Melbourne House Included in Atari Studio Sell-off Plans

Based on the list above there doesn't seem to be little in the pipeline to 'turn the company around', or much in the way of IP to sell.

http://www.kotaku.com/gaming/atari/shiny-boss-quits-155683.php

I wonder what plans the folks at Melbourne House have, if any.

I need a no-shitter. What sot of company is Atari Melbourne House to work for? I am leaving a decent job to go and work for them, and having read some of he news, as well as some of the comments, I am a little bit worried.

I guess, though, regardless of the environment, games industry experience is hard to come by, and beggars cant be choosers.

Wat do you guys reckon?

I'd like to know about this apparent hot-bed of investment by publishers into the local development industry - I'd like to be proven wrong :).

And none of that is proof of growth if it turns out to be a handful of developers that are absorbing talent from already established developers, or absorbing talent from studios closing their doors (Ratbag) and projects being cancelled (Stargate SG1). All that proves is a few studios compared with all of the studios in Australia, perhaps part of a larger international whole - like Irrational Games, Pandemic Studios, etc - are getting larger as other studios get smaller and become extinct.

That isn't growth for the industry as I see it - though I am not saying there is nothing wrong with it.

OTOH if I had been at AMH for a couple of years, I'd be asking myself: do I want to leave now and get my leave paid out tomorrow, or wait till the company sinks and queue up with all the other creditors?

Sorry to be the bearer of bad news but as an ex AMH employee I wouldnt touch them with a bargepole. Continual talent drain for the last 5 years, possibly mad, megalomainac for a boss and a parent company that is so close to dead...

The only startup studio I know of that is working on next-gen and is funded by a publisher with some serious pocket change from Sony is Team Bondi - and that should come as no surprise as they have close ties to Sony. And I am sure the title will get finished and released. As for the rest, well, what rest? There is Red Tribe, but, I am uncertain if they have publisher funding yet and whether they will make it to the finishing line - or at least with an original IP title. There is Intrigue and though I am sure they can pull it off, they still need the funding to do so.

Beyond these startups the only studios that I am certain have decent next-gen titles that will survive and even be original IP are the internationals, like Irrational Games and Pandemic Studios - I'm even tempted to put Team Bondi into that group, as their core is made up of team members from Team Soho, and I think they may be a first-party developer to Sony, or will be.

As for the rest, well maybe one or two of the publisher run sweat-shops have next-gen projects in the works, but, licensed stuff - nothing original. The rest have only just begun to put these next-gen projects together, and you have to ask if they were unable to work on original stuff before then what chance do they have of working on original stuff this time around. Most likely next to none - though perhaps IR Gurus will differ from the norm to a degree. At best they can hope to secure is more fee-for-service work. And you have to also ask if you want a clear picture of the health of the local industry, whether these projects have funding and from what source - like funds siphoned off from a PSP project to get a next-gen demo up and running to secure funding, indirect publisher funding.

Then the question to ask is, well, so what if a few studios have funding, that doesn't mean that the funding will last forever and not just dry up when the publisher decides not to go ahead with the projects, and further more, it does not mean that these projects are original IP, most likely just more of the fee-for-service work this local industry is infamous for - if you don't see any problem with that then you haven't been in this industry for very long or should get your eyesight checked out.

Sure, I am almost certain that many local studios now have next-gen projects, but, that is only because they have had to bite the bullet and realise that developing for current-gen is pretty much no longer feasible. They have had to jump that psychological hurdle and at least make an attempt, and I have to wonder whether that attempt is just a little to late for most them.

I think you guys have simply jumped to conclusions, and have a very unrealistic picture of the health of the local industry, based on news items that report that studios are looking for people to hire - you equate this to "phenomenal growth." You assume that the industry is growing, when the reality is it is not growing at all, just feeding upon itself - and may very well end up shrinking if it hasn't already. You assume that any project is a good project as long as it is funded, well, you are quite simply wrong with such a shallow understanding and superficial an*lysis of the industry.

Perhaps I and others that have bothered to look deeper under the surface of the industry have it wrong, and the industry will not suffer any more negative impacts due to next-gen beyond Ratbag, Perception and the soon to be Atari Melbourne House. Maybe that will be the last off it. But then again maybe it is not the last of it at all. Perhaps by the end of 2006 - and to be more optimistic, 2007 - we will have a turn around to the shortage of talent that we currently have, and have the opposite occur.

