Two weeks ago, the game development community was rocked by news of a groundbreaking deal. Two top independent studios, Canada-based BioWare (Jade Empire, Mass Effect) and California-grown Pandemic (Full Spectrum Warrior, Star Wars: Battlefront II), announced they were joining forces with venture-capital fund Elevation Partners, a onetime suitor of British publisher Eidos Interactive.
The result was the creation of BioWare/Pandemic Studios, a holding company which will unify the two studios under a very loose executive umbrella. Sitting at the top of said umbrella will be John Riccitiello, former Electronic Arts president and current Elevation founding partner. As CEO of BioWare/Pandemic, he will help the two studios develop new games in their specialty genres--role-playing and action, respectively--without having to rely on publishers for funding. According to Elevation, the deal will result in a "combined investment" of more than $300 million, including future funding.
Given the popularity of BioWare/Pandemic games and Elevation's deep pockets--the fund has raised more than $2 billion--the trio's deal could have impact beyond the two studios. On a small scale, the agreement is likely to affect BioWare/Pandemic's relationship with its publishing partners, which include heavyweights like THQ, LucasArts, and Microsoft. On a larger scale, the injection of outside capital might wean studios of their dependency on publishers' cash, potentially upending the traditional developer-publisher relationship.
To get an inside view of the BioWare/Pandemic deal, GameSpot spoke with two of its architects: BioWare cofounder Ray Muzyka and Pandemic cofounder Josh Resnick (shown, above), now both senior executives at the new holding company.
GameSpot: How much of a shot across the bow is the BioWare/Pandemic deal to the traditional publishing community?
Josh Resnick: That's a great question. The short answer to that is we're building a tremendous development organization here. BioWare/Pandemic have a great track record of games, like Jade Empire and Star Wars: Battlefront, and we're going to have close to 500 talented, creative, passionate people here very focused on development.
We're looking to build and continue to maintain our relationships with our great publishing partners, and we have tremendous respect for all the great publishers that we've worked with in the past. This is not something that in any way will jeopardize that. It's going to really enhance it, if anything.
We think with our renewed focus on long-term development and long-term financial perspective on the kind of games we make. We're going to be able to make higher-quality games. So we're going to be able to continue to raise the bar for the games we deliver to our publishing partners, like Microsoft for Jade Empire, and LucasArts for Battlefront, and THQ for Destroy All Humans!, and other great publishing partners we've had in the past--and the ones we want to work with in the future. We think it's going to be really a great addition to the industry.
Ray Muzyka: Just to add to that, 'shot across the bow' implies that they might feel threatened by something like this. We absolutely see the reverse. We really do look at this new venture as a means to improve our ability to deliver a great product, and I think it's going to improve our ability to focus on making great products--and that's always good for our publishing partners.
Now we're going to be so well-funded that I think it's just going to open up the range of deals and relationships that we can form with our publishing partners as well. We have a choice in not only signing in traditional developer-publisher deals, but we now have other choices on how we can work moving forward. Whether on a copublishing route, or distribution relationship, there's just now more choices, and that can only be good news.
GS: Often independent developers allow themselves to be acquired by publishers to survive. Why didn't you take that route?
JR: Some developers have chosen the path of selling to publishers, and that's a viable path. We have specifically chosen not to go down that route, because it was important for us to maintain our independence. We really look for inspiration in companies like Pixar, which, because they're able to remain independent from the distribution partners, are able to increase their focus on creating great products. We've built some wonderful brands here at Pandemic and BioWare; we've built some wonderful franchises. We want to continue to do that but still have the choice to partner with the publishers that have the best fit for our products. So it was really a choice on our part to take this different path, and, again, we do believe that it is going to result in better games.
RM: You know, the independent development community has generated a lot of the new IPs that have come out in recent times, and we're really excited about the potential of continuing to do that. By focusing on quality, it's going to be win-win, given that only 10, 20, 30 games a year actually generate a significant return for the various people involved. We have a real opportunity here to really focus on making the best products, and only the best products.
GS: How did this partnership come about? Who approached whom?
RM: We're really excited about the partnership. We have a tremendous respect for the creativity and the talent they have in their company and...
GS: Yes, but Pandemic makes games that are totally different from BioWare's.
