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Star Fox developer Velan: How to survive as a North American game studio · The Game Business Show

0:00
SPEAKER_01: The Nintendo partnership is a very special and unique one, and the bar is really high.
0:06
SPEAKER_01: North America is the most expensive place to do game development in the world,
0:10
SPEAKER_01: and so there's a lot of talk about, okay,
0:12
SPEAKER_01: what's the burn rate,
0:13
SPEAKER_01: what's the cost for man month for the teams, and where we can go cheaper.
0:18
SPEAKER_02: The number of doomsayers,
0:19
SPEAKER_02: like every two years it seems like everything is done,
0:22
SPEAKER_02: the dominant players are set,
0:24
SPEAKER_02: there's no new opportunities out there, it's a harsh environment.
0:28
SPEAKER_02: And then somebody goes and surprises everyone.
0:31
SPEAKER_01: Today, the IP holders like it,
0:33
SPEAKER_01: recognize that it's matching it with the right teams that have the passion
0:37
SPEAKER_01: and capability.
0:41
SPEAKER_00: Hello, and welcome to The Game Business Show.
0:45
SPEAKER_00: This week's edition is sponsored by Exola.
0:48
SPEAKER_00: Now, the PC studios that will be here in 10 years will be
0:50
SPEAKER_00: the ones building direct relationships with their players today.
0:53
SPEAKER_00: Selling direct means running your own PC game store alongside
0:56
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0:58
SPEAKER_00: You set the price, players buy from you and you keep up to 95% of every sale.
1:03
SPEAKER_00: The launch of your branding handles delivery and updates and payments work
1:06
SPEAKER_00: in every market that you sell in.
1:08
SPEAKER_00: This is not meant to be a replacement for traditional storefronts,
1:11
SPEAKER_00: it is a new revenue stream alongside them,
1:13
SPEAKER_00: and more than a thousand PC games already run one for the Xola Publishing Suite.
1:18
SPEAKER_00: You can see how it works for your PC game by visiting the Xola website,
1:21
SPEAKER_00: or in the links found in the newsletter associated with this very show.
1:26
SPEAKER_00: Speaking of this show, let's get on with it.
1:29
SPEAKER_00: This week we are speaking to two video game legends, Juha and Karthik Bala.
1:33
SPEAKER_00: The brothers were the founders of Vicarious Visions,
1:35
SPEAKER_00: where they worked on some of the biggest games and franchises in the world,
1:38
SPEAKER_00: including Tony Hawk,
1:39
SPEAKER_00: Skylanders,
1:40
SPEAKER_00: Spider-Man,
1:41
SPEAKER_00: Guitar Hero, Star Wars, James Bond, Crash Bandicoot, the list really does go on.
1:45
SPEAKER_00: Now they sold the studio to Activision in 2005,
1:48
SPEAKER_00: and then in 2016 they started again at Velen Studios.
1:51
SPEAKER_00: Now Velen has had quite the journey.
1:54
SPEAKER_00: It secured a partnership with Nintendo and has worked on two massive Nintendo franchises.
1:58
SPEAKER_00: The first was Mario Kart Live Home Circuit in 2020.
2:01
SPEAKER_00: That was for Nintendo Switch.
2:02
SPEAKER_00: It was a mixed reality Mario Kart game.
2:04
SPEAKER_00: And this summer it handled the excellent remake of Star Fox for Nintendo Switch 2.
2:09
SPEAKER_00: But it's not been easy over the last 10 years.
2:12
SPEAKER_00: It's big 2021 live service dodgeball game,
2:14
SPEAKER_00: Knockout City,
2:15
SPEAKER_00: which was published by EA,
2:17
SPEAKER_00: attracting millions of players but struggled to maintain an audience.
2:20
SPEAKER_00: Its public service was shut down in 2023.
2:22
SPEAKER_00: And in 2024,
2:23
SPEAKER_00: following a project cancellation from an external developer,
2:26
SPEAKER_00: his duty had to reorganize and make some cuts.
2:29
SPEAKER_00: But it's now growing again.
2:31
SPEAKER_00: It's just opened a new studio in Toronto, Canada, and over 10 years, it's put out six games.
2:36
SPEAKER_00: That's impressive.
2:37
SPEAKER_00: Now, I've spoken to the violas many times in my career,
2:39
SPEAKER_00: including on stage events,
2:41
SPEAKER_00: and they're some of the most astute,
2:42
SPEAKER_00: considered and intelligent people I've ever had the pleasure to interview.
2:45
SPEAKER_00: And now,
2:46
SPEAKER_00: fresh from their Star Fox triumph,
2:48
SPEAKER_00: I've finally managed to get them to join me on The Game Business.
2:51
SPEAKER_00: Where we will be discussing how they've managed to survive and even grow in
2:54
SPEAKER_00: an increasingly hostile North American game development scene.
2:58
SPEAKER_00: So, without further ado, here is my conversation with Guha and Karthik Bala.
3:04
SPEAKER_00: Heya, Guha.
3:05
SPEAKER_00: Heya, Karthik.
3:06
SPEAKER_00: Welcome to the show.
3:06
SPEAKER_00: It's really nice to be here.
3:09
SPEAKER_00: It's good to see you again, Chris.
3:10
SPEAKER_00: It's been, I find, it's 10 years, which really...
3:15
SPEAKER_00: I'm having like an existential crisis at that.
3:17
SPEAKER_00: Like, it feels like, you know, it was only...
3:19
SPEAKER_00: Six months ago,
3:20
SPEAKER_00: we were like an investment summit in Boston talking about all your plans and dreams
3:23
SPEAKER_00: and aspirations.
3:24
SPEAKER_00: And here we are, what, 10 years in and six games, is it?
3:27
SPEAKER_00: It's incredible.
3:28
SPEAKER_00: Time seems to be going faster and faster, doesn't it?
3:31
SPEAKER_02: Yeah.
3:31
SPEAKER_00: I think the older you get, the time goes faster.
3:34
SPEAKER_00: I don't know what it is.
3:35
SPEAKER_00: But it does seem like yesterday.
3:37
SPEAKER_00: Well, I guess congratulations on your latest game, Star Fox.
3:40
SPEAKER_00: I thought it was an excellent...
3:42
SPEAKER_00: I'm a fan, as you can see from the poster.
3:43
SPEAKER_00: I thought it was an excellent remake.
3:45
SPEAKER_00: Visually very striking.
3:46
SPEAKER_00: I played for it a bunch, so...
3:48
SPEAKER_00: I know you can't talk too much about it, but congratulations on it.
3:51
SPEAKER_00: It was a
3:51
SPEAKER_01: lot of fun to work on.
3:53
SPEAKER_01: You know, we're really proud of what we made in collaboration with Nintendo.
3:58
SPEAKER_01: So, yeah, we're just really happy about it.
4:00
SPEAKER_00: I'm really interested.
4:01
SPEAKER_00: It's still relatively rare to see an independent...
4:04
SPEAKER_00: Western Studio take on a Nintendo IP.
4:07
SPEAKER_00: I know there's a few out there that Christine does Metroid and stuff,
4:10
SPEAKER_00: but 10 years, six projects and two of them with Nintendo, Mario Kart and Star Fox.
4:15
SPEAKER_00: What do you think it is about you or about Velen
4:18
SPEAKER_00: that makes someone like Nintendo sort of trust you to handle such treasured IP?
4:24
SPEAKER_02: Well, I think that we've had a longstanding collaboration with Nintendo.
4:30
SPEAKER_02: I think our very first The game with Nintendo was Spider-Man for GBA in 1998.
4:35
SPEAKER_02: And from there, we've been on the launch of our system.
4:38
SPEAKER_02: Game Boy Color.
4:39
SPEAKER_02: When I said GBA, you had Game Boy Color in 1998.
4:42
SPEAKER_02: That was before the GBA launch.
4:43
SPEAKER_02: We were at the launch of GBA with Tony Hawk's Pro Skater 2.
4:47
SPEAKER_02: I've got that game.
4:49
SPEAKER_02: Yeah.
4:50
SPEAKER_02: And Mysterious Menace as well.
4:54
SPEAKER_02: And we've been really admirers,
4:57
SPEAKER_02: as many people have,
4:58
SPEAKER_02: of So the hardware as well as the software that they create,
5:01
SPEAKER_02: but also try to do something extra in each one of those releases,
5:05
SPEAKER_02: something that's really special for gamers.
5:08
SPEAKER_02: And so over time,
5:10
SPEAKER_02: You know,
5:10
SPEAKER_02: sometimes people ask me sort of how do you build relationships throughout
5:13
SPEAKER_02: the industry over time, especially young people coming out of college and so forth.
5:17
SPEAKER_02: I said, well, you make promises and you keep them and you try to exceed expectations.
