Ahoy, transmedia! Warner Bros. sails into digital games (interview)

GamesBeat: That seems to be one of the things where the social and mobile people have done a lot for the whole industry.

Ballard: That’s right. Just to talk a little bit about our history for a moment, Turbine was really the first American company to make this big change. They went from a subscription-based game, The Lord of the Rings Online, to free-to-play. I had a common board member when I was at Glu and they were making that transition. That board member was jumping up and down and saying, “We should do the same thing at Glu.” We were resistant for the very reasons you were just mentioning about Activision and others. It would have cannibalized our business. But we watched what happened — everybody in the industry watched — and the revenues for Lord of the Rings went substantially higher in the aftermath. To some extent, that pioneering effort by the folks at Turbine, followed ironically by some of the folks who left Glu and started Playfish, among others, was a lightpost for where this industry is going.

GamesBeat: How do you keep up with some of the startups and move fast? What is good to move fast at? What’s also good to sit back and watch?

Ballard: That’s a very good question. The place where it was good to be conservative, and maybe even somewhat slow, was in starting the studio to begin with. Had we done this three years ago, it’s not clear to me that brands had yet become as important or as valuable as we believe they’re going to be. Waiting was ultimately helpful. Now we have to be very quick and nimble in reacting to the market and getting our games into the market.

This one of the places where what we’re doing is the most innovative. At the highest levels of Warner, we have been instructed to have this studio be as autonomous as possible in a corporate environment. [Chuckles] I’m learning that’s still not as autonomous as other studios might be. A lot of people from corporate are willing to help. But we are going to try and run this organizationally to where we have very few decisions that have to migrate up for review at Warner. The idea is a single point of contact between my boss and the organization. Only when we need additional capital or to vary our plan are they going to be looking over our shoulders. If we can do that, I believe we will have the best of all worlds — big brands, big capital backing, but a quick and nimble operation.

GamesBeat: With mobile, one thing that’s unclear is how many titles you should release a year. Kabam has relatively few, but they’ve gone to the top of the charts. Their kind of game enables them to do something relatively infrequently. What sort of model do you think you would be following?

Ballard: I like the big, successful ones. [Laughs] That’s the model we choose. It’s interesting. You look at something like my former team at Glu. They’re doing something like 15 titles this year. Each one of those is smaller. It doesn’t generate the same sort of revenue that a Kabam title does, but that’s their model. We’re going to only release a few titles a year for the first couple of years.

That’s in part a decision that is biased toward the Kabam model of “fewer but bigger.” It’s also to get our legs underneath us and figure out how we can make high-quality titles repeatedly and well. I suppose even if I believe that the Glu strategy was the right strategy — it might be — I’m not sure if we could get there very fast. It’s convenient that we’re doing fewer titles. We hope that we have even a fraction of the success that Kabam has had.

GamesBeat: Mobile can go a lot of different ways. Does the corporation expect it to contribute very quickly to the overall picture in games?

Ballard: There’s a fair amount of patience and willingness to invest, but we certainly believe that in several years it should be an important contributor. It’s already an important contributor — not through our freemium games, but through our premium games. Lockdown, for example, has done extremely well. Scribblenauts has now been downloaded three million times. We have titles that have done well and been very profitable. If you look at the profitability of the mobile group within Warner, it’s probably one of the most profitable parts of the games business right now. The dollars aren’t as big as they are in the console business, but they’re meaningful and noticeable.

I want to come back to emphasizing this point — we are responsible now, in San Francisco, for publishing all of the titles from Warner in the mobile and browser arenas. All of those titles will collectively contribute to a pretty sizable business.

GamesBeat: What do you think of transmedia, the whole joint strategy of releasing across platforms and across media?

Ballard: We’re very intrigued. We’re intrigued in no small measure because we’re perfectly situated to do it. There aren’t many companies that have a vibrant film and video studio capability along with a games business. I expect that at some point we’ll do something.

The biggest challenge is that this is one of those concepts that’s a lot easier to talk about than it is to do. Every time I have looked at a proposal, I’ve found that the film is very intriguing, very exciting, and then the game bears only the faintest relationship to the film or the video. Trying to get to where the game is a truly meaningful interactor with the video is the challenge of transmedia. So far I haven’t seen anybody pull it off. Now, I’m not a creative person. All I know is that when I see something, sometimes it clicks and sometimes it doesn’t. I haven’t seen one that’s clicked yet. But I love the idea.

GamesBeat: I’ve seen huge efforts like Defiance with Trion Worlds and SyFy.

Ballard: And it remains to be seen whether it will work. The beauty there has to be that the interaction between the two creates something bigger than the sum of the parts. We don’t know yet whether Defiance will do that. I hope that it does. It’s good for the industry if it does.

GamesBeat: Movie games seem to be doable much more easily in social and mobile. Under the console model, it kind of broke down. You had to make a game two or three years ahead of time. Release dates got spread apart. I don’t see too many movie games like that anymore. With the shorter release cycles of mobile and social, it’s much more manageable.

Ballard: The budgets are smaller as well. The one thing we have to bear in mind is that the lifetime of a mobile game should be 18 months, if you can pull it off. It’s a long tail. A lot of these movies come and go in the mind of the average consumer such that it’s hard to imagine them staying engaged with it that long.

The beauty of Warner is that many of our movies have transcended brands. When you talk about something like The Lord of the Rings, you’re talking about a brand that’s bigger than any one movie. The DC characters may have movies associated with them, but the brands themselves are bigger than the individual movies, and there are other brands within Warner starting to take on those characteristics. What I hope we will do is take advantage of those brands and help some of the other brands become more transcendant. You’ll see us doing a fair number of movie titles, but movie titles that we believe have longer legs.

GamesBeat: As far as organization goes, do you have digital people in every studio, or is this going to be the digital studio?

Ballard: It depends on the developer. NetherRealm did Batman: Arkham City Lockdown. They’re working on a title right now that hasn’t been announced yet. Different studios have different capabilities. Not every single developer has them.

Part of what we’ve decided to do with this operation is centralize the publishing and the marketing of all the efforts from the studios. The rest of our studios will continue to do mobile games, but we’re going to manage their marketing. Each studio won’t develop an expert on e-commerce or a person in charge of monetization. That will be either here or with a handful of people in Burbank still. What we’ll do is let developers be developers. We will be one studio developing free-to-play games. The other studios will continue to do big mobile games that are oftentimes associated with a console title.

One last comment. When I was at Glu, I remember being at Steve Jobs’ announcement for the App Store. I had a conversation right afterward with the guy who ran my studio. He pointed out that one of the challenges for a company like Glu, going forward, was going to be competing against the console companies who would be able to bring the richness of their assets, developed for console, to the smartphone much more cheaply than a company like Glu or Kabam or others who were building from scratch. Ironically, that wonderful confluence of high quality and low cost was available to one player in the marketplace but not available to others. We intend to continue to exploit that when we have a console title and make robust, beautiful games, but those may actually end up being premium games for sale, as opposed to free-to-play. Maybe, in that sense, we too can’t quite get used to giving away something for nothing.