Feargus Urquhart on Dealing with Publishers

In this interview with Rock, Paper, Shotgun, Obsidian's CEO Feargus Urquhart talks about the business side of game development, and in particular, the inner workings of game publishers and Obsidian's relationship with them over the years. The interview covers Obsidian's struggles to get quality QA for its early games, the studio's subsequent foray into crowdfunding, and some of the specifics of its current publishing deal with Paradox Interactive. It's quite a nice read. An excerpt:

In the mid-2000s, Obsidian earned a reputation for releasing buggy or unfinished games, with Kotor II, Alpha Protocol, and Fallout: New Vegas all receiving criticisms in that regard. But Urquhart states it has always been the case that publishers, not developers, are responsible for providing QA.

“Even back in the day when we were doing stuff with BioWare, or Blizzard for that matter at Interplay, QA was done at Interplay,” Urquhart says. “But then there are these weird situations. With Neverwinter Nights 2, Atari was closing down their Santa Monica office, which we were originally working for. So there was no test locally, and Atari was still trying to figure out where they were going to test games. So we came to the arrangement – now I’m pretty sure we’d already signed up to do the game – we then just came to the thing of like, we would hire thirty testers and then Atari would pay for them.”

Because of unusual situations like this, and the flak that Obsidian received for them, the studio now stipulates precisely the terms of QA in any contract they sign with a publisher. “One of the things that we’ve had to learn to do is to actually, in our contract, to say the publisher must put this number of QA people on the game as of this date. And KEEP them on the game for the extent of, you know, from when the game is ready to be tested all the way through like a month or so after the game has been released.”

There’s no question that Obsidian’s relationship with publishers has been a bumpy road, and one that at its roughest points, such as the infamous Metacritic bonus situation with Bethesda, almost destroyed the company. So when Obsidian had the opportunity to break away from the traditional publishing cycle with its wildly successful Kickstarter campaign for Project Eternity (later Pillars of Eternity), why did Urquhart ultimately decide they still wanted one?

“Whenever we have to dedicate ourselves to something like that it means we’re not dedicating ourselves to the games,” Urquhart says. “As the world knows, 2012 was a tough year for us. So we had to build the studio back up a lot and development needed to be the focus. So a lot of it is we looked to a publisher to do the things that we don’t have expertise in.” In other words, although Obsidian could finance the development of Pillars of Eternity, they didn’t have the infrastructure to publish and distribute it, and it was easier to sign with a publisher that understood these areas well, rather than dedicating an entire section of their own company to it.

This is where Paradox came in. “They’ve really learned how to manage the digital marketplace,” Urquhart says. “I can throw out ten things that I know about managing things on Steam, but they know a hundred,” Urquhart also feels Paradox understand the kinds of game Obsidian want to make. “They just get crunchy, you know, enthusiast hardcore games like Pillars, and that just makes any relationship easier.”

There’s a persisting notion within the games industry that crowdfunding liberates developers from the yoke of oppressive and demanding publishers. But Urquhart believes that crowdfunding simply leads to a different set of responsibilities, and in some ways more responsibilies than having a contract with a publisher. “It’s kinda scary spending your own money sometimes. There’s that old adage that people say particularly about Hollywood. ‘Never spend your own money, always spend someone else’s money,’” he says.

Of course, Obsidian are still spending somebody’s else’s money. The difference is that rather than being held to account by a handful of publishing executives, now they must answer to thousands of backers from crowdfunding sites like Kickstarter and Fig. But Urquhart points out that it’s largely a similar relationship, with communication being key. “I think we do exactly the same thing with our backers as we do with our publishers now,” Urquhart says. “Funnily enough, when we turn a milestone for our publishers now, they get all these videos [that say] this is a feature, this is what’s happening.”

In a curious twist of fate, dealing with fans and backers through crowdfunding has taught Obsidian a lot about how to maintain a good relationship with publishers. The importance of regular updates, of listening to feedback and giving the publisher the opportunity to hold Obsidian to account. This has resulted in some significant changes to how that relationship worked even a few years ago.

“Almost every agreement that I’ve signed whether on the development side or on the publisher side has this sort of generic language that says that the publisher, with five business days notice, can come to the developer and see everything that they’re doing,” Urquhart explains. “But what we’ve changed it to recently; it’s not that they’re able to, they have to. They must come here every thirty days or every sixty days or every forty-five days. It’s a material requirement of the agreement that they come on site and they hang out with us.”