RM: There's tremendous opportunities for synergies, because Pandemic does amazing things in terms of emergence and free-form gameplay--the kind of interesting things we'd love to pull in to the RPGs that BioWare is known for. We're going to continue the focus on strong heritage games here at BioWare, but we'd love to pull some great ideas from our sister company, or studio partner, over in Pandemic.
GS: Could your two development studios have been able to pool together enough resources to create this joint venture yourselves, or did you absolutely need Elevation to come in and make this happen?
RM: Well, I think there's a number of ways to answer that. First of all, the financing is a big, big part of it. By having financing, we're going to be able to take a larger view on games that take time and a lot of resources to make. The cost of development has gone up something like five times over the last five years. The next generation [of consoles] is going to be very challenging in terms of content and technology. So you know, the money is one part of it. Having the longer-term financial view allows us to focus on making the best products, which our publishers and fans are going to support. It's very important to us. In addition to that, Elevation is providing some significant management expertise and people that we have tremendous respect for. To start out, John Riccitiello is the new CEO of the combined entity. We are really excited about the idea of working with him, and then for him. He's going to add tremendous value to the company. I can't express that enough.
GS: How active will his role be in the new company?
JR: Well, John has a tremendous amount of experience. Remember he came in to EA at the very early stages of that company, and he was able to lay out a vision, which, obviously, we've seen has come to pass. In that alone, he has the ability to help companies scale, and having scale is very important as we move to the next generation of consoles. The budgets are going up, and the risks are going up. The stakes are getting high, so he brings tested leadership. Ray, Greg, Andrew, and myself obviously have also done very well building our own companies. But we realized that we needed some other smart people in the room to help us get to where we wanted to be. Obviously, having the financial resources come on board was the final piece of the pie.
GS: What kind of games can we expect from BioWare/Pandemic?
JR: We're going to focus on building new IPs, and we'll have opportunities to work with licensing groups. Now we'll have the confidence to know that we're going to take the time to craft the highest quality when we build a game in partnership with them, and publishers are going to know that, too.
GS: Ray, you talked about new IPs. But you also talked about licenses in the same breath. Are you going to focus on one rather than the other?
RM: We're really looking at building a balance in our portfolio between very high-profile license use and creating our own original IPs. Now both BioWare and Pandemic have had an enormous amount of success partnering with companies like LucasArts, for example. We've had a lot of success working with big licenses like that. As always, we're going to be very selective. We want to work with licenses where licenses bring something to the table--Star Wars, for example. But you know, at the same time, both BioWare and Pandemic have proven themselves to be uniquely capable of building original IPs that are really exciting to the fan base and are very commercially successful.
GS: Ray, I know that the BioWare store has more than 2 million registered users. Given its popularity, many people are speculating that BioWare/Pandemic may use their fan base to work their way in to direct digital distribution, a la Steam.
RM: There is a blend of ways to get products out to consumers. The retail market is definitely the dominant way in for people to buy games currently, and that's going to continue for many, many years. It's really important, and we're not going to lose sight of that. So that's why we're going to continue to work with publishers, because they're an integral part of our business model. Digital distribution is important because it provides an alternative way for fans to get content. It also bridges the gaps between full retail release products and ones that may not be ready to be put on store shelves.
We have about 2.75 million registered users, and we've started exploring [digital distribution] in small steps--very experimental. It's really a learning process, and trying to engage with our fans and figure out what kind of things they want on a community site. We are doing that with some NeverWinter Nights modules, which we're releasing in partnership with Atari. We have some new ideas that we're building right now as well. We haven't announced yet, but we're really excited about bridging the community between Pandemic and BioWare. Pandemic has a community of millions of people. They've sold something like 12 million games over the last few years.
GS: By your own estimates, this deal is worth $300 million. Where do you see the money being spent in the future?
JR: In the short term, I want to reassure fans that Pandemic is still going to be focusing on the types of games and genres that we're so well known for. And I think BioWare is going to do the same. We've developed very strong cores of expertise in the genres that we compete in, and there's a lot of exciting stuff there for us still to do. We have some great plans. I'm sure you can appreciate the fact that a lot of our midterm to long-term plans haven't been announced yet, so I'm not sure if we're willing just yet to tip our hand there. I think both studios are certainly well known for taking risks in their products and innovation, and pushing forward technology, and advancing the art of gameplay.
GS: Thanks, Ray and Josh.