MechWarrior Online tournament

The cafeteria buzzed with excitement. People quickly gathered in groups of four to five, delegating their team captains as they weighed in on the pros and cons of using a wide assortment of mechs — giant mechanical suits equipped with large guns that players use to fight against one another — in the MechWarrior video game universe.

Strange names like Atlas or Jenner popped up in their conversations. Calculated strategies formed out of thin air. Pristine tournament brackets appeared on 42-inch television screens. Thirty-two high-end PC rigs, masquerading as virtual cockpits, lined up on either side of the room, waiting for would-be pilots to command them.

For both the fans and the developers, this was a homecoming.

The MechWarrior franchise hasn’t seen a proper release since 2002. The upcoming free-to-play (F2P) shooter MechWarrior Online, developed by Piranha Games and published by Infinite Game Publishing, changes that. Along with the publisher’s MechWarrior Tactics, the revitalized brand is set to make a big splash in this year. IGP continued its momentum by celebrating with the franchise’s diehard community at the Nvidia campus in Santa Clara, Calif.

MechWarrior Online Catapult

Before the mech-blasting began, GamesBeat sat down with Kelly Zmak, the president of the Montreal, Quebec-based IGP, who is one of the key folks responsible for MechWarrior’s sudden comeback. Zmak is an industry veteran: He started at Activision in the mid 1980s, and he worked his way up to various corporate positions, including president of the now-defunct Prototype 2 developer Radical Entertainment.

Dressed in jeans, a black collared shirt, and his trademark cowboy hat, Zmak’s candid answers offer some refreshing insight into not just the future of IGP but for the game industry as a whole.

GamesBeat: Infinite Game Publishing has only been around since last year, right? What’s the history behind the company?

Kelly Zmak: Yeah, since August. The initial efforts actually started almost five years ago now. A group of guys got together — Nick Foster, who’s currently our CEO; Anthony Brown; and a number of other guys got together — and started pitching a concept. It was a free-to-play space [with] a business model based off of, obviously, on a mindset of four or five years ago. And if you think about how the market has so dramatically changed over the last few years — even in my mind, the last year — you know the history of it started with an idea. Like most concepts do.

Kelly Zmak

Above: Kelly Zmak, the president of IGP.

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And then really in April/May of last year, when I got involved in 2011, the ideas had formulated. We had established some good relationships with investors, and we started to really identify the business model and the business plans associated with it. So the history started from just a pretty humble beginning of the ideas and a group of people involved, to evolving last year to a [set] of business models and proposals that we brought to an investment group. The most difficult thing of any idea is actually getting somebody to put some money into it and to give you the opportunity to prove that you can do it.

That was really what we were focused on. I was joking with my wife the other day [that] August 19 is our one-year anniversary of the business, and it’s been a wild year. But that history is actually, like most great starts, just an idea and a group of people that got together and said this is what we want to do.

And back then, it involved MechWarrior. So it’s always really revolved around that IP. It’s evolved and changed and certainly modified and grown as we’ve gone through the years, but it’s been a great humble beginning to a place where we think we’re gonna see some great things over the next few years.

GamesBeat: It seems pretty timely, because even four or five years ago, F2P games weren’t up to the quality that they are now with games like Tribes: Ascend or Blacklight Retribution. Was F2P always in store for the revitalization of the MechWarrior brand?

Zmak: Yeah, it was F2P and really focusing on triple-A [quality]. I’m largely from a retail space. I started in ’85, and consoles have always been kind of my heart and my soul, though I’ve had PC experience throughout the years. I was involved in the original Mech 1. I was involved in Mech 2. I was involved in Mech 3. So I have a lot of history with MechWarrior.

When I came in the organization and saw the license and the IP and saw [Russ Bullock, the president of MWO developer Piranha Games] and his team, I really had an opportunity to dive in to what they were wanting this product to be. And then we worked together to evolve that concept. But it always stayed true to the basic premise that we wanted a F2P model that focused on a core gaming audience. We felt that was a niche market place. We felt that it was a untapped audience.

