During my trip to Holland to cover StarDrive, I sat down with Erik Schreuder, Iceberg Interactive’s CEO, for a chat about StarDrive and the Iceberg Interactive role on its development. I also took the opportunity to peek in the publisher’s mind, in order to learn more about topics such as publisher duties, digital VS retail sales, DRM issues, to Steam or not to Steam, among other topics.
Iceberg Interactive was the publisher of the space strategy games Armada 2526, Star Ruler, Gemini Wars, Endless Space and now StarDrive. It’s clear that Iceberg likes the genre. So, that was another reason why I was so keen to have a chat with them. The interview came out a bit long but I think it’s really worth it if you’re interested to know more about what game publishers do, and to have their perspective on things. This is particularly useful if you’re thinking about making your own games and want to know a bit more on how the industry works. Enjoy!
SS: When do you plan to release StarDrive, and where? And, do you have already a price set?
Erik Schreuder: The price is going to be 29.99 for this game. You know, that is considered full price nowadays. But, I was just talking the other day with one of my colleagues that games used to cost 100 guilder in Holland, and that’s approximately 45 euros. So, PC games have only gone cheaper, and now 29.99 is considered a major price point, but it really isn’t. Because console games are still 60 to 70 euros, which corresponds with the price they had when they were in guilders still in Holland.
So, PC games have become cheaper. And, people are so used to promotions, that they can get their hands on PC games very cheaply. But, we think this has a good production value, this game. You know, Daniel has worked on it for years. It’s only recently that he stuck his ahead above the field and people started to notice. But, he’s been working on it for years behind close curtains, so there’s a lot of hours in there that you can’t even count.
It all comes down to the value of the game plus, you know, I think it’s a very deep strategy game. I even found it a little bit daunting to really get started. It’s so deep and there’s so many aspects. So, we feel that this is a good price point. I think it brings a little bit more to the table than other 4X games that have released for 19,99. You know, Endless Space is an example, that we went out with 29.99 and 34.99 for the Emperor edition. We feel that 29.99 is the right price point for this game.
SS: And, do you have a release date already?
Erik Schreuder: Now, the problem with release dates and communicating them is that you also have to disappoint people again. We had an internal planning that we discussed with Daniel. But then if you don’t make it, people start to become disappointed. But, for sure in Q1 2013, this game should come out. We’re currently going through extensive QA, outside the company. We test, Daniel tests, but we feel that for a complex game like this it wouldn’t be enough. So, we hired an external company specialized in functionality testing, and that is, you know, typically something that should last about 3 months.
But, there have been some 4X games that came out and were really too buggy. And, we hate to see that people lose confidence in a genre. Because, it’s really up to the publishers and developers to make decisions that calls them to go out buggy or not. In this case we made a conscious decision to invest more money to get a really proper outsource testing done. That has delayed the release a little bit. I had originally hoped that we could release by Christmas but, you know, looking at all the promotions that are happening in every website in Q4 this is maybe not the best time to release anyway. We hope to come out with a better launch because we had a better launch plan for this game. And then we intend to stay for a decent period in Beta to give players the time to supply feedback and to actually do something with that feedback. So, it’s not going to be like it’s a couple of weeks and then we go full launch. But we do intend to have a very polished beta that we are going out with.
So, we don’t want to tie ourselves to dates and then force everyone to go out. That’s how you get buggy releases. You have a date and everybody wants you to stick to it and gamers are waiting for it. But I think in the end, if they had the choice they would rather see the game delayed than have a buggy release. And, also for a publisher and the developer obviously, you don’t want a bad feeling within a community that a game is buggy and then this name will haunt you forever. So, we rather invest more time and release somewhat later and make a good first impression, because you can only make a first impression once.
So, I feel this is really important, especially considering what happened to a couple of other 4X games where I read on forums that people were losing interest in buying something early or investing in a bad product. So, we want to get that confidence back. I think Endless Space has set a good example on how it should be done, with the quality of the alpha that they released on Steam. I think that people were very impressed by the polish level and that’s what we’re trying to do here as well.
SS: So, the final release date is still unknown. Will the Beta be still this year?
