Interview with Greg Costikyan, CEO of Manifesto Games

Joystiq today interviewed Greg Costikyan, CEO of newly founded games company Manifesto Games, a company that hopes to break through the retail bottleneck that has allegedly constricted industry creativity and is in part responsible for the litany of me-too sequels that have some players calling it quits.

Joystiq: So - We've read your manifestos, and we've linked to them on occasion from Joystiq. They're on-target and do a good job of summarizing what many of our readers have been feeling for quite some time: that the current distribution model doesn't really serve gamers' best interests. How did we get to this point?

Greg Costikyan: In part, I suppose it's a result of the maturation of the industry-rising development costs breeding increasing publisher conservatism. But I also think it's a consequence of a failure of imagination on the part of people on the business side of things

Greg Costikyan: And of course there's the problem of the narrowness of the retail channel-the narrow on-sale window for most games.. And, to be sure, cultural factors, too....

Greg Costikyan: The assumption by most review media and gamers that unless something is published and pushed heavily by one of the major companies, it can't be that good or interesting...

Joystiq: Games definitely have a shorter tail than movies, for instance. Movies tend to earn half or more of their box office revenues when they hit DVD stage. Games don' t have the equivalent of a DVD stage.

Greg Costikyan: That's true—and some download operations, like Direct2Drive and GameTap, are in essence trying to build an aftermarket for older titles via direct download—which is fine, but doesn't address the real issue as I see it.

Greg Costikyan: I also don't think it's all that smart a business approach, either—these are games gamers were exposed to at retail when they were new, and either bought then or decided not to buy—I'm not sure I see an opportunity for a big market for such titles.

Joystiq: Doesn't Xbox Live arcade (to be launched with the 360) provide the same basic opportunity to third-party developers as Manifesto Games?

Greg Costikyan: To a degree, yes... But Microsoft does stand as a gatekeeper—and there's a limit on application size...

Joystiq: What is that limit?

Joystiq: And why does it exist?

Greg Costikyan: My assumption (and I'm not privy to MS's plans of course) is that they're looking to replicate the success of casual games on Xbox, more than looking for offbeat and different titles

Greg Costikyan: From what I've heard, it's on the order of 54 megs... And I assume it's mainly for bandwidth reasons.

Joystiq: Why wouldn't they be interested in offbeat titles (I know we're in the realm of pure speculation at this point)...

Greg Costikyan: Maybe they are—there are smart people at MS, after all, and even good ones...

Joystiq: What is offbeat anyway? Is Diner Dash offbeat? It's a highly successful casual game.

Greg Costikyan: Yes, it is certainly offbeat by the casual game market's standards—it's not a pick3 game or a word game...

Greg Costikyan: And I'm pleased at its success—and hope PlayFirst will continue to look for offbeat titles like that.

Joystiq: So how will you identify the titles that Manifesto Games will feature for sale? What makes the cut and what doesn't?

Greg Costikyan: But in general, the casual space has become almost as stereotyped and restrictive as the conventional market in an amazingly short time...

Greg Costikyan: Well, let me put it this way—

Greg Costikyan: We're reacting to the narrowness of the conventional channel, so we want to be as -broad- as possible.

Greg Costikyan: What won't make the cut is something that crashes constantly, or perhaps something that's so offensive that we can't stomach carrying it—no "sim death camp" games, say...

Joystiq: Gotcha — so the JFK Assassination game would presumably be out.

Joystiq: So there's a quality hurdle, a content hurdle...

Greg Costikyan: This does mean, in other words, that we will proudly (well maybe not proudly) sell crap games in addition to fine upstanding examples of the ars ludorum at its best....

Greg Costikyan: But we will give people the tools to distinguish product they might be interested from product they won't be—-

Greg Costikyan: User reviews, ranking systems, best-seller lists, hopefully eventually an Amazon-style recommendation system—

Greg Costikyan: And of course the games we'll feature and promote most heavily will be ones -we- think are excellent.

Joystiq: Haha - well at least you're willing to admit that there will be crap games too. I think that there's this romanticism about the whole indie game scene where gamers start to think that because it's indie it must be good.

Joystiq: That feature set sounds really aggressive. When do you expect to launch?

Greg Costikyan: There's a spectrum, of course...

Greg Costikyan: At least six months from now, realistically... And to be sure, we'll launch with a feature set that's more limited than we hope to deploy eventually.

Joystiq: Right - launch and improve from there. The sooner you launch the better for those of us who'd like to see non-mainstream games succeed.

Greg Costikyan: Well that's the idea... and of course, the more quickly we can deploy, the more quickly we can attract the capital to do marketing at the level we want to see... and of course the more quickly I can go on salary, :)

Joystiq: Hahah.

