The Independent AAA Proposition

10 Aug The Independent AAA Proposition

At this year’s GDC Europe Tameem (NT co-founder and Chief Creative Ninja) gave a talk entitled The Independent AAA Proposition.  Tameem’s full presentation and talk notes are below:

ABSTRACT

Over the last 14 years Ninja Theory have delivered award winning games for consoles under the AAA publishing model.  From Kung Fu Chaos on Xbox which started as a three-person team working from a spare bedroom to Heavenly Sword, Enslaved Odyssey to the West and DmC: Devil May Cry on Xbox 360 and PS3, Ninja Theory has witnessed the AAA business grow and the impact it has had on both creativity and business.

The talk will detail the 14 year journey of Ninja Theory, the sacrifices and concessions made to stay in the game.  Footage of unreleased games, the reason why they didn’t come to market, and the specific sales related decisions that led to their demise will be detailed.  It will include the unrealised sequel to Kung Fu Chaos, footage of an as yet undisclosed next generation game, and various other pitches that we had to put on ice or walk away from.

For a traditionally AAA developer like Ninja, it may be possible to break the cycle of inevitability of rising budgets, sales-driven design and the wallet-busting price of entry of AAA that limits diversity, innovation and makes IP ownership all but impossible for creators.

With the next generation consoles arriving at one end, just as mobile and indie games have taken hold at the other, perhaps there is room for a third way, to turn the “middle”, where many a good studio has disappeared, into an opportunity to redefine gaming: the Independent AAA game.

What is the Independent AAA game? It is about creating, funding and owning IP of AAA quality but with the more focused game design, lower price point and open development process that defines indie games.  It’s about taking creative risks and making spectacular, exciting and unique game experiences that can compete with AAA and engages fans directly.

This talk is a candid reveal of the realities of making games in the AAA space and will be of interest to indies who are dreaming big, AAA devs who are dreaming of independence and the middle-tier who find themselves at a crossroads.

Slide1

Hello my name is Tameem Antoniades, Chief Creative Ninja and co-founder of Ninja Theory.  Thank you for attending.

In case you aren’t familiar with Ninja Theory, here is a short video that shows what we do:

Slide3

Ninja Theory has been around for 14 years now and I’ve been making games for 19, which in game development terms is a lifetime, so I’d like to share with you insights and trends that we have faced along the way.

History tends to repeat itself, markets roll in cycles, and patterns of behaviour repeat themselves. The better we are at seeing these patterns, the more likely we are to break the negative ones and adapt to new ones.

So as we are neck deep into yet another major gaming transition, it felt like a good time to take stock of where we came from, see where we are heading and see if we can steer ourselves into a better future.

Slide4

I feel very lucky to be born at the right time to see gaming evolve from it’s simple beginnings to now.  With each leap in generation, game genres die out, new ones are invented, gaming interfaces change, payment models change radically, companies go bust, new ones emerge, people leave the games industry and new blood joins.  Fear, change and excitement is part of the natural life cycle of gaming.

What is unusual is just how long and steady the last few generations has been from PS1 to PS3. In that time, the retail model has dominated with a high fixed pricing model forcing games to compete on size and features becoming what is now known as AAA.

But now, we are bang in the midst of an even bigger transition. It’s too broad to neatly classify like the arcade/home or 2D/3D transitions. It involves, apps, steam, indie, free to play, social gaming, games as service and cloud gaming. I would say it all sits under the umbrella of a “digital” transition.

Digital has and will continue to raze through entire traditionally physical industries, music, movies, books and so on. We have a good few years of seismic upheaval to get through as we transition fully to digital in games but it is and will continue to happen.

Slide5

There is a space I want us to fill.  Common wisdom says that this space doesn’t exist.  I’m calling this space Independent AAA.

It’s about self-publishing AAA-quality games that are narrower in focus, selling them for a fair price and connecting to your fans in a meaningful way.  It’s a place for developers like us who don’t fit comfortably in the mega-budget AAA space but who are not true indie developers.