Erik Schreuder: It’s not going to be this year. No. Because the QA plan extends to shortly after the new year. So, a couple of weeks later we’ll probably release the Beta. But I’m not gonna say: this is THE date (laughs). Because it can become a week later. We’ll see. When we get closer, obviously, we’ll get a better grip on the situation. But at the moment it is still certainly one or two months away.
SS: What made you decide to invest in StarDrive, and in which way is it an Iceberg Interactive game?
Erik Schreuder: Well, it’s an Iceberg Interactive game in the sense that we are the publisher, so we have publisher responsibilities. But, we are not a publisher that wants to own the IP, or get a stake in the developers company, or take them over, or something like that. We are a publisher partner, but the IP is the child of the developer and we don’t want to get our hands on some else’s child. This is a nice child, very talented and you can do nice things, but we don’t want to change it. We just give feedback like you do. You played the game yourself, and gave a couple of tips.
That’s what we do. We give tips and hints and say “tweak this, tweak that”, but certainly we’re not gonna sit in the developer’s chair and command him what to do. We are a more distant publisher. We certainly stay away from the concept and the idea the developer had. It’s his game, or it’s their game. We are partners that take care of certain publisher duties, like QA, funding, supplying advances and stuff like that. We do PR, do marketing, do age rating, localizations. Sales obviously. Putting it on as many additional portals as possible. Get accepted on Steam. Put it out on retail in certain countries.
So, those are all our obligations. That’s what we intend to do. He’s developing the game. We don’t have any programmers here, or game designers, or animators. We’re just all about sales, PR and marketing. Then we have Raymond, our business developer, whose job his to track good games that could be suited for the Iceberg brand. And then keeping in touch with the developers during milestone deliveries and stuff. Telling me – “this game is not going to make in time”, so we have to postpone it for example. Or, “the quality of the game is lacking a little bit” and we need to talk with the developer. But, that’s where it stops, our involvement in the game development that is. So, certainly we will be in the credits list, but we didn’t participate in the game design or actually made something that you’re seeing or doing.
SS: Now, on a general sense, what’s important and key for you when deciding to invest in a particular game project and not on another? What do you look for?
Erik Schreuder: Well, first of all we look for games that we tend to focus in, in one of four genres: strategy, simulation, adventure and action. So, it’s very unlikely that you see us invest on a football game, or a racing game on PC, or things like that. So, we tend to look at the genres, because this is what we’re known for. This is what we have done before. And, these are genres that are not too crowded with AAA releases and where we can stand out with our own excellent game. Don’t being hammered by some kind of AAA release that is making us a “me too” game. Because that’s what you get when you release a football game, or when you release a shooter. We have done that in the past but they had little things that made them a little bit different.
For example, Nuclear Dawn is a shooter, but it is also a strategy-focused game. So, it was a little bit different from a normal action game. So, in those cases we tend to say – “ok let’s try it”. And, we’ve done Killing Floor which was a huge success.
But we also did a couple of MMO games, MMO action games, which were not really that successful. And now we’re trying a couple of iOS ports, which were also not great successes. We’ve now concluded that we need to stay with these genres that we’re strong in, and maybe we will do another genre. For example, in the past with my previous company, Lighthouse Interactive, we also did RPG games. But, they have, you know, a ton of localization, which makes the investment pretty high.
So, we try to stay away from those as well. We tend to minimize the localization requirements, and role-playing games have many thousands of words. So, Starpoint Gemini was an example of a game that really got out of hand in terms of localization. We did the German localization for it. But it really had a lot of words and a lot of voice overs, and that was a space game. For an RPG it wasn’t even that big, but compared with other games of ours it was pretty big. So, for Starpoint Gemini 2 we have now said to the developer – “hey, trim down the word count a little bit and the amount of voice overs, and you know, make up another system for that”. So, they are rebuilding now.
But, yea, this is one of the reasons. The game must fit in a certain genre. It has to be something that we think has the quality that we strive for. We aren’t gonna just release anything. Because, the retail market is difficult. You got to have a quality product to still make it to retail in Europe, where retail is still somewhat stronger than in the United States for example, where it’s even more difficult if you’re not AAA to get into retail. But, you know, not everything will make it to retail if it certainly doesn’t have the quality, then there’s no angle to get in.
