“If you treat them as the enemy, it’s not going to be a good relationship.” Obsidian’s Feargus Urquhart on publishers

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Since its foundation in 2003, Obsidian Entertainment has worked with seven different publishers. Commencing with LucasArts on Knights of the Old Republic II, Obsidian has since signed contracts with Atari, SEGA, Bethesda, Square Enix, Ubisoft and most recently, Paradox Interactive. In fact, up until Pillars of Eternity [official site], every single game Obsidian had made was funded and distributed by a different publisher.

This is a highly unusual state of affairs, and has proved precarious more than once in the company’s history. But it has also provided Obsidian with a unique insight into how the world of publishing works, and how the relationship between developer and publisher has changed in the last couple of decades. This topic is especially pertinent today, as new methods of funding and distributing games have seen a significant shift in the power dynamic between developers and publishers.

I spoke to CEO Feargus Urquhart about how it all works (and doesn’t).

It’s worth noting that Obsidian never intended to travel down such an atypical road. “When we first started the company, there was an expectation that we would find a publisher and we would work with them, and continually work with them, because that was our life at Interplay,” says Feargus Urquhart, co-founder and CEO of Obsidian Entertainment. “I think that world started to change literally as we were starting Obsidian, and I think it’s just accelerated.”

Urquhart has experienced the games industry on both sides of the fence. In the mid-nineties he worked as a producer at Interplay, and later founded Black Isle as a subsidiary of Interplay, producing Fallout and its sequel, and cooperating with BioWare on Baldur’s Gate. At that time, not only were the budgets for individual projects much lower than they are today, individual publishers were shipping many more games.

fallout2

“As a producer back then I myself was producing like ten games, so Interplay was just doing a lot of stuff,” Urquhart says. “I was approving like twenty-five thousand dollar milestones [the amount a developer would be paid for reaching a certain goal]. Now we’re talking a single milestone could be one and a half, two million dollars.”

This gradual shift toward much higher budgets for a smaller number of games means the risk a publisher takes for each game they finance has increased exponentially. In the nineties, a single poorly-selling game, while disappointing, would not typically spell disaster. Nowadays, one underperforming game can kill off a company. This has fundamentally altered how publishers relate to and negotiate with developers.

“In the nineties, publishers liked to sign up multi-product deals with developers. Basically they’d just sign ’em up, say, ‘We’re gonna publish your next three games’. And that’s kind of disappeared,” Urquhart says. “There was never a meeting about ‘Do we do Baldur’s Gate 2?’ and there was never a meeting about doing Fallout 2 really…we started to work on Fallout 2 before Fallout 1 came out.”

Nowadays, this is far less likely to happen. With modern development cycles, a three-game deal could amount to a contract lasting twelve years or more. If the first game underperforms, then the publisher is stuck with the deal for another eight years. “Because the stakes were so high, they also needed to understand if the game was successful before they wanted to sign up the sequel,” Urquhart says.

alpha

The growth of the industry, and the risks that have grown with it, also force both developers and publishers to make tougher choices. For example, Obsidian often have a waiting period between a game being finished and it coming out, particularly on consoles where there are various approval processes to go through. “We need people to be working on other stuff, whether it’s DLC or other games, to get paid. But then the publishers are not necessarily comfortable signing up the sequel for ninety days. So I think that started to create this very different relationship,” Urquhart says.

The relationship between any given developer and publisher can even be challenged by events that aren’t directly related to it. For example, if a new game developed by a publisher in-house sells poorly and plans for a sequel are cancelled, the publisher might then have a hundred programmers, artists and designers employed but without a project to work on. “But they have this other game and it looks pretty good and this external developer has done it,” Urquhart says. “And they’re like ‘Well, we could lay off these one hundred people, and have that external developer do it. OR we could just not sign. We’re not contractually obligated to sign that independent developer up. And they’re an independent developer, and they’ll go find some other game, and we can move it internally.’”

