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A Gaming Player's New Set of Rules

Alexander Seropian and Jason Jones were fresh out of the University of Chicago in 1990 when they launched a computer-game company called Bungie in Seropian's basement apartment. After 13 years, several hit games (including Halo, the precursor to this season's smash, Halo 2), and the outfit's sale to Microsoft (MSFT) for cash (see BW Online, 12/23/04, "Bungie's Jump into the Big Leagues"), Seropian set off on his own to start Wideload Games. His goal: Create a videogame company based on a movie-production business model, rather than the traditional software-development approach.

BusinessWeek Online reporter Burt Helm recently spoke with Seropian about the business of gaming: How it has changed, what remains the same, and why startups can still get in on this multibillion-dollar market. Edited excerpts of the conversation follow:

Q: What makes a game good, in your opinion?

A: It all sort of comes out of the idea of trying to create a believable world. One of the most compelling things about Halo is that everything is believable. You know you're playing a game, but that's why the Warthog (a Jeep-like vehicle in the game) has a suspension with wheels that bounce around realistically. You look at it, and whether you notice it right off the bat or not, you don't go, 'That's doesn't look right.' That's a theory that permeates everything we do.

Q: How did the Microsoft (MSFT) acquisition affect Bungie?

A: I had a lot of different thoughts. There was this opportunity to take the company three or four next steps, all at once. Taking care of the value that we've built up in the company, and solving all of our current and future funding needs -- they were all solved with doing a deal with somebody.

But it was a little bit of a mixed bag for me, personally, because going out to Microsoft -- I loved working there. I was still working with all my team, and there were a lot of other people around us, Microsoft guys, who are real smart, and I learned a lot from. But my job had changed a lot. My responsibility was to keep the Bungie culture alive, which meant shielding us from the large corporate entity of Microsoft, and the politics that come with it. It wasn't really what I wanted to be doing, which was being an entrepreneur, running my own shop.

Q: What did you hope to do with your new company?

A: I didn't want to start another Bungie, because I didn't think that would work.

Q: What do you mean by "another Bungie?"

A: Another independent developer that was going to try to grow by adding people and projects, because the growth curve is untenable. The whole theory behind what we're doing now is that 11 people work here. And, I think that's all we need. We are doing all of the asset production with contractors, and we focus on the fun work of designing and writing.

Q: As you have said before, like a movie studio works.

A: We certainly couldn't have done this 10 years ago, because the contracting talent wasn't there. I think the industry is going in this direction. I think it's only possible now because of where we are as an industry. There are so many specialized skill sets out there required to build these games. Animation is a very specialized skill set -- modeling, texturing, the audio work. [In the '90s] we had a few general artists, and they did everything. And, you can't really do it that way anymore.

Q: Do you think the guys coming out of college now can still make games that take off? Or do you need to have all these top-notch contractors today?

A: There are definitely opportunities to start up in the market. I think there are a lot of companies that will want to do an expansion pack (where you build off another company's game). But, to do a project like Halo, it's expensive, and there are lot of specialized skills required. I doubt somebody coming out of college is going to have it all together, with that kind of money to do that. But there are tons of opportunities -- Web-based stuff, cell-phone stuff, all sorts of stuff.

Q: What is the key for a successful game startup today?

A: If you can come up with a good hook, and do something that's a chunk that size. Personally, I think games are too long. How many games have you finished on a console recently? I wouldn't mind a shorter experience.

The price point in our industry is pretty high, if you compare how much a game costs to how much it costs to go to a movie. I used to think preserving that price point was critical to the business, because without it, profit margins would erode, and you wouldn't be able to push the medium forward. But, I think we're hitting a critical mass, where games are getting very popular. I think there's definitely an opportunity for the price point of games to come down, the scale to shrink a little bit, and sales to go up. That wouldn't hurt anybody's bottom line.

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