Q&A: Raph Koster on taking the industry into the mainstream

Last week, Raph Koster used his presentation at the Austin Game Conference as a platform to tell publishers rooted in the current industry business model that they need to evolve or die. The hit-driven industry, escalating development costs, rapidly swelling development teams, and a retail environment hobbled by shelf space will leave followers of the status quo flat-footed when the next big shakeup happens, Koster told a room full of developers.

As the conference wrapped up, Koster took some time to answer GameSpot's questions about his new company, his AGC talk, the changing face of retail, and how the online revolution will dovetail with the current furor over gaming legislation.

GameSpot: What's the most interesting thing you saw or heard at the Austin Game Conference this year?

Raph Koster: Once you've been going to them for a while, the most interesting thing of the conference is usually the discussions in the hallways and not the sessions. But some of the sessions I've seen that were really good were fairly technical things. Sam Lewis' breakdown of economics and how it applies to MMOs was really good. Damion Schubert's talk about what are the strengths of the grind, the strengths of classes and levels, the strengths of men in tights, was really good.

GS: Is it any different coming here when you're not the Sony Online Entertainment guy? When you're just Raph?

RK: Not really. When you're in that kind of position, you have the whole "what you say will be taken as representing the company" thing going on. And really in terms of the things that I've been saying in conferences and my talks and that sort of thing, those have always been my opinions anyway. So it's not like I've been saying things all along that have been moderated in that way.

GS: So what are you actually doing now?

RK: I've got a startup going, and you should be hearing about it pretty soon.

GS: Now, when you left Sony, they said that your strategic goals didn't match theirs, and I'm wondering if you can give me the capsule version of how they differed.

RK: The things I'm really interested in doing, and for that matter the things that the startup are going to be centered around, are essentially not really things that fit into the standard publisher model at all. So I'm interested in doing things that go more mass market--significantly more mass market than what we tend to even think of as mass-market games. And I'm just not really in the mindset of making MMORPGs anymore. I'm still interested in making online worlds, but I'm really interested in making very different kinds of worlds than just MMORPGs.

GS: Going back to your talk, I'm wondering if you think that the role of the consoles or the PC is in a better position right now to adapt to the changing market.

RK: So PCs have the advantage that they have very, very rapid revision cycles, right. So PCs can always adapt faster. They can change more readily. [But] the market does favor the standardized platform of the consoles. So usually what you see is innovations pop up on the PC, and then eventually get absorbed into the consoles. I mean, we see Xbox Live Arcade. That's a reaction to a trend from PC games that's been going on for years now. So it just takes a while longer for it to reach consoles, and then when it does, it reaches a bigger audience.

GS: Do you think their fates are pretty much tied?

RK: I do think they're tied. I don't think PC gaming is going to go away, and I think in many ways it's the growth segment now. It's just that it's growing in all the places that the traditional game industry doesn't measure, because it's growing outside the game industry. Some of the biggest publishers of video games today--Kellogg's, Cartoon Network, Lego--we don't think of these as being publishers because they host games on their sites. Well, in a digital distribution world, what's the difference? Portal and publisher are merging.

GS: One of the things that you mentioned in your speech was that embracing celebrity is something that developers will have to do if they want to adapt. It doesn't seem like the industry is set up right now to encourage celebrity in any way.

RK: It's problematic for the industry because if you get a celebrity, then there are all kinds of attendant problems for publishers. Money and control are going to be the things that celebrities want. Don't take the celebrity thing as an ego kind of thing, because that's not what it's about. Fundamentally it's about branding. So it's about wanting a consistent sort of entertainment experience.

GS: How do you cultivate that kind of celebrity?

RK: Well, you have to have good product. You have to have a good relationship with the audience. You have to not let them down. You have to deliver and deliver consistently. I keep saying the words "lifestyle marketing," which encompasses a whole vast array of stuff, but it basically means you have to be relatable to the way a given group of people acts and likes and so on. You have to fit into their life. So that's tricky. It can be hard to do it if you don't have a signature style or vision. If there isn't something that clearly makes this, "Oh, that's a game by these guys," that can be hard.

For example, Introversion--they clearly have a signature style. Look at Uplink and Darwinia, and now they're doing DEFCON. And there's a signature there. You look at it and you go, "Okay, they have a certain retro vibe to all of their games." And at the same time, they have a certain scrappy independence that everybody likes. They choose things that are off the beaten path that people wouldn't [make a game about]. So you look at those and you go, "Okay, they've got a style." And the games are all completely different from one another. But that doesn't matter, because they've still got a style.