5:22
SPEAKER_02: And this is if you do this consistently over time,
5:25
SPEAKER_02: you build trust,
5:25
SPEAKER_02: you build relationships and you build really interesting opportunities
5:29
SPEAKER_02: to collaborate.
5:30
SPEAKER_02: And so, you know,
5:31
SPEAKER_02: throughout our history and of course of 35 plus years in this industry,
5:37
SPEAKER_02: that's what we've tried to do.
5:38
SPEAKER_02: And I think the latest Star Fox is just the latest top hook of that.
5:43
SPEAKER_00: Wow.
5:44
SPEAKER_00: I went to the Nintendo Museum,
5:45
SPEAKER_00: and Carphets commented on this last week,
5:48
SPEAKER_00: and I loved seeing Mario Kart Live Home Circuit sort of featured
5:51
SPEAKER_00: so prominently throughout the museums.
5:55
SPEAKER_01: I don't know if you get a kick out of that, but I was pleased It's an amazing place.
6:00
SPEAKER_01: It is an amazing place.
6:02
SPEAKER_01: Too bad you can't take photos inside.
6:04
SPEAKER_01: No, not that bit, no.
6:06
SPEAKER_01: No, not that part, Bay Inter Sanctum.
6:09
SPEAKER_01: They've done such an incredible job of celebrating the history
6:12
SPEAKER_01: and seeing all those games there and then seeing some of your own work in
6:19
SPEAKER_01: that museum is quite a unique experience.
6:24
SPEAKER_01: It was pretty emotional.
6:27
SPEAKER_02: The thing that stood out to me about that place is the number
6:31
SPEAKER_02: of really out there creative risks the company has taken over time.
6:37
SPEAKER_02: And you remember the successes,
6:39
SPEAKER_02: like the dominant systems and things like that,
6:41
SPEAKER_02: but you don't necessarily remember the quirky things that they did.
6:45
SPEAKER_02: And the reality is that every one of those things,
6:47
SPEAKER_02: when they were taking the at-bat,
6:50
SPEAKER_02: when they were going there and trying to take this point,
6:52
SPEAKER_02: They were like, this could work.
6:53
SPEAKER_02: This would be something really special and surprising for consumers.
6:56
SPEAKER_02: Not everything does,
6:57
SPEAKER_02: but really it's a consistent habit,
6:59
SPEAKER_02: producing quality and taking creative risks that's
7:02
SPEAKER_00: reduced their success as well.
7:03
SPEAKER_00: But we've tried to pattern that for ourselves.
7:06
SPEAKER_00: I do think they're quite masters of turning...
7:09
SPEAKER_00: You can only do failure,
7:10
SPEAKER_00: but even the Switch is taking the Wii U and going,
7:13
SPEAKER_00: well, how can we turn that into...
7:16
SPEAKER_00: I don't think the Switch will exist without the Wii U.
7:18
SPEAKER_00: I think that would have been seen as played in.
7:20
SPEAKER_00: And one of the things that was on display there,
7:22
SPEAKER_00: I didn't even know this story,
7:23
SPEAKER_00: was the radarscope,
7:24
SPEAKER_00: which was an arcade machine that failed, but it led to the creation of Donkey Kong.
7:29
SPEAKER_02: You have these weird rooms where there are ping-pong balls coming at you,
7:33
SPEAKER_02: And you're swinging at the ping pong balls,
7:36
SPEAKER_02: trying to take out different articles in your house,
7:39
SPEAKER_02: as if that's a good idea to do in your actual house.
7:42
SPEAKER_02: But it's one of their games.
7:44
SPEAKER_00: Yeah, yeah.
7:44
SPEAKER_00: It's that whole level.
7:45
SPEAKER_00: It's like an interactive Wario.
7:47
SPEAKER_00: Look, I'm not going to...
7:48
SPEAKER_00: Look, we're five minutes in and we're just talking about nothing but Nintendo.
7:52
SPEAKER_00: So it's been 10 years, and obviously Mario Kart was your first project.
7:56
SPEAKER_00: The first big original project you had was with Knockout City.
8:00
SPEAKER_00: And I remember really enjoying that game.
8:02
SPEAKER_00: I thought it was a really promising project, but it obviously didn't work out in the end.
8:05
SPEAKER_00: And we just had a bit of a chat there about,
8:06
SPEAKER_00: you know, learning lessons from things that didn't necessarily work out and that.
8:10
SPEAKER_00: But looking back on that part of your story now,
8:13
SPEAKER_00: Was there anything particularly you learned from that?
8:16
SPEAKER_01: Not that Serie was such a great game and so fun.
8:21
SPEAKER_01: It was so difficult to make as well.
8:24
SPEAKER_01: You know,
8:24
SPEAKER_01: there's a lot of technical challenges and,
8:27
SPEAKER_01: you know,
8:27
SPEAKER_01: we had a clear vision of what we wanted to go after,
8:29
SPEAKER_01: but we had to invent so many new things to make that possible.
8:33
SPEAKER_01: So it was quite a challenge.
8:35
SPEAKER_01: You know, we had to build our own game engine.
8:37
SPEAKER_01: We had to build our own programming language that the game was built on.
8:43
SPEAKER_01: And it had a lot of strict requirements in terms of like dedicated servers
8:48
SPEAKER_01: and how it operated and how it worked in cross-play.
8:52
SPEAKER_01: So there's a lot of challenges and we had to learn how to do live service and
8:56
SPEAKER_01: as we were growing the studio, I wouldn't trade that.
9:00
SPEAKER_01: I wouldn't trade that for anything, you know, and just all the stuff that we learned.
9:04
SPEAKER_01: And we had 12 million players coming through that game and there's a lot of people
9:09
SPEAKER_01: who really enjoyed it.
9:11
SPEAKER_01: But, you know,
9:12
SPEAKER_01: ultimately,
9:13
SPEAKER_01: you know,
9:13
SPEAKER_01: we got to face some of the harsh sort of business realities and,
9:17
SPEAKER_01: you know,
9:17
SPEAKER_01: and if you're,
9:18
SPEAKER_01: you know,
9:19
SPEAKER_01: you keep trying,
9:19
SPEAKER_01: you're trying to make it work at scale and the market shifted a lot, right?
9:25
SPEAKER_01: When we came up with the whole concept...
9:28
SPEAKER_01: 2017, going with 2018, we showed it behind closed doors at E3 in 2018.
9:35
SPEAKER_01: We thought it was cool.
9:36
SPEAKER_01: We didn't know if anybody else thought it was cool.
9:39
SPEAKER_01: And that's when we got a lot of publisher interest.
9:42
SPEAKER_01: And then ultimately sign with EA and we thought we had something,
9:46
SPEAKER_01: but it was early days for like live service games back then, right?
9:52
SPEAKER_01: Even Fortnite had just come out and the landscape shifted a lot over those years.
9:58
SPEAKER_01: So there's a lot of learnings, you know, from a still a great game, we want to bring it back.
10:05
SPEAKER_01: But we have to do it differently.
10:07
SPEAKER_01: I think there are enough things that have changed in the landscape
10:10
SPEAKER_01: and also technology that may make it more feasible and sustainable.
10:15
SPEAKER_01: So part of what we have to look at is even though we discovered sort of
10:20
SPEAKER_01: a new gameplay mechanic,
10:23
SPEAKER_01: new sound of play with that,
10:25
SPEAKER_01: we've got to figure out how to do that in a sort of sustainable way for
10:29
SPEAKER_01: the community and fans and have it work at any scale.
10:34
SPEAKER_01: That's the challenge.
10:38
SPEAKER_01: But it's an IP that we own and great gameplay and technology
10:44
SPEAKER_01: and remarkably it still hasn't been copied yet.
10:47
SPEAKER_02: It's hard to do.
10:49
SPEAKER_02: It's a hard one to copy.
10:51
SPEAKER_02: It's a hard one.
10:53
SPEAKER_02: I would say, you know, a couple things that I think were really interesting findings for us.
10:58
SPEAKER_02: You know,
10:58
SPEAKER_02: we started Knockout City at a time where many games do take a while to develop,
11:04
SPEAKER_02: but that in particular is kind of a season-based, you know, PvP.
11:10
SPEAKER_02: You know, kind of game, a game is a service game when, you know, that was the thing to do.
11:14
SPEAKER_02: They structurally tend to have a lot of costs.
11:17
SPEAKER_02: There's a server component to it,
11:18
SPEAKER_02: but there's also just the amount of content you need to keep pumping out.
11:22
SPEAKER_02: And so it's not a great venue to experiment with things that are truly out there.
11:30
SPEAKER_02: Maybe it's okay for tried and true mechanics, but even that's very high risk.
