Wednesday, September 17, 2014

Q&A between Game Design Students and Game Industry Pros

I recently visited Seattle to catch up with old friends at Bungie, during the launch of their latest game, Destiny. I was touched that they invited me to the midnight launch party, loaded me up with swag, and included me in the credits, even though I stopped working there in 2011. But perhaps best of all, some of my favorite artists and designers agreed to take an hour out of their launch day to meet with my CIA class via Skype. Jason Sussman organized the event prior to my arrival – he even invited his friend Adrian Finol of Valve to join. So in total, we had these fine fellows speaking (in no particular order):
  • Jason Sussman – Senior Environment Artist, Bungie
  • Chris Carney – Lead Mission Designer, Bungie
  • Steve Cotton – Staff Environment Artist, Bungie
  • Coolie Calihan – Environment Artist, Bungie
  • Adrian Finol -  (Senior) Programmer, Valve

Dummy that I am, I forgot to take photos of the event, nor did I record the excellent Q&A. So before this brilliant moment slips into distant memory, I’m going to share some of the thoughts from that afternoon. The following questions and answers are paraphrased from memory. They barely capture all the things that were asked or said, but hopefully you get the gist. I should also stress that the opinions expressed are those of the individuals and do not necessarily reflect that of any studio. In other words, they were strictly speaking from their own experience, not representing Bungie or Valve.

To get a job in the industry, how beneficial is it to work on a mod?
Working on a mod is very beneficial. Many of the professionals we talked to got their first or dream-job that way, even without college or prior professional experience. If done properly, it shows that you can work with a professional engine and it exposes you to the game-making community – visibility is key. In Adrian’s case, Valve contacted him the day after he submitted the final build of his mod, Front Line Force, to the community. Which brings us to the most important point about working on a mod: you must finish the project. Studios want to know that you can fully execute an idea; that you’ve dealt with all the problems that occur during the production of a game. Also, work submitted to an asset store (Steam, Unity, GameMaker: Studio) is another way to get noticed by an established studio.

What is the relevance of having a college degree in game design, then?
A degree simply gives you the tools to do noteworthy things. Just because you went through a college program doesn’t mean a studio can determine where you stack against everybody else who took the same courses. What will set you apart is what you did with that knowledge – the portfolio you create, the games or mods you make. In and of itself, the degree doesn’t matter that much.

Work ethic is more important than talent or experience?
This question was based on an answer Coolie gave to the question, “Work ethic, talent, or experience?” during his “Breaking In” interview on Students are always worried about the lack of entry-level positions, so can work ethic really trump experience? Yes. Worth ethic is what gives you the ability to develop your talent and build experience.  But, keep in mind you can’t easily demonstrate work ethic in a few portfolio images or during an interview. It’s a quality that you develop long term, and it has a positive impact on the scope and quality of your work.

What is the value (or danger) of spending extra-long hours on a project? On a related note, what is the work-life balance in the games industry like now, and when it is wise to burn the midnight oil?
There are several dangers. First, is the obvious risk that a prolonged period of “crunch” can harm your health and strain relationships. Second, the quality of your work will diminish. These circumstances have been understood (but not always respected) for a long time. But for students there is another risk of working that way: you misrepresent your ability.  If you can’t sustain a certain level of effort 5 days a week, all year long, year after year, then think twice about acquiring a job on that pretense.

When it comes to the benefit of extra effort, each of our guests talked about it as a personal matter. Everyone agreed, though, that having the freedom to choose when to put more hours into something you *want* to work on is rewarding. But as the industry grows up, everyone is invested in keeping the work environment professional and sustainable. It’s about passion for your work tempered with the desire to do it for the rest of your life.

When applying for a job or internship, which approach is more effective – shotgun or laser-focused?
There was consensus that one should start focused on the studios with games that you want to make. When in competition with a large pool of talent, it will be obvious who has greater interest in the company, who has more relevant ideas, and so on. Focus also allows you to prepare work that really applies to the job at hand. That said, Coolie mentioned that there is a time and place for a shotgun approach. If your preferred studios don’t have an immediate position for you, meeting a wider field of possible employers can benefit you in intangible ways. Plus, it’s important to work while you’re searching for your dream job. If taking a job keeps you healthy while you improve your portfolio and demos, then it’s a good one. Take it and keep applying.

