Game On (and On and On and On)

When Warren Spector, a veteran videogame designer who thinks he just might be the oldest person actively making electronic games, first had a meeting with Disney Interactive Games in 2005, he didn’t think the talk was going to go far. After all, he was offering up an M-rated, dystopic science-fiction game, something not really in keeping in with the family-friendly focus of the Walt Disney Company.

As he made his pitch, Spector noticed his audience spending a lot of time texting or emailing on their phones. What at first he took to be disinterest turned out to be something far different. “What do you think of Mickey Mouse,” they asked him, as they talked about some ideas with Mickey as the star of a game. “Personally, I’m just a huge Disney fan, a huge animation-history fan, and when a company like Disney offers you the opportunity to work with a character like Mickey Mouse, that every person on the planet knows, you don’t say no to that,” Spector said.

Thus began a relationship where Spector didn’t just design a game for Disney, he sold his company—Junction Point Studios—to the Mouse House in 2007. Plus, Spector got to revive the first cartoon character Walt Disney created in 1927, Oswald the Lucky Rabbit, which Disney lost the next year in a contract dispute. It took nearly 80 years for the Walt Disney Company to get the rights to Oswald returned. And that, in turn, helped pave the way for Epic Mickey—the videogame Spector and his team of 285 people created. The game gets released next month exclusively on Nintendo’s Wii system.

This past weekend, Spector talked with Portfolio.com about the game and his industry while at New York ComicCon, a three-day event that drew 100,000 comic-book, anime, and videogame fans. Following is a transcript, edited for clarity, of our conversation:

What was it about this game that drew you in?

When the Disney executives said the game was about a world of forgotten and rejected characters, I’m thinking, OK, I'll have access to the entire Disney archive, anything the company’s ever done is fair game. And then they said the magic words, which were, "Oh, and by the way, we’re getting Oswald the Lucky Rabbit back," Disney’s first cartoon star.

Think about what this says about videogames and about Disney. I don’t think this has been talked about enough. Oswald was lost in a contract dispute in 1928. It was Walt Disney’s first cartoon star, he lost the rights to the character—which is frankly why Disney is so protective of its properties now—he lost his star, and he said I’m never going to let that happen again. But in 2006, they got Oswald back. Bob Iger, the CEO of the company, traded Al Michaels, a human sportscaster, for the rights to Oswald the Lucky Rabbit. Al Michaels was on ABC and wanted to go do some stuff that NBC had the rights to do, so there was a trade. So Disney got the rights to Oswald back, and then where did they reintroduce him? In a videogame. What does that say about where videogames are? Five years ago, 10 years ago, I don’t know if that would have happened. They would have introduced him in a movie or on a T-shirt or at a theme park, who knows? And on top of that, what does that say about Disney and their approach to technology and innovation? I think it says worlds. At that point, who says no to that kind of thing? So yes, I was in.

What was the industry like when you were working on your first game?

I actually predate the electronic-game business. I started in games in the tabletop world working for Steve Jackson Games, a really small board-game company, and later went on to work for TSR, the folks who did Dungeons and Dragons, which was the 800-pound gorilla in my business. I remember one product we did cost us all of $2,500 to make. A major boxed role-playing release, I think we spent $80,000 on it total, start to finish.

The first game I worked on on my own, it was called Martian Dreams, and it was budgeted at $225,000. I had a team of about a dozen people, which was enormous. I remember I got reamed by the VP of product development for that because I spent $273,000 total, from start to finish. And the reality is, I don’t even have to work to spend that much in a week now, and we used to spend that much on an entire project. It was a completely different business back then.

I was just talking to some game developers downstairs, and they said $50 million is not uncommon for top games today.

I know plenty of people who have spent more than that…. And if you’re making an MMO, I know people who have spent $75 to $100 million on MMOs, on massively multiplayer online games

Talk more about the money that goes into developing these games, how it’s spent?

Even in 1989 when I started making electronic games, the only thing that mattered in terms of your budget was personnel. People are the only thing—they make things great, they make things terrible, they determine your success, and they are your most significant cost. Overhead, who cares? It’s the salaries that make a difference.

Are there openings for entrepreneurs still in this business?

The most important thing and the coolest thing about the game business right now is that there have never been more ways to reach an audience or more audiences to reach than ever before—ever. We are in absolutely a golden age right now. And anybody who doesn’t see that isn’t paying attention. I make big triple-A games. That’s all I really know how to do, and it’s all I’m kind of interested in doing…. But there is room in the marketplace right now for four guys or gals in a garage making an iPhone app for kids, or doing an ARG (alternative reality game) to promote a movie, or doing something for the iPad, or doing an XBLA (Xbox Live Arcade) game, the small-team, low-cost downloadable. There are people doing episodic content that you can only get by downloading it. There are so many ways to reach so many audiences that there’s absolutely room for entrepreneurs now.

These other games, especially the growing market for smartphones and tablets, do they diminish the console business?

Not at all. There are different strokes for different folks. There are plenty of people who have no interest in going anywhere but a console and going to a big-box retail store and buying a game. But there are plenty of people who want to go on Steam and download something. And there are plenty of people who are willing to give 99 cents to a developer they’ve never heard of to play what I call pastime games. There are an infinite number of people seemingly who are willing to just keep pecking at keys to get a food pellet on social-media sites. Now, I don’t get Farmville, but I know plenty of people who do, and that’s the beauty of the game business now. I can play console games, my wife can play World of Warcraft, my best friend can play Farmville—excessively. And that variety of audience and development methodologies and distribution systems did not exist five years ago, it just didn’t.

What does it take to get into the business of games?

You need a track record. You can get some development software and maybe have a chance of developing an iPhone and an iPad app, but Disney’s not going to talk to you unless you’ve worked already. I would say that for just about anybody, spend some time working at an established developer, learn not just the business of development but the business of games, figure out who the players are, figure out where the outlets are, figure out where you’re going to get the damn money. I say this constantly: Ideas are the easy part. I could care less about your idea. I still get emails all the time, ‘I have a great game idea, I’ll tell you about it, and we’ll split the profits 50-50.’ I’ve got 300 different game ideas on my hard drive right now—I don’t need your idea.

You had your company bought by Disney. And Disney made a big play this year by buying the social-gaming company Playdom. What's your take on the attractiveness of gaming companies to venture capitalists?

I have several friends and colleagues who recently have been able to get some venture money, which thankfully is starting to pour back into games. We had sort of a dry spell for a while, like everybody else. The money seems to be coming back and seems to be coming to people who have a really interesting, different idea, often with a different business model in the iPhone-iPad space. If I were starting off right now, that’s a space I would look pretty hard at.

---

J. Jennings Moss is editor of Portfolio.com.