And, we have to like a game ourselves. I think that’s important as well. We are definitely a company that is, you know, “by gamers for gamers”. I played 4X games myself as well. I also play action games. So do the guys here. Maybe the ladies here don’t play as many games as we do. But, certainly, the core of the team, that’s been together for many years now, are all still gaming. Aside from age and things like that, we’re certainly avid gamers.
We need to like the game and another thing is that we get the idea that it’s manageable financially. Of course, I mean, you can see a great game in a certain genre but if you get the idea that the investment is going to be too high, then obviously nothing will happen.
So, there’s a lot of conditions there, but we still manage to find ten to fifteen games a year that we publish. That’s enough and we are actually thinking about cutting it down a little bit. We released about fifty-five games in less than four years. It’s a bit much, so we’re now going to focus for a couple of months in anything else but StarDrive, because normally we have about one to two releases per month. December and January, because of the retail constraints, you cannot release a game unless you just do it digitally. So, we’ve now done everything for Q4 and from now until Christmas, and all first quarter, we don’t have any other games to focus on than StarDrive. So, we’re going to change things around, and say – “ok, let’s focus on one game with the entire team and see what that brings”.
SS: And, are you also going retail for StarDrive?
Erik Schreuder: Yes, both. Retail and digital. Our retail is now focused on Western Europe. With my previous company we were also on North America. But, as I said, retail in the States is pretty much dead. It’s all digital now. So, for us, the way to reach them is digital.
In Western Europe there are still some viable retail markets, like the UK, which is diminishing as well. But, most of all Germany is still quite strong with PC sales in a box.
SS: Ok, and speaking of games-in-a-box, you mean in kind of a standalone way or do you usually require a third-party tool like Steam for instance?
Erik Schreuder: Some games that we put in a box have Steam on it. So, you could also put a key code in a box. It has an install DVD, but that will probably update with the Steam updates because there’s a gold master, that was made on a certain date. And these units can be sold half-year or a year later. So, you still require an update on Steam because most games get regular updates on Steam. But, the base game is then installed from your drive, and the rest is being done on Steam. But, there also games that we released that don’t have Steam, or that are non-Steam versions.
SS: And, in the case of StarDrive what are you going to do?
Erik Schreuder: It will be Steam. Basically, like Endless Space.
SS: You were the publisher, or at least helped on the distribution, of the space strategy games Armada 2526, Star Ruler, Gemini Wars, Endless Space and now StarDrive. Is your intention to continue investing in space strategy and 4X games in the future? And, if so, why?
Erik Schreuder: It’s one of the genres that is doing well for us. In my previous company we did Sword of the Stars 1. So, that’s where I got into 4X myself. It’s a genre that we personally like to play. So, that’s one condition, that we like a game, that we like a genre. It’s also a genre where development is not crazy expensive. There are genres out there that are more expensive to make. So, it’s usually something that falls within our budget constraints.
Plus, you know, space strategy and 4X games, they tend to sell well. They also still do well in box retail in a lot of countries in Western Europe and they usually get on Steam and they do well on other digital portals. It’s a genre that certainly is performing well. There’s a solid base of space strategy gamers out there. They tend to be quite loyal purchasing a lot of these games. So, this is important, that you have a good solid base of gamers. I mean, one project will be more successful than the other but we never have a real dog, with space strategy. They all performed from decent to really good. So, it’s certainly a genre that is doing well.
SS: You say that your roots are still in the European retail games market, but on your website you say that you are “rapidly increasing your focus towards the global digital games market”. What would you say is the weight of both types of games distribution right now in your business? Digital and retail?
Erik Schreuder: Well, the thing is, not all our games are on Steam. On one hand we have retail sales which is fifty games. On the other hand you have the Steam sales, which is maybe ten games. So, I think if all the games were on Steam, digital would be the biggest. But, since this is not the case, at the moment retail is still bigger, maybe 60%-40%. But, next year I expect that retail will be smaller for the first time than digital. So, we are going very fast now.
