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Commercially Sustainable Creativity


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Colin Anderson's 2012 Turing Festival talk on Commercially Sustainable Creativity. Please note images used in this talk do not belong to the author, they have been sourced from the web.

Colin Anderson's 2012 Turing Festival talk on Commercially Sustainable Creativity. Please note images used in this talk do not belong to the author, they have been sourced from the web.

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  • There’s one question that’s intrigued me since I first started working in the games industry almost two decades ago.\n
  • Why are so few of the games we make in our industry commercially successful?  \n\nI feel well qualified to ask this question as I have personally contributed more than my fair share of games that didn’t make money. However, I’ve also made a couple that made loads, so maybe there’s some karmic thing going on there, I’m not sure.\n
  • Figures vary depending on the source and the specific market segment, but if you average it all out I don’t think many people would disagree with this general assertion: More than 90% of the revenue from game sales is generated by less than 10% of the products. \n\nIs that an inevitability of working in a creative industry like games?  Or is it actually possible to sustain creative success so as to achieve long-term stability?\n
  • I’ll start trying to answer this by outlining my views on creativity and the creative process, because that’s the foundations for everything to do with creative business.\nThen highlight some examples of businesses from other creative industries that have already delivered consistent hit products.\nThen I’ll look at one of those businesses in more detail\n
  • And pick out what I consider to be some key observations we should be mindful of in the games industry.\nAnd finally I’ll discuss how an approach designed to help Silicon Valley tech-startups reduce their failure rate could also help our industry make more “hit” games.\n\nAnd if there’s still time after that, and anyone’s still awake, I’ll be happy to answer questions.\n\nBut first, I’d like to start with a confession: I hate magicians.\n
  • Not the conjurers and illusionists that pull bunnies from hats…\n
  • …or guess which card you pick.  That’s entertainment - they’re fine.\n
  • My problem is with the vocal majority of people that confidently claim anything they don’t understand is magical.  Like the creative process itself - a black art we must simply accept and worship rather than understand and utilise.  And they say it proudly, like it’s a good thing.  Well, I for one don’t think it’s a good thing.  I  may work in what is considered a Creative Industry, but I’m a card carrying scientist, so I have another name for this attitude.\n
  • I call it lazy.  ”The creative process is magic.  There’s nothing we can do about it.  Job done - let’s get on with watching the telly.”  Bollocks - seriously, utter bollocks.  You know why I’m so sure?  Because a few hundred years ago I could have filled this entire room with people who would have said precisely the same about electricity, or magnetism, wireless communication, or luminescence.\n
  • Fortunately for all of us sitting in this brightly lit hall today there were a few more sceptical and dedicated souls prepared to do the hard work to figure out what was really going on.  So its potential could be reliably harnessed and put to work for the benefit of us all.  So here’s to those early natural philosophers who stepped aside from the baying masses of magicians, astrologers and soothsayers and rejected “it’s magic” as explanation enough.\n\nAt Denki we see the creative process in action every single day, and it may be a lot of things, but it’s definitely not magic.\n
  • The biggest challenge facing the games industry at the moment is precisely the same challenge facing every creative industry - how do we create more hits? Our industry is obsessed with hits. And why? Because they are literally the difference between life and death for businesses operating in this market.\n\nAnd yet sustainable commercial success of any kind in any creative industry remains elusive. \n
  • Which rather invites the question: Why Are Sustainable Creative Businesses So Rare?\n
  • In truth, they’re not quite as rare as they might first seem.  There are actually lots of historical examples of individuals that sustained commercially successful creative careers, especially in the book industry - Charles Dickens, Mark Twain, and Beatrix Potter, and more recently Stephen King, Dan Brown, etc., to name but a few.\n\nBut individuals are able to work intuitively, and that’s not likely to teach us much; so we’re ideally looking to find examples of successful teams.\n