An abundance of talent and not enough positions in the industry to cater for them all, which means good news for startups that were struggling to get the talent, bad news for the studios that had to lay people off as they couldn't get further funding for projects, or had to close their doors - not that I think such a change in the industry will be a totally bad thing as it will give new studios the chance to take root and grow.

I can't even have an*lysis spelled correctly without it thinking I am using an expletive.

With licensed IP, or fee-for-service work, the developer usually competes with developers all over the globe for the development contract, usually underbidding with ill devised and planned proposals - they usually have no choice but to do this in order to get the work, especially with emergent development regions like Eastern Europe and Asia. The work is undertaken by the developer on behalf of a developer for like a 20-30(percent) profit markup of the costs to the developer for completing the work - not a hell of a lot. But, because the developer underbid, they usually overshoot anyway, and end up using that markup up to cover their end of the development deal - eating into the profits, unless the publisher is nice or realistic enough to increase the budget available. And if that is not the case, well, the team usually works underpaid and overworked to meet the tough deadlines, leading to developer burnout and resentment - case in point: Atari Melbourne house, read post # 20 again and the part about the talent drain over a 5 year period.

Developers usually use funding external to a publisher, some of it being sweat-equity, to develop a tech and gameplay prototype for original IP. But either due to a deficiency to the design of the title, the business model used, lack of experience in the team, or the publishers just being risk averse when it comes to new studios and original IP, they end up having that tech and concept married to an existing license the publisher has in the back-room gathering dust - one of a large number part of an acquisition frenzy they went through in the past. The developer develop the title believing that they will eventually develop their own IP, it rarely ever happens, as the team is too burnt-out to work on anything other than the current fee-for-service projects, and just don't have the time and creativity left to work on original IP, so they just end up pigeonholed as fee-for-service developers.

If you think there is nothing wrong with this, well there is and there isn't. As long as you keep on getting work, and can secure better deals and working conditions for your studio / team, then I suppose it is ok - perhaps this is what it is like for the publisher run studios, maybe not in publishers efforts to increase their profits. There is a problem when you are reliant on constant publisher funding in order to stay afloat, and when you don't have that, government funding to stay afloat - at some point you are going to sink, not to mention that it is not real sustainable growth if that is the case. As a 20-30(percent) markup compared to a decent original IP release with a progressive business model, is not much at all compared to the latter in the way of profit. Therefore you have less freedom and breathing space as a developer, and are more likely to have to close your doors or take more risky development deals from publishers, or just be bought up by them, who want to cut-costs to their bottom line - and will probably cut funding to your project the first sign of you struggling to meet a deadline or close the studio if they have acquired it.

Good to hear that Red Tribe are making progress and have funding, even if it does sound like for fee-for-service work over original IP. I guess Chris had some pocket change left over from Bluetongue's acquisition by THQ, and a good deal of contacts to put deals together and fund the team as they started out.

Hope they have something original in the works instead of just fee-for-service work though, as that is what we really need in Oz.

You see thats more of the typical industry hyperbole. Its simply opposite of the reality. The point about original IP is simple and Cyncial has again covered it heavily - geez the same thing gets said here so many times... but original IP is critical to our industry surviving the move of fee-for service contracts from Aus to 'cheaper' source development zones - China, India and others. Our dollar also, doesnt help.. when we were 50 cents it was great, we were awesome value, but now we arent. So the contracts have been drying up - talk to ANY company owner, and ask how hard it is to land a contract now. With more competition in the US, more from Chinesse and Indian developers.. its just has become way more competitve. For fee-for-service contract based games, its simply makes sense to choose the cheaper option.

The fact they can hire moe development staff alone is worth a huge amount. But also, in India and China, you can can get BETTER trained IT people (and I mean university trained) for much less. In recent years, China and India have become some of the leading IT univesrity programs - and in recent world wide IT games, US and Aus, simply rank nowhere near the same abilities. This doesnt mean we don thave the talent, India and China just have a much larger pool to choose from, mainly because they have invested heavily in their education systems. This wont slow down.. and wont suddenly disappear.. its a reality, and while slow to move the game industry is starting to take notice (as has the general IT industry).