SS: Do you think digital sales will completely replace retail products in the near future? And, why, or why not?
Erik Schreuder: For publishers, and for developers, there’s a big advantage in box sales: you have something physical in your hands. But, on the other hand, in digital sales you have more margin because the chain of the games industry is developer – publisher – distributor – retailer – consumer. And who is the distributor? The distributor is a local partner of a company like ours, a smaller company. So, we don’t have a daughter company in every country. We have third-party distributors who distribute our products locally in a certain country. So, we have a distributor company in Germany, who handles our titles in that territory. And we have one in France, and we have one in Scandinavia, another in the Benelux and one in the UK. That is completely skipped with digital, because Steam is not a distributor, it’s a retailer. So, you basically skip this and they take margin, so with that margin you win. So, that’s a big difference already.
Another major advantage with digital sales is that you can start with promotions. In retail there’s a price sticker on the box, and the only thing that happens is that it is replaced by a cheaper price, and never goes back up. So, your product is phased out in retail. They take two thousands units, some are sold at this and this price, then it goes down a little bit and this is sold, and then this is sold and it’s phased out. And, never returns. Unless in a super budget two years later or something like that. But, in general you’re limited in your sales by the possibility of the retailer to stock it. And, obviously, with digital you can do promotions and put the price back up. Plus, the stock is never gone. There’s always stock! These are great advantages.
And, I think a fourth major advantage with digital sales is that you reach countries where you normally never sell something. On Steam, people can buy from Zimbabwe, Thailand and Uzbekistan, people that would never buy our product. They would probably never play it, never hear about it or they would pirate it. And now they have the opportunity to legally buy something online. So, you actually get more customers, because you now certainly are global. With retail, we get good distribution in richer countries. You know, like Western Europe and the United States, Australia, where people have some money to buy games that are twenty, thirty or forty euros, and do that on a regular basis.
But, in a lot of countries, where the economic standard is lower, there’s no interest in putting those games in retail. But, there are still people who have enough money there who want to buy something, and who can afford to spend thirty euros. And also, Steam has lower prices for certain regions. If you set a price on Steam it varies according to the country. There’s also a standard price, but that doesn’t translate to thirty euros. It’s just thirty euros in a regional economic sense. But, you still make extra money out of that. And that’s the fourth major advantage.
The only downside of digital is that you don’t have a box. Something to put on your shelve. Maybe with a poster, an art book or a big manual. Those are the downsides. But, the upsides are obviously bigger than the downsides.
I think that retail will not entirely go away. What we’ve noticed is that some retail chains, for example in the UK that we used to deal with, now only sell AAA games. So, I think that will be the case. That in the end only AAA will make it to the retail shelves.
But, what might happen is that they say, well, we just put the key code in the box, and not the DVD anymore. Just the key code, and you can download your thing. But, there’s an art book, and there’s a poster. So, there’s more stuff in the box because there’s no DVD anymore, so there’s more room. It’s more like Collector’s Editions, Special Editions. Those will still be in retail. But, you know, the amount of games that will do that will be fewer. I think that in five years there might be far less brick and mortar stores that are selling music, entertainment and games and films. Because people just order it online.
SS: You support games which have DRM protection, like Endless Space, but also games which are DRM-free, like Star Ruler or Armada 2526. What’s your opinion on the use of DRM? And how is that a factor into your business, if at all?
Erik Schreuder: Obviously, sometimes it has to do with the developer not being able to create DRM. But, they usually tend to want at least a key code, to prevent that people just copy it and give it to their neighbour. But, you’re not gonna stop professional piracy. We don’t have any illusions about that. It’s not that I approve it, but it’s a given. It’s something that exists and they are gonna crack anything. They crack Steam, everything is cracked. A key code will not protect you either.
So, we have no rules about that. But, yea, if we release something DRM-free maybe it’s because it’s part of a design decision, or the developer really has a strong feeling about wanting to go DRM-free. But, we don’t have a safe policy where we say, this needs to be applied or we don’t sign the game, or something like that. So, we’re flexible. Like I said, in the end it’s all gonna get cracked. We certainly are not going to use expensive DRM solutions that are going to get cracked anyway. So, a simple key code or something like Steam that’s what we prefer. And, you know, if it gets cracked it gets cracked, and it will. It will get cracked.