Hence, Obsidian formed at a time when publishers were becoming far more cagey about signing on developers for extended periods of time, and were more inclined to either sign for a single game or bring the developer in-house by buying them outright. This is how Obsidian ended up migrating from publisher to publisher with every project.

nwn

Feargus points out that this had its advantages “The awesome thing about being independent is we’ve had the opportunity to work on Star Wars and do our on IP and do South Park and do Fallout,” Urquhart says. But it has also come with its own unique set of challenges. One of the major challenges was that no publisher works in exactly the same ways. Each contract is different in terms of what the publisher offers, what it demands, and who is responsible for what.

This has caused some unfortunate misunderstandings for Obsidian. In the mid-2000s, Obsidian earned a reputation for releasing buggy or unfinished games, with Kotor II, Alpha Protocol, and Fallout: New Vegas all receiving criticisms in that regard. But Urquhart states it has always been the case that publishers, not developers, are responsible for providing QA.

“Even back in the day when we were doing stuff with BioWare, or Blizzard for that matter at Interplay, QA was done at Interplay,” Urquhart says. “But then there are these weird situations. With Neverwinter Nights 2, Atari was closing down their Santa Monica office, which we were originally working for. So there was no test locally, and Atari was still trying to figure out where they were going to test games. So we came to the arrangement – now I’m pretty sure we’d already signed up to do the game – we then just came to the thing of like, we would hire thirty testers and then Atari would pay for them.”

Because of unusual situations like this, and the flak that Obsidian received for them, the studio now stipulates precisely the terms of QA in any contract they sign with a publisher. “One of the things that we’ve had to learn to do is to actually, in our contract, to say the publisher must put this number of QA people on the game as of this date. And KEEP them on the game for the extent of, you know, from when the game is ready to be tested all the way through like a month or so after the game has been released.”

kotorii

There’s no question that Obsidian’s relationship with publishers has been a bumpy road, and one that at its roughest points, such as the infamous Metacritic bonus situation with Bethesda, almost destroyed the company. So when Obsidian had the opportunity to break away from the traditional publishing cycle with its wildly successful Kickstarter campaign for Project Eternity (later Pillars of Eternity), why did Urquhart ultimately decide they still wanted one?

“Whenever we have to dedicate ourselves to something like that it means we’re not dedicating ourselves to the games,” Urquhart says. “As the world knows, 2012 was a tough year for us. So we had to build the studio back up a lot and development needed to be the focus. So a lot of it is we looked to a publisher to do the things that we don’t have expertise in.” In other words, although Obsidian could finance the development of Pillars of Eternity, they didn’t have the infrastructure to publish and distribute it, and it was easier to sign with a publisher that understood these areas well, rather than dedicating an entire section of their own company to it.

This is where Paradox came in. “They’ve really learned how to manage the digital marketplace,” Urquhart says. “I can throw out ten things that I know about managing things on Steam, but they know a hundred,” Urquhart also feels Paradox understand the kinds of game Obsidian want to make. “They just get crunchy, you know, enthusiast hardcore games like Pillars, and that just makes any relationship easier.”

pillars2

There’s a persisting notion within the games industry that crowdfunding liberates developers from the yoke of oppressive and demanding publishers. But Urquhart believes that crowdfunding simply leads to a different set of responsibilities, and in some ways more responsibilies than having a contract with a publisher. “It’s kinda scary spending your own money sometimes. There’s that old adage that people say particularly about Hollywood. ‘Never spend your own money, always spend someone else’s money,’” he says.

Of course, Obsidian are still spending somebody’s else’s money. The difference is that rather than being held to account by a handful of publishing executives, now they must answer to thousands of backers from crowdfunding sites like Kickstarter and Fig. But Urquhart points out that it’s largely a similar relationship, with communication being key. “I think we do exactly the same thing with our backers as we do with our publishers now,” Urquhart says. “Funnily enough, when we turn a milestone for our publishers now, they get all these videos [that say] this is a feature, this is what’s happening.”

In a curious twist of fate, dealing with fans and backers through crowdfunding has taught Obsidian a lot about how to maintain a good relationship with publishers. The importance of regular updates, of listening to feedback and giving the publisher the opportunity to hold Obsidian to account. This has resulted in some significant changes to how that relationship worked even a few years ago.

