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| Starbreeze Business Analysis |
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cruppstahl Member since: 12/13/2005 From: Munich, Germany |
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 Posted - 12/20/2007 9:47:26 AM |
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| first? ;) kinda weird to post such an analysis. Some things should stay private - i'm not sure if this company is happy to see such an analysis in the web. Since it shows their most vulnerable points - they are 100% depending on their publisher. If their publisher limits the budgets, they can't do anything since they depend on him. i once worked for a similar company, they went bankrupt. it's a horrible business model - being under permanent pressure to find new projects and new publishers. Since then i have always made sure that i never work again at a company with a similar business model. |
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asp_ Member since: 2/24/2004 |
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Posted - 12/20/2007 11:02:18 AM |
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| I think the symbiotic (parasitic? :P) relationship between a publisher and development house grows naturally as the two learn to trust each other and both see that they have a shared process which generates low risk revenue streams. Looking at another Swedish game development house you have Dice who started much in the same way with all risks and also rewards taken by publishers. They used multiple publishers but eventually developed a natural relationship with EA. Eventually EA started buying stock in Dice until a point where Dice was basically a part of EA. This means that Dice can now take more risks as their capital is big enough to cover more high risk titles with high value IP of their own. Whether they do or not is left as an exercise to the reader :) I'm fairly curious though, is recruiting from the US really an option for a Swedish game developer? I'm from Sweden and I moved to San Francisco because of the low salaries and high taxes in Sweden. I find that my disposable income and buying power has increased significantly since the move. Even as we recruit from within the US it is hard to find people. Programmers are easy to come by but skilled and passionate people are much harder to find than I first thought when moving here. Perhaps the US is no longer the primary source of talented computer engineers? One American explained it to me as a product of a defunct school system and an increasing import of skilled workers but the H1B program is limited to 60,000 per year so the second point seems somewhat moot. The only points I would agree with is 1 and 5. 2 would be a setback for Starbreeze as they are obviously used to developing high quality, highly complex products and might mean they become less attractive for both current and future skilled workers. 3 won't happen since the publishers won't allow it, all the websites and so on related to the game will be handled by the publisher and therefore they will own the community and any goodwill. 4 I can almost guarantee that they have already. Never heard of a studio that doesn't have an intern program at least for local talent and if no program exists you can generally ask if they would like to take one in. Interns are never free though and usually require a large amount of time to manage. One day I hope Swedish salaries and tax levels become competitive so that I can move home and continue my career there. Especially since Sweden is such an awesome country and I miss it every day when I'm away. |
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Gaiiden GDNet Content Lead Member since: 8/30/2000 From: Lincroft, NJ, United States |
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 Posted - 12/20/2007 12:55:38 PM |
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Quote: This is a point I raised with the author. I asked him to create a fictional company instead but he said the company CEO has already seen and approved of this paper. It's already been posted in Swedish on a Swedish game development site, this is the first English translation. ________________ Drew Sikora President, Programmer - Blade Edge Software Executive Producer, Newsletter Editor - GameDev.net Community Relations, Live Events Mngr - Game Institute IGDA Chapter Advisor - New Jersey |
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asp_ Member since: 2/24/2004 |
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Posted - 12/20/2007 1:37:12 PM |
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| In Sweden this type of information is completely open if you have an openly traded company. I did the same type of analysis of a game development company in Sweden while still in university. Generally the same type of analysis is done by a company official and shared with all stock holders trough an annual report. Wouldn't surprise me if this is based off of the same type of financial reports. |
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__ODIN__ Member since: 2/20/2002 From: Singapore |
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Posted - 12/24/2007 5:44:42 AM |
