Most of the world looks at Madison and sees Overture Center, the Capitol Rotunda and Bascom Hall. Justin Beck and his staff at Madison-based Perblue see medieval castles, towering keeps and fierce, prowling dragons.
Well, at least they do when they're looking at their iPhones and Google Android devices and playing the latest evolution of their most popular game app, Parallel Kingdoms: Age of Thrones. It's a massively multiplayer online game that uses the GPS system on your mobile device to overlay an imaginary fantasy world right on top of the real one.
Think of it this way: Instead of just walking down the street on Madison's west side, you can pretend you're walking through a virtual forest with your trusty virtual hunting dog, tap-tap-tapping your screen to slay virtual trolls, collect virtual loot and interact and chat with other real players.
To some, Beck's software company, which has been in business for almost three years, represents both the profitable present and the fast-paced future of game development - small and nimble start-ups producing lower-budget, social-based gaming apps, sold cheaply and designed to keep players paying and, more important, playing. In the last year alone, Beck and Perblue raised more than $800,000 from private investors to finance their efforts.
Not so long ago, things looked very different in the real-world kingdom of Madison. Back in 2000, Isthmus surveyed the local game-developer landscape ("Attack of the Computer Game Companies," Feb. 18), and the future looked nothing but bright for the big to midsize players on its pixelated stage.
Raven Software, the scene's 100-pound gorilla, was riding high, heading toward a 100-plus staff and enjoying its hard-earned role as Activision's go-to studio for licensed and movie-based games. Founded in 1990, Raven was acquired by Activision in 1997.
Human Head, the development studio founded in 1997 by former Raven employees, had recently wrapped up its third-person Rune franchise and was beginning work on Prey, a game that would see release six years later. (Shortly thereafter, Tim Gerritsen, one of Human Head's key players, would grab a group of developer pals and spin off to form a short-lived studio called Big Rooster Games.)
The stars seemed perfectly aligned for Madison to become another Austin, Texas - a small-but-brainy liberal college town dotted with game development studios as far as the eye could see. But a funny thing, or, depending on whom you ask, several not-so-funny things, happened on the way to Madison-as-game-mecca.
Gerritsen, who bailed out of Madison three years ago to take a primo gig with Irrational Games, the Boston-based A-listers who are busily working on the much-anticipated Bioshock Infinite, sums it up succinctly: "The majors took a hit. Raven took a hit. And Human Head kept their heads down."
Like all tales of intrigue, there's a lot more to the story than that. The gaming industry, both nationally and locally, has been transformed by brutal upheaval in the economy and the sudden rise of new, casual gaming platforms (think Facebook and mobile devices). Talk to long-timers like Gerritsen and Human Head's Chris Rhinehart, and they'll tell you these two phenomena combined to effectively bifurcate the industry.
It's about adaptability
On the one end, big publishers like Activision, Ubisoft and Electronic Arts snapped up studios to work on triple-A game franchises (think Call of Duty), then cut or shuttered them if the games didn't sell well enough. On the other end, mobile and social gaming, driven by the universal, casual appeal of Apple's iTunes Store and Facebook, gave rise to smaller studios like Perblue.
"What died was the midlevel," says Gerritsen. The midlevel is also known as the ground where Raven and Human Head originally staked their flags.
Last year, Raven published Singularity, an original and entertaining first-person shooter that featured time travel and weapons that aged targets to piles of dust. For a host of reasons - not the least of which was an almost criminal lack of marketing support from Raven's publisher - the game never quite found a wide audience. Shortly after its release, Activision slashed Raven's staff by 30%.
Human Head, meanwhile, seemed headed for its own oblivion. Then, a few months ago, reports emerged that the east-side company had landed a deal to develop a sequel to Prey for Bethesda Software, set to release later this year. "We're very skilled at staying under the radar," says Rhinehart.
Raven's far from down for the count. Brian Raffel, Raven's co-founder and vice president, says the company's currently working on several undisclosed projects for Activision, and it's been unofficially linked to the next James Bond movie tie-in game. But there's a mix of bitterness and defiance in his voice as he wonders if the state business climate is conducive to Madison becoming a nationally recognized game development hub.
He points to weak political support for the tax incentive that was supposed to encourage both filmmakers and videogame developers to flourish here. He also points to Canada, where wide-ranging tax incentive programs have allowed companies like Ubisoft to develop triple-A titles like Assassin's Creed: Brotherhood - and even form their own movie development wing.
