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Game Agents: Show Me The Money? Part 3: Their Side

In the final installment of the game agents series, we hear from two agents. The first article explains the process that one agency uses to evaluate game submissions, and the second defends the work that agents perform.

The vast majority of game concepts, prototypes and demos never get published (the IGDA reported in May 2003 that according to their publisher survey there is a 96% rejection rate!). Given this grim statistic, our firm has been able to place a very high percentage of the titles it represents by developing and utilizing a market-driven game evaluation methodology. This rigorous product evaluation methodology, which is continuously being refined, helps ensure that our firm secures games that publishers and distributors want. By revealing our evaluation methodology in this article, I hope to teach independent developers about the processes that we use behind the scenes when considering whether to represent a game and how those measures estimate market-to-market demand for a product.

Cultivate a Solid Game Evaluation Team

An integral part of our evaluation process at Octagon is our team of game testers. A proficient evaluator possesses a number of desirable qualities. For starters, it is important to have a well-rounded history of playing games on a variety of platforms. An evaluator who can articulately compare a number of titles from any given genre is a valuable asset, as an in-depth knowledge of games enables an evaluator to promptly discern an original product from a knock-off of a successful franchise. A basic grasp of modern graphics, physics technology and game design also helps an evaluator recognize competitive products. A worthy game should be visually appealing as well as mentally engaging, and an experienced gamer understands this.

Octagon's evaluation department consists of game enthusiasts from a variety of backgrounds. Many are college undergraduates, several of whom hope to enter the game development community upon graduation. Others are industry hopefuls who currently work in other fields and a few have past experience in game development. One component of the evaluation group is local gamers that are native to countries such as the UK, France, Korea, Thailand and Japan. This rounds out the international perspective and ensures that a diverse audience gauges opportunities not only with US publishers but potential partners worldwide. Since many titles submitted for evaluation are developed outside the US (and not in English), it is imperative for us to have a multinational staff with multi-lingual skills.

Several steps are taken to lay the groundwork for game evaluation. First, individual profiles are created for each member of the evaluation team. These summaries document a person's favorite games, genre likes and dislikes and platform history. Although it is ideal for evaluators to appreciate all genres for PC and console, inevitably some gamers will enjoy role-playing games on the PC but dislike first-person shooters. On the other hand, console sports fans may have an aversion to the slow pace of many massively multiplayer online games. These differences in preference need to be considered when evaluators detail their reactions to products. Evaluators must also sign a non-disclosure agreement before beginning work. This legally binds the employee from discussing confidential information with sources outside of Octagon.

It is also important to educate employees and set a backdrop for game analysis. The article "Fourteen Forms of Fun" (Pierre-Alexandre Garneau, Gamasutra, October 2001) identifies the characteristics that a superior game embodies. Octagon incorporates the piece into its evaluation methodology by having testers use the text as a reference point.

Analyze Worldwide Demand

An opportunity to represent a title cannot accurately be assessed without the knowledge of what types of games publishers are actively seeking. While some companies may consider a game's potential for a North American or pan-Europe deal, our firm implements strategies to look at a game through the eyes of an international business with multiple publishing divisions. Just as a worldwide publisher consults its local offices before moving forward with a worldwide publishing opportunity, our firm tries to break down the sales potential of a game on a territory-by-territory basis. This not only helps estimate sales potential for smaller markets but also calculates how much to expect in terms of a worldwide deal and better assess whether a country-by-country model would be more beneficial for a client.

The needs of the publishing community are constantly shifting; this refers not only to geography but also to genre. For example, the online game market in Korea is much more developed than it is in most of Europe due to the high penetration of broadband, therefore Korean publishers recruit online games more aggressively than their counterparts in Europe. Korea's real-time strategy market, however, is saturated and therefore that genre does not sell as quickly as it does in other territories.

What publishers are currently paying for product also varies from territory to territory, and this is a major deciding factor in the selection process. This applies not only to a title's proposed budget but also to target platform(s), number of SKUs and pending console approval. Our firm maintains constant communication with the publishing community to stay informed of market changes. It is essential to frequently ask which platforms, genres, price points, and release dates are the most desirable to ensure that we meet the needs of its customers and clients in a timely manner.

A cultural awareness that takes into account not only provocative material but also symbols and allusions that hold meaning to different cultural groups is vital as well. An extremely violent game may sell well in the United States, although other cultures may see the content as offensive. On the other hand, a game may be popular in one culture because is it based on familiar characters or icons, although players outside that region find the concepts meaningless or strange. A viable game's appeal usually reaches beyond a niche market and a well-trained evaluator should be able to note potential barriers to success.

