Building Big Licensed Games with Big Teams

Don Daglow dishes the dirt on the key aspects of creating major licensed games--dealing with the large teams and the complex licensor requirements that go hand-in-hand with such deals.

Passion and Process

Just a few years ago, knowledgeable gamers with strong artistic and technical skills could manage major projects by using experience and instinct to guide them. With 5 to 8 people on a one-year project, the number of moving parts and relationships was low enough that a single individual could still "keep it all in her head" and make it all work.

This is no longer the case. With teams of 35 to 75 people (and up) working on major games, the requirement for the process to be well-organized has transcended all else. Even excellent project management skills on the part of individuals cannot obviate the need for detailed procedures and formal processes. It's the only way to make so many intricate pieces mesh together perfectly on the right day, and to do so over and over again for 18 months to complete a high-end project.

Having stated so emphatically that organization and process trumps all, we've raised the Dark Side of these values: more and more rules that creative team members need to follow.

And, for all my emphasis on process, I also believe the classic wisdom that the more rules you impose on a creative team, the less passionate and therefore the less creative they will be.

This contradiction reminds me of comments by artist and film designer Syd Mead (Alien, Blade Runner, TRON) at the 2003 DICE conference, where he said (paraphrased from memory, with apologies to Mr. Mead if I mangle his wording), "You start any vision of a future world from your imagination, with no rules or restrictions. But at some point you have to find the thread that is the heart of your design, and once you have that thread there is a logic to it. You build on that beginning point, using logic about how this imagined world should work based on those initial creative assumptions. And within all this logic, your imagination remains engaged, so you find the exciting ramifications of that line of thought instead of merely the obvious ones. That's how the visual world of Blade Runner came to be both original and believable on film."

This is the same challenge we face managing large creative teams. Much of what we do requires a complete surrender to logic, structure, process, procedures. And yet our creativity and passion must still find the elegant, the exciting, the striking that differentiate a mechanical game from a great one.

Why Licenses? A Simplistic Overview

There are four steps a game goes through when it's sold in a store:

A. The customer walks into the store. They may already know the exact game they want to buy, or they may only know the category of game they want to buy. Maybe they just saw a game demo'd on G4 or Tech TV and they just have to buy it. Maybe they just finished Final Fantasy XVIII and there's nothing on TV except infomercials with burly guys gesticulating about cleansers.

B. The customer looks at the shelf. Regardless of how firm their initial buying plans may be, they scan the box titles looking for a name -- or image - they recognize. They may also be there to buy a gift, and they intend to ask the sales staff for advice on which game to pick. How many times have you gone into a store planning to buy one item and walked out with something different? Or maybe something extra? The salesman said Brand X is good but Brand Y is better. It happens a lot.

C. The customer picks up a box, and almost immediately looks at the back. They're looking to see if the game has great graphics; for a list of features; for stars whose names, faces and voices they recognize; for validations like Academy of Interactive Arts & Sciences Awards, Game Developers Choice Awards, Magazine Game of the Year Awards, etc.

D. The customer takes the box to the checkstand and buys it. Cha-ching! Most boxes that get picked up never make it this far. Congratulations!

A license makes the customer more likely to go to the store for your masterpiece, because they don't have to watch G4 or Tech TV or read a game magazine to learn a new game title and decide it sounds interesting. They already believe it's interesting the moment they learn that there's a game based on their favorite TV show, movie etc. The excitement they already feel about that experience is transferred to the game, as is the assumption of quality.

A license makes them more likely to pick up your game and look on the back, because they recognize the name and images on the front of the box.

A license makes them more likely to take the game to the checkout stand, because you get the assumption of quality the license brings:

Is Danger in Duplicate a quality game? I have no way of knowing.

Is The Lord of the Rings a good game? Well, I know that everything about the movies has been incredibly well done and fun. So I put down Danger in Duplicate, pick up Lord of the Rings and I'm off to the cash registers.

A license even makes the sales staff more likely to recommend a game. You'll close more sales recommending a familiar title than an unfamiliar one. And it's harder for the consumer to later blame you for bad advice if your sales line was, "If you liked the movie you'll like this game." Play detective in a software store some time, and listen for how often licensed games are endorsed this way instead of, "That's a great game you're holding."

Without the license, the marketing budget has to spend enough money to:

  • Make everyone aware of the name;
  • Inform them about what the game is like;
  • Pay for prominent shelf placement in the stores so shoppers can't help but see your title. That new shooter isn't on the rack by the door just because the manager likes the soundtrack!
  • Prove it's fun (since every game ad says the title is fun, just saying it isn't enough). Often this means buying expensive space on magazine demo disks. If you're really ambitious, you can spend more money than you could possibly earn back on the first version of your promising game, while winning awards for quality. You could then break even on Psychotic Penguins II and after five years of effort finally make money on Psychotic Penguins III. This was easier to do when games cost $200,000 to develop instead of $5,000,000 and up!

Since advertising is based on having each consumer see promotional materials over and over again before the message finally sinks in, it costs a lot to create as much awareness as even a moderately successful movie… where the studio already spent millions informing the public what the film is all about.

