There was a bit of a stramash last week regarding who gets to own the Intellectual Property (registration required) rights to games when someone other than the creator is paying for it. Good way to get publicity for a new publisher, some might say.

As you might expect, there was a mix of outrage, agreement, indifference and factual error in the comments that followed the article. Given that the most common question I’m asked in my role at the Cultural Enterprise Office is “Where can I get money?”, there were a surprising number of people prepared to turn down the chance to get their product made.

There’s a truism thrown around that game creators must maintain control over their IP at all costs. It’s certainly true that the only way you can build a sustainable games company is to retain as many rights to as many things as possible, but you also need a plan that actively builds that value. Simply making a game and releasing it will technically provide you with some IP, but if no one knows it exists is it actually valuable?

Sometimes, it’s worth sacrificing IP to reach your ultimate destination. Pixar never owned the IP in Toy Story. It was all transferred to Disney in the funding deal for the film. Pixar did retain several royalty streams as part of the deal (including merchandise, which for some reason no one at Disney thought would be a big deal in a movie about toys), but Disney had full control over when or if a sequel would happen, for example. The clue that there was a masterplan at work is the clause that stated Pixar’s logo would be given equal prominence to the Disney logo in all promotional materials.

When Pixar filed to go public (their IPO date was the week after Toy Story was due to open), they explicitly stated they wanted to build the next big consumer facing movie brand of note. A brand that acted as a stamp of quality and expectation in the same way as Disney, for example (the only other example). I’d say they certainly managed to achieve that, given that more than five years after Disney acquired them, the name “Pixar” lives on above the film name.

Not owning the IP to Toy Story didn’t hold Pixar back, but they had a clear understanding of why it didn’t matter quite so much at that point. So, by all means negotiate to keep your IP, but make sure you have a clear understanding of what you’re negotiating for.

Kickstarter, the crowdfunding site that can’t handle non-US projects, posted some stats from its first 10,000 funded projects:

Music and Film clearly dominate, taking 61.5% of all projects between them, but Games are way down at the other end of the scale, with just 180 projects: 1.8%.

Why? There’s an IGDA selected project page, after all. I’ve asked IndieGoGo (which does handle non-US projects) how games figured into their stats, and I’m waiting for them to get back to me. I’ll update this post as and when they do so. Update: IndieGoGo will only say that games are a “steadily increasing percentage” of their 30,000+ campaigns. That makes me think it’s a low percentage.

Are games creators deliberately avoiding this funding model? If so, why? Especially given that “lack of funding” is one of the main reasons given for not making something. Do they think they won’t raise enough money? You might not raise enough to make a big console game, but Urbanized (a documentary sequel to Helvetica and Objectified) raised $118,505. Are players not interested in supporting game makers? Do players even know who the game makers are? Are the rewards offered by games projects powerful enough?

Are game makers trying but failing? I follow a fair few people on Twitter from across film, games, music and theatre. I see lots of project promotion from all those sectors except games, which leads me to suspect that game makers aren’t even trying it out.

Clearly, I have more questions than answers about this, but given the fuss about this funding model in the worlds of film, music and art, I’m curious as to why more don’t seem to have taken this route.

Letters of Note is a site that collects “fascinating letters, postcards, telegrams, faxes, and memos.” There’s a letter from Pixar director Pete Docter (Monsters, Inc., Up) originally posted last summer, but which I’ve seen doing the rounds again recently.

Mostly, people are picking up the closing line: “As John Lasseter likes to say, our films don’t get finished, they just get released” - a common refrain from artists - but it’s an earlier line that jumps out at me:

It takes a lot of work (and rework, and rework and rework) to get it right.

Related reading: The Vertical Slice

Ken Levine, of Bioshock fame, on raising industry profile (free registration required):

It’s not their fault. It’s our fault. As an industry we need to think of ourselves differently. We need to think of ourselves that way and present ourselves that way… We have a responsibility … to educate people who don’t think of games. Like the people booking those [chat] shows.

His point is that the games industry as a whole, isn’t that great at raising it’s own profile, or the profile of those who work within it. Unless, of course, it’s some sort of “video nasty” type story (e.g., Manhunt, Hot Coffee).

This is something I’ve been thinking about over the last week or so, triggered by a couple of shows on BBC Scotland’s Artworks Scotland strand. The first was about Scottish bands heading out to SXSW earlier this year. The second about Scotland’s comic book writers and artists. Why isn’t there a third show about Scotland’s games industry?

