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In the era of digital publishing, work-for-hire studios face a new reality

Dan O'Leary, CEO of n-Space, speaks about how his studio -- which made its money primarily with work for hire games -- is navigating the transition towards a digital future with fewer publisher jobs.
Over the course of this console generation, the work-for-hire console game business has fallen off precipitously. Studios like Blitz Games and Eurocom, both of which had long histories as console-first development studios and which had work up until recent times, were forced to close this year -- the latest in a long line of studios that have faced serious problems thanks to the shifting sands of game development over this generation. When I asked Jools Watsham of Renegade Kid (Mutant Mudds) what's happened to the work-for-hire market -- an area he's moved his studio away from as he focuses on self-publishing -- he put it this way: "I think it is because consoles used to be the largest and most affordable market for publishers to publish licensed games in. That has now been replaced by mobile phones."

Console work-for-hires often have a tough time transitioning to digital-focused markets

That's true, but I knew there must be more going on. To that end, I also spoke to Dan O'Leary, CEO of Florida developer n-Space. Not so long ago, the company's bread and butter was developing Call of Duty games for the Nintendo DS, but Activision no longer cares to put the franchise onto Nintendo's handheld. While he still takes on work-for-hire -- the studio made the 3DS version of Skylanders: Swap Force -- things have evolved, as he tells it: "In the PlayStation era and, to a lesser degree, the PS2/Xbox era, there was a business opportunity for lower cost games that sold enough to make the publisher an attractive return on their investment. As development costs continued to increase in the PS3/360 era, that opportunity was greatly diminished." Are work-for-hire gigs still viable in this age? And are there digital-only opportunities? If you're a console-focused studio, says O'Leary, it's often difficult to make a pivot to mobile: "There are work-for-hire opportunities in other markets like mobile, but most don't fit the needs of studios built for the console world. Their budgets and expectations are entirely different, as are their target consumers in most cases. We're talking about a 10x difference, on average, and much greater in many cases." O'Leary also thinks that game consumers are pickier than they were in the past -- thanks to the explosion of choice in entertainment options. The big games thrive; others fail.

"Traditional publishers are still coming to terms with consumer expectations in the digital distribution world"

Opportunities for digital work-for-hire console titles exist, says O'Leary, but publishers haven't always been able to stay in step with the realities of the market, which can adversely affect developers. "In 2012 we developed the somewhat awkwardly titled 5 Micro Lab Challenge with Microsoft for Wrigley's gum. It was a digital distribution only release for 360 with Kinect. In that case Microsoft and Wrigley's did a good job of setting reasonable expectations for the time and budget, allowing us to create a product that ultimately made everyone happy. We've considered other opportunities where that was clearly not the case. "Traditional publishers are still coming to terms with consumer expectations in the digital distribution world. The retail 'go big or go home' sensibility rarely applies in the digital marketplace, yet we've seen several [requests for proposal] that still reflect that approach, but are significantly underfunded to succeed. The results are often predictable."

"We have simply accepted that work-for hire cannot be our only business model"

Still while O'Leary has not rejected work for hire, he does note that the challenges that come along with it are incredibly intense -- especially given the new opportunities he sees: "We have simply accepted that it cannot be our only business model if we want to give our employees the stability they need to do their best work and live their best life. Luckily there are possibilities available to developers today that did not exist even a few years ago. We now have the tools at our disposal to create, market, fund and distribute titles on our own -- all responsibilities previously accepted by the publisher, for which they took the lion's share of the upside. I don't begrudge that, but it is hard looking at a royalty statement where n-Space receives literally 1 percent of the gross revenue of a successful title."

"Create something you are passionate about and scope it small enough to make it great. Everything else is secondary."

But despite being a Kickstarter fan and an enthusiastic backer, O'Leary has been hesitant to dip his toes into the waters of crowdfunding -- "a bit of a paradox," he admits. But he has his reasons: "In spite of having delivered the vast majority of our projects on time and on budget at n-Space, the pressure to fill a promise to thousands of enthusiastic consumers is a bit daunting. Publishers understand the risks and are compensated for it, those that fund Kickstarter campaigns are not." As noted, though work for hire has been dramatically affected by the realities of today's market, the self-publishing possibilities of today's game development space still excite O'Leary: "n-Space is just starting on that path ourselves, so it's a bit premature for me to offer sage advice on self-publishing. Instead, I'll use my default answer - create something you are passionate about and scope it small enough to make it great. Everything else is secondary."

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