"As a businessman, it's about adaptability," notes Raffel, who watched his staff swell to nearly 120 employees when Raven's workload was heaviest. "We outgrew our capacity for positive return on the creative front. Working on three games at once [Wolfenstein, Singularity and X-Men Origins: Wolverine] really hurt us. These days, it's all about quality, not quantity. You get paid much more for one great game than for three mediocre ones."
Most of all, Raffel shakes his head at the way his industry's business dynamic has changed, not unlike like the terrain and timestream in Singularity. "Five years ago, everyone was going to buy $60 games, and now they won't," Raffel says. "The iTunes mentality has really changed that."
So has the successful formula deployed by mega-popular franchises like Call of Duty and World of Warcraft, each of which thrives by cranking out a steady diet of new content. "These games capture players and keep them from playing other games," Raffel says. "The old model used to be, play a game for 10-15 hours, then move on."
The biotech model
Whereas a major console release such as Call of Duty: Black Ops can take years and tens of millions of dollars to develop, an iPhone app like Angry Birds can take mere months, and can be downloaded at an impulse-buy price.
In the case of games like Perblue's Parallel Kingdoms, the profit is backloaded. Downloading the app to your mobile device is free, but if you expect to make any sort of real impact in the game's world, you'll have to spend real-world dollars on things like roc feathers, gold and improved weaponry.
The industry terms are "monetization" and "microtransaction," and for the moment, they represent a pretty solid business model. Perblue's Beck won't disclose actual sales numbers, but he does note that more than 400,000 people have downloaded Parallel Kingdoms since it launched, and that many of them are "persistent and active" players. In other words, they're using their credit cards to buy in-game items.
"We don't have a hit with Parallel Kingdoms as much as we have a grind," says Beck. "It's more valuable because it's consistent."
Beck has a lot of respect for the ways Raven has successfully navigated the changing game-industry tides. As he notes, not every game company manages to stay in business for 20-plus years. Still, it's not exactly a surprise to learn that he favors Perblue's model - go small, get in and get out fast.
Beck is convinced that Madison's path to game-development greatness should follow the well-worn one that's been trod by local biotech start-ups, multiplying and spinning off faster than the Raving Rabbids in Ubisoft's minigame franchise. The word he uses is "churn."
"If Madison is going to become a city of gaming, you're going to have to see more churn," says Beck. "Churn is healthy when creating a professional culture."
Beck already has plans in place to do his part. Within the next five years, he says he'll have sold Perblue to a larger publisher, maybe EA, maybe Zynga, the company responsible for the annoyingly ubiquitous Facebook game Farmville, and be on his way to the next project.
"My ultimate goal is to staff myself out of a job," he says. "I want to create a culture that isn't dependent on me."
Even though "microtransaction" is currently the fastest-growing section of the game industry, Raffel isn't convinced that it won't burst the same way the dot-com phenomenon did in the 1990s. "It comes down to the current definition of creativity," he says. "And right now, the parameters are just different than they were five years ago. We're getting ready to see where it leads, but I'm definitely glad we're with a stable company."
A nice ecosystem
From his offices in the new Wisconsin Institutes of Discovery, Kurt Squire looks out on Madison - and Middleton, where Raven's offices are located - and sees not a kingdom of virtual castles, but a kingdom of possibilities.
In June Squire, an associate professor and games-in-learning researcher in the UW's School of Education, will be part of the group that hosts the seventh annual Games+Learning+Society Conference. The event brings together some of the brightest minds in games education and research (see sidebar). And last week, Squire and his spouse, fellow UW education professor/games researcher Constance Steinkeuhler, met with Raffel and his Raven staff. The meeting began the overdue process of building local bridges between games academics and industry, and helping to find ways to help Raven raise its game.
That ball will continue rolling at the GLS conference. "We plan to host a special convening among leaders in the different parts of the Madison gaming community to help people get a sense of the bigger picture, and see if there are ways we can work together," says Squire.
The potential is certainly there. Squire points to Filament Games, the Madison-based group founded by former UW School of Education grad students, as further evidence of the local scene's health and growth. Over the last five years, Filament's been cranking out a steady stream of science- and learningbased games, mining the growing territory known as serious games.
With a growing number of grad students coming back from the games industry to learn, teach and perhaps even spin off their own companies, the synergistic possibilities could end up rivaling the plasmid power-ups in Bioshock 2. And perhaps create a different vision of Madison as a game city. "I imagine a nice ecosystem of the university and our group doing start-ups, subcontracts and so on," says Squire.
Madison may never grow to rival Austin, Boston or Montreal on the list of game development's most recognizable cities, but there's obviously no shortage of energy. "I still think the ingredients are there," says Irrational's Gerritsen. "Madison's creativity and technology are still as strong as ever. The industry and the opportunities just changed."