Big risk that 'nobody cares' about next gen - Epic prez

Mike Capps talks about the changing industry and what the Gears of War developer thinks about microtransactions and the future of the AAA boxed retail game.

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Next month, Epic Games president Mike Capps will be delivering the keynote address--"Size Doesn't Matter: How Epic Brings AAA Attitude to Every Game, from Gears of War 3 to Infinity Blade"--at the Game Developers Conference Europe in Cologne, Germany. While the show doesn't kick off until August 15, Capps made time for a GameSpot interview to give a sneak peek at his talk and answer questions about where Epic thinks the industry is headed, the fate of the AAA game, and the explosive growth of microtransaction-based games.

Epic Games president Mike Capps.
Epic Games president Mike Capps.

GameSpot: What's your GDC Europe talk about?

Mike Capps: I think people often think of AAA game development as big budget, lots of time, and console. We've been doing what we think of as AAA games for about 20 years now. And all those projects are not big-budget console games. We were just noticing a trend between those projects. Even the small projects we do, we've seen some threads in common between why they're successful. It sounds kind of simple to say, but a lot of it is about passion for quality and caring more about the end user experience than how long it takes to make it.

GS: So if that's the biggest thing that has stayed the same, what's the biggest difference in what you guys are doing now?

MC: I'd say the biggest difference is in looking for efficiency. It's one of the most difficult things we do here.

If you can imagine hiring some amazing soloists and maybe a couple two- or three-man jazz bands and putting them all into a building and telling them to be an orchestra, it doesn't work. You can't make a marching band out of them because they're all soloists, and you need to give them room to do what they do best. And at the same time, you can't have them all off doing something completely unrelated.

Trying to find that sweet spot between letting people have the freedom to really put their love and soul into a product, but also making sure they're not working really hard to build a helicopter that's never going to go in the game because there was never a plan for a helicopter? That's kind of the tricky part. So freedom, but still some structure.

GS: At the Develop conference, we heard lots of talk about the current model of AAA games being replaced by free-to-play and service-focused offerings. Is that traditional AAA model doomed?

MC: Oh man, I hope it's not doomed. I'm still planning on betting big on that business. What we're saying is it's a really confusing time for the industry. It's hard to know exactly what's going to happen. We're bullish on the next generation. We're excited about it. But there's a big risk that nobody cares because they're all too busy playing [Zynga Facebook game] Empire and Allies, and they don't need a next-generation console box. So we're a little worried about it, and you see us experimenting some in the mobile space, partially because that's where the developer base is moving to. It used to be they just wanted an iPhone port, and now they just want an iPad SKU as their main SKU, and we're adapting our technology to meet those needs. We're definitely experimenting in those spaces, and we'll be doing some interesting things in spaces other than pure HD AAA console gaming.

Epic is banking on AAA retail games like Gears of War 3, but that model might not last forever.
Epic is banking on AAA retail games like Gears of War 3, but that model might not last forever.

GS: Do you have a specific attraction or aversion to microtransactions or subscription-based games?

MC: Hmm. The only aversion we have is that I think that market's still very confused right now. You see a lot of people, both on the customer side and the service side doing things that don't make sense. I don't think people meant to spend $500 on gold in whatever social game they were playing. I don't think that can really last. I doubt they're going to keep doing it. I think chasing after millions of people who will pay you $500 a month to play your game online doesn't really make sense. So there's a little bit of unrealism in that market that I'm hoping susses out.

But in terms of having people pay for what they want and not having people pay for stuff they don't want, that just makes sense. And we don't have that kind of marketplace in the console space. You get to choose to play or not for $60, and there may be some additional things you can buy for a little bit more money after that. But there's really not a scaling market--a vertical market, I guess--where you can choose how much you want to get into the game. It makes sense that there are some people who are lost at the $60 price point. And with darn ol' used game sales, they do come in at a lower price point, but one that only benefits retailers, not the developers of the games themselves. So microtransactions and free-to-play games are a great way to make sure the revenue is going to the developers and the publishers instead of the retailers.

GS: There's a lot of talk at conferences like GDC Europe about the "next big thing." Like you said, there has been a lot of confusion in different parts of the market right now. What do you see as the one biggest change the industry is heading for?

MC: Wow. Well, I think Ray Muzyka put it pretty well when he said, "Everything's changing." It's kind of hard to know where we're going to be, what kind of company will Epic be five years from now. It's hard to say we'll be like we are today, working to finish up Gears of War 3, a big console AAA game that we expect people will be very interested in because they've preordered a bunch of boxes and discs. We could be in a very different world five years from now where retail doesn't play as big a part. I think it's too many things coming together to say there's one big thing.

I wish I could give you that perfect quote to say what's going to change everything is digital distribution. But the reason digital distribution works so well for us is because there's a different model for monetization with microtransactions and subscriptions. And the reason that's working so well is because Nexon tried it out in Korea with a base that's really happy to use that model. And it's moving its way here, growing in the United States, but it's growing faster elsewhere. So our customers are moving, they're coming from different places. It's a chaining of events putting those things together, and when you get to the end, everyone has console-style hardware in their pocket on their phone. Everyone's connected, and half the gamer space or more isn't in the United States or the [English-French-Italian-German-Spanish] countries, and that completely changes the picture.

I'm not sure how we get to the other side of it. But one of the cool things about being Epic is we're just going to bet on technology getting better, like we always have. We're going to make great tech and have everybody else hopefully use our technology and figure out the market. So even if our games don't find a way to succeed in the new market, hopefully our engine will be useful for it.

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