“Almost every agreement that I’ve signed whether on the development side or on the publisher side has this sort of generic language that says that the publisher, with five business days notice, can come to the developer and see everything that they’re doing,” Urquhart explains. “But what we’ve changed it to recently; it’s not that they’re able to, they have to. They must come here every thirty days or every sixty days or every forty-five days. It’s a material requirement of the agreement that they come on site and they hang out with us.”

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Urquhart concludes our discussion with two pieces of advice for developers and publishers respectively. On the development side, he believes it’s crucial not to treat the relationship with a publisher as adversarial. “If you treat them as the enemy, it’s not going to be a good relationship. If you flip ’em off or whatever, just say ‘Hey those guys are idiots,’ now you’ve created this relationship where the people that are going to be heavily involved in what your game is don’t want to be in the same room as you.”

On the other hand, Urquhart urges publishers not to treat publishing as a zero-sum game. Indeed, he believes in some ways the industry is shifting back towards what it was like in those early days of Interplay and Black Isle, with lots of games being released, all with very different budgetary requirements. “It doesn’t need to be one million dollar mobile console games, or one-hundred-million dollar games. There are absolutely these other avenues that independent developers can be super successful at,” Urquhart says. “Looking at games where selling a million units is seen as a success and not a failure.”

48 Comments

  1. MushyWaffle says:

    I still dont’ understand the need for a publisher. Make your game, stick it on digital download. If your game is quality, it will sell without all the Marketing and 1/2 truths being sold to the masses.

    • Drinking with Skeletons says:

      Then why have Arkane’s games–which, like Pillars of Eternity, have sought to revive an older, niche genre–sold so poorly? Advertising and publicity matter.

      • Velthaertirden says:

        Arkane games have had quite a lot of publicity. How about something like “The Dwarf Run”?
        link to store.steampowered.com

      • MushyWaffle says:

        I believe the average gamer doesn’t like to read that much while playing. I personally, loved the game, bought it twice :) Unfortunately it is the same fate as Tyranny.

      • Kinsky says:

        What the hell are you talking about? Both Dishonored games exceeded sales targets, and Prey did very well for itself. And as far as advertising and publicity go, Bethesda had ads screaming in everyone’s faces for months before those games came out, not to mention coverage on all the high traffic gaming news sites. Furthermore, Arkane’s modern games are hardly niche – they’re very much modern action/adventure with a few older design conceits i.e. nonlinearity (which can’t really be considered fully outside of the AAA wheelhouse these days anyway) whereas Pillars of Eternity’s stated design goal from the beginning was to fully emulate an Infinity Engine game in look and feel. Terrible comparison.

    • captain fitz says:

      If you truly think that’s how it works then you have never sold any kind of product at scale.

    • gunner1905 says:

      They can’t just make their game without an initial investment (guess who’s money that usually is) and “If your game is quality, it will sell without all the Marketing and 1/2 truths being sold to the masses” is proven incorrect weekly by this same site, Unknown Pleasures.

    • grimdanfango says:

      If a game is “quality”, *and* happens to hit precisely the right combination of secret sauce, at precisely the right time, to kick off a wave of word-of-mouth, such as Minecraft, then sure, it’ll do fine.

      You’re entirely discounting the hundreds and thousands of quality indie products that come and go without ever being noticed by most people. It’s easy to point at the few who made it big without any marketing budget and say “look, that’s all you need to do!” – but that’s assigning massive survivorship bias.

      What you can point at is the AAA industry – where a high percentage of games manage to sell well, or at least moderately well, regardless of their quality.
      Having a marketing budget isn’t essential, but it sure as hell can raise the likelihood of a good game taking off.

    • dontnormally says:

      well bless your heart

    • MushyWaffle says:

      Thanks, sorta. I was being serious. The instant snarkiness while disheartening, is understandable. There is no connotation in reading text and never hearing ones’ voice, it’s impossible to tell and always assumed. I thought leaving the /s off was good, but it wasn’t. I apologize.