Before I land my dream job, should I keep working on my portfolio or just get any job?
You have to eat and keep a roof on your head. So work. Everyone in the room agreed that they all held jobs while they put in the 1 or 2 years between deciding to work in the industry and landing their first gig. But even so, your portfolio should never stay static. Even while working, keep enhancing your demos, mods, and portfolio.

Advice you’d give your younger self?
Read a book. Meaning, learn from others. Trying to learn everything unassisted isn’t efficient. It may feel great to accomplish something on your own, but you grow more slowly when you don’t exploit the expertise that’s already out there.

Don’t let fears (of rejection or failure) keep you from trying the work you want to do, or applying to the job you want.

Finish something. Give yourself a limit and hit it. It doesn’t have to be perfect, it has to be seen.

So there you have it, my recollection of a pretty cool and unique interaction between game design students and seasoned professionals. To top it off, here's a picture of the class, wearing the exclusive Bungie shirts I brought back from the trip!

Monday, June 2, 2014

Does your studio have a future? Look at its business cycles to find out.

Risk and the Fate of AAA Game Studios
Recently, while speaking to game design students at the Cleveland Institute of Art, I was asked if I knew of any established AAA studios working on risky, new projects. I’ve been thinking about why my answer at the time was a firm no. Furthermore, the question has made me wonder whether or not studios, despite their current success, have a future if they are unable to change this. I came to the conclusion that weirdly interesting projects might not be necessary for AAA studios to survive, but the ability to risk the development of new businesses, at the very least, is a must. You’d be surprised how many studios cannot do this. Or perhaps not, given how many studios close every year.

First, some definitions
Business versus Company – There is a legal definition for each of these terms, but in this article, a business is activity that leads to a particular revenue stream. For example, a large business in AAA games is the creation and sale of packaged first-person-shooters. On the other hand, a company is an entity that conducts one or more businesses. For example, Microsoft owns businesses ranging from operating systems to video games.
AAA Game – Several definitions exist, some more formal than others. In this article, AAA is the label publishers and studios apply to a project they believe will be a critical success (high quality and polish), have technological innovation (graphics, gameplay features), and financial success (low-risk, high return). It must have all three qualities to qualify as AAA.  

Is traditional games development still relevant?
Html 5 and other cross-platform delivery systems are still several years away from producing games as reliable, performant, or rich as their native app counterparts. So it’s fair to say core game developers will continue to target native console and PC development for at least the first part of this hardware generation. According to the ESA’s 2014 Essential Facts report, physical retail video game sales represented 40% of 2013’s total US game software purchases; selling discs at retail is still a $6 billion dollar industry. However, the cost of doing AAA core games is reaching astronomical, perhaps unsustainable levels and developers need to know whether or not their studio is going to survive.

Still relevant, but healthy?
For dominant genres, such as shooters, we have already reached the top of their business curve. The numbers do not lie – take a look at these charts of known sales information for two popular shooter franchises. Even if there is debate regarding the precise numbers of units sold, the general trend is correct.

Call of Duty’s curve demonstrates that the business is mature and the publisher should be leveraging revenue from the business into a new one.

Halo’s trend is more concerning. Even after discounting Halo 3: ODST – due to its nature as an expansion, rather than a full release – the trend indicates that revenue has fallen since 2007. The business is in clear decline. While Microsoft has plenty of other businesses, it should have invested Halo’s revenue and IP in at least one new opportunity long ago – perhaps in the television programming business?