  • When I turned to the music industry, somewhat to my eternal shame, the first business that came to mind was the self-proclaimed Hit Factory:  “Stock, Aitken & Waterman”.  Now, to be clear, I personally hold SAW responsible for crimes against humanity, but objectively speaking there’s no denying that they were responsible for a large number of commercially successful records by different groups between 1985 and 1990.  So that’s more along the lines of what I’m looking for.\n
  • Fortunately there’s a much better example in the music industry from two decades earlier - Motown.  Here was a business that had 110 top ten singles in the US between 1961 and 1971.  That’s an average of one a month for an entire decade.  And not just any decade – the 1960s was one of the US’s most tumultuous, with more profound social and cultural change than any other in recent history. \n\nEven better – Motown were critically as well as commercially successful.  So there’s definitely something worth looking at there, though we don’t have time today unfortunately.\n
  • But it’s within the realm of film that I believe the best example of consistent hit creation is to be found.  Not, as you might expect, in DreamWorks (particularly as so many their hits have largely depended on a single producer - Stephen Speilberg), though they’re certainly not a bad example.  Not even within Disney themselves, although again the period where Walt Disney was in charge himself is clearly worth looking at, along with the successful blip they had in the late 80’s/early 90’s around Little Mermaid, Beauty & the Beast, Aladdin and Lion King.\n
  • But no, the ideal company to study would be one where there has been consistent hit films, released over the course of (preferably) more than a decade, made by different creative teams, with different creative leaders, and (again, preferably) without relying on sequels.  That’s where we’re likely to find the most interesting and valuable insights.\n
  • By that criteria, by far the best example is to be found in Pixar Animation Studios.  13 films released since 1995.  Every one of them a commercial blockbuster by any standards.  And almost all critically as well as commercially successful.  Even their flops (by their own standards) outperform most of their competitors’ successes.  At $602m average revenue per film they are the by far the highest earning studio in their industry.  26 Academy Awards, 7 Golden Globes, and 3 Grammies – that’s a lot of critical success too.And, fortunately, they’re pretty open with their processes too.\n
  • So what do we know about Pixar then?\n
  • Formed in 1986 by these guys after their Graphics Group was spun out of Lucasfilm. \n
  • Funded by this guy, who you might recognise from some of his other endeavours.\n
  • And they were simply Pixar back then, because they were a computer hardware company focused on selling their specialist graphics hardware.  This is what they were making and selling when they started - the Pixar Image Computer.  It was essentially a $135,000 graphics card for the $35,000 dollar workstation needed to run it.  Needless to say, it wasn’t exactly flying off the shelves.\n(Speed: 11.8MHz, Memory: 100Mb, 32-bit)\n
  • So John Lasseter started making these - short, animated films that demonstrated the potential of Pixar’s $135,000 graphics card.  They won standing ovations at computer graphics festivals, along with all sorts of critical acclaim, awards and accolades.  \n\nBut still nobody was buying any of their computers and even Steve Jobs was tiring of continually having to fund Pixar to the tune of about $5m/year as they had no sustainable source of revenue and no sign of anything changing on the horizon.  They needed to prove they could make money - and soon.\n
  • Since the hardware business wasn’t showing any signs of improving they decided to investigate how they could use their software and animation skills to generate income.  This was the result: Television Adverts.  Many people don’t realise that between the Academy Award winning shorts like Luxo Jr. and the Academy Award winning features like Toy Story it was something rather less glamorous paying the bills - animating television advertisements.  In the end, between 1989 and 1996 when the division officially closed they created more than 70 adverts for brands as diverse as Listerine mouthwash and Prime Option Credit Cards. \n\nMost of the people who went on to direct features had previously directed commercials, including John Lasseter, Andrew Stanton and Pete Docter.\n
