Lane, Greg --- "Introduction" [2007] SydUPLawBk 53; in Fitzgerald, Brian; Coates, Jessica and Lewis, Suzanne (eds), "Open Content Licensing: Cultivating the Creative Commons" (Sydney University Press, 2007) 190

Introduction

GREG LANE

I would like to give you a little bit of a background to this session, to give you an overview of the industry generally, where it is at, and where I see it moving forward. In particular, some of the issues that we face as a developer, specifically the legal issues that arise from day to day in the general run of the business.

Auran began operation on 1 January 1995, literally in my garage, with just myself as a programmer. That is my background – programming. Over the course of the next two years we went on to develop a product called Dark Reign, which shipped in 1997, and went on to become a very big hit for us. We did a little over 800,000 copies of that product. We are now located at Teneriffe, and we have grown to about 80-odd people. That is a sizeable growth spurt. Of course, growth of that magnitude carries with it a number of interesting issues that arise from time to time, but the industry generally, coinciding with our growth, has gone through enormous changes.

When we started, you could easily write a game for $100,000 in a garage with a few people. Nowadays, if someone walked into my office and said, “I want to write a game and I am only going to give you a few million dollars”, there would be no way we would even begin. We would be looking at budgets of $10million and up. Common games nowadays are 30, 40, 50 million dollars US. The record is about US$86million to date. The budgets are getting way up there in terms of scale, competing with movies. The industry has grown astronomically. Most of you would now know someone that has a game console, or probably has more than one game console. Most people have a PC or a Mac now, so the industry is enormous. I see various figures from day to day come across my desk, but the average seems to be an industry roughly the size of, or double the size of, the motion picture industry, and growing at roughly twice the rate.

During the development phase not only have the budgets and the team sizes and so on gone up but the product quality has increased astronomically as well. No longer is it possible to have someone compose a tune that is a simple little midi file that will play through their midi sound card. Now we have built a multi-million dollar recording studio. We have professional musicians come in. Everything is scored. There is a lot of emphasis and effort put into making products that are highly realistic. Going along with that is asset production: making not just the sounds but the graphics and the art files that go with the product, in addition to the coding.

It is the assets of products that are going to undergo enormous change over the coming years. There is already some really interesting information, which I know some of the presenters to follow me are going to let you in on. Just to touch on some of those, one of our key products is ‘Trainz’. It is actually a model train simulator. It is surprising how many people are into model trains. We have done about 300,000 copies to date, so it is quite large. The interesting thing about Trainz is that it is a very content rich environment. There are, as you can imagine, hundreds of different styles of locomotives and carriages and so on that exist across the globe. It is almost an impossible task for us to develop that amount of content. We would need an enormous arts staff, and given the size of the project and the amount of dollars we are prepared to put into it, it would be uneconomical for us to develop a product with that amount of content.

We have taken a very different tack with that product and really opened it up to end users to add content to it. It is not a new thing. A lot of games out there do this. But there has been a general trend away from the initial environment that games were developed in whereby you had a tool set that the development team would use to make a game. They would not release the tool set to the public. Now it is very common indeed for that tool set to be released with the game, and, in fact in Trainz’s case, the tool set is a part of the actual game. It exists on the main menu with the other objects of the game, and you can enter the editor as part of the normal sequence of events.

To the people who were model railroaders, the act of actually building their railroad is obviously very important. We wanted to make that part of the environment. Of course, since there is so much content out there, we wanted the ability for other people, other end users, to make trains, to make locomotives and so on. We went to great effort to embed an entire content delivery system within the actual application itself that enables Auran to host content developed by users and to actually deliver that for free to any number of users that connect to the Internet. That model has proven to be tremendously successful. We often joke about that fact that we have only ever had one main competitor to our Trainz product – unfortunately that was Microsoft – but they have dropped out of the market now and so it is just us. What is very interesting is that Microsoft, using their marketing muscle, did about ten times the number of copies that we did. They had three million copies in circulation. Yet the content that has been developed for their product is less than ours, and they still make the tools available, but their tool was very difficult to use. Ours was extremely simple and anyone who made content in Trainz could easily make it available to others, and the net result is that we now have about twice the content readily available for our Trainz product as Microsoft do for their product, even though they distributed ten times the number of copies.

That is a really good indication that good tool development can actually significantly add to the value of the product. Of course, we use this in marketing our product. On the back of the box we highlight the fact that you can get access to, literally tens of thousands of objects that have been made available by end users and are available through our download systems. We have taken a very open approach with how we make that available to people. We ask them to give us a licence to distribute their content, but we do not want that to be exclusive. We are happy for them to give us a non-exclusive licence. We simply say, “please give us a licence so that we can make your content available and you can do whatever else you like with it as well”.