      I equate it to the comedy where Louis CK and others cut out the middle men. I don’t follow the gaming industry inner workings, just the games.

      • Nucas says:

        i don’t think you understand any industry or business of any kind. capital investment, marketing, distribution, these are realities in almost any industry. your comment didn’t get “snarky responses”, it got clear and concise replies and apparently even these whooshed you if “snark” was your takeaway.

    • KenTWOu says:

      If your game is quality, it will sell without all the Marketing…

      It used to be that way, when Steam released a couple of indie games a week, so it could do all the marketing for you, but not anymore.

    • Voxavs says:

      Where you’ll get the money to make the game in the first place? Say you have 4 people crew, unless you are already rich, your game will cease to exist after three months tops. And whether you like it or not marketing sells the product it is just how it is, bloated marketing budgets can actually yeld a better monetary return then a bloated development budget.

    • pentraksil says:

      And who is going to pay for programmers, animators, designers, actors etc? Put a mortgage on a house?

    • Eater Of Cheese says:

      Marketing helps a huge deal. There’s a shitload of games on the market. Plenty of good stuff doesn’t reach the mainstream due to a lack of attention, marketing campaign/spend & simply by virtue of existing in a digital marketplace in the first place.

      Stuff can break through, but for everything that does break through… Shitloads don’t.

    • waltC says:

      Why do writers need book publishers to buy their work and sell it? It’s very much a complementary situation–so that the game devs can concentrate on what they do best while the publishers take care of marketing, packaging and the rest of it. Developers don’t *want* to “do it all” and it’s hard to blame them for that, imo.

  2. Drinking with Skeletons says:

    OK, I love Obsidian’s output, but this sudden flurry of articles is driving me mad. It’s clearly leading to something. What is it? Are they being bought out by Paradox*? Working on a successor to Vampire: The Masquerade: Bloodlines**? Something unforeseen, but probably related to Paradox in some way***? The suspense is killing me!

    *Who, according to Eurogamer, paid for the trip.
    **White Wolf was purchased by Paradox back in 2015.
    ***See asterisk one.

    • Lars Westergren says:

      I know, right?

      Edit: And another one at USGamer just published, about Josh Sawyer.
      link to usgamer.net

      Could be the secret project they have been working on for years, project Indiana that’s about to be revealed? The one Tim Cain said was his dream project to work on.

      • Drinking with Skeletons says:

        I just want to know what it is! I’m always stoked to hear about what Obsidian is working on; even their misfires, like Tyranny, are worthwhile experiments. Heck, I’m going to get the DLC for Tyranny just to see if they can iron out the flaws in an ambitious, unique RPG.

        If they have a secret dream project, I don’t need to be built up to be excited for it.

        • Lars Westergren says:

          They absolutely have a secret project they have been working on for quite some time, but I don’t know if that is Tim Cain’s dream project. The secret project is mentioned here in the recent Eurogamer video, Feargus goes “oops, we can’t go down this corridor”.
          link to youtube.com
          It has been rumored to be a AAA title, possibly console oriented action RPG, but I think he said there are a little bit more people working on it than Pillars of Eternity 2. It’s all just rumors, so who knows?

    • Premium User Badge

      Neurotic says:

      I think it’s also because with Pillars 2 *and* Tyranny both doing the rounds now, Obs is getting some media love generally.

    • Fry says:

      Feargus has already said it isn’t a Vampire game. Beyond that, it’s anyone’s guess.

  3. Risingson says:

    That surname kind of spoils the interview for me. Cannot avoid reading his quotes in Ian Richardson’s voice. And I’m sure 56623668844577 people said the same thing before I did.

  4. Premium User Badge

    teije says:

    I haven’t liked absolutely everything they’ve done, but definitely appreciate the wide variety and reach of their development projects. I think partnering with Paradox – that has a bit of the same quirky vibe – is a good fit for them.