  • Most people have this impression of Pixar as a successful, creative powerhouse, but that’s only their 2nd decade onwards.  Their first decade is just as interesting, but for different reasons.  During their first 10 years they’d take whatever work was going - just like most creative businesses today.  Other companies could have been crushed by this relentless work-for-hire schedule, but far from being crushed Pixar revelled in it - because they understood the value of it.  Not for a moment did they think “Ugh, commercials - that’s so beneath us”, or anything of the sort.  They recognised an opportunity to prove what they could deliver, make some much needed money and (possibly most importantly of all) build their team and refine their production process.  \n
  • They knew that by doing that, when the right opportunity came along, they’d be ready to take it.\n
  • And the rest…\n
  • …as they say…\n
  • …is history.\n
  • They eventually sold to Disney in 2006 for $7.4bn. Well done them!\n\nLet’s stop and think about that. $7.4bn: that’s how much a company that can deliver consistent hit products can be worth. \n\nAnd that’s what Steve Jobs and his Pixar team created in 20 years, from an initial investment of less than $35m\n
  • So as Pixar, Motown and others have proved, creative businesses clearly *can* deliver hits consistently, it’s just that most don’t.  \n
  • So the question becomes: Why don’t most creative businesses deliver hits consistently when it’s already been proven possible? \n\nI think an important clue comes from one of the rather unsung heroes of Pixar: their President, Ed Catmull.  Ed’s a really special talent, and worthy of a talk all of his own.  As the linchpin between an exceptionally talented creative team at Pixar, the commercial hawks at Disney corporation, and the legendary entrepreneurial impatience of Steve Jobs I can only imagine the stress this man has had to endure at times, and the fact he did speaks volumes.  \n
  • One of Ed’s insights is this: he likes to ask audiences a question: “Which is harder to find: great ideas, or great people?” He says it tends to split most audiences 50/50, but that experience has taught him it’s great people that are hardest to find.\n
  • As evidence he cites Toy Story 2.  \n\nToy Story had already been a huge success both commercially and critically.  John Lasseter’s team from it moved on to A Bug’s Life and a new team was brought in to oversee production of Toy Story 2.  They hadn’t worked as a team making a movie before, but then neither had Lasseter’s original team on Toy Story.  All the individuals were clearly talented enough to have been hired by Pixar and there’s no question they worked very hard on it.  So talent, hard-work and ideas weren’t in short supply. Yet the results were speaking for themselves: 8 months from release it was a complete disaster by all accounts - dull, undramatic, unengaging - basically your classic sequel, and certainly not what Pixar needed.\n
  • The people were good, the idea was already proven, but The Team was broken.  The collection of super-talented individuals had failed to gel into a productive, creative team.  So 8 months before release they were replaced by the original Toy Story team, who were already burned out from working on Toy Story and A Bug’s Life back-to-back.  Despite being completely exhausted when they started, and facing a task requiring superhuman effort, they turned it around in record time and, as a result, Toy Story 2 stands today as one of the few sequels regarded as “as good” or “better” than the original.\n
  • Catmull summarises it like this: “If you give a good idea to a mediocre team they will screw it up; if you give a mediocre idea to a great team they will either fix it, or throw it away and come up with something that works.” Great people might be hard to find, but great teams are even harder to find.\n
  • I recently heard the very same sentiment echoed in the words of George Doriot, former dean of Harvard Business School and “father of venture capitalism”.  He’s quoted as saying, “I would take an A team with a B idea over a B team with an A idea any day of the week.”  Clearly he had learned the same lesson Catmull had at some point too: Businesses, especially creative ones, are not about ideas; they are not even about people; they are about teams.\n
  • But Pixar also know that just having a great team is not enough on its own to deliver hits consistently.   \n\nAudiences grow more sophisticated every year, and what was once exciting for them quickly becomes passé.  \n