11:34
SPEAKER_02: Or tried and true game formulas or established brands, even that's high risk.
11:38
SPEAKER_02: So do it with something that's completely different.
11:41
SPEAKER_02: The structural costs make innovation difficult.
11:44
SPEAKER_02: There's that.
11:45
SPEAKER_02: There's also, and this is a bit of like time moves faster as you get older type of thing.
11:50
SPEAKER_02: The dynamics of the market chain are changing very rapidly,
11:52
SPEAKER_02: enabling technologies,
11:54
SPEAKER_02: consumer attention, where entertainment is coming from, the nature of discovery.
12:00
SPEAKER_02: Even the things that are classified as like the black hole games,
12:03
SPEAKER_02: the games that people are spending all their time in,
12:06
SPEAKER_02: I believe that's going to change fundamentally over the next 18 months
12:09
SPEAKER_02: and really transform.
12:11
SPEAKER_02: So when we look at that, developing a game that's structurally high cost,
12:18
SPEAKER_02: So
12:22
SPEAKER_02: I think that in a lot of ways, I feel like we've made a great game.
12:28
SPEAKER_02: You know, it was recognized that way and people love it, the new staff, fans asking for it.
12:34
SPEAKER_02: I would like to bring it back,
12:35
SPEAKER_02: but I'd like to bring it back in a much more agile way,
12:37
SPEAKER_02: in a leaner way where we could figure out what happens or what's going to happen
12:42
SPEAKER_02: if we try something in a very short window.
12:45
SPEAKER_02: In a lot of ways,
12:47
SPEAKER_02: We talked to a lot of experts in the process of trying to figure it out
12:51
SPEAKER_02: after we launched.
12:52
SPEAKER_02: And it turns out the experts are better historians than they are forecasters.
12:58
SPEAKER_02: You never know what's actually going to happen, what people are really going to think.
13:02
SPEAKER_02: And so I think actually just modifying our approach entirely,
13:05
SPEAKER_02: seeing how quickly we do things,
13:07
SPEAKER_02: how quickly we can change things,
13:09
SPEAKER_02: and how the cost of that It's low enough that you can take some real risks.
13:13
SPEAKER_02: I think that's really the big lessons from Knockouts today.
13:16
SPEAKER_02: And it shows up in the types of games that we make now,
13:18
SPEAKER_02: like Murder Club and other smaller, you know, wilder creative experiences.
13:23
SPEAKER_00: I always say to the analysts who I have on the show all the time,
13:26
SPEAKER_00: and they'll admit it themselves,
13:27
SPEAKER_00: they're good at looking back and all their predictions are based
13:29
SPEAKER_00: on what's happened rather than what's going to happen.
13:31
SPEAKER_00: And when you're in a creative,
13:32
SPEAKER_00: artistic, innovative industry, You can never predict what's going to happen.
13:36
SPEAKER_00: In one minute,
13:36
SPEAKER_00: something that you thought was dead can suddenly be the biggest thing in the world.
13:39
SPEAKER_00: The industry moves so fast.
13:43
SPEAKER_01: But isn't that one of the greatest things about our business?
13:46
SPEAKER_00: Sometimes.
13:48
SPEAKER_02: You've got to take good with the bad, right?
13:52
SPEAKER_02: I do think it's one of the greatest things,
13:54
SPEAKER_02: because I think it's like we've heard The other thing that you learn over time,
13:59
SPEAKER_02: and I'm sure you recognize this too, Chris,
14:01
SPEAKER_02: is that the number of doomsayers,
14:04
SPEAKER_02: like every two years, it seems like everything is done.
14:07
SPEAKER_02: The dominant players are set.
14:08
SPEAKER_02: There's no new opportunities out there.
14:11
SPEAKER_02: It's a harsh environment.
14:13
SPEAKER_02: And then somebody goes in and surprises everybody.
14:15
SPEAKER_00: So this is what keeps us hopeful.
14:17
SPEAKER_00: I guess it can feel that way at the moment in the industry.
14:18
SPEAKER_00: It can feel like it's taking a tumble.
14:21
SPEAKER_00: But as you talked about it, you know, you've gone through quite a rapid change.
14:25
SPEAKER_00: So you talked about things moving smaller and needing to be faster and be more agile.
14:29
SPEAKER_00: Is it just being quicker to react to things?
14:31
SPEAKER_00: Is that how you deal with that?
14:33
SPEAKER_01: I think it's multiple things.
14:36
SPEAKER_01: Rapid prototyping and trying new ideas quicker.
14:40
SPEAKER_01: The whole fail faster kind of mentality.
14:45
SPEAKER_01: Being able to try things and get into consumer hands,
14:50
SPEAKER_01: whether it's public or private tasks and getting feedback
14:55
SPEAKER_01: and having tighter feedback loops.
14:57
SPEAKER_01: I think that's actually really important.
14:59
SPEAKER_01: Especially if you're doing something sort of really new.
15:04
SPEAKER_01: This is the kind of like mindset and approach is pretty crucial.
15:11
SPEAKER_01: So building tools and pipelines or keeping a small and agile team when it comes
15:17
SPEAKER_01: to discovery, I think that's absolutely crucial.
15:20
SPEAKER_01: But then even when a product is out there and then you're evolving it,
15:23
SPEAKER_01: that's where the rapid response
15:28
SPEAKER_01: And being able to take consumer feedback is also really important.
15:34
SPEAKER_01: And I don't know if we're that good at it.
15:38
SPEAKER_01: I mean, we're pretty good, but there's room for improvement there.
15:45
SPEAKER_01: And I think that's what's going to be necessary kind of going forward.
15:48
SPEAKER_01: And most of the work that we've done is in the PC and console area.
15:52
SPEAKER_01: And so for that,
15:54
SPEAKER_01: I think
15:55
SPEAKER_02: A lot of times the craftsmanship involved in the product matters a lot.
15:58
SPEAKER_02: So there's a real balance there.
16:01
SPEAKER_02: It's not like we can crank out a prototype and then just put it out there
16:04
SPEAKER_02: a test market,
16:05
SPEAKER_02: look for our KPIs and respond to KPIs and suddenly optimize the perfect game.
16:11
SPEAKER_02: That's just not how this part of the industry works.
16:14
SPEAKER_02: And so these are real artistic expressions that you need to say,
16:18
SPEAKER_02: okay, this is an expression of what I want creatively.
16:20
SPEAKER_02: That could take a while.
16:22
SPEAKER_02: But then balancing that with the ability to respond to what's actually happening
16:26
SPEAKER_02: or shut it down and making it into something new,
16:29
SPEAKER_00: you know, that's the problem that we've been working on.
16:32
SPEAKER_00: I'm sort of interested, Nogi,
16:33
SPEAKER_00: I wasn't planning to ask this,
16:34
SPEAKER_00: but you mentioned that,
16:35
SPEAKER_00: you know,
16:35
SPEAKER_00: even you think black hole games and what's happening there will change substantially
16:40
SPEAKER_00: in 18 months.
16:41
SPEAKER_00: I got a poke at that.
16:42
SPEAKER_00: What do you, how do you think that's going to, what's going on there?
16:46
SPEAKER_02: Well, I just think that so much is going on right now with people go
16:50
SPEAKER_02: to user-generated content platforms,
16:53
SPEAKER_02: people go to destinations for games to form social communities.
16:59
SPEAKER_02: And there's a bit of a stickiness factor because there's structural advantages
17:02
SPEAKER_02: to creating those communities.
17:03
SPEAKER_02: And the obvious ones are going to be like Roblox and Fortnite and places like that.
17:09
SPEAKER_02: There are others, right?
17:10
SPEAKER_02: Some big franchises out there to do that.
17:14
SPEAKER_02: It's not at all clear to me that those barriers are going to be durable.
17:20
SPEAKER_02: Those walls are going to come down and maybe they're going to be more micro communities made.
17:25
SPEAKER_02: Some of that could be because of AI generated environments.
17:31
SPEAKER_02: It might be.
17:33
SPEAKER_02: It might be that the barriers to creating those,
17:35
SPEAKER_02: the structural barriers to creating those environments may come down.
17:39
SPEAKER_02: It may come down because web becomes a more Prominent means of consumption
17:44
SPEAKER_02: for more geographies,
17:46
SPEAKER_02: because I do think that having high GPU systems as barriers to adoption
17:52
SPEAKER_02: or proprietary console systems as barriers to adoption,
17:56
SPEAKER_02: they're very geographically bound type of constraint.
18:00
SPEAKER_02: I just see developers, consumers poking at all of these boundaries at a rapid rate.
18:08
SPEAKER_02: We're going to see a lot.
18:09
SPEAKER_02: I don't know what is going to happen exactly.