  5. Michael Fogg says:

    I like Fallout New Vegas for the non-linearity and faction gameplay, but I think it spelled the decline of the series in the narrative sense, with the previous dark and grounded visions of the postapocalypse were replaced with a Frontiersland straight out of a dime novel.

    • malkav11 says:

      The dark and grounded vision of the post-apocalypse that had encounters with the Bridgekeeper from Monty Python and the Holy Grail and a crashed shuttle from Star Trek? The one that involved having conversations with a tree growing on a dude’s shoulder?

      I mean, no question that the Fallout games are dark, but grounded I think is a stretch. And New Vegas captures the original feel much better than either of Bethesda’s contributions. (Though they certainly have their own charms.)

      • Michael Fogg says:

        But most of the things you mention are easter eggs that don’t negate the overall takeaway that post-apoc life would be a miserable experience. NV is all ‘howdy pardner’.

        • kraftcheese says:

          I dunno dude; I think the few jokes and quirky situations are outweighed by the themes of the socio-political impact of NCR and Legion occupation of the Mojave, the interaction of the factions, stuff like Bitter Springs…Old World Blues is definitely goofy comedy but even it has a tinge of sadness and horror to it.

        • WulframMors says:

          Eh? While the Western aesthetic is prevalent in Goodsprings and some of the civilian outfits, there’s not a great deal of it beyond that, outside of the similar themes of frontier life and manifest destiny.

          Even then, Westerns and Post-Apocalyptic stories aren’t all that far apart. A Post-Apocalyptic Stagecoach is basically Fury Road. Mad Max and The Man With No Name are both wandering drifters out for themselves with a deeply hidden heart of gold. Violence is a way of life and roaming bands of raiders/outlaws terrorize the locals.

          Really it’s down to the hats they wear.

          I’d also note that New Vegas’ main plot involving a conflict between two rival empires is, in my opinion, more grounded than either the Master’s Super Mutants or the Enclave.

          • Michael Fogg says:

            That’s exactly my point, that postapoc envisioned as Western doesn’t do it any favours. What made F1 so haunting was this hopeless vision of humanity being doomed to vegetate in the wreckage. Stories of hardy settlers bringing Civilisation to the wastes (with help from frontiersmen) is something from a different league and IMO much more cliched.

    • Blackfish says:

      “I think it spelled the decline of the series in the narrative sense”

      Not sure I agree with this, since the Fallout games both preceding and succeeding it (FO 3 & 4) don’t have much narrative DNA in common with New Vegas.

  6. malkav11 says:

    “There’s a persisting notion within the games industry that crowdfunding liberates developers from the yoke of oppressive and demanding publishers.”

    Well…it kinda does? I mean, it’s not like publishers contribute nothing and they’re not all monolithic oppressors. But there’s no question that they tend to get into ruts (because they can’t afford to take significant risks), are often answerable to people other than their customers (namely, their shareholders if publically traded) and tend to have to be primarily profit-oriented. Crowdfunding doesn’t let you just do whatever you feel like, but it does let you do things that publishers can’t or won’t.

    • dolgion1 says:

      I think crowdfunding liberates you from dealing with publishers who don’t “get” what you’re doing, make silly creative demands or put you at risk financially. But crowdfunding does put you under the yoke of the enthusiast masses. If you heard about Torment Tides of Numenera’s controversy, there’s a lesson to be learned. Torment was already always going to be a niche product, the backers basically the audience that they’d rely heavily on for their sales. Then they mismanaged expectations and communication and it became a shit storm among those very people they were targeting as their main demographic. inXile has suffered a big reputation hit, when IMO, they just went through common development problems (too ambitious from the outset, they had to scale down the project and cut features). But because their backers had already given their money up front based on the ambitious pitch, they felt burned and entitled to bash the company and its people online.

      I realize that crowdfunding is really a form of donation and showing goodwill and NOT preordering, but sadly enough people don’t have the same understanding that the practical reality is that crowdfunding is a dangerous endeavor for any serious game developer with something to lose. I hope that going forward, they take in these lessons and be extra committed to good communication and transparency and realistic pitches.