This is why licensors get to charge big bucks for their top properties: it's still cheaper than all the advertising and marketing you'd have to do yourself in order to achieve the same consumer urge to get off the sofa, drive to the store and buy your game.

And it's a lot cheaper than a five year plan to make the world associate the name Psychotic Penguins with video game excitement!

A brief sidebar: It's been a common saying in the games industry that movie and TV licenses usually produce bad games. Until the last few years that was often true, in part for reasons I touch on below. But if you think about the last two or three years, the pattern is different: once the licensors and the big publishers figured out how much money was to be made on these major titles, the average quality of the licensed games has increased greatly.

Why are Licensors So Famous for Being Hard to Work With?

We'll answer that question indirectly by having you role-play a possible real-life situation. (Yes, even the GDC conference sessions include RPG elements.)

Since the video game business is getting to be like Hollywood, soon you, too will be quietly working on a screenplay or novel during your free (sic) time.

Because game developers are inherently brilliant, unlike all those guys parking cars at the clubs on Sunset Blvd., you will sell your screenplay, The Invasion of the Insurance Salesmen from Duluth to a major motion picture studio. And, as a savvy gamer, you will retain the video game rights to sell separately on your own to a top publisher.

The studio signs Steven Spielberg to direct; Jim Carrey, Marlon Brando and Beyonce Knowles to star; and Howard Shore to compose the music. At $150 million the film's budget is the talk of Hollywood. Within a month the Biography Channel is running your life story three times a week, sandwiched between programs highlighting the careers of The Dixie Chicks and the guy who founded the Wendy's fast food chain.

There's only one problem: in order to retain the video game rights in your movie deal, you gave up all royalties on the first billion dollars in profits from the film. If you're going to make any money from your triumph with The Invasion of the Insurance Salesmen from Duluth you're going to have to do it from the game.

After a fierce round of competitive bidding, you pick a major publisher to develop and market games based on your film for three years. You earn a nice guarantee, much of which will go into the pocket of the IRS. What do you have to do to make enough money to buy that house in Malibu instead of that apartment in Culver City? You have to make sure the game produced by the publisher is a good one that will sell, so that it will inspire a sequel that's also a hit, and so on. You have to sell enough copies so that you earn royalties above the guarantee… hopefully for many years to come.

Most of all, you have to ensure the game adds to the reputation and value of the dreaded Insurance Salesmen franchise, which has the potential to outstrip even Freddy, Jason and the monsters that constantly torment Sigourney Weaver in the annals of film horror.

With your star-studded future and your friendship with Steven Spielberg on the line, what kinds of things would you insist be part of the video game deal? How about…

  • Approval rights on the development team assigned to the game
  • Approval rights on the initial game design
  • Approval rights on the font and art treatment for the title The Invasion of the Insurance Salesmen from Duluth
  • Approval rights on the characters of the Insurance Salesmen and every variety of terrified Duluth resident in the game.
  • Approval rights to all settings and environments in the game, with strict requirements for the accurate re-creation of Duluth.
  • And so on…

You get the idea. If you had everything riding on this project financially, not to mention your reputation, you'd pay a lot of attention to the details. You wouldn't worry if you were annoying the game development team. This is your life we're talking about here!

The same is true of the big corporations that most often control these licenses: they recognize that EVERY product associated with their property must be of high quality, or ALL products they license will be damaged. The people to whom this job is assigned understand how important it is, both to their companies and to their careers.

The license-holders' downside isn't just the lost profits from your game. If you damage the quality reputation of their license, you can damage their profits across the board to the tune of many millions of dollars.

Do Licensed Games Have to be a Hassle?

Just because there are lots of extra approvals doesn't mean the experience has to be a bad one. Like anything else in life, some licensors and some publishers are more skillful in the process than others.

On The Lord of the Rings: The Two Towers, our publisher was EA and our licensors included New Line Cinema and Peter Jackson. EA and Stormfront are in Northern California, New Line is in Southern California, and Peter Jackson's team was in Middle Earth, otherwise known as New Zealand.

EA has a great deal of experience and trained staff in handling these kinds of properties, especially after their success with the James Bond and Harry Potter games. They assigned a full-time specialist whose only job was to funnel film assets to the game development team, and to pass materials for approval to the licensors on both sides of the world. She then managed the exchange of feedback to produce decisions that preserved the deadlines for everyone involved. Many other people took part in this complex effort.

New Line and Peter Jackson each gave thoughtful feedback on the game. There were lots of little issues, but never were we waylaid by arbitrary directives or sidetracked by irrelevant concerns. Some of this is because all the companies involved were focused on "doing things right," and being faithful to the films above all else. Some of this is because EA managed the communication process skillfully, as did the Stormfront and EA development teams on one end and the licensors on the other.

The game shipped on time, earned strong reviews, won major awards, and sold in the millions in both North America and Europe. And proved that licenses may involve some extra work, but they don't have to be a hassle.