18:14
SPEAKER_02: Speaking of being an expert or an analyst, I'm going to go on.
18:17
SPEAKER_02: But the ways to poke at the boundaries are growing, you know, a tremendous amount.
18:21
SPEAKER_02: So I think we're going to see a lot of change and include those durable advantages.
18:25
SPEAKER_02: Well, to the owners of all those advantages, they could be quite comforting.
18:28
SPEAKER_02: I think they're going to be more fleeting than no.
18:31
SPEAKER_02: Of course, in the middle of all this, where do we see ourselves?
18:33
SPEAKER_02: I do think that great creative teams,
18:36
SPEAKER_02: creative insights,
18:38
SPEAKER_02: trying to always think about creating something special for consumers.
18:42
SPEAKER_02: Meaningful ways of spending time together.
18:45
SPEAKER_02: These are at the heart of what drives us.
18:47
SPEAKER_02: I think that'll continue to be valuable.
18:49
SPEAKER_02: The structural boundaries, all these advantages.
18:52
SPEAKER_02: I see so many ways that that could come down.
18:55
SPEAKER_02: Interesting.
18:56
SPEAKER_00: So let's go about talking about Velen.
18:58
SPEAKER_00: You've had mixed reality racing games and Mario Kart and Hot Wheels.
19:03
SPEAKER_00: There's a sports action game in Knockout City.
19:06
SPEAKER_00: Murder Club, which is like a horror party game thing.
19:09
SPEAKER_00: VR pinball game.
19:12
SPEAKER_00: What would you say is a Verlan game?
19:15
SPEAKER_01: I think the core to our values is staying curious.
19:22
SPEAKER_01: And we're always trying to go after new sorts of play mechanics at the heart of it,
19:29
SPEAKER_01: something we haven't experienced before.
19:32
SPEAKER_01: When we do look at it, we're like, wow, it's like cutting across lots of different genres.
19:36
SPEAKER_01: And we experiment and we see where we find unique, fun, And we build from it.
19:42
SPEAKER_01: But I do think that what we're finding is that over the course of the last 10 years,
19:47
SPEAKER_01: we've built teams that have a lot of expertise in certain genres and trying
19:54
SPEAKER_01: to innovate and come up with new gameplay mechanics or new ideas
19:59
SPEAKER_01: within those genres.
20:01
SPEAKER_01: But I think the core of it really kind of comes down to like play feel.
20:06
SPEAKER_01: And find something unique and new,
20:09
SPEAKER_01: a new kind of feeling or connection that you can have with the game.
20:14
SPEAKER_01: I think that's what makes it a valid game.
20:15
SPEAKER_01: We always talk about create breakthrough games that have magic.
20:20
SPEAKER_01: And that's something that's magical is inherently bring something new to the table, right?
20:26
SPEAKER_01: A new trick.
20:27
SPEAKER_01: And so we got to keep doing that.
20:32
SPEAKER_00: You talked before back in my games in shop these days,
20:35
SPEAKER_00: you talked before about the importance of finding that magic,
20:37
SPEAKER_00: particularly in the initial sort of concept phase.
20:39
SPEAKER_00: I remember you saying,
20:40
SPEAKER_00: you know,
20:41
SPEAKER_00: you give yourself time to really know what makes the game special before sort
20:44
SPEAKER_00: of going full steam ahead with development.
20:46
SPEAKER_00: But, you know,
20:46
SPEAKER_00: we've just talked about the industry shifted,
20:48
SPEAKER_00: things are tougher out there, people are moving fast, you need to react quicker.
20:52
SPEAKER_00: So how do you get the balance between giving yourself the time to find that magic,
20:55
SPEAKER_00: but then also not taking too long because the industry moves so quickly?
21:00
SPEAKER_01: That is one of the core challenges.
21:03
SPEAKER_01: You know,
21:04
SPEAKER_01: we are prototyping,
21:05
SPEAKER_01: you know, all the time and trying new ideas, sort of percolating in the background.
21:10
SPEAKER_01: And we do internal game jams and things like that,
21:13
SPEAKER_01: you know, from time to time and folks have ideas.
21:15
SPEAKER_01: And when we do latch onto projects that we feel, okay,
21:20
SPEAKER_01: there's a real sort of market opportunity as well as just the passion,
21:24
SPEAKER_01: you know,
21:24
SPEAKER_01: for the team, we have a pretty structured approach with internal green lines.
21:30
SPEAKER_01: The balance that we're finding now is really when we think about the size of games
21:35
SPEAKER_01: that we can make as an independent studio
21:39
SPEAKER_01: with multiple teams is I think we're finding a natural cadence where we can kind
21:46
SPEAKER_01: of go into a AA scope game that has Like an established IP, licensed IP.
21:54
SPEAKER_01: That might be a partner project or a licensed IP that we are directly licensed in.
21:59
SPEAKER_01: And we can make a double-A investment around that because there's an audience and so on.
22:04
SPEAKER_01: And then with more original IP or like something that's really out there,
22:08
SPEAKER_01: you know,
22:09
SPEAKER_01: in terms of gameplay,
22:10
SPEAKER_01: you know,
22:10
SPEAKER_01: we can sort of make more of a triple-I level investment with like
22:14
SPEAKER_01: an even smaller team.
22:15
SPEAKER_01: And so we're trying to sort of find that middle path,
22:18
SPEAKER_01: which there are some studios going down that.
22:23
SPEAKER_01: And, you know, for a veteran team that's not a...
22:28
SPEAKER_01: You know,
22:29
SPEAKER_01: sort of GarageBand indie and we're not AAA,
22:32
SPEAKER_01: you know, multi-studio, multi-hundred person, you know, sort of efforts.
22:37
SPEAKER_01: This feels like a sort of a natural sweet spot for us and something that honestly,
22:42
SPEAKER_01: like the industry has lost a little bit,
22:44
SPEAKER_01: you know,
22:44
SPEAKER_01: and maybe you're coming back,
22:46
SPEAKER_01: you know, but it seems like a more sustainable path for teams like ours.
22:51
SPEAKER_02: We don't see a lot of independent studios where A bit more of a staggered slate,
22:57
SPEAKER_02: some bigger projects that have a bit more genre stability in a built-in,
23:03
SPEAKER_02: and then smaller ones that are sort of creatively experimental with a path to market
23:08
SPEAKER_02: as well.
23:09
SPEAKER_02: I think more independent studios should try to do that.
23:12
SPEAKER_02: They tend to be single product companies,
23:15
SPEAKER_02: and if the slate plans, if the publisher changes, that becomes a real challenge.
23:20
SPEAKER_02: Or if they're solely investment-driven and the metrics don't show up in their product, Yeah.
23:26
SPEAKER_02: And the funding gets cut off.
23:28
SPEAKER_02: And I think that's a lot of where we see the carnage,
23:30
SPEAKER_02: you know,
23:30
SPEAKER_02: as well,
23:32
SPEAKER_02: especially in an environment where the publishing world is really contracted
23:36
SPEAKER_02: to like small number of operating businesses within each entity.
23:42
SPEAKER_02: And that's across the board,
23:43
SPEAKER_02: whether it's Take-Two or most recently,
23:45
SPEAKER_02: obviously Microsoft,
23:47
SPEAKER_02: Embracer, Activision, even Activision really started that process 15 plus years ago.
23:55
SPEAKER_02: It leaves a lot of audiences,
23:59
SPEAKER_02: a lot of IPs that don't have great creative behind them that can effectively serve
24:05
SPEAKER_02: that fandom as well.
24:06
SPEAKER_02: So we see an opportunity there,
24:08
SPEAKER_02: but I do think as an event developer,
24:12
SPEAKER_02: trying to design a slate that allows within the capabilities of that developer
24:16
SPEAKER_02: To be able to have smaller,
24:18
SPEAKER_02: more agile teams take market risks with stability,
24:23
SPEAKER_02: with larger projects which have more defined genre requirements would be
24:27
SPEAKER_02: a good formula for that.
24:29
SPEAKER_02: I mean, that's the approach that we have available and it's been serving us
24:32
SPEAKER_00: pretty well.
24:33
SPEAKER_00: People talk about the sort of return of the middle
24:34
SPEAKER_00: and I guess Claire Obscure has been used as a bit of an example of that
24:38
SPEAKER_00: but you know Sabre sort of operates like that and they're a very big company
24:42
SPEAKER_00: and I find I quite like what you're suggesting there as well
24:44
SPEAKER_00: about you know there are lots of big companies that have IPs
24:47
SPEAKER_00: that you know they might want to develop but they need someone to find them
24:50
SPEAKER_00: and you kind of just answered my question there but you think that this isn't just
24:53
SPEAKER_00: a couple of examples of companies
24:55
SPEAKER_00: that are making this work this is something they can work on a
24:58
SPEAKER_02: I actually went
24:59
SPEAKER_02: to business school and then we graduated in 2013, so a number of years ago.