Anecdotally, I’ve seen and heard plenty of evidence over the last couple of years that school pupils and university students don’t have a huge awareness of where games are made in the UK, what games are made in the UK, and the fact that there’s an industry beyond EA, Activision, UbiSoft, Sony, Nintendo, Microsoft or Take 2. Combine this with quality of life and workplace diversity issues (never mind the lack of creative diversity), and we have ourselves a bit of an image problem. And it’s no use talking to ourselves about it.

TIGA have done a fantastic job of raising awareness of the industry at a government level, and are rightly applauded for that. But I agree with Levine’s sentiments: it’s up to the creators of games to get out there and talk to the world, rather than just to ourselves. We can’t (and shouldn’t) rely on a trade association to do that, we can’t (and shouldn’t) rely on the media to come to us. If we don’t talk to the world about what we do, we have no right to complain about being misrepresented or misunderstood.

Develop reports on Australia’s tax relief scheme:

That breakthrough scheme sets aside $1.9 billion for digital creative companies across the country.

Good for Australia, except… well, it’s not a tax credit for “digital creative companies” at all (and it’s also not $1.9 billion). It’s a pure R&D tax credit, according to the Australian’s Innovation Ministry:

The Gillard Labor Government’s $1.8 billion R&D Tax Credit will deliver more funding to innovative firms – including manufacturers, ICT and biotech.

From what I’ve read, this scheme for Australia sounds almost identical to the scheme we already have here in the UK. It’s not just some magical pot of gold that pours money into the bank accounts of games companies (or indeed, any company). That’s what the “credit” part in the names of these schemes means.

Meanwhile, Tony Reed, CEO of the Game Developers Association of Australia, says:

Our goal at the GDAA is to prepare Australia to become one of the top three territories in the world for game development within the next five years. I think this can be achieved.

I’m sure he does. I believe that the UK can achieve the same. What I don’t believe is that a tax credit scheme, however designed, is the singular basis on which that achievement will be made.

So the rumour du jour of course is that EA are attempting to buy PopCap for $1 billion (according to TechCrunch; VentureBeat also has coverage). I was looking forward to PopCap going public, for a couple of reasons. First, I was curious to see the inner workings of the company opened. Secondly, I think it would have been a great thing for the industry in general to step eating its own young and have a potentially hugely-powerful new pillar besides the usual suspects.

Both pieces linked above have some weird bits of reporting, though:

• TechCrunch implies that PopCap is a “hot gaming startup” - whilst two paragraphs later noting that the company was founded in 2000.
• TechCrunch claims that it would be a big deal for EA, clearly forgetting that they paid $680mn for Jamdat in 2005.
• VentureBeat states “EA already tried buying a social gaming company”. Sigh. A) PopCap games are available on every platform you can think of; B) Given that PopCap are the number 3 games company on Facebook (behind Zynga, and yes, EA) according to the same report, this puts EA into a comfortable second place.
• A later report from TechCrunch says this deal is a “Hail Mary pass from EA to break into mobile and social gaming”. Umm. But they’re #2 in social, apparently, and made $242mn from mobile in FY2011, a solid 29% of their overall revenue.

EA have gone on the record as saying they’re reinventing their business as fast as they can to take advantage of the opportunities available in digital. PopCap built their business in digital, and have a great track record of introducing successful new titles.

EA’s interest in PopCap is nothing to do with getting into markets they’re already doing quite well in. EA’s interest is centred around PopCap’s ability to continually introduce new games and to make money from them. That’s why they bought Chillingo rather than Rovio. The fact that PopCap have also making interesting deals in Asia can’t have gone unnoticed either.

There’s also some consternation over the price, and I’ve seen various people saying it’s a sign of a bubble. My take is that $1bn is basically the minimum price required to stop PopCap going public - anything less wouldn’t be worth their while. Given how well they manage to grow their revenue and take advantage of new platforms, I think it may actually be a relatively cheap deal in the long-term. PopCap may also be thinking that the impending Groupon IPO will actually screw up their opportunity, given all the concerns about Groupon’s ability to actually turn a profit.