We believe that the maturity that you see in the F2P market in Korea, you’re gonna see in the North America market. We believe that the success of our key competition clearly demonstrates that there’s a desire among consumers to invest in games that they like and are willing to participate in this process. Really, what we’re talking about is a transition from retail boxed product, where I had to think I knew what the product was going to be when I shipped it.Zmak: And I might spend millions of dollars getting to that point, and I roll the dice and hope, versus what’s a service-based model where we’re communicating with the users every day and our content plans don’t span six months. They span three to four months, derived out of the feedback coming from our audience and what they want to see in the game. What are the key features that they’re looking for? What are the elements that they want? What are the social aspects that they’re looking for? And all of those conversations are happening in real time.

MechWarrior Online screen #1Whether they’re happening directly to us or happening directly to user-to-user on the forums, is part of the wonder of it. Because out of that, we get to derive these ideas that we look at and we go: You know, we have that on the list, we just didn’t realize it was gonna take this turn. We didn’t realize that it would follow this level of importance. We didn’t realize that this really isn’t that important to the player.

And [being] able to gauge and then measure that. In my mind, the beauty of the space is 1), it’s been demonstrated as viable in the market place, and 2), the consumers are actively involved in the passion for the IP. They’re actively involved in the passion for the game. They help generate the content creation process that we use for it.

And thirdly, the thing that I look at, that as it continues to evolve and grow, [is] we have an opportunity as both a developer and publisher to respond quickly to those changes. And I think that capability to respond quickly will distinguish anyone in the F2P space. It’s that unique capability to respond to the consumer, respond to the content, and put it out there in a timely fashion that will make or break the folks playing in the industry.

GamesBeat: How did IGP decide it was the right time to bring MechWarrior back? It’s been sitting dormant for so long. 

Zmak: I wish I could say there was this wonderful strategy document we’ve been following and it’s just been awesome. Every opportunity falls in a time and a place, and we’ve been remarkably fortunate to be here. And I think that anything other than that would be a statement of ego. I think we have to recognize that the time, the place, and the opportunity for the IP came together at the right time with the right players and the right people involved. And we took the initiative to take advantage of that time and place, and that might be the one thing that we can take credit for.

I think it’s chance and opportunity, and it’s a lot of good fortune on our part.

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GamesBeat: You mentioned earlier the maturity of the Korean F2P market. Is that where you see the U.S./Western equivalent heading three to five years from now?

Zmak: When I say the Korean F2P market, you have to recognize that it’ll never be that market. It’ll always be the “North American market,” right? But it’ll evolve, and it’ll grow in its own way here in this space. I think that we’re in one of the most unique times in our industry. I look at retail sales; I look at the market that exists there. I look at console development. I look at PC development. I look at the new platforms coming down the road.

“Love it or hate it, Apple has made $.99 too much.”

And what I see is, basically, our friends over at Apple and our friends in the Android market changing consumer mindsets about what is entertainment. And I’ve used this analogy before: Love it or hate it, Apple’s made $.99 too much. You’ll pay $6 for a cup of coffee, and you’ll love it. But you buy an app for $.99 and you don’t like it? You feel like you got ripped off! We have this perceived value issue that we’re dealing with, and I think that it’s affecting all consumer habits.

We’ve never seen a time in our industry where as many people are playing games as they are today. But it’s diverse. People like to use the word it’s “segmented,” or it’s “fractured,” or it’s all of those things. But the fact of the matter is, yes, it is from a marketing standpoint. But from a social standpoint and from a community standpoint, we’re actually [in] one of the few times in any media where we’re probably the most influential form of entertainment on culture in the world.

And that’s a very powerful place to be. And I look at the markets and go: There will always be a place for consoles. There will always be a place for F2P. And there’s gonna be a place for mobile. And there’s gonna be a place for the other markets. They’ll change and evolve and go through the pains associated with it. But when I look at the North American market, what I see is a consumer that is embracing the entertainment media, interactive media. And I recognize I’m using those buzzwords. But they’re embracing games in a way that they never had before.