25:05
SPEAKER_02: If you look at a business school strategy course,
25:07
SPEAKER_02: they will say, do not be in the middle of anything.
25:10
SPEAKER_02: The middle is always a giant hole.
25:13
SPEAKER_02: We hit one extreme or another because that's where you get differentiation.
25:17
SPEAKER_02: There's a classic collapse of the middle.
25:19
SPEAKER_02: What we mean in terms of the middle here is that there are lots of opportunities
25:23
SPEAKER_02: with audiences that are not massive.
25:26
SPEAKER_02: So you still need to make an amazing experience
25:30
SPEAKER_02: because making mediocre experiences is not worth anybody's time.
25:34
SPEAKER_02: So the puzzle to solve or the game to make is how can you make
25:38
SPEAKER_02: a remarkable experience for a fan base that's big but may not be such a mega size
25:45
SPEAKER_02: to support hundreds of millions of dollars in production.
25:50
SPEAKER_02: What we're finding is there's surprisingly large number of opportunities
25:54
SPEAKER_02: in this space, but it takes a different mindset towards development.
25:58
SPEAKER_02: Some companies solve it by having low cost development locations.
26:02
SPEAKER_02: Other companies solve it with technology and tools and high productivity.
26:07
SPEAKER_02: Some companies solve it with genre specialization.
26:11
SPEAKER_02: So particular teams are highly productive in certain types of games.
26:14
SPEAKER_02: So the different solutions that are available for that,
26:17
SPEAKER_02: but it's still Amazing products,
26:21
SPEAKER_02: but which can be developed in a manner that can serve audiences that don't have
26:26
SPEAKER_02: to be tens of millions of people.
26:30
SPEAKER_00: I use the word,
26:31
SPEAKER_00: we live in an age of the niche,
26:33
SPEAKER_00: and niche don't necessarily mean small,
26:34
SPEAKER_00: but there's lots and lots of audiences looking for very specific things,
26:38
SPEAKER_00: and I think you can build a business Interestingly,
26:41
SPEAKER_00: there was an interview with Hughes Games and making the Star Wars racing game.
26:44
SPEAKER_00: And I said, you know, why haven't we had that many Star Wars racing games?
26:46
SPEAKER_00: And he thinks we live in a time where
26:48
SPEAKER_00: a Star Wars racing game could do really well today,
26:50
SPEAKER_00: whereas maybe it wouldn't have been the case 10, 15 years ago.
26:54
SPEAKER_01: I think our key holders have actually gotten smarter, you know, with this whole thing.
26:59
SPEAKER_01: You know,
27:01
SPEAKER_01: we talked a little bit about our early days on handheld on,
27:05
SPEAKER_01: like, Game Boy Advance and whatnot.
27:10
SPEAKER_01: There was a lot of these licensed games, you know, back then.
27:13
SPEAKER_01: Your quality was across the board.
27:16
SPEAKER_01: And, you know, we really try to like, you know, just really focus on quality and serve the fans.
27:22
SPEAKER_01: But the licenses were granted to the big publishers.
27:26
SPEAKER_01: You know, all those deals, the IP holders just went to the big publishers.
27:32
SPEAKER_01: The IP holders like it recognize that it's matching it with the right teams
27:37
SPEAKER_01: that have the passion and capability, you know, for it.
27:40
SPEAKER_01: So the deals are out there,
27:42
SPEAKER_01: you know, the partnerships are out there where it's in a way much more reasonable.
27:47
SPEAKER_01: They want the quality.
27:49
SPEAKER_01: It's an expression of the IP that actually gives longevity to the IP
27:53
SPEAKER_01: and actually bring in new audiences into the IP as well, you know, through games.
27:59
SPEAKER_01: There's actually more opportunities that we're seeing now than there were before.
28:05
SPEAKER_01: And maybe it's also a function of the big AAA publishers have doubled down
28:09
SPEAKER_01: on their own IPM projects and there's less licensing going on other
28:15
SPEAKER_01: than integrations into live service games and that sort of thing.
28:20
SPEAKER_01: But when you've got that audience and it's sort of underserved in these niches
28:24
SPEAKER_01: and there's that fandom and you can really deliver You know,
28:28
SPEAKER_01: for those fans, what they're looking for.
28:31
SPEAKER_01: It's also a great force and function of scope.
28:34
SPEAKER_01: So you can be really disciplined about that.
28:38
SPEAKER_01: So I think that's,
28:40
SPEAKER_01: I think those confluence of those factors are actually opening up
28:43
SPEAKER_01: an interesting space for proven teams.
28:48
SPEAKER_00: I think it's probably worth noting that you,
28:50
SPEAKER_00: obviously with your previous company as well,
28:52
SPEAKER_00: Vicarious Visions,
28:53
SPEAKER_00: is that you are Very well known for taking a brand that might have existed somewhere
28:59
SPEAKER_00: or someone else's game and then making a sequel or taking it elsewhere and doing
29:04
SPEAKER_00: an incredibly good job of that.
29:05
SPEAKER_00: So I imagine when people are looking out, they're going, well, I've got something.
29:08
SPEAKER_00: You might be on there.
29:10
SPEAKER_00: It might be someone they called before.
29:11
SPEAKER_00: Maybe they called other people.
29:13
SPEAKER_00: So you've got that.
29:15
SPEAKER_00: You've got both that insight, but that advantage, I suppose.
29:17
SPEAKER_02: One of the things that we try to inform our prior games with
29:22
SPEAKER_02: the brand itself is going to be able to help identify an audience or help
29:26
SPEAKER_02: an audience identify a type of game that they may enjoy.
29:29
SPEAKER_02: But on its own, it doesn't make sense to do.
29:33
SPEAKER_02: We've rarely experienced commercial success based on brand strength alone.
29:38
SPEAKER_02: Except for certain very specific types of products,
29:42
SPEAKER_02: you have to have an amazing creative experience for that audience.
29:45
SPEAKER_02: And so when we look at things,
29:47
SPEAKER_02: we still start with a valid approach of saying,
29:49
SPEAKER_02: what is an amazing creative experience?
29:51
SPEAKER_02: In some cases,
29:52
SPEAKER_02: we could say,
29:53
SPEAKER_02: well, that would be amazing for this audience, especially with this brand as well.
29:57
SPEAKER_02: And then that's where that marriage occurs.
29:59
SPEAKER_02: And I think that's a worthwhile approach for others to take as well.
30:03
SPEAKER_00: You talked about some of the ways that people can structure themselves to sort
30:06
SPEAKER_00: of move quicker or react faster or make games a bit more,
30:09
SPEAKER_00: I don't use the word intelligently,
30:12
SPEAKER_00: but whether it's,
30:12
SPEAKER_00: you know, low cost locations or being really good or using tools and technology.
30:16
SPEAKER_00: Of course,
30:16
SPEAKER_00: a lot of studios,
30:17
SPEAKER_00: I don't know if this necessarily makes you move faster,
30:18
SPEAKER_00: but it's a way of sort of managing size,
30:20
SPEAKER_00: is they're using a lot of outsourced teams and contractors.
30:23
SPEAKER_00: People have been talking about this Hollywood model for 15 years.
30:26
SPEAKER_00: It seems the conversation certainly come back round again.
30:29
SPEAKER_00: Is that something that you do?
30:31
SPEAKER_00: What's your take on that?
30:34
SPEAKER_01: We do.
30:35
SPEAKER_01: And I think what we're finding is we're finding this balance
30:40
SPEAKER_01: where we have these core teams that have sort of been together a long time.
30:45
SPEAKER_01: They've operated really well together.
30:47
SPEAKER_01: And with that core team,
30:49
SPEAKER_01: as well as a level of internal production,
30:52
SPEAKER_01: You know,
30:53
SPEAKER_01: we can figure out all the whiskey bits,
30:55
SPEAKER_01: figure out what's core to the game and the glue.
30:58
SPEAKER_01: And then we can partner with co-developers or outsourcing team
31:04
SPEAKER_01: or individual freelancers for that scaling up, you know, in terms of production.
31:09
SPEAKER_01: And for a long time,
31:10
SPEAKER_01: we were like observing this sort of trend of working on projects where as you get
31:18
SPEAKER_01: into the back half of production, the costs really go up.
31:22
SPEAKER_01: And the risk also goes up and it's a nail biter to the finish line.
31:27
SPEAKER_01: And you're hoping you can get down on time and hit the quality bar or you're at alpha.
31:32
SPEAKER_01: Is it fun yet?
31:33
SPEAKER_01: Oh, no, it's not quite fun.