Sales are dropping, so if revenue is simply the number of sales multiplied by the average price per sale, then we know revenue is dropping. This will bring diminishing returns, if the price per sale did not increase or development costs did not fall enough to compensate for the revenue drop. In fact, I believe all three of these negative conditions exist – stagnant or dropping sales, unimproved base retail price, and increased production costs. Let’s look at some details.
  •        Shooters have reached all the easy-to-get customers. Aging core gamers, soccer moms and children under 6 are going to be tough audiences to acquire for the next Call of Duty. As a result, most big publishers now place a significant push on sales-per-customer (e.g. limited editions and DLC), rather than just increasing the number of customers.
  •        Declining product buzz. The industry has fallen a long way since Halo 2’s I-love-bees viral marketing campaign or the massive launch-day celebrations of CoD: MW 2 and Halo 3. Player fatigue has even reached mainstream media critics. Word-of-mouth and viral marketing has run its course.
  •        Price competition. To prevent losing players to Battlefield, Activision cut the price of CoD’s Elite Service to zero. Furthermore, no publisher has been able to raise the price of their regular retail SKUs, despite rising costs, because of competition from free-to-play games and a saturated AAA market, where customers do not perceive increased value in a game, unless it is accompanied by extra physical merchandise or scarcity (limited editions).
  •        The cost and complexity of development has gone up by an order of magnitude. Publishers have to fund multiple studios to keep up with their release schedule for a single game, Killzone 3 and CoD: MW III both required three or more studios to complete. Assasin’s Creed: Unity is going to require the work of ten to meet its schedule while controlling costs. Microsoft’s Phil Spencer has said Halo 4 is the most expensive game they have ever produced. Not to be out-spent, in September 2014, Bungie’s $500 MM Destiny may become the most expensive game ever made, period. (Disclosure: I was a member of Bungie for over 11 years, until late 2011, and believe the number reported is accurate.)
  •         Required solutions for new or increasing technical challenges, just to stay afloat. Next-gen console owners demand more content on screen, requiring larger teams and more management expertise. Significant engineering effort must be devoted to increasingly complex graphics engines and online infrastructure. Despite being less profitable with each subsequent release, a popular game series may have a huge user base with enough toxic players to threaten the longevity of online play, which is crucial to keeping used games out of the marketplace. Developers therefore have to devote substantial resources on non-core systems, just to stay ahead of cheaters and misanthropes. But even honest, decent players are making the business harder, because they demand extensive metagame support – mobile apps, rich community tools, tournaments, daily challenges and other special events. These types of features have been around for a while, but now they have to satisfy a huge number of users, again with a certain percentage of toxic users to manage. All of this adds cost.

If these circumstances weren’t convincing enough, then also consider how much effort AAA companies spend to reduce the inflation of development costs. At the start of a technology or business curve, R&D losses are expected, as the company spends heavily to establish itself and pay the price of early failure. But, if a business is mature and is already in decline, then the business must cut costs to stay vital.

To know where a studio’s business lies, consider a few things regarding its current work. If a project defines a new genre or establishes an IP in untapped creative territory, then its development is part of a new business. On the other hand, if the developer is limiting risk – staying within familiar genres and themes, then it’s in a mature business. Does the production plan heavily rely on outsourced or contract workers? Or perhaps, the publisher has asked that a subsidiary in a less expensive location produce a lot of the content? (Disclosure: I was a Development Director II at EA Visceral; part of my job was to work with EA Shanghai’s art production team.) Are companies adopting middleware for major engine components or perhaps basing all their titles on just one or two engines? The answers to these questions indicate whether a company is trying to get a foothold in an accelerating new business or control costs in a mature one.

This is where publishers and development studios antagonize each other, despite being in business together. While a publisher is constantly leveraging the revenue, intellectual property, or technology from one business into another, developers often fail to do so for three reasons. First, if development goes long, a studio will often close or suspend their other business in order to keep a particular project on track. Second, the studio may have signed a contract that limits their ability to engage in other business. Or third, due to publisher or self-inflicted pressure, the studio stops pursuing a new business, or alters its plan until it is essentially in an old business. In such a circumstance, the studio is saddled with increasing R&D costs when it should have been cutting costs. Whichever of these circumstances may be, a studio in a mature business that is not creating their next game for less than their previous one is going to die. On the other hand, a studio that is aggressively cutting costs while investing in their next business has a chance of survival.