      • Jerykk says:

        Pretty much this. As Urquhart said, dealing with crowdfunding is basically the same as dealing with a publisher. In some cases, it can actually be worse. Publishers understand how game development actually works. They understand that the original design doc isn’t an absolute template and that some things will inevitably be changed or cut. The average Kickstarter backer doesn’t understand these facts. They expect that the final product will be exactly as described in the Kickstarter pitch. Some people even expect it to be released by the original delivery date estimate, which has never been true of any game ever.

        Torment is a perfect example of the pitfalls of crowdfunding. 90% of the complaints about the game stemmed from features that were either cut or changed from the original pitch and the lack of communication thereof. If Torment had used a traditional funding model, these complaints wouldn’t exist because people wouldn’t know that these features were ever proposed in the first place.

        • Someoldguy says:

          That’s definitely the major problem with the trend for detailed stretch goals in Kickstarter. When you explicitly say, give us another $300,000 and we’ll add a Martian Spelunker companion and a pet Tribble, you better be prepared to follow through or get called out on it. Abandon a considerable amount of the stuff you promised and there’s going to be a shit storm. Much better to say that certain aspects of the game like companions will be expanded and leave it at that.

      • malkav11 says:

        That’s what I mean by “you don’t get to do whatever you feel like”. But all the same, the things you deal with by crowdfunding are decidedly different than going through a publisher, and for quite a few sorts of games that difference is “you get to make the game” versus “you don’t get to make the game”.

        And ultimately, the relationship between crowdfunders and a studio is quite different from the relationship with a publisher, because the publisher a) controls funding on an ongoing basis, b) may well own the rights depending on the deal, and c) has real, practical control over what you are doing and what gets released. If you do things in a way that’s very different from what you advertised during the Kickstarter (or whatever crowdfunding), yes, you’ll get upset backers. Yes, you’ll get bad word of mouth and maybe have to process some refunds and whatnot. But you can absolutely make those decisions and the backers cannot stop you. I’m reminded of say, Elite Dangerous, which advertised that it would be playable offline during the Kickstarter. Is it? Nope. Did it weather the storm of outrage from backers over that (imo bad) decision? Yup! They’ve got a strong playerbase and what, two full price additional content releases under their belts?

  7. Jason Moyer says:

    I hope that whatever it is they’re secretly working on is something in the vein of Alpha Protocol or New Vegas. I love all of Obsidian’s RPG’s, but it’s been awhile since they did a first or third-person action RPG and those two games are probably among my top-10 games of all time.

  8. brucethemoose says:

    Well if Obsidian likes Paradox, that says alot about them as a publisher since Obsidian went through more that most.

  9. remoteDefecator says:

    Is that Feargus Urquhart? …or is it Gizmo from FO1?

  10. Kelvin says:

    So what they’re saying is publishers definitely are the enemy.

    100% No mistke: look at all the crap they pull.

    However, just because they ARE your enemy, it doesn’t mean you have to TREAT them like the enemy. At least to their faces.

    Yep. I agree with this. It’s like politics: the enemy I need something from is my friend. Frienemy.

  11. TotallyUseless says:

    Paradox… SIGH

    A publisher that looks good and all but is as every bit as greedy as Sega, heck they could be even more greedier no thanks to their very numerous overpriced DLCs. At least Sega sells DLCs for their TW games much cheaper than Paradox.

    I hope Obsidian leaves this greedy piece of publisher, there are way better publishers out there.

    • funky_mollusk says:

      I just wanted to point out that calling a corporation ‘greedy’ is like calling water ‘wet’. It’s in its fundamental nature. publicly traded corporations are legally obligated to maximize profits; that’s how they’re structured. Just sayin…

  12. Vilos Cohaagen says:

    “If you treat them as the enemy, it’s not going to be a good relationship.” I think that is true generally.

    Also: why the feck did I have to complete *2* maths puzzles to login to RPS? Your login system is soooooo crap. I spend so much time caught in login loops. Feck it. After 10 years of posting, next time I won’t bother.

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