DEVELOP CONFERENCE: UKTI survey of developers reveals ugly truth of the publishing paradoxUK studios are finding it increasingly hard to get new IP to market a panel discussion at today’s Develop conference and expo has revealed.
Citing research done for his work on an upcoming UKTI report, games analyst Rick Gibson has said “there’s a major disincentive to create new IP – the amount of new IP in the UK is reducing”.
The report will delve into the competitive nature of the games industry in the UK and Europe – we already know that the report says the UK has slipped from third place in the global market to fourth in terms of development thanks to the rise of Canada.
A survey in the report revealed, said Gibson, that funding problems arose as “publishers are getting wary about new IP and ‘unbranded’ IP.”
100 per cent of those surveyed said they had trouble convincing publishers to take on new games – even those developers working at publishers admitted this.
This in turn has meant work for hire projects are a safer bet for studios and publishers – resulting in a fall in royalties for developers, making funding problems even worse.
“Only 12 per cent of survey’s superdevelopers said they have royalty overages – and they are the big studios,” said Gibson.
“So if super developers are having such a problem for new IP what does that mean for smaller developers? The answer is that royalties are extremely rare in the industry.
“Few can afford to fund new IP to a stage where publishers will fund a game. We’ve spoken to a number of developers now working on significant work for hire projects to fund their new game. They can get one new IP out every two years while working on yearly work for hire games,” he explained. This has meant the quantity of new IP in the UK is ever falling.
Plus, the new channels seen as ‘saviour’ for the industry – such as Xbox Live Arcade – are not the perfect answer many think they are.
“Are new channels really green fields?” asked Gibson, suggesting the answer was ‘no’.
“Few of the new channels “have prioritised original new IP. Channels like Xbox Liver Arcade, mobile decks or Pogo are crowded, many with old classics or big brands, and original new IP is rare,” Gibson pointed out.
But there are ways to stay ahead of funding problems, said Gibson, saying that developers would do well to look into regional funding plans, seize the above-mentioned model that uses work for hire projects (where margins can be from 15 to 20 per cent) to fund new ideas, and also secure publisher buy-in early.