Exclusivity deals, VR game development, and consumer response

Over the past week, a bit of a controversy has popped up on the Vive, Oculus, and general VR subreddits. Here’s the short version: some users are upset because the developers of the VR graffiti game Kingspray appeared to accept a deal from Oculus to delay the release of their game until the Oculus Touch controls were ready, before releasing this week for both the Rift and Vive platforms. 

This controversy very quickly built on waves of drama that had been building since the summer when other VR  games, like SUPERHOT, announced Oculus exclusivity (presumably in exchange for funding from Oculus). The resulting outrage of VR early adopters has led to an onslaught of negative reviews (many from people who have either not played the game or whose only criticism was platform exclusivity) as well as boycotts and, yes, even threats from some of the darker and more questionable corners of the community.

This has revived a conversation about one of the oldest practices in the video game industry: the exclusivity deal. While the VR development world is still in its infancy, console developers have been making exclusivity deals for ages. Of course, first party games always end up limited to the console produced by their developer, but titles as recent as Rise of the Tomb Raider, Destiny, Persona 5, Street Fighter V, and more have all had some form of console exclusivity.

There’s an old saying: impact is more important than intent. So I don’t want to get bogged down in the mire of what’s “right” and “wrong” here. An unfortunate reality of the video game industry is that it is, in fact, an industry. Games aren't developed just because they developers people to play them or because it’s the right thing to do. If that were the case, all games would be free, wouldn’t they?

No, people are in this industry want to make money, and hopefully be a little creative along the way. So, let’s look at how exclusivity deals impact that money making process.

Leaving Gamers Out, Keeping Games In

First, let’s examine the impact of the exclusivity deal itself. Naturally, creating a game with some sort of exclusivity tied to any console, VR headset, operating system, or processor (yes that’s a thing) creates the primary drawback of shrinking your market. Fewer people with access to your game means fewer people can buy your game and, if you are the artistic type, fewer people can be reached by your game’s message.

Many people have decried this process as being “anti-consumer” for this very reason.  But this stance makes some strange assumptions about the way game development works. It assumes that all games, by default, could release on every platform and the only reason they become exclusive is to somehow spite a certain subsection of gamers or to make a selfish profit via first parties that want to harm their competition.

But these assumptions are flawed. Game development doesn’t really work that way. Developing for even a single platform costs money. Each additional platform makes development costs rise. It’s not as simple as copy/pasting the code.

In the case of indie developers (which is where this controversy seems to be primarily focused this time around) development is already on a tight budget. Many indie developers aren’t even paying themselves while they push their game toward launch. Just meeting payroll tends to be difficult. That’s why you never see indie developers pull up to game conferences in gold Ferraris. Rather, you are more likely to find them in a basement somewhere eating ramen noodles (I should know, I’ve been down that path before).

Enter the exclusivity deal. Imagine for a second that you are an indie developer just struggling to meet the costs needed to publish on your platform of choice. Along comes someone from a competing platform who offers you money in exchange for exclusivity.

In the case of timed exclusivity this is a no brainer. Delaying a game’s release on one platform will certainly lose you some sales, but not nearly as much as you’ll gain by opening up sales to another platform, and in this example a publisher is offering to subsidize that cost for you. It's hard to argue against a deal like that, from a developer's point of view. Of course, communicating that to your fanbase then becomes a matter of damage control.

Full exclusivity is a bit of a stickier situation. Developers have to carefully consider which market will best serve and be served by their game. A good example is the console exclusivity of niche anime style games such as Danganronpa. The PlayStation brand is bigger in Japan than Xbox, and even in America data shows that there is a larger market for these kinds of games on Sony consoles. If a developer were to switch markets they would have to weigh whether or not the money they would bring in would offset potential lost sales.

All in all, the situation a lot more complicated than the image some gamers seem to have of a Snidely Whiplash style villain, wearing a cloak and top-hat, twirling his moustache and saying “MUAHAHA! Now with this exclusivity deal I will be able to afford a mansion made of gold that doubles as a giant robot! Soon the world will be mine! MUAHAHHAHAHA!”

Is Virtual Reality a special case?

Usually articles like this eventually spin into a “give the developer a break” standpoint, but I’m not really here to do that. Negative fan response is a natural part of game PR. Developers need to consider their actions, and if those actions cause a massive negative fan outcry, then that is just something they have to deal with.

But just like developers, fans have to be wary of the consequences of their actions as well. So, while I am not telling you to give the developers a break, I am asking those involved in the current backlash against Kingspray and other virtual reality titles to consider what boycotts and negative review raids will do, not to any specific developer, but to VR as a whole.