For the individual engineer, artist, or designer, the question is then: am I in a studio that has the freedom and resources to pursue new lines of business as soon as our existing ones bear fruit? Or, if you work within a large publisher, does the executive team give you a choice to join one or another team, should your current business go into decline? Conventional wisdom is often wrong on these issues – vaunted independent AAA developers may actually be doomed software factories, where developers are required to push content year-in-and-year-out until the publisher decides to take production elsewhere. Conversely, behemoth publishers lambasted for their heartless search for profit in a hard-pressed business may actually be a safer place to have a career in AAA games, due to their ceaseless creation of new businesses. You really have to know your company’s businesses in order to protect your career.

Every business goes through a life-cycle – even multi-billion platforms or franchises eventually fail; the question is whether or not you’re at a company that leverages the revenue from a healthy business into a new one that you can join when the time comes. If not, it may be time to start looking for a company that does.

Saturday, May 31, 2014

A Healthy Perspective on Compensation – Focus on the Future, Not the Past

Disclaimer: this post represents my personal philosophy toward pay and does not necessarily reflect the opinions or practices of my previous employers. Also, I am neither a lawyer nor an accountant; I'm just a former manager who has dealt with compensation issues (pay, stock, bonuses, and profit sharing) for teams comprised of artists at every skill level.

Why you should learn about compensation
There are plenty of tutorials about developing specific skills, but very few that help an artist become a happier, less distracted one. This is unfortunate, because being focused is crucial to improving every skill, and artists who misunderstand how they are compensated are unnecessarily distracted. Reducing your non-creative concerns, such as worries over compensation, will lead to better job satisfaction and faster career growth. 

Your income is a tool that allows you be creative; it shouldn't be a roadblock to happiness or career satisfaction. Despite this, I've known many artists who suffered simply because they expected to receive regular, sizable raises every year or immediately after shipping a title. They mistook their annual salary update as a kind of high score tally – a measure of the good work they performed – when it's really an incentive for future work, limited by the studio's financial position.

Pay for future work
A raise is not a direct measure of your previous achievements, regardless of the feedback received during an annual review (or whatever review period your team uses). Although your work history is very useful and important data, your compensation is actually based on a prediction of the value of what you will do, not the work you've done. This may be counter-intuitive, because a raise or bonus usually follows an achievement in the past review period. But the salary and bonus you’re offered is commensurate to the income your employer thinks you can bring into the business moving forward. Your past contributions are an indicator of your future performance and your raise represents that value.

Did you get a bonus after shipping the last game? Well again, the amount probably wasn't determined by how much crunch you endured. Instead, it was an incentive to encourage you to come back for the next project. It's offered because you're the kind of employee who would work hard to ship another great game and they want to keep you. That's also why you don't usually get payouts after you leave a company, even if the game continues to sell. Again, think of your salary and bonus as an incentive to keep you working tomorrow, not as payments for the work you did. 

If that still doesn't make sense, try this: recall when you were last hired and the incentives offered to you at that time. You negotiated a pay rate or salary. Perhaps your new studio also covered the cost of your move, offered a stock grant or options, and maybe even gave you a nice signing bonus? Was there an earn-out or vesting period associated with any of these things? If so, there can be no doubt that your pay and bonuses were negotiated in anticipation of your future work, not because you did awesome work in the past. The same goes for your annual review; you’re essentially being hired again for the next year.

When a big raise isn't a good thing
Even if it is not reasonable to expect a sizable raise every year, it is fair to expect incremental raises as your performance brings greater financial value to the studio. Be wary of companies that habitually give employees big raises upon promotion. An irony facing managers who consistently demonstrate the value of their team members to the company is that their direct reports (employees) are always paid what they are worth at any given time. In this scenario, when a company promotes an individual once she has demonstrated a consistent ability to perform at the next level, she is already paid appropriately. Most management groups will still find a way to grant a raise, even a small symbolic one. But expecting a 10% raise with each promotion is not realistic under these circumstances.