More and more game development studios are popping up in China, and India doing contract based fee-for-service work. Much of these contracts are actually traditionally US based contracts.

So the idea, is that original, Aus sourced IP is key in making sure the longevity of the industry here is maintained. Or, we have a big dive in the value of our dollar (which I would actually love :) ). At the moment, there is NO original IP being generated here.. we might see some rehashes of Ty.. but not much else. As soon as the next-gen has really kicked in the cost savings for off-shore developers will far outweigh, any advantage we have here for fee-for-service work, leaving us with originally derived works, that can propogate in their own right (due to the strengths of their franchises). Btw, I think Ty is a brilliant example of what can be done.. it was well marketed.. and it was well made, and has gained a solid franchise backing. You cant name many others that have, nearly all are US derived, contracted licenses... even Team Bondi's nextgen game.. is a Sony funded scheme.

Still think the Aus indusrty is 'booming'..

<NOTE> I am not a doomsday person, because I honestly beleive it can be fixed, as I have said many times before. But to fix something, you need to see the problems that need fixing.

Grover, IR currently have 5 of their own IP's in production at the moment, on current Gen, Next Gen and PSP.
Like THQ, Team Bondi and Pandemic, they are hiring at the moment.

Publishers may have some idea about what they want with their IP, but typically its up to the developer to design and implement and package a unique vision for that game. It's exactly the same process with exactly the same levels of creative freedom. In some cases you also get to work on some amazing IP that a lot of people enjoy. It's exactly the same as creating you own IP. Creating your own IP can be great, but obviously it's a hell of a lot riskier and the benefits are minimal. Financially its risk verses reward, I'm not a betting man, but I would wager that companies with strong relationships with quality publishers are going to be around a lot longer than original IP companies. Even if you're making your own IP publishers will have the final say about game design anyway, so it's all the same stuff. The truth is, for someone who has been in the industry for 20 years it makes no bloody difference to me if its original IP or publisher IP. Publisher IPs are actually a more exciting proposition. It's development work for grownups.

Ownership of desirable IP is a key asset that will differentiate a studio. With the poor AU/US exchange rate studios with nothing but dev to offer are going to find it harder and harder to secure work.

In IR's case there publishers for their recent IP include the likes of Sony, Ubisoft and Codemasters so who owns the IP would not appear to be a barrier. to hooking up with stong publishers.

*You're going to have to fund the development. Publishers are experts in that area and if they fund it, then they own it.

*Very few titles succeed. The developer has to take the risk in place of the publisher. Good if it works out, you close shop if it doesn't.

*If you're working with a AAA quality publisher then they will insist that they own the IP even if you build it. This means you're going to be working with third rate publishers.

*A lot of people want to work on high-profile games, not another unknown IP. If you have some unknown game on your resume its harder to get a job at another studio, especially if it gets cut and a lot of them do. If you have a high-profile game built for a high profile publisher on your resume then your in a much stronger position.

There are pros and cons.

Initially many people thought it was a magic bullet and went charging in without fully thinking it through.

Now, older wise and a bit burnt, a more sensible approach is being taken, outsourcing components, or specific services (eq RelQ for Q.A.), not wholesale, and its working for many people, both here and abroad. Sure there are horror stories, but it's in the developer / publishers interest to keep quite about the successes.

You would be surprised at some of the high profile international titles that have used people like Tose to create much of their non critical content.

That 5(percent) you talk about, is largely made up or hits, and original IP hits. That 5(percent) generates most of the profit from sales of titles within a year - just like any other hit-driven entertainment industry. You probably have something like another 10(percent) that either break-even or generate a small profit, and then the rest don't even break-even. The real money or reward for developers is in original IP. If developers want to presumably play it safe, and work only on fee-for-service work instead of the potential of original IP and royalties, then by all means do so. But don't project your own fears and shortcomings onto others as "best-practices" for the future of the industry.

Publisher IP means that you are forever reliant upon fee-for-service contracts to fuel your studio, that is as long as you can get it without another studio somewhere else getting it instead. And Australian development isn't some of the best in the world, perhaps economical, but with the advent of next-gen, development costs go up and so do quality expectations, and I wonder whether most studio can deliver - though I am sure they can still churn out decent PSP titles. If you don't have publisher funding, then you are reliant upon other sources of funding like private investment or publisher welfare - both I only see being justifiable for an established studio if they are using such funds to expand their business, not just to keep it afloat.

