Q&A: Pandemic's EA deal postmortem
As the dust settles on the $860 million buyout of BioWare/Pandemic, Josh Resnick and Greg Borrud explain how the purchase will free up their studio to make better games.
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Last week, Electronic Arts stunned the game industry by announcing that it was buying one of the world's biggest independent developers for $860 million. The studio in question was BioWare/Pandemic, the union of the eponymous Canadian RPG developer and the Californian action studio.
In November 2005, the two companies joined forces in a deal brokered by Elevation Partners, a venture capital group that vainly tried to acquire Eidos earlier that year. The merger was backed up by nearly $300 million in venture capital, a sum that helped the company break free of the traditional publisher/developer relationship, which sees the latter dependent on the former for financing.
Less than two years later, BioWare/Pandemic was purchased part and parcel by the world's biggest third-party publisher. As soon as the news broke, EA's numerous detractors decried the news as the ultimate sellout, given that both BioWare and Pandemic had been independent since the mid- and late 1990s, respectively. Critics of the deal predicted that the two studios would share in the fate of other EA acquisitions such as Origin Systems and Westwood Studios, both of which were eventually folded into the publisher's massive corporate hierarchy.
That won't happen, according to Pandemic CEO Josh Resnick and director of production Greg Borrud. Speaking with GameSpot, the two executives stated repeatedly in no uncertain terms that they still see Pandemic as an independent operation. They also look at EA not as a dominant corporate parent, but as a big brother with numerous connections, ample resources, and bottomless pockets.
GameSpot: How does it feel going from the best-funded, highest-profile independent developer in the world to becoming part of the biggest third-party publisher in the world?
Josh Resnick: Well, the reason we did both those deals is so we could focus on making great games. We asked ourselves what we could do to build the value of the Pandemic brand, to invest our technology and our IPs. There's tremendous talent there. We've had different phases here at Pandemic; we had Pandemic 2.0 and Pandemic 3.0. So this is just another phase of growth for the company.
Greg Borrud: I just wanted to add to that by saying that, even though we're now part of a much larger organization, we still plan on operating as an independent company. Our day-to-day operations aren't going to change much. Naturally, we want to draw upon the vast resources that EA can bring to bear, especially when it comes to marketing and sales, but also looking at their other teams in terms of knowledge-sharing. But in terms of the day-to-day, we're still here, we're still running the studio as an independent company, whether we're part of a larger organization or not.
GS: Now one of the issues often faced by independent developers is the fact they are dependent on publishers for funding, and spend a lot of time negotiating deals to get said funding. Do you feel liberated by the fact you no longer will have to do that?
JR: That is a big part of why we're partnering with EA, because it allows us to focus on making unbelievable games. I mean our goal at the end of the day is to get that 13-year-old kid or that 35-year-old kid to spend their allowance on our games. That's what counts. That's what's important to us.
GS: Now your friends over at BioWare told us that a key factor in this deal was John Riccitiello, who was CEO of BioWare/Pandemic before he rejoined EA as its CEO...
JR: Well, that was one of the big reasons we got so excited about this deal, was that we share John's vision for that. He was one the people who came to us with the idea of putting Pandemic and BioWare together in the first place. So now, for us to be able to partner with him on a much bigger stage, on EA, is really exciting for us. Again, the key thing for us is getting his support for building the Pandemic brand, our teams, and our franchises. And he's on board with that, and we love being part of that.
GB: The whole concept of BioWare/Pandemic was John's brainchild, and without him, I don't think we'd be having this conversation. What he's trying to do at EA totally matches perfectly with our idea to focus on creativity, creative talent, and to give us the freedom to make great, great games.
GS: So now that Pandemic is part of the EA Games subdivision, will its name be changed to "EA Pandemic"?
JR: Over our dead bodies! [Laughs.] Seriously, though, nothing is going to change. John and the rest of EA have no interest in changing that. They want us to continue to operate as an independent entity within EA. They want us to be Pandemic Studios, our games are going to be branded as Pandemic Studios, and they've talked to us a lot about continuing to build the value in the Pandemic brand. Honestly, they want to provide us with support where we need it, but otherwise they want to stay out of our way and continue to let us do what we do.
GB: We've been building Pandemic for nine years now, and I think in our minds, we're only halfway to where we want to be as a developer. Continuing to build Pandemic is what gets us up in the morning. And the key to this transaction is that we'll be able to keep doing that.
JR: One final thought on that. Some of our favorite developers, such as Blizzard and Rockstar, those guys have been able to do incredible work and continue to build their brands and the excitement people have about their products while inside large organizations. So, we're happy to follow in those footsteps.