Obtain Product Submissions

Octagon regularly contacts developers and publishers from around the world that have games we are interested in representing. This includes developers that are looking for advance royalties or licensing deals, as well as publishers that would like to place their products in territories in which they do not have distribution arms. A portfolio with fully executed NDAs for prospects and customers is kept secured and is continually updated to further ensure the integrity of the evaluation process.

Projects are typically submitted via mail or ftp download, which we then burn to disc. The evaluation manager documents the game title, developer/publisher, platform, date in, agent and stage of development (concept, pre-alpha, alpha, beta or finished goods) in a product database and then marks the material as confidential. All hard copies and support material are then stored in a locked space that is only accessible by the evaluation manager. This prevents the mishandling of restricted information and keeps products organized.

Initial Product Assessment

When taking a first look at a product, it is important to consider a prospect's track record for several reasons. If the prospect is a developer seeking a sizeable advance, it is important to know if this is their first project or if they have they shipped several titles. Their goals should also be realistic, based on the current market. For many publishers, the team is as important as the demo (particularly for early stage products), so our firm evaluates the potential to "sell" the team as much as the potential of the demo.

If it is quickly apparent that the chances of success are low based on a title's current demo, then it may be necessary to hold off on submitting the game to the full evaluation team. Octagon will then discuss the situation with the developer and ask to see the project when it has a greater likelihood of success.

If a prospect submits a game that requires extensive localization, Octagon gauges the ability of the prospect to deliver a localized product and the cost to localize the game. Localization consumes a great deal of resources and it is important to perform due diligence to make sure a deal can be faithfully executed. If a title cannot be localized in a time- and cost- effective manner, we won't pitch it to non-English speaking markets.

Perform Evaluation and Gather Feedback

All testing is performed in-house to protect confidential material and ensure that games are tested on top-quality machines. Most games are reviewed by at least three evaluators to ensure that the scores reflect a true average and not the bias of one person. The guideline is to have as many evaluators as needed look at a title before passing feedback to the agent that is working with the developer or publisher. The goal is to get to this point within two weeks of the product submission, though this is contingent on the number of products in evaluation (for example, the process is sometimes delayed after major trade shows).

Several tools help quantify evaluator input. A product evaluation database assigns a number to each product, keeping feedback organized and easily identifiable. Each evaluator enters scores and comments into an evaluation form and a corresponding spreadsheet. An evaluation summary worksheet tracks individual data for all games in evaluation and gives a broad look at the current index of prospects. Massively multiplayer online game surveys help assess opportunities specifically for those types of games.

The evaluation form's chief focus is on a game's single-player experience. It is broken down into several sections, each of which contains questions that are ranked and scaled in regard to importance. These include:

  • Interface - controls, tutorial and navigation
  • Attributes - fun factor, learning curve, market competitiveness
  • Content - storyline, complexity, sound effects, music
  • Technology - graphics, physics, AI.

A game's overall fun factor, for example, is allotted more points than the AI, since fun factor is a top priority (plus not much AI may be implemented due to a game's stage of development). After scores are allotted for different features, a questionnaire section asks evaluators to list games they have recently played (to determine their personal preferences), to compare the game at hand to potential competitors, list what they like most and least about the title, give suggestions on how the game can be improved, disclose whether they would purchase the game and, if so, at what price point.

The points from the evaluation form are then entered into a spreadsheet that calculates the average score for a review. The average is then entered into an evaluation summary spreadsheet that tracks the game's composite average and score variance. Each evaluator's average score as well as his or her personal variance is reflected in the table as well. This way, the average and variance for each game can be viewed side by side along with each evaluator's individual data. This helps track which people typically assign higher scores and what their preferences are realistically (not necessarily what they indicated when they were hired). Thus, data from this table offers a "big picture" and helps build upon existing team member profiles.

A more qualitative approach is taken to assess a massively multiplayer online game's market potential. Evaluators make appointments to log on to a server, set up accounts and either play against each other or the developer. Once testers feel they are familiar with a game, they fill out a survey that is similarly broken down into sections like those in the evaluation form. First, the system specs of the machine are documented along with any other significant technical information (e.g., the server is located in South America and therefore runs slowly). Then the tutorial is scored on factors such as helpfulness, interactivity and seamlessness. Next, the graphics, interface and controls are critiqued. If applicable, the single-player experience is graded. Part of the multiplayer assessment is based on the smoothness of gameplay, quality of communication and combat features. Points are also given for sound effects and musical score, content, complexity and difficulty. Evaluators are also asked to compare the game to similar products, document their likes and dislikes, offer suggestions and disclose what kind of payment model would be ideal if they were to purchase the game.