Sure you take a risk with original IP, but the rewards are so much greater than publisher IP. And it does not mean that you cannot undertake publisher or other established forms of IP - like acquiring a license to develop a title with. But only undertaking publisher IP is very risky, not safe - as your growth potential is limited, your sustainability is limited, your life expectancy is limited.

Also, it only results in a cheap labour farm for publishers, it doesn't result in any real wealth generation for developers and sustainable growth for the local industry. A business that is constantly reliant on external funds to stay afloat is not a successful business in my opinion.

If the game is amazing then there is a chance (slim) that you may be able to keep the IP if there is a bidding war or something, but this is a one in a million shot. It's a big gamble. If on the other hand your studio is hooked up with a major publisher Sony, Microsoft, EA, Warner Brothers, Activision, THQ, etc. then you're going to be a better bet in the longer term. Your margins will be greater, your job security will be greater and your CV will look healthier.

The fact is that games are risky and you can't survive for long if you are taking the risk as a developer. You don't have enough products so you don't have a portfolio of products to fall back on should a game not succeed. Fee for service work is still the most lucrative part of the whole game development industry with the added bonus that its has less risk. This is the model most professional independent studios use.

If you look at the studios that have failed recently U235, Ratbag, Perception then you will notice that they all worked on independent IPs either exclusively or as part of the mix. It drains resources, increases risk and leaves you without support should things get hard, and they always do in games.

Yes I am aware that many of the original IPs out there are actually publisher initiated and owned, but that is not to say that they are all owned and initiated by publishers and that you should not at least try - even if a publisher ends up owning it you will still get a larger share of royalties as apposed to a fixed profit markup - your margins will be better. You could probably end up with duel ownership of the IP, that way you have some say as to how it is used and whether you see income of not.

Now for most developers that simply have no hope in ever creating original IP or any worth, yes, the money for them is fee-for-service work working on publisher IP. As for them it really is a one in a million shot, but a studio like Team Bondi - or Rockstar, Blizzard, Irrational Games, Pandemic Studios, etc - the odds are probably a lot better.

And as for "you won't survive" for long, well IR Gurus seem to be doing just fine, and they are focusing on original IP - and I wouldn't say there stuff is the best in the world, they just have a progressive business model and strategy. Just because not every developer can pull it off, doesn't mean no developer should try - some developer can do more than just do another second-rate licensed-based movie-tie in title, and should strive to do more.

You are also completely ignoring the effects of fee-for-service work on developers as I stated above - developers worn out and resentful. That is not a healthy industry nor sustainable one. Then there is the constant need for investment, whether it be publisher, private or government in order to stay afloat. That is not a picture of business success. There is also the question as to whether it can be maintained for much longer, and whether the fee-for-service work will start to dry up and become rare by the end of 2007.

The more you guys use the excuse of "good business" in running a studio to justify fee-for-service work, the longer it will take you to realise that original IP is "good business" for those with the ability to try, as we are in a creative entertainment industry, not a "we make widgets" industry - and there is risk in anything, even staying a fee-for-service provider, as most of your profit, if not all of it including external sources, goes into acquiring the next fee-for-service deal.

FYI: using Perception as an example is a poor one, the management did not have much of a clue in developing titles period - whether they be license based IP or original, hence their below average track-record previously. And though Ratbag always had some solid tech, I just don't think they had the design and management know-how for anything more design intensive beyond racing titles and technology development, and most definitely for anything original - plus they may have been pigeonholed as a racing title developer. And U235 didn't have much of a chance with original or license based IP development - sorry to use you guys as an example, but that is the reality of it.

When was the last time a gun saw a decent royalties payment?

Apparently IR are now sub-contracting other local developers to help them cope with expanding workload, in the current climate how many other Aussie owned are doing that?