10. Do you sell only PC and Mac games, or do you also sell console and mobile games? And if not, do you see yourself selling those in the near future?
Erik Schreuder: We don’t sell console. The reason behind that is that it’s very capital and time intensive. Meaning that if you release a game for PS3 as a publisher you pay 12 euros per copy and you need to pay that three months in advance to Sony, or Microsoft for Xbox. So, if you order 30.000 copies – which is a very small order – that costs you around 360.000 euros, three months before the release. And then the distributors don’t pay you until two months after release. So, basically you’re fronting 360K for five or six months, and then you have to hope that these guys pay. Everything in retail is with right of return, so if it doesn’t sell you’re sitting on stock that is worth 12 euros per unit. So, this is very risky business. The price that you’re getting is a little bit higher, but the investments are really high. The risks are really high.
And, secondly, the console life-cycle is very short, where with PC games you usually sell them for four or five years. But, if you now invest in a PS3 game, how long is that going to be a viable market? At this stage. Yea, we have our thoughts about that and we try to stay away from consoles, that’s basically it. This submission business is for people that know what they’re doing. And we are all about PC games, and nobody here has ever done a Playstation submission before.
Plus, a third reason I think, is that Playstation coders are way more expensive. If you look at the development team. You need more knowledge to make a Playstation game. You need a bigger team. The licenses for the developer will be quite expensive to begin with. These are the reasons for us to stay away. I mean, I’ve always a been a Playstation gamer myself, but we’re a privately funded company. It’s just too risky.
And, as far as mobile is concerned, we are looking into mobile. Yea. But, that’s also a very much a hit and miss market. We’d rather acquire knowledge, or outsource it, because owners of an IP are always convinced that they will do well and they need the PR and marketing. And, you’ve got to have a phased approach, I think. Release it in a couple of smaller territories first, try to reach the top positions. Top 10, top 5. And, from there we go to other countries. This will be our strategy for mobile.
We are looking at some games now, but we have some people in the company that were involved in mobile releases and they were not successful. There’s a big chance that you’ll fail. In PC games we know what we’re doing and the hit and miss ratio is far better. A hit for us is not a hit for EA mind you. If for example we can repeat the Endless Space sales, then we will do really well.
SS: What was the last game you played strictly for pleasure?
Erik Schreuder: The last game that I played was Killing Floor. It’s one of our own games. I played it like, yesterday.
SS: Just for pleasure?
Erik Schreuder: Yea. No, no it was not work. Just for pleasure. And before that was Endless Space. I also have a Playstation 3, so the last game I played for, I think, was GTA 4 Liberty City Stories. I may play it for a few weeks now and then, and then I don’t play for a couple of months. Because, I’m so busy that I don’t have a lot of time now. I have a lot of movies and TV series to look at. Do something with your girlfriend now and then.
So, yea, Killing Floor is a really nice game. I’m very good at it. I’ve invested sixteen hundred hours over three years in it. So, that’s like months, full-time. So, I’m pretty much at a pro level, and sometimes it’s a daunting perspective actually to start with a different, new game and become a stupid rookie again.
To be honest StarDrive, to me, sounds so complex that I’m a little bit afraid to get started. I mean, I will. But, with Endless Space I thought – well I know 4X games I’ll just not go through the manual and start. But, that didn’t work out. I then watched some videos and tutorials. Then I played against the weak AI, the normal AI and the hard AI. I won them all, but in the beginning I was super bad. But, you get the hang of it. But, it takes time, you need to invest a lot of time in these games. And to me, at this moment in time, I think StarDrive looks even more difficult than Endless Space.
Thank you for your time Erik. Good luck for StarDrive’s release.
StarDrive’s Beta is scheduled to start in the beginning of 2013 – probably mid-January. Pre-orders are expected to start by then on Steam. StarDrive will also be sold in retail form in some European countries. Desura is also another possibility, where actually you can find more information about the game, and also on the StarDrive official website.
For more information on StarDrive’s gameplay have a look at our hands-on preview.
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