Assess Opportunities

Octagon's core value proposition is to generate "better deals, faster" and the company's operations are based on this principle. Once the feedback on a title is presented to the appropriate agent, Octagon decides whether or not the company can quickly secure a winning deal for the game. First, the sales potential is estimated and weighed against the needs of the prospect versus that of possible publishers or licensees. The evaluation scores and comments are discussed and the prospect history is once again taken into account along with the marketability of the game. Several questions may arise during this deliberation period:

General Concerns

  • Is the game fun and unique?
  • Does the title fall into a genre that is in high demand?
  • Is the technology up-to-date?
  • If we get a deal for this game will localization efforts be sufficiently supported?
  • Console manufacturer approval. Is it a game that has approval from the console manufacturer in its originating country but will have to undergo a painstaking approval process in the available territory?

Developer Issues

  • Are the developer's budget expectations realistic?
  • Can they be flexible with the game design if it is not possible to get the full amount of the desired advance?
  • Have they already shopped it around to publishers several times?
  • Is the developer easy to deal with or do they require excessive resources during the contract negotiation phase?

The agents must conclude whether Octagon can create a success based on the answers to the above questions. A decision is then made to move forward on an opportunity, wait for a new build of the game that incorporates more features, or simply decline to move forward with the prospect. If our firm wants to represent a game, a contract is drawn up and presented to the potential client.

Onward and Upward

Once a prospect has been signed as a client, Octagon further utilizes the feedback from evaluators and agents to create a comprehensive sales and marketing package that enables the agents to effectively shop the game to publishers in North America, Europe and Asia. The agents then proceed to introduce the opportunity to publishing partners and drive the negotiation process to secure a lucrative deal for the client with the best publishers worldwide.


Hillary Rodham Clinton recently received eight million dollars in advance for her book, Living History. And what every game developer should be asking isn't whether or not Simon & Schuster paid too much, but rather who put the deal together. Ms. Clinton is a seasoned attorney and a bright woman, but she didn't pick up the phone and begin discussing deal terms with six different publishing houses. Rather, it was her agent who maximized her popularity and marketability. And the truth of the matter is that if you want a big deal to go down, you're going to need an agent to make it happen.

Despite being a critical deal component in every other entertainment field, agents are relatively new to the interactive industry, and thus their role and value is often misunderstood. But what game developers are discovering is that as the industry matures, publishers' demands are getting tougher. Developers are asked more frequently to accelerate development schedules, to adhere to smaller advances, and to give up rights to the very software they create. And without an agent, it is only going to get tougher.

Whether you are Michael Jordan, Tom Cruise, J. K. Rowling, or the next video game super-developer, there's a reason that talented people use agents. Agents provide a needed conduit through which the forces of our free economy can flow. In the video game industry agents are beginning to compel publishers to compete for top talent. And this is healthy. Just as it has happened in every other creative field-from film to literature to music to sports-as publishers compete for marketable talent, the wealth shifts in favor of those who create rather than those who distribute.

As you consider the merits of an agent, there are some misconceptions you should be aware of:

  • Misconception: Agents take development dollars away from a project. If you believe that the advance you are receiving is truly an "advance against royalties" then the fee your agent receives is miniscule compared to the deal they broker on your behalf. The truth is that many publishers would rather not pay advances at all, so if they can limit yours to your actual development costs (and sometimes even less), then they lower their risks and raise yours. An agent's job is to negotiate better terms for you and that still make sense to a publisher. If your publisher believes they are going to make a profit on your product (and they do), then they should be willing to give you an advance against those earnings. If you're a proven developer, your agent has much more leverage in negotiating favorable terms on your behalf. And remember, a one or two percent higher royalty negotiated on the next Tomb Raider will eclipse your agent's fees.
  • Misconception: Publishers won't work with agents. Game publishers work with agents like my firm, BizDev Inc., everyday, and since the number of unqualified proposals they process each year is staggering, it won't be long before many follow other industries and began working exclusively with agents.
  • Misconception: I already maintain good relationships with publishers, so I don't need an agent. You may have a great relationship with two or three publishers, but if you're honest, you probably don't maintain even mildly successful relationships with all the publishing companies. An agent's job is to provide the best opportunity for you wherever it may be found. And as a publisher's business ebbs and flows, you're likely to find a more favorable opportunity with another publisher in the future. Historically, some of the biggest entertainment deals have been completed with emerging publishers who were willing to give creators a better deal in effort to gain market share.
  • Misconception: I can negotiate a good deal on my own. While you may be able to negotiate a good deal, it will be very difficult for you to negotiate a great deal. For top talent, an agent's most critical role is in brokering you to the world and allowing the market place to decide your worth. The reason Hillary Clinton received the money she did was because her agent was able to negotiate with several publishers at once. Ms. Clinton is a sharp woman and she could have negotiated a good deal herself. But she was smart enough to let her agent handle the negotiation and she walked with eight million dollars, which was a great deal.
  • Misconception: I've hired an in-house business manager to handle all our publisher negotiations, so I don't need an agent. You're going to be hard-pressed to find someone who can fill the shoes of a top agent. Even if you're a busy development house, you're probably only negotiating two or three contracts a year. Agents, on the other hand, specialize in interactive entertainment negotiations and they maintain tight relationships with all of the important publishers. Many perform exhaustive research and hone their negotiation skills in order to create the best deals possible. If you do the math, the time and money you spend on an in-house full-time employee will cost you more in the long run, especially when you consider the lost opportunities and the lower compensation that you most likely receive.
  • Misconception: I've hired an attorney to negotiate on our company's behalf-that's all I need. Make no mistake, a law degree is a great foundation for an agent, but business acumen, experience, and communication skills are an agent's most valuable attributes. An attorney will assure you of a legally binding deal, but not necessarily the most favorable one.