When a manager works with someone to develop her skills, resources are used to cover the inevitable learning curve. That investment will continue until the promoted team member is at the mid-point of her new role’s performance and salary range. Let’s say a senior artist is promoted to a lead position, because she consistently mentors new artists and helps her lead perform quality-control work. But as a new lead, she often takes on other people’s work, because it’s easier in the short-run to fix their problems, rather than coach them. Her manager will have to spend time and money managing her fatigue, diffusing team frustration, and supplementing her team’s training. She went from being a fantastic senior artist to an average lead. That’s perhaps why she may not get a giant raise the moment she’s promoted. This dip in productivity is a natural, well-documented phenomenon in business and technology cycles and it applies to individual careers as well. 

On the other hand, if her manager was not paying her what she was worth before her promotion, the company has room to reward her with a nice fat raise. But, she’s probably still going to earn fewer total dollars than if she were paid fairly throughout her career. Sometimes a big raise is like a big tax refund. It means the studio was using money that an individual could have had earlier. This doesn't change the fact that it’s nice to receive a windfall, but the truth is an artist benefits more from small-but-fair raises along the way, rather than a big one at the time of promotion. (Important exception: good employers who recognize they were under-compensating an employee will grant a raise and bonus to “true-up” the employee.)  

Growth yields personal satisfaction first, then maybe dollars
New responsibilities, skill   mastery, and personal sacrifices occur routinely during a project. But did you ever work hard on a game, only to receive a disappointing bonus or raise afterward? Before you let that affect your morale, ask yourself what your extra effort accomplished for the project above your core responsibilities, and how that indicated your ability to increase studio profits in the future. If you can't come up with a clear and substantial answer, then there is very little your manager can do either. If you want a bigger number, then you and the studio need to cut costs and bring in bigger numbers. This doesn't sit well with artists, because they rarely define project scope, budget, or audience. Nevertheless, they will often take things into their own hands by working even harder or by broadening their skill set. If that decision was made without working with the appropriate manager to align the effort with the team’s needs, it’s a mistake to expect additional income for such work. Maybe your new Mudbox expertise isn't what your studio needs.

In short, killing yourself over work or learning a new skill may lead to a false expectation that you'll get a monetary reward simply for doing so. This will only happen if the next project will require the same kind of work, you saved the team a meaningful amount of time and money (e.g. your manager didn't have to hire another artist), or your assets had positive sales effects (e.g. you set the industry high-bar, increasing media impressions, metacritic score, and player interest). Otherwise, it's not reasonable to expect an increase for taking extra steps that weren't necessary to ship the game and didn't bring in additional profit – unless you and your manager agreed to it in advance. 

Going above-and-beyond the requirements of your role brings pride, the admiration of your peers, the euphoria that comes with mastery, and perhaps most important, recognition from your manager that you might be ready for more responsibility. Just don't make the mistake of thinking those good vibes will be converted into dollars immediately; it takes time for your manager to work with every other discipline manager to ensure the company is assigning value to everyone’s work fairly.  And don’t forget your current earning potential is only part of the value you receive from work. You have compelling creative challenges, great tools and coworkers, travel and training opportunities, and other fringe benefits. Don't let your professional happiness depend on whether or not you're receiving ever-increasing dollar amounts. There are too many external financial and market factors that you can't control. Instead, if you seek creative satisfaction by fulfilling the needs of your team, fair compensation will follow.

Pools of money and industry competition
Hopefully by now, you understand that your compensation reflects the financial value you are expected to bring over the next review period. But it’s not possible to draw your salary from a pool of profits that doesn't exist yet. Instead, payroll is taken from what's currently available to the studio, minus amounts necessary to ensure smooth company operation over time. Your office, hardware, software, insurance, snacks, travel, training, holiday and ship parties – and especially a safety reserve to cover future salary and studio expenses – draw from the pool of currently usable money. 