31:35
SPEAKER_01: We still got it iterating soon.
31:37
SPEAKER_01: And the risk is going up while the costs are going up.
31:40
SPEAKER_01: And this is actually one of the observations where we're starting Valen.
31:44
SPEAKER_01: It's like, shouldn't that be inverted?
31:46
SPEAKER_01: Shouldn't the risks be really high when the costs are really low?
31:50
SPEAKER_01: And then...
31:51
SPEAKER_01: The risk goes down and then the costs can go higher and it can be sort of more well managed.
31:58
SPEAKER_01: And so that goes back to the structure of the teams,
32:01
SPEAKER_01: you know,
32:01
SPEAKER_01: and how can we have a small core agile team figuring out all of these unknowns?
32:06
SPEAKER_01: And so that's obviously the ideal case, right?
32:09
SPEAKER_01: And it's like, I don't think two game projects have ever gone the same.
32:15
SPEAKER_01: And if they do, it's actually you're not taking enough risk.
32:20
SPEAKER_01: Going after that general sort of principle,
32:23
SPEAKER_01: I think allows you to, again, structure those teams.
32:27
SPEAKER_01: And now that we're finding sort of specialist co-developers
32:31
SPEAKER_01: and specialist outsourcers who are built for that,
32:35
SPEAKER_01: to be able to go and support teams for that phase of the project,
32:40
SPEAKER_01: it can work out quite well.
32:41
SPEAKER_01: It's quite symbiotic.
32:43
SPEAKER_02: Let me kind of build on the part that I come in.
32:45
SPEAKER_02: So it's important To be able to be deeply curious of all the different ways to make things.
32:52
SPEAKER_02: There's no one way to do it, like Karthik says, but there are some common moments.
32:56
SPEAKER_02: So for example,
32:57
SPEAKER_02: having a strong core team with very clear creative direction,
33:02
SPEAKER_02: trying to find the fun and the architecture of a game early on so you understand
33:07
SPEAKER_02: where the value to the consumer is going to come from.
33:09
SPEAKER_02: That's very important.
33:11
SPEAKER_02: And having a team that it's not just about the individuals that are experienced.
33:15
SPEAKER_02: But a team that has veterans here around doing that and has done that before tends
33:20
SPEAKER_02: to be much more dynamic and adaptable and,
33:23
SPEAKER_02: you know,
33:24
SPEAKER_02: not only quick,
33:26
SPEAKER_02: but also quick to find the solutions and then to find the problems as well.
33:29
SPEAKER_02: So that's a commonality across the board.
33:32
SPEAKER_02: At the same time, you know, for us, we have to be mindful that we're a North American studio.
33:37
SPEAKER_02: It is our philosophy to pay as much as we can for the best talent
33:41
SPEAKER_02: that we can possibly have employed at Valen.
33:46
SPEAKER_02: And with that mindset, we have to say, well, we've also got a strong dollar.
33:50
SPEAKER_02: So what are the tools available to us?
33:53
SPEAKER_02: What are the production methodologies available to us?
33:55
SPEAKER_02: Sometimes outsourcing can play a role.
33:57
SPEAKER_02: It has played a role and will continue to play a role.
34:01
SPEAKER_02: But each type of outsourcing is also a little bit different.
34:03
SPEAKER_02: Sometimes wholesale for certain types of work can be efficient.
34:07
SPEAKER_02: Sometimes it's highly inefficient as well.
34:10
SPEAKER_02: And so it's very important for us to be able to have many options and find
34:15
SPEAKER_02: the right fit for each project.
34:16
SPEAKER_02: And that's what we wind up doing.
34:19
SPEAKER_02: Some of the smaller projects that are indie have a very small role for our outsourcing.
34:24
SPEAKER_02: And it's just more about moving as quickly as possible with very focused systems and
34:29
SPEAKER_02: that kind of thing.
34:30
SPEAKER_02: Other ones,
34:31
SPEAKER_02: large productions,
34:32
SPEAKER_02: tend to cry and say, okay, well,
34:33
SPEAKER_02: how can we figure out the pipelines and the methodologies and who are the right set
34:38
SPEAKER_02: of partners to work with as well?
34:40
SPEAKER_02: And we have developed trusted relationships over time that are very valuable to us in that also.
34:45
SPEAKER_00: I ask a lot about this subject on the show, and we had Maverick making that new racing game.
34:51
SPEAKER_00: And one of the people who run Maverick used to run Sumo.
34:54
SPEAKER_00: And her thing was that, you know, outsourcing is really powerful, but it can slow you down.
34:58
SPEAKER_00: And it's their first game,
34:59
SPEAKER_00: they want to get it out, you know, at a certain point in time and make a statement.
35:04
SPEAKER_00: And then we had Bulkhead who made War Dogs, they came on.
35:06
SPEAKER_00: And they're a little bit less trusting about outsourcing
35:09
SPEAKER_00: because sometimes you don't get to get the best people.
35:11
SPEAKER_00: And I think what you answer,
35:12
SPEAKER_00: you just gave there that you do have to,
35:15
SPEAKER_00: it's not a one size fits all thing that can just work for everybody.
35:18
SPEAKER_02: I mean, sometimes it's written into a business plan to sound really good.
35:22
SPEAKER_02: The readers tend to be,
35:24
SPEAKER_02: It's like buy or buy or buy on those types of business plans, let's say.
35:28
SPEAKER_01: It's tricky because,
35:29
SPEAKER_01: you know, I mean, again,
35:31
SPEAKER_01: North America is the most expensive place to do game development in the world.
35:36
SPEAKER_01: And so there's a lot of talk about, okay, what's the burn rate?
35:39
SPEAKER_01: What's the cost per man month for the teams and where we can go cheaper?
35:44
SPEAKER_01: And that doesn't necessarily mean You get the same productivity, so it's a balance.
35:51
SPEAKER_01: And if a team is half as expensive as your internal core team but it takes twice
36:00
SPEAKER_01: as long or it takes more than twice as long because you're not set up effectively
36:04
SPEAKER_01: for it or the type of work or the relationship isn't going as well as it could,
36:10
SPEAKER_01: it may end up costing you more.
36:12
SPEAKER_01: Taking longer.
36:14
SPEAKER_01: And it is trying to figure that out.
36:16
SPEAKER_01: And there's no single answer, I think, you know, one size fits all, I guess.
36:22
SPEAKER_01: So the teams,
36:23
SPEAKER_01: but like over time,
36:24
SPEAKER_01: you build these trusted partnerships,
36:26
SPEAKER_01: trusted relationships,
36:28
SPEAKER_01: know which teams are really good at doing certain kinds of things.
36:31
SPEAKER_01: And then you can find some productivity games because ultimately it's like,
36:37
SPEAKER_01: We're all after factor productivity,
36:40
SPEAKER_01: not the burn rate, not the cost per person month.
36:43
SPEAKER_02: When you start with a creative insight,
36:45
SPEAKER_02: and then you're like, well, how am I going to make this?
36:47
SPEAKER_02: And then you're after, how much output can I make for the input?
36:53
SPEAKER_02: And that really comes down to saying, okay, well,
36:56
SPEAKER_02: let me put a great quality team together and all the components that involves.
37:00
SPEAKER_02: But if you don't know what you're trying to build,
37:03
SPEAKER_02: where you don't have those pipelines down,
37:06
SPEAKER_02: And you're trying to still figure that out,
37:08
SPEAKER_02: it'll cost you three times as much to do it outside than inside.
37:11
SPEAKER_02: Because there's wait time,
37:12
SPEAKER_02: there's iteration speed,
37:14
SPEAKER_02: there's just communication gaps and interaction costs and that kind of thing.
37:18
SPEAKER_02: The same kind of truism is with upstream QA versus downstream QA.
37:24
SPEAKER_02: If you try to have a very large QA team pick up all the errors later on,
37:27
SPEAKER_02: it's usually three times more,
37:28
SPEAKER_02: three to five times more expensive than doing A more costly tester that's located
37:33
SPEAKER_02: on site, but one with your development team and in line with development.
37:37
SPEAKER_02: Those are properties that have actually existed for the last 15 to 20 years.
37:40
SPEAKER_00: I think people are looking at them a bit more now.
37:46
SPEAKER_00: You opened a studio in Toronto, right?
37:50
SPEAKER_00: So where's that fit into all this?
37:51
SPEAKER_00: What's the thing in there?
37:53
SPEAKER_02: So there's been a,
37:54
SPEAKER_02: you know,
37:54
SPEAKER_02: post-COVID,
37:55
SPEAKER_02: you know,
37:56
SPEAKER_02: during COVID,
37:57
SPEAKER_02: a lot of growth in general for studios has been with remote employees
38:02
SPEAKER_02: and remote workers and so forth.