CF you say, "Yes I am aware that many of the original IPs out there are actually publisher initiated and owned, but that is not to say that they are all owned and initiated by publishers and that you should not at least try "

This sounds benign and helpful but is in fact an extremely dangerous idea. If I have understood your point you are painting a picture of self-funded-games as the better option. Yes its great if you can afford to take a punt and loose, but its not the ?better option" by a long stretch of the imagination. The problem is there is a victim in all this, the poor investor that gets roped into the idea with promises of huge returns. In reality they are gambling with their money and would be better off putting it all on black at the Casino. No one in the industry could say with a straight face that you get better odds in the games industry betting on a handful of games. Even publishers get caught out and they have many more titles in their portfolios and much deeper pockets than any developer. Look at Majesco.

Working with high-quality Publishers is not only the safer option it is the most lucrative, that's why the most successful independent game studios work with Publishers. Very few developers get to work with the best Publishers however. You need to work with a high quality Publisher, simple as that. The successful companies that you have mentioned all worked with high-quality publishers to get where they are today, including original IP development.

If you are a developer who self-funds and are thinking about some sort of windfall when the game hits the shelves then think again. Assuming you have a hit on your hands, which has a tiny probability (smaller if there are no marketing dollars), you still need to pay the investors back and the distributor before you see a single dime. There's also the problem of smaller publishers going broke and taking your investment and profits with them. It's risky business.

A lot of these self-published game models are actually pyramid schemes that rely on fresh sources of investment as the old ones get burnt. Mostly companies go down the self-funding route because they can't get a quality publisher interested in working with them, and that may be for a good reason. The best way to identify the new up and coming studios is to look at what publishers want to work with them. Simple.

Dont for a second even think we have 'better quality' education and talent here, because its simply untrue. There are so many examples in recent times, where China and India is leading the way in the IT sector - ignorance is sometimes bliss.. but Id suggest you have a look around a bit, or better still get involved with the IT industry.

On the matter if IP, it comes does to industry survival. Look at manufacturing for instance, it is a consumer based demand (like games) and consumers dont give a stuff where it comes from, or how its made. Those games will hit the shelves no matter if they are made in Aus, China or Uzbekistan. So, figure out what is important in making sure you can maintain a method of securing investment and publishing deals - it is NOT fee-for-service, because in the long run you cant compete. It is having something, others DONT have.. that is marketing leverage.. ask the most famous in gaming .. mr Carmack, his technology, and games game him marketing leverage to be able to sell and do what he could do.

If you are at the mercy of a fee-for-service contract, you are living contract by contract. This is the high majority of all companies in Aus.. and for crying out loud, stop saying it isnt.. we all know this is true.. why the heck do people keep denying it? Why keep trying to avoid the truth? This is more evidence of the classic industry hype that is seen everywhere in news media about our gaming industry here.

I think self funding is great, and so is publisher funded, but maintaining IP and thus LEVERAGE to be able continue making games, and continue a BUSINESS makes alot more sense doesnt it? Who in their right mind thinks its sensible to have a long term business based on contracts that could disappear OS at any time? Seriously thats the pure hard matter of it?

Im seeing a tun of comments for the classic employees who see everything through rose coloured glasses.. and also classic management types who see everything as not a problem.. and "everythings fine".. geez.. theres a few recent demises that should have listened to their experienced ppl.. than simple playing that tune. Its all about being serious about fixing it. I cant think of a single game company owner who would be happy about the 'subsistance' contract living they live under.. at the end of every contract (in fact its really a continual ongoing process) trying to find more contracts to help pay the bills and secure workers roles and livelihoods. Dont people want to steer away from that sort of "locked-in demise" because that provides a very tenuous future for any game dev.. can any one see that?

I dont know all the answers, but I do know we need to do like what Krome has done with Ty. Build strength upon leveraging their own IP. IP that they own, and that they can use to profit from and grow from. More of this is needed, by the bucket load.. with support from gov.. and with support from each other. Look around at other countries and see how they are tackling the 'global' development trends.. its not "cover my ears.. everythings fine here".. but its more like working together.. sharing technology.. assets.. even in the US.. huge paterniships are occurring - Pandemic and Bioware for one example. This is simply out of necessaity and market demands.. ignorance wont get anyone anywhere.. if you dont react to market changes.. and demands.. and competitors..