I believe that we need this space to be filled if we want the future of gaming, particularly on consoles, to be diverse and creative for both developers and gamers. I will be speaking from a console developers’ perspective because that it is where our history and heritage lies.

Slide6

A note on terminology.  I talked to Lorne Lanning from Oddworld about this space between AAA and Indie earlier this year at GDC in San Francisco.  He used the phrase “AAA Indie”.  I am using the more neutral “Independent AAA” because there is a particular ethos, culture and energy that surrounds the word “Indie” that I admire but don’t feel like I’ve earned.

As for Lorne, he’s put his money where his mouth is and launched a high quality digital game for the price of a DVD movie.  It’s a good example of what AAA indie is about. It would be good for all of us if he is successful. I wish him and his team the best.

Slide7

I want to share as much as I can without breaking NDA’s and be respectful of partners that have supported us over the years. After all without them, we wouldn’t be around.  For that I am appreciative. Being in the games industry for 20 years means that I am the establishment, whether I like the sound of that or not, and want to make better games in a better environment for everyone: gamers, devs and publishers.

My intentions here is educational, to put forward my experience and share my observations through examples.
“To see with eyes unclouded by hate”

Slide8

So in this spirit,I will be revealing footage and documentation of some of our projects that didn’t make it. Some of  these will be made available online to everyone next week. We gladly share it with you in the hope that it will be interesting, useful or educational.

This talk will describe the changes brought about by the rise of AAA gaming using our history as an illustration. I hope this talk will be interesting for AAA developers looking for change, for indie’s who are looking up to AAA, and to publishers who are considering their place in the digital publishing world.

Slide9

I was employed as a programmer and designer when I and two of my colleagues, Nina Kristensen and Mike Ball set up Just Add Monsters with £3000 in savings and not a lot else.

We had little money, no equipment, no code, and no office, just a spare bedroom. I had a passion for Kung Fu and had designed a multiplayer brawler called Kung Fu Chaos, something smallish to get us started.

We set about looking for investment but no one was interested in that. Instead, 3 game companies, all developers wanted to buy us outright.  Having run out of savings, we sold to Argonaut 6 months after founding.

With Argonaut’s backing we bought computers, hired staff, and moved into a little office and prototyped a little gameplay demo. We signed the game to Microsoft Games Studios on who were looking to make a mark in the console space with the Xbox.

We grew from 3 to around 20 at full production. We were owned by Argonaut, but operating independently, in a small office in Cambridge.

Slide10

The publishing team we worked with was brilliant and supportive. They helped us out in every area of production to create a cool first game that we still get love for.

As the game hit the shelves, there were no ads, no support and the game tanked at retail.  I was amazed that an organisation would invest so much in a game and then send it out to die. It seemed like such a waste of money.  But the logic behind this was very simple:

An organisation with a marketing budget will back the games that give a better return on the investment. If game A is projected to make a better return per marketing dollar than game B, then game A will likely receive ALL of the funding.

Slide11

But before Kung Fu Chaos hit the shelves we were already working on a sequel.

During development, it was clear that some players didn’t take to the cartoon style characters so we started heading towards a slightly more mature style for the game. There was an expectation from publishers that audiences wanted more realism in their games.

We thought that delivering Kung Fu Chaos on time and on budget would mean that our relationship would continue.  It didn’t. No sales. No sequel.  This was something that we learned again and again, on subsequent games, that no matter how good a working relationship is, the only thing that counts at the end of the day is the profit and loss.

And because the Kung Fu Chaos IP was owned by our publisher, and all the code was Xbox exclusive we couldn’t take the sequel anywhere else. We had to start from scratch. We didn’t have the financial leverage to own the IP and take it forward so it was effectively dead.

It is simply the model that AAA operates in.  The handful of developers that have stand-out hits are able to break this model by funding their own game and keeping their IP but the vast majority were and still are in the same boat.