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| Thanks for an excellent report, and one that's brutally honest about the key issues facing developers under the current biz model. As an industry we need to start realizing that even with top10 hits your unlikely to ever see backend royalty. If you turn out to have a GTA super-hit on your hands, you'll find the publisher DMA'ing you with an option to buy or similar clause. Now if we could just stop underbidding each other for projects, so we can actually prize profit into development budgets, or look at a better revenue distribution agreement. Quote: Well; who's expected to be surprised about this? The publisher? They've made starving developers down into a fine art; a wealthy developer starts developing airs and hiring lawyers (like Valve), while one that you've beaten into milestone-subsistance and zero-cash-balance will serve you gratefully for the rest of it's brief life. While there's always options and tiers between different publishers, trixing and fixing with milestone requirements and payments to bring a recalcitrant developer to heel is a time-honored practice. The competition? Well, they're kind aware, and bent over the same barrel. They can't really lower their costs much more (unless they're in China or Eastern Europe), and so there's this feeling of a pack of hungry dogs eyeing the same slab of rotting meat. Telling the other dogs that you too are hungry and reliant on that meat is unlikely to provoke surprise. The only ones getting surprised by this would be startup development teams. And they kinda NEED this wake-up-call, so they understand that even a critically acclaimed team with back-to-back Top10 titles to their names aren't seeing meaningful royalties. Stop dreaming of the pot-of-gold, and price your contracts reasonably.. So thanks for the honesty, and the sharing of this. Good work. Allan ------------------------------ BOOMZAP Try our latest game, Jewels of Cleopatra |
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dethmuffin Member since: 12/27/2007 From: Edmonton, Canada |
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Posted - 12/27/2007 1:20:09 PM |
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| Agreed...this is an excellent report. Public disclosure really hits the message home and I applaud Sebastian for being so open. One idea Sebastian should consider is remote, non-contract teams (MySQL AB comes to mind). This would nullify Starbreeze's geographical disadvantage and allow them to use their reputation to attract talent globally. It would also be a pretty big carrot for developers who might want to work with a company like Starbreeze but cannot relocate to Sweden for whatever reason. http://www.mysql.com/company/jobs/ Cheers, Pat |
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FableFox Member since: 1/24/2007 From: Pasir Mas |
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Posted - 12/27/2007 6:58:21 PM |
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| Talk about licensing game engine, maybe they should emulate garage games. different price for indie, different price for larger studio. Just the way GG develop their own game Marble Madness, StarBreeze can develop their own game too. The nice thing is that when you build game for client, you will have to update, improve and fix the game engine anyway - so this licensing game engine money, is like, in a sense, free money. Besides, the engine is a tried and true engine. It will generate user in no time. The plus is that in the article they mentioned it's hard to find worker. when you license the engine out like GG, you can easily find the best user out there, and hire them. On day one on the job they already know the game engine inside out, which is a good thing. Fable Fox |
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__ODIN__ Member since: 2/20/2002 From: Singapore |
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Posted - 12/29/2007 9:59:18 PM |
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Quote: Well; GG's had to turn themselves into an engine company first, and a game developer second. They spend a lot more money on their tech-support and feature updates than they do on game development. It depends on whether that's what startbreeze wants to do with themselves (they're not the first company that's thought like that, and who's forgotten that making a tool available for an external user is significantly more expensive on documentation, feature completeness and testing than making something for an internal group). I do agree that it helps in hiring the best and brightest from the community, though. Many of the Unreal team were hired straight from the community. Would they have users? Well.. that depends. If they're going after the corporate customers (i.e. real money), then it's by no means a sure thing. And if they're going after the cheap market, they're competing with Garage Games and it's ilk, which costs real money in terms of community support and feature upgrades, for relatively low return. I somehow think they were thinking of 1M USD/user, rather than 200USD/user, but you never know. We'll see where they go; my guess is they'll find an external cash infusion and try to self fund projects to a higher degree. It's a hard sell, though; VCs know just what a lousy deal developers are getting, and don't like to invest into them. Allan |
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holtt Member since: 9/9/2007 From: Corvallis, OR, United States |
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Posted - 1/1/2008 3:38:06 AM |
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| Most excellent to see this kind of post. It's truly educational to read. People interested in this kind of openness might find this Lost Garden post interesting... http://lostgarden.com/2007/12/naked-business.html |
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kodapa Member since: 3/29/2007 |
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Posted - 1/3/2008 11:13:24 AM |
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Quote: Sebastian is a student at Umeå university (Swedish link). He does not work at Starbreeze. |
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