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We have two generations behind me that’ve never known basically a time without interconnectivity. Four or five years ago, I asked my wife, “How old were you when you got your cellphone?” She laughed, “35.” Because they didn’t exist! It’s a different mindset. It’s a different world. And I think that’s part of what we’re seeing is this evolution of the games is based off this reality of consumer and investment trends, and product trends surrounded by business models that are evolving so rapidly, that much of the old standards don’t apply.

And look at MechWarrior. It’s been in development for less than a year. We have fully playable product. That’s high-quality standards. People are enjoying playing the game. We’ve clearly recognized that it’s not done. Maybe three years from now I’ll say, “Well, we’re done!” But that’s the beauty of the business; that’s the beauty of where we are. Instead of taking $50 million or $60 million dollars and working on it for two years, we take a fraction of that dollar amount and we work on it for a year. We release it to the community, and then we evolve and we grow and we build on it.Zmak: We might eventually get to $50 million or $60 million in development, but it’s $50 million or $60 million targeted to what the consumer base is looking for, asking for, and wants. Not based off a game design. That’s the reason I left my studio in 2010 to enter this space, because I see this as a sunrise of our industry. I don’t think it’s gonna eclipse the other industries, the other parts of the business. I think they’ll just settle into their respective roles. There’s good money to be made in all parts of the business.

This is one of those [times] right now where I’m obviously trying to convince my investors, “This is a great place!” But in order to do that, we have to demonstrate that to the gamers — we have to demonstrate that to our audience. And I’ll even go one step further: That’s why you haven’t heard a lot about IGP. Because until we have the products to show, what are we gonna say? I’m sure my users are interested in my business model, but it’s not nearly as exciting to them as the product.

MechWarrior Online screen #4

GamesBeat: Because it’s really this transition to games-as-a-service model, rather than shipping it as a boxed product.

Zmak: Yeah, it is a service model, and that’s a big shift. And [Piranha Games] has done an awesome job at actually making that mental shift. We as an organization have set up our infrastructure to manage that process. Initial feedback’s been real positive. And I think all of that really worked for us. I think, like every other business, we need to stay true to what we started with: And that’s focus on the consumer, focus on the game. And the rest of it will fall into place.

GamesBeat: What do you think of the Ouya console and its emphasis on F2P games? Is that something IGP has been paying attention to? [Editor’s note: this interview took place prior to the closure of the Ouya Kickstarter campaign.]

“I’ve got a huge opportunity in the Windows PC business. Let’s make that sing.”

Zmak: We’ve been watching it. As a startup, every opportunity is unique and interesting, but at the same time, we need to stay true to the core model that we laid out. If I can, and this is my kind of philosophy, and the one I’ve been sharing with my partners and developers: If we can deliver on what we set out to do on the PC in the current market, achieve the quality standards that we’ve set for ourselves, every other business opportunity becomes available to us.

But to fracture that focus now would jeopardize our entire business model. So I think it’s fascinating. Yes, I’m very interested in it, and I’m watching all of the business models closely. [But] I’ve got a huge opportunity in the Windows PC business. Let’s make that sing. There are millions of players out there waiting to participate in this game right now.

And they have the hardware and the equipment to do it. And we don’t need to go anywhere else to find that audience, so let’s not go there right now.

GamesBeat: So it’s more about establishing your games first and then eventually branching out. 

Zmak: Right. And then opportunity presents itself based off growth, [which] can in fact then be measured. We’ve got a relatively small development team with Piranha focused on this core product. You’ve got your to-do list and your not-to-do list. Everything you do with your not-to-do list is as important as what’s on your to-do list. And that’s the balancing act: It’s prioritization; it’s focus; it’s understanding what’s important to the game. It’s understanding the quality standards that are there.

And it’s understanding the consumer service we need to provide on the backend. And are we achieving that, measuring it, and balancing that. That right now is our focus.

GamesBeat: It seems all the bigger players in the industry are just taking a wait-and-see approach when it comes to investing into the F2P space. Like seeing whether the Ouya console will actually have some kind of foothold and traction with a broad audience.  