To let it be utterly understood (and I have said this sooooo many times now), is that I WANT to see the Aus industry grow, and become a serious power house in game development. Relying in US fee-for-service contracts, and steering away from original IP is frought with danger. I dont doeny people need the fee-for-service contracts, but relying on them isa horribly bad business decision, and connot lead to anything but disaster. No company is going to gain any sort of leverage with a ublisher by saying "we will take whatever you have".. because the Chinese and Indians are saying "we will take whatever you have, and at a third of the cost"..

Finally.. these are only the musings of a grumpy coder stuck doing fee-for-serive work :) .. take it as you will.. Id hate to see this amazing talent pool here disappear, but as much as others say.. over the last 5 years alone we have lost so much talent overseas its utterly sad.. doesnt anyone want to try and stop that floodgate.. and build an Australian Gaming industry that can dominate development in its own right?

You mention original IP as if that actually means something. It doesn't mean anything. All games are in fact original creations . This has nothing to do with whether or not it is self-funded These two things are completely seperate issues.

There is a reason people work with existing licences, movies, sequels, books, comics, famous people, places, etc. You can draw from these things to create original works, original IP. What it gives you is an interesting starting point. Many producers are interested in a licence or movie and will go looking for ways they might work with it. This stuff is not just valuable to publishers, its valued by developers who want to work on certain games, its valued by the consumer that buys games and it also makes good business sense.

Self-funded games are a gamble as has been stated, so if you're willing to gamble, then take the plunge, just don't tell the industry that's how your'e giong to help Australian developement. That's just dangerous and missleading as the other gentlemen has pointed out. It would be better to tell the truth and get people involved that are willing to take the risk (e.g. to get a foot in the industry). That would be a much more ethical approach.

If you want to "see the Aus industry grow" then you need to understand it from the business end. if you were to ask any top executive in the industry they would tell you that quality is more important than cost. Reducing risks is more important than saving pennies. Good developers command the highest rates and royalties. You would be stunned what some developers can ask for simply because they produce the best quality work. The biggest problem these developers have is do I buy the Porche or the Ferrari.

Also, just because its an Australian publisher doesn't mean it should use Australian developers exclusively. That would not make sense. Any publisher has to seek the best talent for a given project.

It's complex but its not about where you are based, or whether you are Australian or not. The industry is truly global. There are some amazing developers in Australia and other smaller countries for that matter. The good ones are tracked down by publishers wherever they might be.

Face facts - WE are off-shore contractors too. As fee-for-service work, you are an off-shore contractor working for a US firm. So if we are off-shore contractors too, how do you guarantee your contract work?

IP means alot. Ask anyone who works on important IP. It is the key to them SELLING. If you own the IP, you get to license it, and thus market it.. and even further develop it - just look at Ty. I never said self-funding was related to IP, I said as a business if you want to be able to make more money.. sell more product, original IP will provide you with better mechanisms than otherwise - because otherwise, you are back to relying on contracts. If you note, I said I neither think self-funded or publisher funded is critical. What is.. is making sure you can make a continued business through sensible marketing and management of original IP - again.. look at Ty ... if you use publishers IP.. you own nothing.. so how you can compare the two as equal is quite insane.

IP is intellectual property. Now if you are a VIP PUBLISHER, then you would well know that owning quality intellectual property is worth its weight in gold. And this is leverage for developer to be able to more easily tackle developing contracts with publishers - in fact half decent IP will get the publishers coming back to YOU. Again see Ty for example :) Publishers love something that holds less risk - and good developed IP.. can be one way to tackle it.

Again existing IP is fine.. and it'll continue to happen.. no doubt. But being a small development industry here, how long do you think we can compete on a global scale with the rest of the world, when we simply act as US off-shore contractors? Seriously how can you even presume this is even slightly beneficial in the long term?

"This stuff is not just valuable to publishers, its valued by developers who want to work on certain games, its valued by the consumer that buys games and it also makes good business sense. "

This almost guarantees you have never been near a publisher. Its obvious by your writing you consider IP to be code.. or something less than a whole concept, idea and style. Ty for instance is IP - Krome owns Ty.. and Ty and all its artistic trademarks, its animation and marketing are all part and parcel of that IP. In fact when pitching to publishers, they want to see original and outstanding IP more, than any demo, or license or manager standing up front giving a ppt presentation. Its companies IP that drives publishers to release new franchises - look at all that do get released OS.. I mean.. look at it? You're happy to say that IP doesn't have any bearing on publishers decisions.. hehehe man.. funny. And if it weren't so valuable for publishers.. why do they spend so much money buying up as much interesting IP they can.. hehe you really should talk to an E A exec...