To this day, if we could work on a sequel, we would.

Slide12

We thought about creating a similarly themed new IP and called this game Kung Fu Story.

We created this pre-vis video to show how it would look and play.

Slide13

Slide14

But the arms race towards higher budgets and more realism was in full swing. A stylised game like Kung Fu Chaos was not appealing to publishers. Kung Fu Story was in the same boat. Back then a game called Brute Force was getting the big push.

Given a £40 game, why would anyone buy a kung fu comedy game over a high budget game with sexy realistic graphics? I can’t say that I agree with this thinking but I do understand it – it’s much harder to find a unique style than to pursue realism.  Publishers do feel realism means less risk so we have to go with the flow.

There was no room for Kung Fu Story.

Slide15

The doggedly fixed price of retail which continues to this day results in an arms race where bigger bets must be made alongside lower creative risks. Competition focuses on size and feature lists pushing budgets up to unimagined levels. We’re in a world where for some games, selling less than 5m is deemed a failure.

This is the Go Big or Go Home pattern that has continued through to this day in AAA.

As creative innovation and competition goes down you start to see fewer bigger games, many of which seem quite similar to each other. Hence the observation made by some: “Everything’s Uncharted”

This list is everything a modern AAA game must have in terms of feature set to be considered viable.  AAA is starting to look more like Tesco superstores:  big, homogeneous, high volume, expensive, and not necessarily better quality than diverse local markets. This is a creatively destructive force that has sidelined entire genres of gaming as the demand for higher budgets and more predictable sales took hold. It has sunk many creative teams and kept many games away from players that couldn’t compete with the blockbusters simply because they couldn’t justify the retail price tag.

Slide16

Many have packed it in and started over in indie gaming, apps, or other areas.  Others have been absorbed into publishers who are not willing to bet $100m+ on external game developers. Most have simply gone bust because they cannot attract funding to compete with huge teams.

This isn’t “survival of the fittest”. Evolution has nothing to do with being “fitter” or “better” and everything to do with being more adaptive to a changing environment.

While people in these studios often move on to form new ones, talented teams are broken up forever, and years of knowledge in AAA game making is thrown out as developers switch industries.

How have we survived? We focus on quality, stay on budget, ship on time but then, so have many others on this list. it comes down to this: we have been lucky.

Slide17

Given the push towards realism and going big, Kung Fu Story was looking shaky.  So we doubled down and bet on going big.

We would create a new IP for next gen platforms, then not even on anyone’s radar, and create something with outstandingly high production values that, unlike Kung Fu Chaos, would be difficult to ignore. So Kung Fu Story evolved into Heavenly Sword.  This is the first concept video we made, a few months after Kung Fu Story.

Slide18

We prototyped the game on PC guessing at the capabilities of the then unannounced Xbox 360 and PS3 which were about 3 years away.

We had no idea what a next-gen game was supposed to look like so we really were shooting big. This is an early prototype. Even back then we had full scene shadowing, high dynamic range lighting, realtime time of day changes, armies of thousands in realtime, time-dilation effects and physics.

Publishers were very interested as we ticked all their GOBIGGOHOME boxes. But none would bite because they knew something we weren’t aware of: Argonaut our parent company was in trouble.

Slide19

We got a call. Argonaut is entering administration. Under the same pressures, the biggest developer in the UK could not sign their games to publishers.As they were our parent company, we were told we would be shut down in two weeks time.

We needed to find cash fast. In the end we remortgaged our houses and Jez, the CEO of Argonaut invested some money.  We had enough to buy back the company from the administrators and enough cash for 3 months.

We returned to publishers but this time there was a different problem. No one believed we could pull it off. At the time the thinking was that only high end PC developers would be able to cope with next gen technology. In the words of one of the biggest publishers, “We’ve had 50 people working on next gen tech for two years. What makes you think you can compete?”.