There isn’t a whole lot of money in VR right now. It’s a niche platform, at best. Few consumers have the money to afford VR capable PCs and fewer still have decided to take the plunge into VR gaming. So choosing to develop a game for VR is already, essentially, taking a sort of exclusivity deal without the infusion of cash. You are going to lose the sales of the rest of the gaming populace in order to laser focus your sights on the VR market. Dean Hall, developer of DayZ and Out of Ammo, covered these financial concerns in length in his recent post “The Hard Truth About Virtual Reality Development,” which is a must-read for anyone interested in VR or game development.

Many fans have taken to boycotting and review brigading VR titles that have signed into some sort of exclusivity deal as a way to punish the developer. This punishment is actually quite effective, but I think something that VR fans haven't asked themselves is “What do I want to accomplish?”

If your goal is to force a developer out of business for taking an exclusivity deal, I’d question whether or not your motive is rational, but staging a widescale boycott could very well get you what you desire. Low review scores coupled with low sales are enough to take developers, especially indie developers, and even more especially indie VR developers, completely out of the market. You will have effectively sent your message, but you will have sent your message to someone that, for all intents and purposes, will no longer exist in your market. Your goal may be to “make an example” of this developer by running them out of the market, but that presents a further set of problems.

Let us say, for example, that you succeed with your campaign. You scare developers off from taking exclusivity deals in the indie market. That has ramifications. Developers don’t take these deals unless it somehow benefits them. First party platforms won’t subsidize development costs unless there is something for them in the deal, such as exclusivity. So by cutting off exclusivity deals, you also cut off the chance for EITHER the Oculus or the Vive to subsidize a game’s development.

At this point the entirety of the development cost is laid on the developer’s shoulders. Development for a new technology actually costs more than development for existing technologies, so you are in-effect laying the highest costs on the developers with the least resources. If you’ve noticed that larger developers haven’t necessarily been jumping on the VR bandwagon, that may be because they aren’t yet sure if there is any money to be made in the VR market. Indie developers have to prove that VR can flourish as a platform, and forcing them to shoulder the costs themselves has effectively made that harder.

In fact, this may produce a “too many constraints” problem. Without any clear path toward subsidizing development costs, the message you could be sending to indie developers is “VR development isn’t worth it.” Many fans protest, saying that VR games should be made for the “love of the project” or the “desire to further technology,” but the fact of the matter is somebody has to provide the income. Despite fantasies about angel investors throwing wads of money at an unproven developers, that’s far from the reality of the situation for most in the industry. 

Thus we bring ourselves to the major paradox of consumer boycotts like this. If you think you are having an impact on the market in any way, then you also have to accept that this same impact might kill the market if it was highly effective.

If that's a concern, there are other things you can do. You can contact developers to voice your displeasure. You can call first party companies to voice your concerns about exclusivity deals. Fan reaction does have an impact and instead of directing that impact in ways that might negatively affect the market as a whole, direct it where it might accomplish your goal.

I’m not telling you to deny the righteous anger you feel inside you. I am asking you to understand the consequences of your actions and, if possible, harness that rage for good.

The Requisite Moral Debate

I said earlier I was uninterested in discussing what was “right and wrong” in this situation because right and wrong is hard to define. What we need to ask is “Who is benefting from our response?"

What is right for the developer? Probably what makes them the most money, but it seems that many gamers have a problem with that.

What is right for fans? Some gamers say risking an immense amount of money to develop games for little personal return, but that seems awfully unfair to publishers and developers, doesn’t it?

The scope of right and wrong has been a philosophical debate that has stretched through the ages and still does not have a clear answer, and I certainly don’t expect any massive revelations to occur in an article about VR gaming.

But I can say this: examine this situation in a utilitarian context. What creates the most happiness for the most amount of people? In the case of developers taking timed deals with Oculus, the developers have managed to make more money, open up their game to more people, and make multiple first party publishers happy. They traded a small amount of unhappiness in the Vive fanbase for a large amount of happiness elsewhere. That seems to be sound in a utilitarian context.

Meanwhile, examine the boycotts and review brigades. These do not make the Vive fanbase happier, they do not make publishers happy, and they do not make developers happy. Instead, they simply spread misery in the name of punishment. In a utilitarian context, this would seem to be wrong.

Maybe you aren’t a utilitarian. Maybe you believe in moral imperatives or cultural relativism. Maybe all of this is best left for a Philosophy 101 course. But at the very least, appreciate that this situation is not as black and white as an evil developer taking money from an evil publisher in order to screw over innocent fans.

As is so often the case, the reality is far more complicated than it first appears.