audience is at anyway.)

3) use the same demo to broker a deal with a casual publisher willing to fund you in the high six figures, on the terms that you’ll be covering 50-65% of the budget through ad-placement revenues.

The “demo” in question could very well be Facade, so if you can stomach potential compromises, your next move is really to get moving on these business deals.