Month Nine – Entertainment Media Publishing and Distribution
For this class we learned about current publishing and distribution methods as they relate to entertainment and entertainment business. We learned about the structure and composition of both artist and movie deals and contracts. We also extensively researched how media is constantly evolving through online digital distribution methods and social networking.
The Leadership Portfolio assignment we were given for this month was to interview someone that works with media publishing and distribution in order to further our knowledge about the subject.
I was lucky to secure a phone interview with David Luntz, President of Nunchuck Games.
In order to further expand my understanding of publishing and distribution within the gaming industry I decided to interview someone with experience in this field. I was able to schedule a phone interview with David Luntz, President of Nunchuck Games, who I got in contact with through a mutual friend. His daily activities include making sure the company is running smoothly (financially, personnel, team mechanics), managing development teams, communicating with the publisher/distributor, and coming up with creative concepts.
David Luntz is an industry veteran. He founded z-Axis gaming in 1994. They are most famous for the Dave Mirra Freestyle BMX series and BMX XXX. Activision, a major game publisher, acquired z-Axis in 2002. Under the ownership of Activision, z-Axis produced Call of Duty 3 (2003) and Spider-Man 2 (2004). In 2006 David Luntz formed a new company named Nunchuck Games. They have released a game called Ninja Reflex for the Wii published through Electronic Arts.
I asked David to explain how publishing typically works in the gaming industry. He explained the difference between dealing with an external publisher (z-Axis before being acquired by Activision) and dealing with an internal publisher (z-Axis after the acquisition by Activision).
Most studios dealing with external publishers are small independent studios working on one game at a time. These studios are always dealing with cash-flow issues. If your money is coming from angel investors you might run out of money if you run into any issues and go over budget. In a lot of cases you are receiving money from the publisher directly. They typically give you an advance and buy the product for a set fee when it is completed, or they fund the project and you get a percentage of sales. You run the risk that the publisher withholds money from you, or pull the plug on your project if they get cold feet. Another major issue when dealing with an external publisher is that you are typically working on just one game at a time. That means that when that game is completed you need a new concept, new investors and a new distribution deal. During the down time between projects it can be hard to pay employees, meanwhile firing all of them and then rebuilding a team when you are ready to start a new project is not a viable solution either.
Dealing with an internal publisher eliminates the cash-flow issues experienced when dealing with an external publisher. However, being part of a larger company you give up some of the freedoms that come with being an independent studio. David said that sometimes publishers try to force their way of doing things upon the development teams. This can break the team efficiency as the teams typically have already established a way of doing things that work well for them and are resilient to change.
Next, we discussed retail versus online publishing for video games. David said that online publishing for video games is steadily becoming more popular. It was not until cable/DSL became mainstream it became a viable solution due to the sheer size of a video game download. Online distribution is more cost-efficient as there are fewer middlemen. With online distribution you do not have to pay a retailer, neither do you have the manufacturing, packaging and shipping costs associated with a physical project. One advantage however to retail distribution is that you reach more people as they physically see your boxed game in the store.
Finally, I asked him about where he saw the gaming industry heading in the future. He thinks online distribution will continue to grow. While PC games dominate online downloads, console games are still typically sold as retail only. He predicts that this will change in the future. As far as technology is concerned, the focus right now is on input devices and how to make games more interactive and more engaging.
So what did I get out of the interview? I learned a lot about the different distribution and financing models for video games. It is clear for my company that I want to focus on online distribution. Retail distribution is not the right solution for my product because it will turn out to be cost prohibitive. I also feel that I built an important networking contact. Before ending the interview we talked about some of my own work in the industry (I have a lot of experience doing security consulting for game companies) and he seemed intrigued. The gaming industry is very small and tight-knit and it is likely he will be a valuable contact in the future.
The opportunity to interview someone who is a veteran in the gaming industry was very valuable to me and it was also a great opportunity to further extend my network.
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