  • That means adding something the audience hasn’t seen before to your next act. Audiences like what they already know, sure, but they also want to experience something new too.\n
  • So creative teams need to be capable of constantly improving their act and delivering content that audiences find reassuringly familiar and yet also feels fresh and exciting. \n\nThis cycle of constant improvement never ceases for any business that wants to deliver consistent hits.\n
  • Pixar’s rule of thumb is if it feels like they’re working within their comfort-zone it won’t be enough to excite and capture an audience by the time the film releases.  They expect to be operating right on the edge of their abilities all the time, and that means there’s always a very high chance of something going wrong.  \n
  • So failure needs to be survivable.  \n\nEven the most well understood systems in the world aren’t 100% reliable, and the creative process is still far from well understood at the moment.  \n\nSo , my Word-to-the-Wise advice would be – if you ever see a business plan for a creative business and there are no fail-safes designed in to the production process, decline politely and walk away very quickly indeed.\n
  • To make failures survivable in creative industries it needs to be possible to prove value quickly, and without entering full-production.  Generally speaking, the Games Industry is pretty rubbish at this. Many production systems we use mean we don’t know whether audiences find the game engaging until it’s finished.\n
  • And by then it’s usually too late.\n\nGames have to develop ways of finding the fun fast.  It’s the foundation upon which everything is built in a game, so building without it is our industry’s equivalent of building tower blocks without foundations.\n\nAnd why is fun so important in games? Because it is the primary mechanism by which audience engagement is created.  Without sufficient engagement it will be almost impossible to sustain any sort of commercial model for the long-term.  \n
  • That engagement needs to be proven right upfront in games.  What form that takes is still open to debate, but in the film industry we often see Scripts, Sizzle Reels, Screen Tests and Storyboards used to gauge audience interest successfully.  \n
  • At Denki we’ve defined our own system that works for us, and we used it for our most recent game Quarrel – a word game for iPhone and Xbox360.\n
  • It’s a series of rapid deliverables, including a High Concept Pitch; \n
  • Screen Mock-Ups and a Gameplay; \n
  • An internal Playable Pilot; \n
  • and a Releasable/Testable Pilot for external audiences\n
  • The investment in each stage is proportionate to the proof delivered by the previous stage.\n\nOnly if there’s adequate proof of a product’s value at all of these stages do we move it forward into full-production. By then we’ll have proven we can achieve audience engagement in the game’s crude form, which means any improvements we make by adding production polish and sparkle will only increase that.  \n\nWithout proof of engagement before entering full-production, all the production polish in the world won’t hold users beyond their first play session.\n
  • At Pixar their engagement focus is on the story.  They’ll iterate a story for as long as it takes because they know that putting a poor story into production doesn’t make the story good - it just makes the bits that don’t work even more obvious. \n\nPutting a broken story in to production won’t fix it; it just produces a very expensive broken story.\n
  • So if the first reason so many games aren’t commercially successful is prioritising ideas ahead of teams, then the second reason is putting those teams in an environment that doesn’t make failure small and survivable. \n\nOur industry hasn’t yet found an effective way to build fail-safes in to the development and production process.  That, in turn, doesn’t afford teams the safe environment to push themselves to deliver products that are both familiar and fresh.\n
  • What our industry could really do with is adopting a production method that focuses on identifying good teams and empowering them to work in an cyclical way, trying out their assumptions, assessing the results and feeding the lessons back into subsequent versions until they find the fun or run out of time.\n
  • The system I describe is what we implemented for Denki’s internal prototyping team back in 2007. It proved very successful and produced a portfolio of successful game demos, but we never managed to figure out how to get the process working beyond our prototyping team. It still relied far too much on the intuition and experience of key individuals to be of much use on a wider scale at that time. \n