GS: I was going to say it sounds like you guys are aiming to be like Criterion Games, which was allowed to keep their name and largely do their own thing while technically under EA's management.
JR: And DICE too, from my understanding.
GS: So, when this deal was announced, there was some pretty delicate wording about which properties Pandemic wholly owns and will be transferred to EA. When we spoke to BioWare, they confirmed Mass Effect, Jade Empire, and Dragon Age as three of their original IPs which will become EA properties. Now, for the record, the Pandemic games which will now be wholly owned by EA included Saboteur, Mercenaries, and Full Spectrum Warrior, correct?
JR: Yes. There are also an additional four unannounced products we're working on that we will be partnering with EA on.
GS: During the conference call after the announcement, John mentioned the 10 games being worked on by BioWare and Pandemic, "several unannounced titles that are targeted both at the Wii and DS." Is it safe to say some of these four games will be on the Wii and DS?
JR: Um... [Pauses.] Let's just say we're looking at all types of platforms and are very interested in the Wii and DS.
GB: Yes, totally interested. [Laughs.]
GS: So you guys have several previous, popular games which were published by THQ (Destroy All Humans!) and LucasArts (Star Wars: Battlefront). Will this deal now mean that EA will collect royalties from its rivals?
JR: Obviously, when we developed those products for those companies, we had deals with those companies to collect royalties from those products, and will we continue to collect those royalties.
GB: But at our studio, we have a focus on our employees and we want to reward them. So we have a history of paying them royalties for them being successful, and that will continue to happen. However, the money that used to go into the company pool, as such, will now go into the EA company pool. So I imagine there will be some interesting conversations there when it comes to royalties.
GS: You said you like to reward your staffers by sharing the wealth. Are your employees getting some of the not-so-small fruits of their labor from the EA buyout?
JR: Oh yeah. We treat the employees here as an ownership society, and it's very important for us to make our employees feel like they have a stake in the success of the company and the products we make. It's very important to us to make Pandemic the best place for talent in the industry, and revenue sharing is just part of how we do it.
GS: Now EA, for lack of a better term, has its fingers in many pies such as mobile and in-game advertising. Do you plan on taking advantage of those options with your properties? If so, how are you going to make sure your properties don't get overexposed?
JR: Look, at the end of the day, we look at how to best manage each of our franchises, whether it's with EA or some other publisher. We only bring our properties to the platforms which make sense for those properties, and that's not going to change at EA.
GB: Well, I hope we're creating IPs and brands with a life outside of gaming. That said, our focus is still on making games, first and foremost.
GS: Now, I know some studios that have done deals with EA have essentially outsourced some development tasks to the publisher. I guess the most famous example is Valve Software handing over all PlayStation 3 porting duties of The Orange Box to EA. Do you guys plan on taking advantage of EA's vast resources to offload some development duties?
JR: Well, we work with outside developers right now, and will continue to make that choice on a product-by-product basis. If there's some way to leverage EA's internal resources and external resources in a way that's appropriate, then we'll do it. And we'll continue to work with outside developers on a SKU-by-SKU basis.
GS: Now, a lot of people are saying that, for lack of a better term, you guys have sold out. Rightly or wrongly, EA has acquired a reputation for pushing out products according to rigid milestones not necessarily tied to whether or not developers are 100 percent satisfied with the game's final quality. What kind of assurances would you like to give to Pandemic fans that the games you'll release as an EA subsidiary will be as high a quality as the games you released as an independent developer?
JR: Well, the guarantee is we're Pandemic, and we're not changing how we operate. EA bought us to continue to be Pandemic, and we had that in mind when we decided to partner with EA. This transaction will allow us to focus on making great games, and EA honestly doesn't want us to do anything else.
GB: We can talk, and we can try and come up with reasons why EA won't change us. I know people are skeptical--we're reading the message boards too, believe me! But at the end of the day, we'll just have to let the games speak for themselves.
GS: Now, a game that really spoke to me a lot is Mercenaries 2: World in Flames. Does that still have a nebulous early 2008 release date?
GB: Well, we've said "Q1 2008." I guess you could consider that nebulous.
JR: Well, this is part of the tradition we started with our deal with Elevation Partners. The core of who we are are the games we put out there, and the last thing we ever want to do is rush a game to market. Mercenaries is in a great place, but we know that it needs that extra polish that can take it to the next level, and we're taking the time to make it as good as it possibly can be. So sure, Q1 is kind of nebulous, and we could just pick a date and try to hit it. But we've taken a lot from how BioWare handles their development. I know people get frustrated by games, but we just won't release a game until we're totally satisfied with it.