GS: You mentioned that the game industry needs to get the back-catalog reuse going. Do you think that the publishers are trying to increase their ability to reuse content?

RK: Oh, yeah. EA's been on it for years. Look at how they pioneered the whole [practice of] repackaging into bundles and boxes. And Blizzard is really good at it. Valve is really good at it. That's absolutely part of it.

GS: Is there any one example of reuse you've seen that you think is going to become the standard in the future instead of just dragging out some incremental revenue? Is it just collector's bundles, or is there more?

RK: I think the collector's bundle is it. And I actually think saying "it's just collector's bundles" minimizes just how dramatic an impact it's having on the industry. We're finally seeing that kind of subsidiary market. The fact that Yar's Revenge is now available on a keychain... You can take your keychain and plug it in to a television and play Yar's Revenge. Now we're talking something like what movies can do with sending content downstream to live on other platforms. It's the equivalent of DVD rentals and cable and pay-per-view and all that. We're seeing content actually spread out and be able to be reused and monetized in fresh ways.

GS: But it doesn't take 20 years for DVDs to show up.

RK: No, it doesn't. That's because we're in the game business and really bad at it... Look at what Introversion's doing, or what many midtier developers can do, which is build a following. They aren't at the top of the chart, but they've got celebrity within their crowd and their niche. And it's sustainable for them, and they can keep on making games and keep on building value. And that's a great gig, and they'll be able to keep selling because they've got that unique stylistic thing. They'll be able to keep selling Uplink for years.

GS: You said in your talk, "Assume a future without retailers." So as the gaming specialty store we know today gets phased out, do you see there being some retail brick-and-mortar solution for games? Or is it pretty much heading online entirely?

RK: There will still be [brick-and-mortar game retailers]. But look at the way that the retailers are evolving now. More and more of their business is coming from reselling the physical discs, the physical cartridges, those glass cases full of Game Boy Advance games and those kinds of things. There's a huge market out there that simply doesn't buy first-run games in the same way that a lot of people just don't buy first-run DVDs or go to the movie theater for first-run movies. There will still be retailers who can do that.

GS: Right now we're seeing a lot of game-legislation efforts and criticism of the Entertainment Software Ratings Board. Pretty much all store-bought games carry that rating symbol, and the reason the ratings are so important is because retailers won't carry any games without them. But you say we're going online, where there is no requirement for the ESRB to be involved in any way, shape, or form. As online gaming grows bigger, are we just going to have this exact same sex, violence, and ratings argument again?

RK: Yes. The tactic that the game industry has taken is self-regulation as a kind of prophylactic measure. It's saying, "We'll self-regulate so that they don't come and regulate us worse." So the publishers get together and fund the ESRB, and they intentionally make it independent. They make it independent, but it's clearly still of the industry. So we set them up to watch us. "Don't let us do anything stupid." And I think it's very literal. "Don't let us do anything stupid so that the government won't come after us." I think that's pretty much the way the system works, if we're talking about it bluntly.

On the Internet, everyone is free to be stupid, as we know in spades. So it's an interesting challenge because in part that Web-based stuff doesn't even necessarily consider it part of the game industry. They're not funding the ESRB or the Entertainment Software Association. And it is actually to the benefit of the whole Web-based industry to participate and to get ESRB rated and so on and so on. But the economic pressure is missing, because you can find anything you want on the Web and rating labels don't mean a damn. So there's an interesting tension there, and it might mean that somebody will make something egregious, and it doesn't get rated at a point when online is the major distribution channel. And in steps the government. And we're going to see this kind of thing happen.

In my book what I say is, "Hey, developers, we need to say, 'This is our code of conduct for ourselves. These are our standards. These are our ethics. This is why we think games have impact.'" I think we all need to take responsibility and not just push it off on the ESRB.

One of the things that we need in order to get the mainstream acceptance is to demonstrate that we actually give a damn about the standards. Where we get busted is in saying we have standards and then having Hot Coffee happen. That's what hurts us, because we even meant it when we said, "We have standards." It make us all look hypocritical, and it makes us look like we're lying. And that makes the credibility gap worse. That's why it's important to support things like serious games, even if you don't care about games that try to solve problems in Darfur or whatever. It's still important to support them because it just helps with the credibility gap and it buys everybody credibility.

GS: Thank you very much.