38:03
SPEAKER_02: We do find with,
38:05
SPEAKER_02: especially with high RD exposure and rapid prototyping and things like that,
38:10
SPEAKER_02: a remote system,
38:12
SPEAKER_02: Is not as effective as,
38:13
SPEAKER_02: you know,
38:14
SPEAKER_02: having in-person iteration and development and doesn't give us much opportunity
38:18
SPEAKER_02: for serendipity for larger teams.
38:21
SPEAKER_02: And so we've moved to really on a go forward basis hiring in FROI, near our FROI headquarters.
38:30
SPEAKER_02: And then we knew that, okay,
38:31
SPEAKER_02: in the absence of More of a remote forward hiring,
38:35
SPEAKER_02: we need to have another location with a large potential talent base and a potential
38:39
SPEAKER_02: to draw talent as well.
38:41
SPEAKER_02: And so Toronto is actually so geographically far from us.
38:45
SPEAKER_02: As a pro fly, that should only be an hour to fly, but we don't have a direct flight there.
38:50
SPEAKER_02: But it's not so far from us in Canada.
38:54
SPEAKER_02: It's same time zone,
38:55
SPEAKER_02: awfully very similar,
38:57
SPEAKER_02: you know,
38:57
SPEAKER_02: as well between the northeast of the United States and Canada, you know, as well.
39:01
SPEAKER_02: Great talent base.
39:03
SPEAKER_02: It allows us to essentially extend our team.
39:05
SPEAKER_02: And we've been really excited about the new folks that we brought on board in Toronto.
39:12
SPEAKER_02: We have active plans for that as well.
39:14
SPEAKER_02: So it's sort of like a hiring and growth motif that has access to talent.
39:19
SPEAKER_02: In the United States through our headquarters in Troy,
39:23
SPEAKER_02: but also in Canada and international for our second location in Toronto.
39:30
SPEAKER_00: I have to be mindful when you say it's not so far from us,
39:33
SPEAKER_00: is that I think you were at an event we did in PAX and you said,
39:36
SPEAKER_00: oh, it's not so far from where we're based.
39:39
SPEAKER_00: And it was still like a four hour drive.
39:42
SPEAKER_00: Whereas in the UK, that would get you across most of the country.
39:45
SPEAKER_02: Well, I think we're in Boston and of course we're in the capital region of New York.
39:50
SPEAKER_02: And it's literally three hours down the road.
39:53
SPEAKER_02: So we can get on a road about two minutes away from our office
39:56
SPEAKER_02: and go three hours down the road and be where you are.
39:58
SPEAKER_00: All right, yeah.
40:00
SPEAKER_01: How big are you then today?
40:02
SPEAKER_01: How big is Studio?
40:04
SPEAKER_01: We have about 120 full-time employees, so it's a decent size.
40:09
SPEAKER_01: Yeah.
40:10
SPEAKER_00: So interestingly,
40:11
SPEAKER_00: I was going to ask this question,
40:12
SPEAKER_00: but the more I've talked,
40:13
SPEAKER_00: I don't know if it's a redundant one, you've worked with some big publishers, right?
40:17
SPEAKER_00: And I wondered if there was a desire to get away from reliance on big partners
40:20
SPEAKER_00: or big publishers or big platforms or licensing partners.
40:23
SPEAKER_00: But actually, it seems like you might be, you see that as an opportunity rather than a risk.
40:28
SPEAKER_01: It is an opportunity and it's balancing it as a multi-project studio.
40:35
SPEAKER_01: We've always been that.
40:36
SPEAKER_01: We were a multi-project studio at Vicarious as well.
40:41
SPEAKER_01: And during the handheld heydays,
40:44
SPEAKER_01: there were a lot of games that were in development as a function of
40:47
SPEAKER_01: the smaller teams.
40:50
SPEAKER_01: And that actually has been an important part of that formula for sustainability.
40:56
SPEAKER_01: And so we can sort of have offset release schedules and stuff as part of it.
41:01
SPEAKER_01: So working with great partners,
41:03
SPEAKER_01: having projects that are funded helps keeps the lights on, but makes the partners.
41:12
SPEAKER_01: And also like self-funded projects.
41:15
SPEAKER_01: So like one big step that we're taking is...
41:20
SPEAKER_01: Directly licensing like world-class IP that we're self-funding
41:25
SPEAKER_01: and publishing ourselves and mixing that with having projects
41:32
SPEAKER_01: that are partner funded.
41:34
SPEAKER_01: So that's a big step for us to be able to do that.
41:40
SPEAKER_01: But again, it's looking at where the teams have expertise and passion.
41:48
SPEAKER_01: And where we see opportunities.
41:52
SPEAKER_01: It's really interesting.
41:53
SPEAKER_02: I think one of the things that we can do being independent outside of
41:57
SPEAKER_02: a large publishing structure is really look at the world in a broader scope
42:03
SPEAKER_02: than just the singular publishing strategy of any individual content company.
42:09
SPEAKER_02: So Xbox has its own strategy.
42:12
SPEAKER_02: EA has a tone around its core operating businesses and so forth.
42:17
SPEAKER_02: Here we can look at the opportunities for consumers, you know, at large, so to speak.
42:23
SPEAKER_02: In some cases,
42:24
SPEAKER_02: it makes sense to co-fund,
42:25
SPEAKER_02: co-finance,
42:26
SPEAKER_02: or work with larger entities,
42:28
SPEAKER_02: and other times it makes sense to do things on our own.
42:31
SPEAKER_02: And that's the flexibility that we wanted because the number one thing
42:34
SPEAKER_02: for Valen has been to be deeply curious and think about new types
42:38
SPEAKER_02: of surprising experiences.
42:39
SPEAKER_02: So if that's your fundamental underwriting thesis,
42:44
SPEAKER_02: then being independent becomes quite an important part of that.
42:49
SPEAKER_00: How are you with funding sort of projects like that?
42:51
SPEAKER_00: I imagine the landscape's quite different and everything's smaller deals
42:55
SPEAKER_00: and stuff compared to when three years ago when we used to,
42:59
SPEAKER_00: but are you finding it easier to find funding?
43:01
SPEAKER_00: I don't really know what my question is,
43:03
SPEAKER_00: but it's sort of, you seem to be doing quite a lot of projects.
43:07
SPEAKER_02: There was a period of time where it seems like you can cast a stone
43:10
SPEAKER_02: and find somebody willing to fund game companies.
43:13
SPEAKER_02: And that existed between approximately 2019 and 2023.
43:19
SPEAKER_02: But in the rest of the 35 years that we've been in our industry, that has not been the case.
43:24
SPEAKER_02: And so funding has always been One of those things where it's like, okay, well,
43:31
SPEAKER_02: do you have a great plan and do you have evidence that your product will work
43:35
SPEAKER_02: as well?
43:36
SPEAKER_02: And so we try to look at that in our own products.
43:38
SPEAKER_02: We look at that in products that we may invest in as well with third parties,
43:43
SPEAKER_02: you know, also, so we do a bit of that.
43:45
SPEAKER_02: I do think that for us,
43:48
SPEAKER_02: we've been able to create a balance of having projects that were funded
43:52
SPEAKER_02: by larger entities,
43:54
SPEAKER_02: being efficient with our capital,
43:57
SPEAKER_02: Maintaining a strong balance sheet in the process of doing that.
44:00
SPEAKER_02: So then we can make our own investments also.
44:03
SPEAKER_02: And so the way we've been able to manage Balanced Studios, it gives us that flexibility.
44:08
SPEAKER_02: And we've had our mission at the root, but,
44:11
SPEAKER_02: you know,
44:12
SPEAKER_02: kind of a financing approach that's been able to help us underwrite that as
44:17
SPEAKER_02: a result.
44:18
SPEAKER_00: When you've got a partner like Nintendo that trusts you,
44:25
SPEAKER_00: do you get a lot of phone calls when something like that happens from people wanting
44:28
SPEAKER_00: to work with you?
44:29
SPEAKER_00: I think there's a lot less
44:38
SPEAKER_01: Publishing deals out there these days, you know, there's a lot less of that.
44:42
SPEAKER_01: And the Nintendo partnership is a very special and unique one.
44:48
SPEAKER_01: And the bar is really high, you know, in terms of what we need to make.
44:57
SPEAKER_01: But that's always been the case, right?
44:58
SPEAKER_01: Even when we were third party and with the relationship with Nintendo.
45:03
SPEAKER_01: And it helped us back then.
45:06
SPEAKER_01: Even as a third party, because we made really good games that Nintendo had liked.
45:15
SPEAKER_01: And that gave us the opening to have conversations.
45:20
SPEAKER_01: But the reality is that the funding environment is challenging.