  • But last October this guy published a book that I managed to completely overlook at the time. Fortunately my colleague Sean picked up on it and brought to my attention by saying “this guy’s written a book that pretty much says everything you’ve been saying about how to make games; except he’s applying it to web-based startups. And I think he’s figured out the duplication-with-other-teams bit you’ve been struggling with too”.  \n\nNaturally, I was more than curious.\n
  • His name is Eric Reis, and his book is called The Lean Startup - I’m sure some of you will already be familiar with it.  It’s a scientific approach to creating and managing startup businesses, with the intention of minimising new business failures by identifying and testing the fundamental assumptions they’re based on as quickly and as cheaply as possible.  \n
  • At its core is a principle almost identical to what we’d independently arrived at Denki but had trouble scaling beyond prototyping - building products iteratively in a continuous loop of prototyping, testing on potential customers, and changing what wasn’t working before building the next version.  In this way Denki was already applying Lean Startup’s core tenet - Build; Measure; Learn.\n
  • With one big problem of course – your average startup business, doesn’t look much like…\n
  • …your average game development team. But from Denki’s perspective at least, the overlap is actually quite considerable.\n
  • Consider, for example:* Both assume they’re starting with an idea for a product people will love* Both choose what features to implement based on gut feeling and past experience* Both spend months or years perfecting that product without getting much feedback from potential customers who might use it\n
  • And perhaps most significantly of all, both have a success rate of substantially less than 1 in 10\n\nPersonally, I don’t think that’s a coincidence…\n
  • My takeaway from that is, in a certain light, it’s hard to tell a business startup and a new game project apart.\n\nAnd that’s the key part - once you accept that there’s remarkably little difference between a new business startup and developing a new game project the principles of Lean Startup up can be applied wholesale to whatever game development and publishing process you’re currently using in your creative business.  \n
  • Quarrel was the first product that applied Denki’s own Lean-ish development process consistently throughout its development process; but not to its publishing process. In retrospect I think that was a mistake. As a result it reviews well with people who play it, but hasn’t gained the wide-spread exposure we wanted to achieve.\n
  • By comparison Save the Day is our first product that will use The Denki Difference within a Lean Startup framework for both our development and publishing processes.\n
  • It’s a browser-based arcade save-em-up built using Turbulenz’s HTML5 engine. At this point we don’t yet have compelling evidence of our Lean Startup process in action to share it’s effectiveness with you, unfortunately. It’s just a little too early in the process – hopefully in time for the next Turing Festival though.\n\nHowever, ourselves and our platform partners Turbulenz already have confidence with our initial internal releases that have used this process.  \n
  • And, in the spirit of Lean Startup principles, today – after only 12 weeks of internal development, we released the first fully-public version of Save the Day. The presentation’s still very rough, but it’s already proving where the fun is. This is precisely what we wanted to do with Quarrel, but weren’t able to for various contractual reason.  \n\nRomana, who is in the audience somewhere today, joined us about a week ago as Denki’s Player Champion, and she’ll be focusing our external customer development activities for the game. \n\nSo if you’re interested in learning exactly how Denki applies Lean Startup principles to game development ‘in the field’ then I’d encourage you to sign up for access to our first browser-based HTML5 game Save the Day at this address:; and also subscribe to our Denki newsletter, as that’s where we’ll be publishing all our experiments, results and observations.\n
  • Just go to this website right now and see all the theory I’ve discussed put in to practice for yourself.\n
  • So that’s all I have to share with you today.  I realise that’s a lot of ground to cover in a very short space of time, so here’s a quick summary of what I consider the key points in case you missed anything:\n
  • Creativity and the Creative Process are not magic. They are simply not sufficiently understood yet – but Denki’s working on that.\n