Joystiq: So your user rankings sound like a proxy to account for the fact that sites like GameRankings and Metacritic tend to ignore offbeat titles... That'll be helpful for gamers, for sure. How else do you plan to promote these games and help us filter the good stuff from the bad?

Joystiq: You mentioned that you'll feature top titles — kind of like a "staff picks" I imagine...

Joystiq: Does the advocacy go beyond Manifesto Games' own website?

Greg Costikyan: As I said in the "Death to the Games Industry" piece, I view the problem indie games face as mainly a marketing one—so Manifesto will be ultimately a marketing-driven operation...

Greg Costikyan: So yes, we'll have several different sections and feature product we like best in each—but in addition we do plan to do substantial print and online advertising....

Greg Costikyan: As well as keep up a steady drumbeat of publicity... And perhaps of outrageous stunts, manifestos, and brickbats—

Greg Costikyan: Basically, we need to make noise and shake things up.

Joystiq: How do you plan to rise above the cacophony of marketing that already bombards gamers?

Greg Costikyan: Hopefully our attitude will make a difference—but I also want our advertising to be quite different... I mean if you look at print ads, its virtually all pre-rendered graphics, insets of some screen shots, feature list, and some copywriter's idea of a cool tag line... It's almost impossible to figure out exactly what is different and interesting in a title—sometimes it's even hard to figure out whether it's an RTS, an MMO or what....

Joystiq: So what's a sample ad for "Awesome Indie Game Horkrunk" (just to make up a title) look like?

Greg Costikyan: Obviously you do need imagery... But you also need to try to impart some sense of what the gameplay is actually like... In some cases, that's hard—e.g., people have remarked that explaining Darwinia's game play is tough... But if you cannot come away from an ad saying "this is what's different about this game, this is why it might (or might not) appeal to me," it's not doing the job

Greg Costikyan: One of the things we will be doing is partnering with Themis, btw.... a company I was formerly on the Board of Advisors of... my impression is that they've been quite effective at online marketing, and I 'm glad to tap their expertise in that area.

Joystiq: Gotcha — so the marketing function sounds very publisher-like. Obviously you'll need to recoup the spending you put into marketing a game. How will the relationship between Manifesto and developers be structured? Will it consist of advances and royalties (a la traditional publishing relationships) or will it differ in some way?

Greg Costikyan: Well, as I said in the Death to the Games piece, I want to slice the industry's value chain a different way—to take the marketing piece of it, plus distribution and sales to gamers—but at least initially, we will not be offering development funding....

Greg Costikyan: Though we do hope to offer that down the road.

Greg Costikyan: How does it differ from the conventional model?

Greg Costikyan: We don't ask for ownership of IP. We don't ask for exclusivity. We pass on a far higher proportion of the consumer dollar than the conventional channel does (and very likely more than most casual downloadable portals).

Greg Costikyan: In many cases, we expect our partners will also sell their game off their own website—but will be willing to sacrifice some amount of the retail sale for sales through us, because we offer exposure to people they might not reach otherwise, as well as marketing support.

Joystiq: So if I'm a developer and I price my game on Manifesto at $10 to buy, how much of that money will I see per game?

Greg Costikyan: That is, of course, subject to negotiation—but 50 percent at a minimum, and often more.

Joystiq: Will there be a common structure to games offered on the site? For instance, download now and play for one hour for free before being required to pony up? That seems to be the common model right now.

Greg Costikyan: We may move in that direction ultimately—but not initially...

Greg Costikyan: We want to make things as simple and easy as possible for developers and publishers to work with us... thus we will, initially, require nothing.

Greg Costikyan: Just give us the app, tell us the pricing... If you have a DRM solution, fine; if you want to go out naked fine... And if we have our own DRM solution (which we probably will) and you want to use that, fine, but we don't force you to.

Greg Costikyan: If your demo model is 60 minutes of free play, fine; if it's 1 level fine; however you want to do things.

Greg Costikyan: We'll certainly advise people about how they can change their application to maximize their sales—but it's up to them to determine whether or not the development effort required to do so is worthwhile.

Greg Costikyan: We're here to please our partners—and hopefully gamers—not to enforce particular technologies.

Joystiq: Quite flexible... but that comes at expense to the user experience. It'll be a little confusing if a gamer downloads one game that uses the one-hour-then-pay model while another game utilizes nag screens only. Those are the trade-offs you've got to make though.

Greg Costikyan: That is true... And over time, if we can do it without making our partners tear their hair out, we may want to make the user experience more uniform...

