Are Video Game Publishers Becoming Irrelevant?

Bryan Cashman is the founder of Callvention, a service enabling phonecalls with game developers.

In a digital world, game developers can excel without being under the corporate umbrella of a large game publisher. Game developers owned by game publishers used to have an endless list of advantages: Strong marketing support, extensive financing, a strong front and back-office staff, and a brand that gamers recognized. In today’s market, where games are delivered and discovered digitally, developers are increasingly succeeding without the ownership of a publisher, or an exclusive relationship. Today, the benefits of existing under a publisher’s umbrella have never been smaller.

The New Found Freedom of Video Game Developers

It’s telling that two of the most important titles of 2014 are by developers not owned by game publishers. Both Respawn Entertainment’s Titanfall and Bungie Studio’s Destiny are made by industry icons that broke free of a publisher’s ownership.

Titanfall by Respawn Entertainment

Titanfall is 2014’s strongest new AAA IP, yet it was developed by a studio founded only four years ago and operates independent of a game publisher. Started by the creators of the Call of Duty series, the company entered an independent publishing arrangement with EA, and gained exclusive marketing support from Microsoft. The company took their expertise in online games to build their own company and create their own IP, without joining the payroll of a large game publisher.

Destiny by Bungie Studios

The next big IP launch of 2014 will be the cross-platform Destiny, another online shooter developed by veterans. The game’s developer, Bungie Studios, left Microsoft after seven years of ownership by the publisher, and entered into a ten-year independent publishing agreement with Activision-Blizzard, while retaining its own ownership of the company. Rather than seek ownership of established video game publishers, both studios preserved their independence and IP by instead forming distribution relationships with publishers.

Brands are Bypassing Video Game Publishers

With game distribution easier than ever thanks to app stores and digital console marketplaces, famous IP owners are starting to examine releasing games on their own, without partnering with a game publisher. Major League Baseball is releasing its own baseball game this year, without the help of a game publisher. Sports games are traditionally developed and published by large video game publishers like Electronic Arts and Take-Two Interactive, but MLB Advanced Media decided to build a game on their own terms, and release it themselves through digital marketplaces. If successful, IP holders may consider funding their own inexpensive download-only games, in addition or replacement of licensing IP to game publishers.

What Can a Publisher Offer a Developer?

In the past, publishers provided significant added value to development studios, but the mutually beneficial relationship is at risk. The advent of digital distribution, and the combination of quality outsourcing, freelance and consulting firms has significantly decreased the value-add of game publishers. Just as some musical acts no longer need a major record label for success, video game developers can now succeed commercially without a publisher. Many of the value-add services provided by publishers in prior console generations are now less relevant to developers. Developers can now use outsourcing firms for tasks not core to their game development duties, and can leverage their own content expertise to conduct social marketing in a way a corporate office at a video game publisher could not. By being close to the content itself, studios can tweet asset images, developer quotes and share YouTube video clips faster than a publisher’s corporate workflow. The benefits of working with a major video game publisher are decreasing in a digital world.

Video game publishers still provide many benefits to developers, such as financing, IP and technology expertise, but to compete in a digital world, they will have to improve their library of services for developers.

The Industry is Changing

The shift away from publishers shouldn’t be a surprise, given how quickly the industry adopted a digital value chain. 2013 saw more game revenue from digital content sales than from physical game sales, and the trend will only grow further in the future. Developers need publishers less if they can sell and market the game themselves on digital platforms. Developers that used to have to partner with an Electronic Arts to sell in Walmart and Toys R Us can now sell and market a game directly on Apple, Amazon or Google’s storefront with no publisher middle-man.

Adapt or Become Extinct

As game developers increase their independence, what can publishers do to continue to stay relevant to the development community? Should they focus on acquiring killer IP that developers can enhance with great games, should they lower the cut they take from game sales, or should they build integrated online infrastructures to help games get online and recognized by gamers. We want to talk with you about this, and leave your thoughts below or on Twitter.

Stay in touch! The author, Bryan Cashman ( @consulgamer ), blogs about business issues in the video game industry at CONSULGAMER. This article represents Bryan's personal opinion only.