It’s a pattern that was going to repeat over at the start of every new hardware generation.  Publishers button down, focus on internal development, stating that independent devs don’t stand a chance.  This is the most dangerous time to be independent. It invariably turns out to be untrue.

Slide20

In the end, within days of running out of money we signed to Sony who were by now aggressively betting on PS3 content. But our desperate position left us weak.  We signed the IP rights away, the technology away and became an exclusive Sony developer.  Sony saved our skin for which we are grateful to this day but we no longer owned our creative output and effectively lost our independence.

We achieved many things to be proud of some of which is still rarely seen on the PS3 or X360.  We had also pioneered the use of performance capture in a videogames with help from Andy Serkis and Weta digital.

The game came out on the PS3 in 2007.  In retrospect, we took on too much but as a first effort on PS3 it hit 79% metacritic and had a great attach rate. With this grounding we were planning to knock it out of the park on the sequel.

Slide21

So we started planning the sequel. But since we came into the deal from a weak desperate position, we would now suffer the consequences. We didn’t own the IP or the tech we developed and we were tied by exclusivity.

At the time, a game development team would be expected to start at 15-25 people and build up during production.  We had built our team up to 80 die-hard loyal developers and this didn’t fit into the cost-analysis model of AAA production.  Exclusivity meant that we weren’t free to develop or find new projects for the team outside of heavenly sword 2. We explored every option open to us and found none that didn’t involve the dissolution of the team. This was not a situation that either party had envisioned but nevertheless, it was where we were at. Publishers need to protect their interests and developers need to protect theirs.

We knew that the value of a creative company comes from the team-work, experience and talent of the people in it. Creating games is a very personal endeavour that takes a lot out of you and it’s a very painful thing to let your baby go but keeping the team together was more important and more valuable to us. For that reason, we felt the only correct choice was to walk away from both the IP and the technology and seek a deal that would allow us to stay together as a team.

It was a heart-breaking end to an amazing journey but I am very grateful that we had the opportunity to make Heavenly Sword and that we got to work with so many talented and passionate people at Sony.

To this day if we could work on a sequel or remake we would in a heartbeat.

Slide22

Once again, we were out on our own with little cash reserves. As we couldn’t use our own engine, we licensed Unreal Engine and set about creating a new IP, Enslaved: Odyssey to the West, then called Monkey.  In two months we created a design doc and this CG trailer.

We were in a financially critical position when we signed the game to a new publisher called Green Screen. Green Screen imploded within one month of signing us. But the signing fee meant that we had a tiny bit of time to find another publisher. We signed with Namco in the nick of time.

With far less time and budget than Heavenly Sword we released the game it to good reviews, 82% on metacritic.  It was delivered on time, on budget.  It had almost double the game content of Heavenly Sword with 2/3rds of the budget.  Massively improved efficiency is the real value of keeping a team together.

Slide23

The game came out with little fanfare and disappointing sales. To this day I’m not sure if the fantasy elements were a turn off, the gameplay mix or the lack of visibility.

It was probably a mix of all three.  But yet it is a game we are very proud of, we pushed storytelling further than we’d done before and created a game that was able to touch players on a real emotional level. Our production had matured and Namco were great partners.

But once again, there is no sequel, we don’t own the IP and the sales figures are the only thing that matters in publisher decision making. It was dead in the water and we couldn’t do anything to resurrect it.

At the risk of sounding like a broken record, if there were any chance for us to work on a sequel we would. When you don’t own the IP, you don’t get a say in the matter.

Slide24

We started DmC just before we finished Enslaved and hit the ground running. Once again we delivered on time, on budget, hit 86% metacritic. At launch it hit number one in the US, Europe and Japan and is the first game we have generated royalties on.

We had a great relationship with Capcom and we are grateful for the opportunity to work on DmC.

But by the time of release, the retail market for generation 7 was winding down and, once again, we were left to ponder our next steps.

Slide25

In summation, the generation has been good for us in terms of getting games created and out to the public.

