GamesBeat: There are some very big, broad opportunities in the industry now, but there are some traps that have been laid as well. It’s great that platforms are coming to developers and paying them to get their game onto the platform. But that happened with VR, and ultimately when VR didn’t sell that much, I see more problems at some of those developers.
Howard: I have some friends in the industry who were part of the VR enthusiasm, and then the lack thereof. When you’re in a position where you’re reliant on those checks rolling in, and then a platform doesn’t really emerge as a real thing, you’re in a pretty tough pickle.
GamesBeat: The retailers aren’t very strong right now. They aren’t taking financial risks. That’s not so good.
Howard: Now that we’re in this world of digital, the cooler the special edition is, the bigger the opportunity lately with games. You see these amazing special editions, and it seems there’s an awesome market for really bespoke, well-executed physical items that don’t necessarily have to flow through a retail distributor. It’s an opportunity for publishers themselves to sell directly to their biggest fans.
GamesBeat: Is that something you guys are thinking about? Or is that something the Microsofts of the world are more able to do?
Howard: No, we’re totally thinking about it. We’re still a small company that’s growing a lot. We tend to go pretty far down the rabbit hole on what would be the coolest thing to do for players. We have a lot of big ambitions for a number of our upcoming titles in terms of merch and special editions and collectibles, just super creative ways to extend the experience of these games. That’s one of the big things we’ll be tackling over the next 12 months. What is our physical strategy? And by that I don’t just mean a game in a box, but the whole merch thing.
On the development and publishing side, when you’re a part of creating those things and seeing the fan response, it’s one of those “Pinch me, is this my job?” moments. Making people so happy is a lot of fun.
GamesBeat: There’s the inventory risk. That’s what drove down the original THQ. They had too many of those learning tablet things.
Howard: Yeah, uDraw. That was the nail in the coffin. Overinvesting in physical goods inventory is a rough place to be. But now there are these awesome people in the middle that can lower margins and allow you to sell direct to consumer and do really limited runs. You can pre-sell, so that you’re not taking on as much risk. Hopefully that can get us out of that kind of a situation.
Here in Austin there was an announcement around Rooster Teeth laying off a number of people. Then the internet debate becomes — I don’t remember the term they used. The nerd market? The geek market? That market softening. But I don’t know if it’s that market softening so much as it’s just so cyclical. We’re in this new world where the cycles take way less time than we’re all prepared for. Things are just moving really fast. Tastes are changing. Expectations are changing.
The thing that’s not changing is that great games still continue to succeed. That’s our focus. How do we make sure we’re shipping quality experiences? How do we continuously improve in making sure we have the right people around here, we’re creating a great culture, we’re shipping great things? We want to delight the fans, basically.
GamesBeat: In August the NPD folks pointed out that this was the worst August in many years. I wondered if the dip is real in terms of the last year of the console cycle. Does that give you some pause about what’s going to happen in the different sub-markets here?
Howard: You know, I don’t think so. I think it’s representative of the big releases. If you look at that NPD list, the top-selling games, a lot of those games were not new. You have your juggernauts that are still on the top of the list. There were only a few titles that were new releases. I think we’re still dependent on giant games releasing to stretch the market.
To your point, maybe we’ll see a lull in that as we transition to the new consoles. But I think that customers still want new games. I live in a household of boys and work in an office full of gamers. Everybody just wants something new to play. I think the hunger is still there. We’re just not satisfying the market demand right now with great new things that people want to play. We’ll see what happens this fourth quarter, with a lot of big releases coming.
GamesBeat: I wonder if that makes the PC and the Switch more attractive right now than PS4 or Xbox One.
Howard: Well, you can look at the risks and benefits. The benefits of shipping content late in a console cycle, you have this peak installed base. The risks, how much are first party going to be investing and marketing to that audience? Will they be able to support you? I mentioned Stubbs the Zombie earlier, a game that Aspyr published in 2005. We launched this game as an Xbox and PC exclusive. I think it was 35 days before the Xbox 360 came out. [laughs] That was not the best strategy.
But my understanding is that future platforms are going to be backwards compatible. I don’t want to be naive about that, but I feel like there’s a reduced risk this time. We’re certainly going to be shipping stuff for the next 12 months on whatever platforms we can get our hands on, for the most part, while we’re building some of these longer-term big experiences. Again, we’re in the middle, so there’s probably an opportunity for us.
GamesBeat: Was there anything else you wanted to add today?
Howard: When there’s an announcement as big and significant for us like the Star Wars announcement, my big purpose is to give fans comfort. “Hey, these guys know what they’re doing.” Because we were in the Mac space for so long, people might not be aware that we’ve been around for 20 years doing this kind of work, and we’ve done it really well. That’s my big goal. Don’t worry. We’ve got this. We’re going to continue to do our best to bring great games to you guys.