Carmack: It’s a tough thing for Microsoft, where, essentially, Windows XP was a just fine operating system. Before that, there were horrible problems with Windows. But once they got there, it did everything an operating system is supposed to do. Nothing is going to help a new game by going to a new operating system. There were some clear wins going from Windows 95 to Windows XP for games, but there really aren’t any for Vista. They’re artificially doing that by tying DX10 so close it, which is really nothing about the OS. It’s a hardware-interface spec. It’s an artificial thing that they’re doing there. They’re really grasping at straws for reasons to upgrade the operating system. I suspect I could run XP for a great many more years without having a problem with it.
Aww yea. Too bad you want to sleep with the 360 though.
Carmack: Of course, it doesn’t help developers that much, because they take as big of a cut as a conventional publisher would.
hahah no wonder it is all still so expensive.
Hollenshead: I’ve spoken to them about Steam and I’ve looked at it for our back catalog, and the royalty Valve was getting—and we have a publisher that still has distribution rights we’d have to share—and by the time we go through all of the royalties, you end up making less money distributing it over the Internet, which is the opposite of the way you think it should be. The story that Gabe [Newell] told at GDC, when he sort of introduced Steam as, “Here is your distribution platform of the future,” and all that—I don’t think Gabe intentionally misled anyone, but I was there, and I saw that there were serious flaws in the economic analysis that he laid out for developers. The problem for most developers is not one of not getting paid enough once the game is out, it’s that they don’t have the seed funding necessary to internally fund development of their titles. That’s why they work for publishers on milestone schedules and advances against future royalties, and Steam offers no solution for that. It also doesn’t offer any solution for the marketing spend question, where if developers don’t even have enough money to fund themselves internally to develop their product, then they’re not going to be able to pay for a multimillion dollar marketing campaign, which is a huge amount of risk that as an industry standpoint is offloaded from developers to publishers. A lot of the marketing spending goes in advance. They have their metrics about what game anticipation is and game rankings and a number of measures that they can use to gauge their marketing spends. Building the inventory and spending the marketing dollars, those are before you get a dollar of revenue, generally, and developers just can’t afford that, and Valve doesn’t have a seed-capital solution for that. So the issue is that if developers are beholden to publishers, which gives publishers more leverage in the business relationship, the problem with using Steam is that it would only make sense for a developer like id or Epic or Valve, who are completely internally self-funded. We don’t have that issue of not having leverage with publishers because we have to borrow their money to make our games or they have to pay us to make games for them. To me, that’s a bit of the catch-22. I think when you look at the access to a market, in terms of, “Hey, we have this game and we want to make it available to everyone who has Steam,” which is theoretically everyone who has bought Half Life a few years after it was out or Half Life 2 or a lot of these other titles, I think that they’ve created an asset that has significant value.
While they give Steam it's due, the whole massive distribution cut thing is shocking. So in the end just like retail, it is the publisher making the money.
The gamers and the developers get screwed in both mediums. At retail as gamers even if games are expensive, at least we get a physical disc and manual. But online, we get nothing, and it is still expensive. Meanwhile the poor developers have to pay a big cut to Valve as well, which is bullshit.
GI: Two more quick questions. Is there any game or tech that you’ve seen in the past year that’s made you say, “Wow”?
Carmack: I think Gears of War looks great. I really do. I think they did an excellent job with that. They did a lot of things really well. That’s the best-looking thing that I’ve seen in a while.
Hollenshead: The Crysis stuff looks pretty good, too. I don’t know if you’ve seen that.
Carmack: Yeah, that’s not a shipping product yet.
Haha Carmack makes Hollenshead look dumb.