I never said self funded, are better or worse than publisher funded. Don t care.. get yer money where you can.. its not an issue.We simply don't have the luxury of choosing money sources - this is one of the reasons why contract work is so often picked up because investors and gov backing are so hard to come by. Read my comments, don't make them up.

If you think you understand it from the business end, I think you need to probably talk to some more ppl in the US, for you are living and talking like a sheltered off-shore contractor, who is certain the contracts will just keep rolling in.. I hope they do.. (I know for me at least I have a year or two left).. but I cant see it lasting.. and it'd be a fool to think it will.

Quantify quality? You say Australian made games have better quality than say, European ones, or Singapore ones, or Indian ones or Chinese ones? Do you even know? Good developers.. driving porches are all working for large IP driven studios.. without any decent IP.. all your "good developers" wouldn't be doing squat.. they'd be out in the cold like so many US developers.. begging for GBA, DS, PSP titles to do. Good developers don't get where they are by simply serving a publisher - in fact there aren't many I can think of, you might class some of the internal studios of publishers like that, but thats hardly relevant when comparing to indpendant studios.? All good/great developers have become that way because of the IP they have generated.

#45 - I'm betting you haven't worked in defense. you'd be surprised how similar contract landing, costing, and engine development techniques are. In fact a couple years back, a few of you here helped me build a train sim :) .. a group of game developers making a 3D train sim in 12 weeks.. crazy eh.. if that wasn't the same as game dev.. hehe.. Mind you the consumers are definitely different, and the single package sales are definitely different, but development wise, and contract wise.. its almost the same. Mind you I am of course referring to mainly 3D sim work here.. simply because alot of defense work is DB gear.. and other research work. Which obviously have little relevance when comparing against the game industry (apart from the contracts).

The market is also very fickle, IP goes out in and out of fashion as different strategies emerge, but there is one thing that is consistent throughout all this kafuffle, fee for service work. The guys that have the IP advantage are the bigger entertainment companies that can create products across the entire entertainment spectrum, TV, Movies, Games, and Music. And don't forget software patents, if they start getting enforced then the landscape will change again.

The one and only thing a developer has that the publisher absolutely needs is quality development. Capability. You can't patent it, you can only try to utilize it or buy it up. It's in short supply worldwide. It would be a far smarter strategy to offer the big boys what they want and they are forced to pay handsomely for it. If you've got it then they definitely need it and lots of it. The problem is most developers don't have it.

Publishers need high quality development work and the developers that can produce it in the future will be the new industry super stars. The new landscape is one in which a new type of IP gives you leverage, namely trade secrets and know how. Is it Fee for Service?, Sure. Is it lucrative? you better believe it! Is it the way to build an industry? Absolutely! Would I like to own a piece of that action? Of course! Would I invest in a self-funded game, not on your life!!!!!

Ty is not the best example as Krome has had great dificulty getting the thing published/distributed. There are a few burnt bridges there.

As for risk, risk can be minimised by investors, by investing in experienced and knowledgeable teams - they are more likely to pull it off. I am sure publishers use something similar, though their answer is probably just to marry your tech and concept to an existing IP.

As for "know-how," I'm afraid that for most Australian developers, they have next to none when it comes to making quality interactive-entertainment. Most attempts are second-rate affairs at best. Though I am sure you will differ with me, but only because you mistake technology development as game development, and being able to follow a publisher's specs - your client - as game design.

Look at that 5(percent) that makes the majority, like 95(percent), of the profits for the entire industry. How many are existing film based licenses and how many are original IP? Granted there will be a mix of both, but, more profit (a majority) would have been made by original IP - and that would also include sequels of original IP titles as well. Most of the successful releases that are based on existing IP only make a small profit or just break even - as do many solid and original IP attempts that perhaps should have done more market research. The majority of titles that fail, though I am sure there is original IP in that group, it would not surprise me to find a hell of a lot of existing IP titles as well.