45:24
SPEAKER_01: There's less publishing deals that are out there.
45:29
SPEAKER_01: But we also need to be really strategic about what we take on and What we say no to.
45:39
SPEAKER_00: Obviously, you worked on the... What was the game?
45:41
SPEAKER_00: What was the Skylanders game that had the Nintendo characters in it?
45:44
SPEAKER_01: That was Skylanders Superchargers.
45:46
SPEAKER_00: Superchargers, that was...
45:48
SPEAKER_00: I couldn't remember the name.
45:49
SPEAKER_00: It escaped me.
45:51
SPEAKER_00: Yes.
45:52
SPEAKER_00: Going back to that, yes.
45:53
SPEAKER_00: I remember that one.
45:54
SPEAKER_01: That was a...
45:56
SPEAKER_01: That was a big moment for us because we finally were able
45:59
SPEAKER_01: to integrate Nintendo characters into one of our games,
46:04
SPEAKER_01: and that was a big learning experience as well.
46:06
SPEAKER_01: It was quite successful.
46:09
SPEAKER_01: We were all very happy with how that turned out.
46:14
SPEAKER_01: A third-party developer for the longest time.
46:20
SPEAKER_01: But I think we had a close relationship even as the third party are working on Wii
46:24
SPEAKER_01: and Guitar Hero and then Skylanders and all the DS stuff they did and Game Boy.
46:30
SPEAKER_01: And so which I think over time that
46:35
SPEAKER_00: relationship grew.
46:37
SPEAKER_00: And I guess that's interesting because I've got,
46:39
SPEAKER_00: I don't know,
46:39
SPEAKER_00: I've got a few games on the brain, but they've got Star Wars Galactic Racing.
46:42
SPEAKER_00: And I was like, how did an independent studio get a Star Wars, get to work with that IP?
46:46
SPEAKER_00: And the answer is they used to work at EA, they worked at Criterion, they worked on Battlefront.
46:51
SPEAKER_00: And so they got the relationship, they built the trust.
46:54
SPEAKER_00: And so that led to that.
46:57
SPEAKER_01: And I'm sure a big part of it is they also Deliver
47:03
SPEAKER_01: and they do what they say they're going to do.
47:06
SPEAKER_01: And I think that's really important.
47:08
SPEAKER_01: I think the trusted relationships and stuff all the time is really important.
47:12
SPEAKER_02: There was a period of time that, I don't know, that may still be the case.
47:17
SPEAKER_02: You have an amazing showman and they give a great kind of razzle dazzle presentation.
47:24
SPEAKER_02: You know,
47:25
SPEAKER_02: kind of really charm executives and charm IP holders and get financers
47:30
SPEAKER_02: and get their game funded.
47:32
SPEAKER_02: And, you know, kind of like the Conan O'Brien monorail episode in The Simpsons.
47:38
SPEAKER_02: We see less of that now, and we should see less of that.
47:41
SPEAKER_02: It should be based more on what we relied on is competence,
47:45
SPEAKER_02: delivery, keeping your promises, and really making excellent products for gamers.
47:51
SPEAKER_02: So I think hopefully we've shipped it to that.
47:55
SPEAKER_02: More than anything else,
47:55
SPEAKER_02: I'm sure, you know, from a Galactic Racer standpoint, that's been the case.
48:01
SPEAKER_00: Yeah, well,
48:02
SPEAKER_00: I'll ask one more question because I've taken up way too much time,
48:05
SPEAKER_00: more than I was expecting.
48:06
SPEAKER_00: But where would you,
48:07
SPEAKER_00: I normally ask five years,
48:08
SPEAKER_00: but seeing as this is the 10 years of LN,
48:10
SPEAKER_00: I'm going to ask 10 years, where would you like to see yourselves in 10 years' time?
48:16
SPEAKER_02: I think for me, I would be delighted if we can, one, bring back Knockout City.
48:22
SPEAKER_02: But two, really, you know, create some special experiences that we can bring.
48:30
SPEAKER_02: I mean, we have an active slate,
48:32
SPEAKER_02: you know,
48:33
SPEAKER_02: right now,
48:33
SPEAKER_02: bring out some really special experiences that become durable franchises,
48:37
SPEAKER_02: that we continue to be doing creative experiments that people are really like,
48:43
SPEAKER_02: wow, where did that come from?
48:45
SPEAKER_02: That's very interesting.
48:45
SPEAKER_02: I'm glad somebody took the risk on that.
48:48
SPEAKER_02: And be able to do that sustainably,
48:50
SPEAKER_02: it's also really important to me that The people that come here to work every day
48:55
SPEAKER_02: at Bellin have that spark and curiosity and the ability to say,
48:59
SPEAKER_01: yeah, here's a place I want to take creative risks.
49:02
SPEAKER_02: So if they say that in 10 years and we have a commercial success to keep supporting
49:06
SPEAKER_02: that, I would be absolutely delighted.
49:09
SPEAKER_01: I think looking back at 35 years, it's been a journey and it's not about the destination.
49:18
SPEAKER_01: We want to keep creating great.
49:21
SPEAKER_01: Experiences both original and world-class IP and keep pushing ourselves in terms
49:28
SPEAKER_01: of what we can do.
49:29
SPEAKER_01: And there's just going to be new challenges, new constraints.
49:33
SPEAKER_01: Early on,
49:34
SPEAKER_01: I think,
49:36
SPEAKER_01: it was actually after we made our first game called Synergist and we were in college
49:44
SPEAKER_01: and the game was not successful.
49:48
SPEAKER_01: You know,
49:49
SPEAKER_01: Guha and I,
49:49
SPEAKER_01: when we started in high school,
49:50
SPEAKER_01: we thought we were going to be rich and famous after making this first game.
49:54
SPEAKER_01: And neither one of those things happened.
49:56
SPEAKER_01: And it was, we were just left in a lot of debt.
50:00
SPEAKER_01: And it was like, it was a real town beat, you know?
50:03
SPEAKER_01: And after five years, but we shipped our first game.
50:09
SPEAKER_01: And it was really a moment of introspection in terms of like what we...
50:15
SPEAKER_01: Enjoyed about it.
50:16
SPEAKER_01: And it was the game, but it was not the game.
50:19
SPEAKER_01: It was, at first it started out, it was just this vision for making this game.
50:24
SPEAKER_01: But what we realized,
50:25
SPEAKER_01: it was actually like the team and the people that we were working with day to day,
50:31
SPEAKER_01: that's actually what made it special and really fun.
50:35
SPEAKER_01: And it's like, oh, that's why we do what we do, you know?
50:39
SPEAKER_01: And we get to also bring joy to like, There are actually millions of people around the world.
50:45
SPEAKER_01: And if we can keep doing that, well, that's just awesome.
50:50
SPEAKER_01: So it continues to be that journey,
50:53
SPEAKER_01: you know,
50:53
SPEAKER_01: and as the industry keeps sort of changing and evolving and redefining itself
50:59
SPEAKER_01: in terms of what is a video game.
51:01
SPEAKER_01: And I think that's what's so cool.
51:04
SPEAKER_00: Interesting,
51:05
SPEAKER_00: we had Arcane on,
51:07
SPEAKER_00: not Arcane, we had Harvey Smith on, and we talked about Redfall, right?
51:12
SPEAKER_00: And he said, look,
51:13
SPEAKER_00: we're disappointed how it ended up and what happened, how disappointing it was.
51:16
SPEAKER_00: But actually, the journey was great.
51:18
SPEAKER_00: And it was kind of a, it was a very refreshing view on it.
51:24
SPEAKER_00: It's not really about the destination.
51:26
SPEAKER_00: You know, do we regret it?
51:27
SPEAKER_00: No, we learned a lot and developed a lot and we had fun.
51:30
SPEAKER_01: Exactly.
51:31
SPEAKER_00: Yeah.
51:32
SPEAKER_00: Thank you so much for your time.
51:34
SPEAKER_00: I've taken up way too much of it, but good luck for the next project.
51:37
SPEAKER_00: Again, congratulations on Star Fox.
51:39
SPEAKER_00: I think it's brilliant.
51:40
SPEAKER_00: And yeah, your insight is, as always, impeccable.
51:43
SPEAKER_00: So thank you so much.
51:44
SPEAKER_00: Thank you, Chris.
51:45
SPEAKER_00: Really enjoyed it.
51:46
SPEAKER_00: Lots of fun.
51:46
SPEAKER_00: Thank you.
51:47
SPEAKER_00: Thank you to Guha and Karfit there for diving so deep on so many of those subjects.
51:52
SPEAKER_00: That's it for today's episode of The Game Business Show.
51:55
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51:58
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52:00
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52:01
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52:02
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52:06
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52:08
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