Greg Costikyan: But again—I hope and trust gamers will understand that the experience differs from game to game precisely because the games are different.

Joystiq: Microsoft has the clout to demand that sort of uniformity from all developers who would place their product on Arcade. Do you think Arcade will succeed?

Greg Costikyan: Oh, I'm sure it will... At what level remains to be seen, of course.

Joystiq: What's it going to take for you to call Manifesto Games a success one year from now? What will you have accomplished by then? How about five years from now?

Greg Costikyan: In a year, we should be up and running with 100+ titles in inventory; closed on our seed round and be working toward a close on a serious venture round; be generating noticeable revenues; and still be generating buzz in the industry.

Greg Costikyan: In five years, we will have a worldwide gross in excess of the US treasury, boast the highest ROI of any company on the globe, and be spoken of in hushed whispers in the corridors of power.... But of course, all business plans say that...

Joystiq: hahahhaha

Joystiq: When do you reckon you'll be cash-flow-positive? I know that's tough to predict, but just curious what the model is.

Greg Costikyan: Within two years, is my guess... But of course it depends on a lot of intangibles... My BP financials actually show us in the black before then, which I don't like—I mean, I think my assumptions are plausible, but I don't really believe the world is that kind.

Joystiq: Will you ever sell so-called triple-A titles via download on Manifesto Games? Big publishers are also interested in doing an end-run around the retail channels...

Greg Costikyan: Well, if EA came to me tomorrow and said "We like what you're doing kid, we're distributing all future PC titles from EA through you," I don't know that I'd say "no"... But from my perspective, the whole point of the operation is to make it viable to get away from the need to spend seven or eight figures on a game in order to make money... So even if we do wind up with some triple-A titles on the list, there's no way we'll move away from also offering games with much more modest sales expectations.

Joystiq: So would it be fair to say that it's perhaps less about sponsoring indie games and more about busting open the retail bottleneck that has constricted industry creativity?

Greg Costikyan: Sure..... And indeed, a lot of the games I hope to offer aren't what hardcore indie developers would consider "indie..."

Greg Costikyan: E.g., I want to aggregate as many computer wargames, flight sims, graphic adventures, 4X games, and the like I can find, and they'll mostly be from smaller publishers, not indie developers...

Greg Costikyan: Another way to think of it is this way:

Greg Costikyan: In every other medium—books, magazines, cable TV, even film—there's a way for people to reach an audience, and be successful, with niche product.

Greg Costikyan: The narrowness of the retail channel makes it virtually impossible to succeed unless you appeal to the lowest common denominator, because you need 1m_ unit sales to succeed.

Greg Costikyan: That's silly; there has to be a way for niche product to succeed in the games industry too—and once upon a time, there was...

Greg Costikyan: Talonsoft, for example, used to be able to be profitable on 15k unit sales.

Greg Costikyan: The trick is finding product, figuring out how to market to its niche—and working through a channel that's open to games that are only going to sell a few tens of thousand, or even a few thousands, of units. And of course, controlling your dev costs so they match your sales aspirations.

Greg Costikyan: So what we're really about is aggregating niches—and "true indie" games are one niche, in a way—

Greg Costikyan: And also fostering innovation to discover new niches that people haven't conceived yet.

Joystiq: That makes lots of sense to me. It'll be for the masses to vote with their dollars — and of course up to you to make sure you're on the ballot when they are ready to register those votes.

Joystiq: I can see why you've got the marketing focus.

Greg Costikyan: From my perspective, it's what's necessary,

Greg Costikyan: And... You know, most developers, even the larger ones, are not that great at marketing... Publishers have traditionally filled that role, and developers =should= be spending time and mental energy on making great games, not worrying about how to market them...

Greg Costikyan: But the upshot is that there's no one really filing the marketing needs of people who don't have publisher contracts.

Joystiq: Right - that's their competitive strength. You can't be good at everything. Companies that try spread themselves too thin.

Greg Costikyan: This is true

Greg Costikyan: This is also, incidentally, one of Manifesto's current weaknesses when pitching to investors—neither my resume nor Johnny's screams "these guys know how to sell."

Greg Costikyan: Finding a partner with a strong marketing background is one of our priorities at the moment

Joystiq: You'll have to hire a Wharton marketing weenie like me! ;)

Greg Costikyan: Possibly so...

Joystiq: Any last words for Joystiq readers?

Greg Costikyan: Just the usual... Gamers of the world unite! You have nothing to lose buy your retail chains! From now one we must all strive resolutely to overturn the established order! We have a world to win!

Joystiq: You've got that hotkeyed, don't you?

Greg Costikyan: lol... not yet... maybe I should