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Zmak: I look at the large retail players and I think for the context that they’re in, and having worked in many of those companies and understanding the philosophies in which they approach, the first thing I’ll say: There are some really smart business guys there. You don’t walk away from a billion-dollar business in order to chase a business that’s going to bring in $50 million. So they’re stuck in that middle ground. They’re also challenged with this business model that I was just describing, this agility, this fast pace, this focus on a MVP concept — minimum viable product concept.

It’s a big shift for them to go through. But to be honest, I have no doubts that they’ll be there. And they’ll embrace it as part of their business models. And I think in North America, downloadable content on the consoles is merely one step toward a F2P model. It really is just an evolution. You’ve seen some phenomenal success with Activision. You’ve seen some phenomenal success with Electronic Arts. And they’ve got a lot of really smart guys working on this stuff.Zmak: I just think it’s a apples-to-orange comparison when you look at a company like us and you look at a company like them. Because we don’t carry any of the heavy burden, right? We don’t have to. I don’t have quarterly earnings I have to report; I don’t have to sit in front of a group of shareholders and deal with those realities. And those are very real. But I have absolutely no doubt that they will evolve and respond. Look at the quality of the games. Has there ever been a time in our industry that the quality has been so high? And everybody likes to complain about “Well, it’s just another one. It’s just another sequel,” or it’s just another this [and that].

MechWarrior Online screen #7

But you look at the innovation in those games, and you look at the millions and millions of players that are spending their money to play those products. You can’t deny that the quality is there. And there is innovation happening. I think the innovation conversation — the whole debate around innovation — is a chicken and egg thing. So you come out with something innovative but it doesn’t sell, was it really innovative or was it just not fun? [Laughs]

I don’t know. It’s a tough balance. I look at the market and I look at the conditions and I look at the competition. I think right now in our industry what we need is less failure and more success. And whoever finds that success helps establish business models that achieve it.

I’d like to believe one day people will look at our organization and go, “There’s a model for success.” And we’ve demonstrated that model, we’ve demonstrated that business, we’ve demonstrated that financial reality. And our developers have shared in that success.

And they’ll look at that and say, “There’s a model that needs to be copied.” Great flattery.

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GamesBeat: These days, so many publishers in the console and PC space are chasing after Call of Duty-like sales numbers to offset the rising costs of development. It’s not all that uncommon to hear them say that their games must sell so many millions of copies if they want to break even, let alone make a profit. And all these studio closures keep happening. Sooner or later they’ll have to adapt and find a sustainable business model, whether it’s F2P or something else, to mitigate the high risks that exist in the market today.

Zmak: I think it’s easy to get caught in the here and the now. This is an industry that adapts. I believe it was 1982 in a New York Times story: “The Video Game Industry Is Dead.” I always look back on that time because at the time, they were burying cartridges in the desert for the Atari 2600. Literally, everybody thought it was dead. We have always been the [cockroach], we’ve always been the adaptable ones. We’ve always been the ones to respond.

“This is not the time to lick our wounds. This is not the time to hunker down.”

We’ve always been the ones to…[when] a studio blows up, we form entrepreneurial small development studios all across the city. It’s a different and a challenging time because it’s combined with political and economic realities that are making it tough for everybody. But those political and economical realities are part of what’s causing the challenge in the consumer trend. So I look at that and go, “This is not the time to lick our wounds. This is not the time to hunker down.”

This is a time for entrepreneurs and business folks and investors to step in and say, “Look, this is a $50 billion business. We have the opportunity to influence culture around the world. We either take that, or we walk away from it.” And it’s silly to walk away from it. And again, I generalize it, but I’m one small guy working on three games out of Montreal. And I look at this and go, “This is exactly what we need to be successful. This is what we need more of.”

This is exciting. This is what we do. And to think that this is not what we do means that you don’t understand where we came from. And I say that because I started in ’85, so maybe I’m just one of the old guys. [Laughs]