From EA’s point of view, I’d say it’s a great deal. I’d (clearly) prefer that PopCap stayed independent. PopCap themselves provided an unofficial politician-esque response saying that “the company was not planning to sell to any other company for $1 billion” - so they might be selling for a different price, then. We shall see.

Did Dennis Crowley write the original code for Foursquare (Dodgeball) himself?

Incidentally, if you’ve got an idea but aren’t particularly technical you should really consider the example Dennis set here. He didn’t really know what he was doing but he sat down, taught himself enough to crank out a prototype, and figured it out from there. Anyone can do this sort of thing with enough hard work.

Mule Design: Getting Comfortable With Contracts:

I am a designer. I work for a living, I solve problems within a set of constraints, I hire people, I rent space, I pay bills, and I have payroll to meet. These things are not in addition to the job, they are A PART OF the job. None of this came naturally to me. I had to learn it all.

Jay-Z, writing in Decoded:

But whoever said that artists shouldn’t pay attention to their business was probably someone with their hand in some artist’s pocket.

Ed Burns explains why it matters:

For me, it’s about the ability to make another one.

James Surowiecki in the New Yorker:

From a business perspective, the willingness of consumers to take risks means that new technologies can see profit faster here than they can elsewhere. That encourages inventors to invent, and investors to pour money into startups. (It’s no coincidence that the modern venture-capital industry got its start here.) And the speed with which successful products are taken up also allows companies to benefit from economies of scale sooner, bringing prices down and making it easier to reach even more customers.

Essentially, perhaps it wouldn’t matter if Facebook or Zynga or Dropbox were UK companies (assuming they were reliant on UK consumers only). In other words, the US is how to build your audience for something new.

Incidentally, yesterday Ian Livingstone asked how we could have the next Zynga be British. I’d say it’s already been and sold itself to EA for a large amount of money: Playfish. And related to the above, they focused on the US from day one.

Amongst all the chatter about PopCap’s likely IPO later this year, and the success of games such as Plants vs Zombies, Bejeweled and Peggle, one thing that’s missing is a discussion of what underlies PopCap’s ability to even consider an IPO: predictability. Games are generally considered to be a hit driven business (and by extension, a miss-led industry), so how do you mitigate those concerns? In my mind, that comes from an aspect of PopCap that I’ve seen zero comment about: their ability to manage their games and brands.

Everyone knows about the success of Bejeweled, Bookworm, et al, but I haven’t seen anyone talk about their many hidden object games. How many, exactly? Let us count them:

• 4 in the Amazing Adventures series;
• 4 in the Mystery P.I series;
• 2 in the Escape series;
• Vacation Quest (I’m going to guess this is the start of a new series).

For those skipping ahead, that’s 11 in total, from their current line-up of 28 PC downloadable ‘favorites’ (source).

Given that these games can easily sell in their tens, if not hundreds, of thousands, and that PopCap have produced multiple editions within each franchise, something tells me they’re not doing too badly out of these games.

These may not be the games that win the plaudits and awards and press, but I’m pretty sure they contribute to PopCap’s bottom line in a reasonably predictable manner. They may well be the equivalent of EA’s annually updated sports games, but without the massive licensing fees attached.

An even more undiscussed (is that possible?) aspect of this ability is the way they take their games to as many platforms and sales channels as possible, including boxed product at retail. From everything I’ve heard over the years, PopCap’s games do phenomenally well in stores such as Wal-Mart, Target, etc. Bear in mind that not everyone has a broadband connection, even (especially?) not in the US, so this is still an overlooked channel for most game creators; one that PopCap’s games fit perfectly. I wouldn’t be at all surprised to see retail forming a large portion of PopCap’s income.

PopCap’s ability to nurture their franchises gives their games a far longer shelf-life than is normally associated with the industry. The Bejeweled series is the prime example of this, having sold more than 50 million copies since it’s debut in 2001, but they’ve repeated the formula over and over. They’re amongst the best brand stewards in the industry, alongside Blizzard, Nintendo, and Valve.

All this predictability allows PopCap to then go off and experiment with any number of ideas. They can take an extra year to finish Plants vs Zombies, to make sure it has the right level of polish. It means they can introduce new brands, and invest enough to ensure success in the market, resulting in more growth as they take the game to the myriad platforms that exist today.

To an uninformed observer like me, PopCap’s business model seems perfectly designed to support being a public company. Actually, scratch that; whether public or private, they seem to have the model pretty much nailed.