Yet here you are saying that existing IP is better than original IP. Perhaps for the developer that is lucky enough to get their 20(percent) markup, but not for anyone else.

The only reason you preach this method, is because you know quite well that your current studio will never be able to develop a title that sells in the millions. And I mean without adding up sequels and every platform release - and even then probably not. There isn't a chance in hell you will sell more than 5 million or more than 10 million. You just lack the know-how and quality in design to do that. Therefore you preach this approach as it is all that you have and you wish the local talent to be assured that it is the best approach - otherwise they might go to other studios with more progressive approaches. It may be all that you have, but it is not all that everybody has. Some actually have a clue when it comes to designing games, not just relying on the publisher to point them in the right direction and marry their average tech demo to an existing license on hand.

Your adamant that you will never be able to achieve such results, but you seem to think that everybody shares your failings. Therefore, everybody should do as you do, as you guys are apparently self-appointed experts, and your "experience" will no doubt lead people along the safe and short-sighted path of mediocrity - too bad if things change with time, and what you can deliver is no longer of value to publishers.

Perhaps you are right, in that some developer will only be able to achieve what you have, nothing or interest. But you are wrong if you think that every developer is as clueless as you are when it comes to game design and development ;).

Also with regards to cultural differences, its a major issue. You can outsource bits here and there, but not the whole game. Cultural differences cause problems with outsourcing too. If you're claiming it doesn't then you haven't had to deal with it for any serious long term projects in the entertainment industry. It might work for IT, call centers and Accounting, but entertainment is different.

Selecting a developer to do a project is about the quality of their work and the likely hood of success, not price. The majority of work is currently carried out in the US where developers are some of the most expensive in the world. They are also some of the best. That's a fact. Publishers require quality games and quality developers that know how to create entertainment for a given market.

If you're going to invest in a developer's game then be prepared to loose your money. The chance of succes is close to zero. If you want to invest in game development then buy stock in a Publisher. Even if you own the idea/concept and have finnished the game, the publishers still have the upper hand when it comes time to distribute it and will likely give you a hard time (especially if they are putting in their own marketing dollars and running the game through their own distribution channels).

You can of course go straight to distributors and smaller publishers, but you won't sell as many units (no marketing, poor channels to market, more expensive channels to market.). Not to mention the numbers of smaller publishers that prey on companies that self publish only to rip them off.

If you're agenda is that your investors should be investing in your games, then you are misleading them. Not very ethical. Talking about painting a rosy picture, you're painting a complete fantasy and a lie.

I'm not saying its impossible. I'm not saying don't do it. I'm saying be realistic about how it all comes together and be honest with the stakholders - including staff. If Australian developers all decided to self-fund from now on you won't have a games industry in this country in the next 2-3 years. It's just probability, e.g. high probability of failure on each attempt multiplied by the number of attempts = 99.9(percent) failure rate (much worse than going to the casino, but you can tell your friends you invested in such&such a game). Can't argue with the probabilities. Of course you could get lucky and some companies do, but you've got more chance winning the lotto.

If you do decide to self-fund or invest, then do it for the right reasons. Get a foot in the door, learn the ropes, gain experience making games. You should also be honest about the business side of it.

FYI: just because you put VIP in front of the word publisher, doesn't mean you know what the hell you are talking about - or that your even a publisher. I've meet developers and publishers a like that didn't have a clue yet believe they did - and were only too happy to tell anyone that listened their views. And it just doesn't go with individual publishers but individuals within publishers - some new what they were talking about, others didn't.

I think you are very unrealistic with your probabilities btw. Probabilities all get better when you factor in more than it being just original IP, like the track record of the team, their concept based on market research, their technology base, their pre-planning and preproduction - I mean, that is why we write project proposals and make playable prototypes, to limit risk.

And just because the majority of developers couldn't pull of original IP with it not even making a small profit, doesn't mean that no one should try. I mean for f*cks sake, the titles that make most of the profit for the industry are original IP, not some shoddy film tie-in crud. If your argument is that no one should try to do it as they won't see any royalties from their efforts, well I think you are delusional. Sure some publishers you are best to stay away from, but are you telling me, that a developer with a solid concept that they have developed to a high degree of quality and to like alpha / beta stage of development, that a publisher like THQ isn't going to