Of course, Stormfront Studios has done a lot of licensed games over the years, and not all of the licensors have been as well-managed as they were on The Two Towers. We once had an approvals manager at one licensor who knew so little about the licensed property that the publisher and Stormfront received letters asking us to explain more about elements invented by the license-holder, not by us. Imagine George Lucas asking the game developer to explain more about this Jedi thing so he can evaluate it for approval… you get the idea!

Why Do Big Licenses Mean Big Teams?

The publisher laid out big bucks for the license. Creating a weak game on a cheap budget to go with that high-end license means several really bad things happen:

  • The publisher loses money, because a weak game won't earn enough profit to pay for the licensing guarantees for a hot property.
  • The development team looks weak, even though they may have made a good effort with too little time and too few people. A prima ballerina can't look good dancing to Swan Lake with the music played at double speed and a 92-year-old stage hand named Murray standing in for her partner.
  • The publisher alienates the license-holder, who isn't likely to sell them any more of their better properties after seeing this one damaged by being mishandled. Even worse, they show ALL top licensors that their publishing company can't handle the better properties.
  • The publisher alienates the retailers, because they sabotage the retailer-customer relationship by selling a product that damages the assumption that top names always equal top products. If you produce a weak Star Trek game that gets returned to Best Buy in droves, you don't just damage the Best Buy Star Trek game shelf. You also damage the Best Buy Star Trek movie shelf, the Best Buy Star Trek TV Nostalgia DVD boxed set shelf, the TV and Movie Soundtrack audio CD shelf, etc. That affects every title the publisher wants to sell to Best Buy, not just future Star Trek games.

This doesn't mean that some publishers won't continue to shortchange development on major licenses. One major license-holder I know laments that he still sees publishers saying, "I spent so much on the license I have to go cheap on the game development if I'm gonna make my numbers."

But look at the list of recent top-selling games based on major movies: every hit game produced with these licenses over the last several years has featured a AAA development effort to go with the AAA license. The amount of money the top games make keeps climbing, which means the stakes are bigger and the amount of money at risk is bigger.

And that means big teams.

What Are the Key Things to Know About Managing Big Teams on Licensed Properties?

  • The licensor is doing his job when he watches every approval carefully. Help the people involved do their jobs well and you'll have a better game. Teach that attitude to every team member, not just the senior managers.

  • Small teams work on personal chemistry. Big teams do the same thing, but there are so many different "persons" in that personal chemistry that something else emerges. You can call it Big Team Chemistry. More often it's referred to as "team culture."

    On a 6-person team each person has 5 relationships, so 6 x 5 = 30 and you have 30 test tubes of personal chemistry to deal with. That's a small enough number to work in ways we intuitively understand.

    On a 35-person team that number of relationships jumps to about 1,200. That's enough people and relationships to make the way that issues ripple through the team seem random and chaotic. Daglow's Law of Team Dynamics: "Small Teams are Informed, Big Teams Infer."
  • Culture emerges by default. It doesn't matter what you say, but it matters a great deal what you do. Give speeches about quality and then ship buggy games and your team will ignore quality and ship buggy games.
  • There is no one "Right Culture." When teams try to work together and two previously-successful cultures mix, you can get anything from "1+1=3" to "1+1=0".
  • There may be no one "Right Culture"… but inconsistent ones are always Wrong. One member of our Board of Directors is Tony La Russa, the manager of the St. Louis Cardinals. When I seek his counsel on these issues he'll remind me, "I never won a pennant with a team where we didn't have every one of the 25 guys in the clubhouse on the same page. I pay attention to that every single day."
  • The bigger the team, the easier it is to be fooled into thinking that key issues are solved when they're not. With technology changing rapidly, "we'll do it just like last time" seldom works, and on big teams it's easier to assume someone else will take care of a problem when in reality no one else has noticed something's wrong.
  • The link between a) the calendar, b) the budget, and c) the quality / scope of the project is just as real on big projects as it is with small ones. It's just easier to fool yourself by saying, "Hey, it's a big team - we can make up the time before Beta."

    Example: If two weeks of the schedule are diverted for an E3 demo (no, I haven't been reading your email…), one of the following things has to happen:

    • The budget has to be increased so more people can come onto the project (a solution that won't always help), or…
    • The total number/quality of features in the game will turn out to be less than would otherwise have been the case (since neither schedule nor budget change), or…
    • Regardless of what the schedule says, the project will be late and thus cost more (since neither the features nor the official budget change).

  • Big games happen in stages: concept, preproduction, production, alpha, beta, final. The last three of those phases are familiar. Big teams have to master the different needs of the initial three phases in order to maintain both quality and reliability in their work.
  • In full production, on big teams it is essential that someone keeps track of the detailed schedule and the status of each asset on a daily basis. There are way too many moving parts to permit the use of the informal systems that sometimes work on small teams.


Creating licensed games means following the Golden Rule: do unto others as you would want them to do to The Invasion of the Insurance Salesmen from Duluth.

Running big teams is fundamentally different than running small ones, because you simply cannot control all the variables without disciplined processes. Nevertheless, the focus on team passion and creativity has to remain strong as well.

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