However the AAA arms race hasn’t let up and IP ownership remains a dream when you are not funding development yourself. Royalties are virtually impossible achieve because you have to pay back the rising development costs before you see them.

By the time DmC launched, retail sales were nose-diving for all but the biggest hitters like GTA.  As the next gen consoles weren’t fully realised, no publisher was signing games for these, instead focusing on the internal teams they already had.

This was to coincide with the current transition into PS4/Xbox One and digital landscape and prove to be another tough chapter in NT history.

Slide26

1m sales were considered a hit in PS1 days, this became 2m in PS2, 3m for PS3 and it was clear that it was going to be 5m+ in the new generation. This has far reaching ramifications on what kinds of games would be signed.

The common wisdom from publishers was that any game genre, art style, gameplay concept that would not all guarantee 5m sales would be dead. We’ve variously been told point blank that single-player story games are dead, that any art style other than realism is not commercial, and that melee games do not sell.

Slide27

As the Xbox 360 and PS3 were winding down, and due to the perceived threat of mobile and PC, console publishers were unsure about the future of consoles full stop.  They were taking a very cautious wait and see attitude or pulling out of consoles altogether. The global financial crisis wasn’t helping.

We could see that there would be huge risk in continuing in the AAA retail space so we thought it wise to diversify our approach and break up our team into several smaller ones each focusing on a different avenue to explore.

Slide28

We wanted to test next gen art production pipelines in Unreal Engine 4 to see what we could do with it. We called this our beautiful corner.

So with 10 artists and a 10-week window, we set out to create something beautiful in UE4.  Our rule was no CG and no Post Production. Everything had to be in-engine.  So from a one-page brief and in 10 weeks we created a 3 minute short movie.

It felt good to be working on a project in which we had creative authorship and the tech we developed for this would help us push the limits of what we could for next generation consoles.

Slide30

On the other hand we had no experience in mobile and digital publishing so we set a small team apart to explore both these concepts and we created a game called Fightback on iOS and Android.  We learnt a hell of a lot about creating smaller games, digital distribution, live tweaking gameplay, games as service models, mobile technology, touch controls, the list goes on.

It has hit 3m downloads on iOS in Europe, Russia and the US and has now gone wider on iOS and Android.  This game showed that we could put our hands to different business models and non-console platforms. It also showed us how tough and competitive the apps landscape is.

Slide31

We also approached publishers offering to bypass the AAA monster with smaller games, episodic games or online games.

We pitched a novel horror game that we worked up with Alex Garland, the writer, producer of 28 Days Later, the Beach and Sunshine and collaborator on Enslaved. Only to be told that we had to add melee combat in it because that was what we could sell. Then told that melee combat wasn’t popular enough and neither was horror.  A spreadsheet was shown to us that demonstrated this.

We also pitched with Alex, a co-op story based game set in the real world with real characters only to be told that super heroes and space marines would sell better so “why don’t you set it on Mars?”.  That was the end of that game.

I believe both these concepts were very strong and we would have made a go of it if we had funds to. We could have pandered to these requests but our heart wouldn’t have been in it and “heart” means everything to us.

Slide32

This video shows an early prototype for a multiplayer online melee system. All animation, sound and effects are placeholder. The focus was to test core combat mechanics across a network before proceeding towards gameplay design and iteration.

With the experience of making DmC, we had an edge that few western developers have in combat gameplay.  We had never tackled multiplayer and we felt that it would be interesting to create a multiplayer game based around this. We had an online prototype up and running.

We took a concept around to publishers and the response was mixed. One was fixated on developing the single player story aspect of the game which wasn’t what this project was about. Another didn’t believe that online action melee would sell because their spreadsheet said so. Another was concerned that we didn’t have experience in online. We would have to develop much more to prove otherwise but it was not something we could fund ourselves so we had to put it on ice.

Every concept we came up with came back with a sales sheet showing how similar games didn’t reach 3-5m units and some frankly lu