  • There have already been examples of sustainable creative businesses.\n
  • Motown and Pixar are two businesses worth studying in detail for anyone looking for inspiration with regards sustainable creative development.\n
  • Creative businesses are not about ideas; they’re about teams.\n\nFocus on building good teams, not finding good ideas. The quality of your team matters much more than the quality of your ideas.\n
  • Constantly increasing audience demands require creative teams to continually work outside of their comfort zones.\n
  • Failure is inevitable, and must therefore be survivable. Fail-safe mechanisms need to be designed in to the development process.\n
  • Engagement must be demonstrated early and often during development, not hoped for in the end.\n
  • Study Lean Startup principles and consider them as a framework for your Development process and Publishing process . Build products iteratively in a fast “Build, Measure, Learn” loop and feed that out to real customers to prove engagement as fast as possible; measure their effect with real people; learn the lessons from that; refine and repeat.  \n
  • And if you want to watch Lean Startup principles being applied to game development live, WITH a safety net: sign up for access to Denki’s next game “Save the Day” at this URL\n
  • Hopefully then that’s provided some food-for-thought for everyone. In conclusion…\n
  • What I hope I’ve shown is that the answer to that original question, “Why do so few games make money?”, is not a simple one.  But if I had to sum it up, my answer would probably look like this.\n
  • We don’t yet understand the process of making games well enough to know how to build them efficiently; and that inefficiency shows up as a 1 in 10 success ratio.\n\nI’m not saying that’s actually bad, all I’m saying is I think we can do better and Denki wants to prove it.\n
  • In my opinion, Lean Startup represents the best opportunity I’ve yet seen for creative businesses to address that 1 in 10 hit ratio. \n\nAnd while I’m not suggesting Lean Startup methods will be the answer to every problem, I’m sure they go someway to addressing the most pressing ones.\n\nIt’s highly unlikely our industry will get to a point any time soon where every product we make will be a commercial success. But in a market where the average hit rate is currently 1 in 10 – there are a lot of opportunities waiting for any teams that can reliably deliver 2 in 10.\n\nAnd that’s something I’m sure every creative business here today can realistically aspire to.\n
  • Thanks for listening – and let’s talk!\n
  • Transcript

    • 1. Commercially Sustainable Creativity
    • 2. Why Do So Few Games Make Money?
    • 3. More than 90% ofgame revenues are generated by less than 10% of releases
    • 4. 1. Creativity and the creative process2. Can businesses deliver hits consistently?3. Examples?
    • 5. 4. Key observations from other industries5. What we can learn from Silicon Valley startups6. Summary/Questions?
    • 6. Why Are They So Rare?
    • 7. Why Are These Companies So Rare?
    • 8. 1. Consistent hits2. Released over years3. Different teams4. Different leaders5. Few sequels
    • 9. Alvy Ray Smith Ed Catmull John Lasseter
    • 10. Steve Jobs
    • 11. Knick KnackTin Toy Luxo Jr.
    • 12. $7.4bn
    • 13. ?
    • 14. Which isharder tofind: greatideas, orgreatpeople?
    • 15. "If you give agood idea to amediocre teamthey will screw itup; if you give amediocre idea toa great team theywill either fix it orthrow it away andcome up withsomething thatworks."
    • 16. “I would takean A teamwith a B ideaover a Bteam with anA idea anyday of theweek.”
    • 17. Quarrel is Word Crunch meets Dice WarsQuarrel is a simple, fun WORD GAME But Quarrel is also more…
    • 18. QuarrelVisualisatio ns
    • 19. QuarrelReleasable Pilot
    • 20. Fail Fast……but fail small
    • 21. QuarrelPrototype
    • 22. 1. Assume product wanted2. Features implemented by gut feeling3. Long development without much testing
    • 23. 4. Both have a success rate of substantially less than 1 in 10
    • 24. QuarrelScreenshot
    • 25.
    • 26. Save the Day Screenshot
    • 27. Save the DayVisualisation 2
    • 28.
    • 29. Summary
    • 30. CreativityIs Not Magic
    • 31. Somebusinesses havingconsistent hits
    • 32. Best examples: Pixar & Motown
    • 33. Teams > Ideas
    • 34. Familiar + Fresh
    • 35. Failure must be survivable
    • 36. Find Fun First
    • 37. Apply Lean StartupPrinciples
    • 38. Live, With A Safety Net! day
    • 39. Inconclusion…
    • 40. Why do sofew games make money?
    • 41. It could bewe’re making them all wrong…
    • 42. Games Industry +Lean Startup
    • 43. Let’s talk!