Having said this, not all agents are created equal. Developers should proceed with caution. When considering an agent, look beyond the superficial skills they wear on their shirtsleeves. Do your homework. Ask for referrals. And create a list of criteria that all your prospective agent candidates must be measured against. Here are a few important areas you should consider:

  • Compatibility: This comes first and foremost. Align yourself with an agent who shares your values and value system. Your agent is more than a distant associate; he/she is an intimate business partner with whom you should have much in common. Before making a commitment to an agent, sit down with them and dream the big dreams. Make sure that you both like working with each other and that you have developed mutual trust and respect. You should value and admire their abilities, just as they do yours.
  • Industry Experience: Interactive software is a highly specialized field, and your agent must be an industry expert. A sports star would never think of using an agent who wasn't a sports expert, and you shouldn't work with an agent who doesn't know the game business from the inside out. Look for someone with executive level experience in the interactive business, preferably working for a major publisher. The more time they've spent on the inside of the publishing community the more effective they will be negotiating with them. Furthermore, agents with little direct industry experience will have a hard time understanding the scope of the projects they will be negotiating, and consequently it will be difficult for them to deliver you the best possible terms.
  • Reputation: Your agent's reputation is as important as yours. Ask business associates and publishers what they think of the agent you are considering.
  • Experience at the negotiation table: The more time your agent has spent negotiating tough development deals the better.
  • Legal Experience: Familiarity with interactive entertainment law is essential. But before you consider anyone an expert, make sure they have directly related experience. Keep in mind that it is always in your best interest to have your publishing contracts reviewed by an attorney regardless of who negotiates the terms.
  • Marketing and Promotional Experience: Professional agents should have the ability to not only negotiate marketing approval rights for their clients, but to also become actively involved in a publisher's marketing campaign; to be capable of creating ancillary opportunities for creative property. Your agent is your front line promoter and should have the expertise needed to help shape your studio brand.

In 1975 a little known attorney named Leigh Steinberg successfully negotiated the largest NFL contract ever for a rookie quarterback. The achievement was revolutionary in several of ways. At the time few in the NFL had anything good to say about agents, and for good reason. The industry was plagued with unscrupulous agents who provided little value to either the players or the NFL. But Steinberg was ahead of his time, and his business was founded on stratospheric ethical standards and shrewd business acumen. When Leigh Steinberg entered a negotiation, he built and presented solid, believable business cases. As rookie quarterback Steve Bartkowski's agent, Steinberg convinced the Atlanta Falcons that his client's contribution to their bottom line was worth every penny they were going to pay him. As a result, Bartkowski began his NFL career as the highest paid rookie ever. It was an achievement that would have been impossible for him to do on his own, a success where Steinberg's skills and preparation paid off in millions of dollars. And perhaps more importantly, the resulting shift of power-from distributor to creator-has forever changed the way NFL contracts have been negotiated since.

In our business, there's one thing you can be sure of: publishers want to work with developers who can yield them higher profits. Your agent's job is to show them clearly that under the terms proposed, they will make more money. Unless you're willing to play ball at this level, you're going to have a hard time getting much more than a publisher's first offer. And the fact is that if you're an independent developer-especially a successful one-it's tough to represent yourself, to invest the time and expertise necessary to negotiate the best terms possible. And as the bucks get bigger and the stakes get higher, no one is in a better position to represent your interests than a seasoned interactive agent.

 

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