Industry Insider - September 2008

A Primer – Who’s Who in the Games Industry

by Eric Marlow

When I first started to work with games professionally, there were a number of terms that befuddled me. After all, when I went through school there were no game development classes, so what I know was self-taught. I would have appreciated some kind of primer on who the various parties are, and what do they do. This becomes important as you seek to place yourself in the industry and work with others.

Developers - as a “developer” you are generally tasked with the software coding, 2D and 3D modeling, and animation of the game. You must design how the game will look, play, and feel. But there are different kinds of developers, and knowing what kind of developer you are will give you a better idea as to your responsibilities and who is ultimately responsible for the game’s success.

1st Party Developer – this type of developer is actually part of a company who makes game consoles, hand-helds, or other hardware platforms. Although they may be formed as teams inside the larger corporation, they may be just known by their parent company’s name: Microsoft, Sony, and Nintendo. Occasionally they may brand themselves inside the bigger company to distinguish what they work on: EA Black Box Studios (Need for Speed), and EA Tiburon (Madden) are good examples. They are typically fully-owned by the parent company, and as such their employees reap the benefits of working directly with the company who pays for and publishes their work.

2nd Party Developer - 2nd party developers sit somewhere in-between the corporate-owned entities of 1st party developers, and the independent 3rd party developers. They are usually completely separate from the hardware makers, but they have a unique relationship with them and usually tied to them through formal relationships or long term contracts. They become known for their affiliations with the hardware maker, and may actually be acquired by the hardware company at some point. Examples would be: Level 5 and Insomniac Games.

3rd Party Developer – this kind of developer is the most common type of developer. Not aligned to any particular platform, most 3rd party developers do concentrate on types of hardware (i.e. consoles, PCs, or handhelds). But given the nature of the available work, many 3rd party developers tend to make themselves available on most major platforms such as those made by Sony, Microsoft, Nintendo, and the PC. They typically have good relations with all hardware makers, but over time they may start to focus on a particular platform. Examples include: Id Software (Doom, Quake), Epic Games (Unreal), Kuju (Battalion Wars, SingStar), and Valve (Half-Life). Many popular 3rd party developers go on to be acquired by the big publishers – such developers include: Bioware (EA), Pandemic (EA), Red Storm (Ubisoft), and Blizzard (Vivendi, now Activision Blizzard).

Publishers - Historically a publisher was the big fish in the pond that took games and brought them to market. From the outset they are responsible for funding the development of the 1st, 2nd, and 3rd party games, marketing them, manufacturing them, and then passing them to distributors and retailers to stock on their shelves. Companies such as Electronic Arts, Ubisoft, Sega, Activision Blizzard and THQ are the biggest players in the market. Now this link in the value chain is a bit more nebulous - a number of large 3rd party developers are distributing their products directly as digital downloads, thus bypassing the traditional publisher/retailer arrangement. In-effect they are becoming publishers and retailers themselves. Valve is a good example of this type of company with their Steam system. Companies that operate mostly online MMOs, such as eGames and Level Up are also considered publishers, as they take the online games and provide the backend, localized support.

Distributors – these are companies that sit in-between the publishers and the retailers, and they are responsible for taking the software boxed products and moving them to the retail outlets. Big publishers like EA, Activision Blizzard, and Ubisoft have their own in-house distribution groups, and may move products directly to the large retailers such as Wal-Mart, Target, and GameStop. Distributors typically handle smaller stores and overseas outlets beyond the reach of most publishers. Distributors are usually less-known companies, and include the likes of Ingram Micro, Tech Data, and Navarre.

Retailers – retailers are the brick and mortar stores people are familiar with. Here in the Philippines, Datablitz is one of the biggest. Department stores and mail order houses can also be game retailers too. In the US, companies like Wal-Mart, K-Mart, GameStop, Costco, Amazon, and Best Buy are well-known. Beyond the physical stores, a retailer can also be vendors who sell their products digitally, such as the Steam system by Valve. For the arcade platform, Timezone can be considered a retailer.

End-Customer – the entire process would mean nothing without YOU, the end-customer. As an end-customer you are responsible for turning over your hard earned money to the retailers so you can play your games. You may buy your games directly from a physical store location (like Datablitz), through net cafes that connect to online publishers, through mail order, or through digital downloads. As an end-customer, your desires play a key role in not only what games are available, but how you receive them.

Please feel free to drop me an email with any questions you may have. Space permitting I’ll do what I can to answer your questions in upcoming editions. You can reach me at theinsider@octobereighty.com. Game On!