Therefore, it would be a mistake to think you're guaranteed a big bonus or raise when your studio ships a successful project. Think of the aforementioned costs. Did your team grow significantly over the course of the project? What if this is the last time your studio will be shipping a title with that IP? What if the revenues from previous titles tapered off? How long until your studio is paid its share of the profit by the publisher? What if studios similar to yours closed recently? This last question is a tricky one, because it isn't directly related to your studio. But it’s important nonetheless. Not only do those studio closures indicate that games made by companies like yours are risky, it means there's excess talent available. Should your manager continue to pump up the cost of her team, while your remaining competitors exploit the supply of talent and lower their average cost per artist? Hopefully, your manager is going to ensure long term survival and prosperity for the team and not overspend during periods of industry contraction.  

Publishers are more interested in their portfolio needs rather than the unique abilities and culture of your studio. If a publisher can choose from a number of developers to fill a particular portfolio gap, they'll select a team the same way people buy a gallon of milk. Do I recognize the brand, is the store close to me, and is it cheaper here than elsewhere? Your studio needs to compete in that environment. More studios have closed over the years because of high overhead, rather than an inability to do good work.

The other guy
Angst regarding your compensation relative to everyone else is a common morale problem that stems from not knowing if peers and disciplines are evaluated against sensible common standards. If this is bothering you, ask your manager how the review process allows her to offer fair incentives for working on the next project. Don’t be nosy about your peers, but you should feel free to ask general questions. If a reasonable system exists and you trust your manager, there’s no reason to worry about the other guy.

During periods of transition or difficulty, misgivings may occur when someone is asked to leave the company and rumors of an overly generous severance package abound. Any such package is a private matter. Do yourself a favor and keep in mind that continuing salary payments, promises of future profit sharing, or stock vesting represents a smaller cost than keeping that individual on the team. Your manager is trying to free up resources – including your time and energy – by making it comfortable for someone else to leave.

When things are tough, it may be tempting to start slacking-off in hopes you’ll receive a sweet, sweet severance package too. But the drag on your morale in the meantime, awkwardness at your next job interview, and impaired friendships are not worth it. You’re better off continuing to work diligently, even if you eventually decide to take another position elsewhere. Leave them wanting more and better compensation will follow, no matter where you go.

Talk to your manager
Request a meeting if you still find yourself distracted from your work, because of compensation issues. Let your manager know in advance that you’d like to talk about it, just as you’d like to know in advance when you’re going to discuss your work with your art director. Compensation is a complex problem and managers are only human; they need to prepare their thoughts. Otherwise, you might put your manager in a defensive or adversarial position, when you’d rather approach your concerns as a team.

Prepare yourself too. Think about why compensation is bothering you. There are some insecurities or lifestyle choices that only you can address. Define those and set them apart from the conversation. Your manager can’t help you afford a new car or pay school loans. But she can show you which roles within her organization command higher salaries and how you might get there. 

I hope this blog post helps you understand compensation better, frees you to do your best creative work and achieve fair compensation for it. Nothing beats being able to spend every day making beautiful art and developing new skills without distraction. Good luck, and please let me know if you have any questions or comments.


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A Deeper View into the Games Industry

Who's writing this blog and what's in it for you?
My name is Michael Wu and I’m an aspiring indie game developer with well over a decade of experience as a AAA games artist, designer, and development director. I have shipped multiple titles and DLC with some of the most significant companies in the industry, with total lifetime unit sales in the tens of millions. Games I've worked on include a couple Star Wars games, a beat-em-up called Oni, a slew of Halo shooters, and DeadSpace 3.
An artist or designer who studies this blog will hopefully make smarter career decisions and learn to communicate more effectively. Throughout my career, strong communication has been my focus, and it's what I continue to think about when I write code, design a sprite, or send an email -- even though I currently work alone. This blog connects rapidly evolving technology and processes with our universal desire to hear, be heard, and be treated well.  
My sincere hope is that these posts will extend your view into the industry's practices and trends, allowing you to prosper in what has always been a very tumultuous place to grow a career.
Thanks for reading,