It is surprising to see the number of people that have put large amounts of content onto our download station and make it available. It has proven to be one of the key successes of the product. In fact we pushed it a step further recently, whereby we made all the content we developed internally, available for near cost (I think it was $9.99). We gave them every single asset that we had ever made – sounds, art assets, whatever it might be – and put it on a disc that we made available to every user. We gave them a licence that said:

you can use all of this content to make your own things. You can make completely derivative versions using every piece of our original content, do whatever you like with it, sell it – the only exception is that you cannot use it to make an asset that goes into a competitive product.

That was widely accepted and we had literally hundreds and hundreds of sales of that product, and, of course, in turn that has meant that there has been an explosion of additional content on our site.

Looking forward, there are some radical changes going to take place in content development and we have already seen the embryonic phases of this. Going back a little bit in the creation of our Trainz product, it was fairly easy for people to make a single locomotive, or a tree, or a house, or whatever it may be, and make that available. Looking forward, as the programs themselves become more and more complex, what the assets can do within the structure of the program becomes more complex, and a good example of this would be a locomotive. Locomotives have a cabin and they have a number of controls and so on that function, and work, and they enable you to drive the train.

For months now we have been able to allow users to make a cabin, to make the locomotive and so on. We have started to embed program script associated with art assets, that extend its functionality. People can make things such as fans that turn on inside the cabin, and handles that move, along with a whole range of things that actually interact with the environment. They can write scripts that control the weather or do anything within the scene. They might have an art asset like a windmill, and that asset can have a script associated with it that reads the wind vector and then makes the windmill point into the wind and the blades rotate, based on the wind speed and so on. All these things increase the realism of the assets that have been created. But of course, to do it they need program code and this raises a very interesting dilemma because a lot of users who are artists, who are actually making assets for us and/or for themselves and distributing them, are not necessarily programmers. You start to get small groups or teams of people forming that include an artist and perhaps a sounds engineer and a programmer and, of course, now collectively they are making a single asset for distribution. The complexities that were already there with regard to distributing assets and re-using each other’s content as individuals, is now significantly more complex. We now have teams of people doing this.

This is a trend I can see taking place across the board. A number of companies that we deal with, and I talk to the CEOs of these companies almost on a daily basis, are also moving in this direction whereby they are getting more and more complex art assets that are packaged as a single product. But they are composed of a number of objects made by a number of individuals. The issues associated with who owns the copyright in those products, who is going to distribute those, and the arrangements that they enter into amongst themselves, is going to be very interesting over time.

One of the things from a developer’s perspective which is very important is that as we move into these products which are now becoming more and more expensive, risk management becomes a very key issue to whether or not you actually move ahead with the product. If you are going to look at it and you think we are only going to distribute so many copies, you have got to work out what your break-even point is, and in many cases, because the asset product load is so high now – it can easily consume half your budget and in some cases it can be 80 or 90 percent of the budget – lowering those costs is critical to the success of the product. If you cannot do that, in many cases, you would abandon the project.

We have often debated at Auran whether we could continue with our Trainz product if we did not have the assistance of the third party community, and the answer is probably “no”. We have had a huge amount of assistance from them, and they generally make assets for us that we can include in our product and they do so for free. There could well be an argument as to whether we should be taking free product and including it in our product. We make sure that in every single case when we do these kinds of things that we offer an agreement with the people that supply this product, to provide what they deem to be an equal-value proposition for them.

In many cases it might be advertising on the box, putting their name in the credits, allowing them to say they are a payware creator and actually selling their content. They might want to put one of their objects into the program, and use it as a sales tool so that people can see the quality of their product and hopefully come to their website. We are very open to all the suggestions that the third-party creators offer, so we say to them, “what are the arrangements under which you would like to distribute this”? We get an enormous number of individuals that readily offer up their content and without that we would not be able to continue the project. I know there are a lot of smaller companies, like Auran, that really need that input. Without that we would have to abandon some projects.

The size of the asset data base is getting to be enormous. ‘World of Warcraft’ has 300,000 individual objects in the game, and that is an enormous number. Just imagine the asset management task of that alone and the cost associated with keeping it. I believe they are spending about $5 million a month just on maintaining and building new assets. It is an enormous cost, and of course, there are not many large companies in the world. You can probably count the number of them on one hand. Who can afford to pay those kind of prices? The vast majority of developers are Auran size – 80 staff or less – and certainly, in our case, the product would not exist without the input of third-party people, and we happily let them know that.

We regularly post on our own forums that without their input there would not be a product and I think they have a definite sense of ownership of the product. If we go and change something without consulting them, they often get very annoyed with us and tell us how they think the product should be. We generally listen and we take their input on board. A lot of features of the product are a result of user input. In fact, often is it the case that we will have an idea as to what we should put into the program, but if someone suggests it on our forums, we will let them get the credit for that, even though we might already have thought of it and it might already be in the design document. We will often say, “great idea, we will include that”. When we finally ship the product there is quite often hundreds of features in there that people did suggest. More often than not they are features that we already had, but I think it really creates this sense that they own the product and that has been enormously important to the success of Trainz and to the other products that we are working on. That gives you an overview of where we are coming from and the industry size and where it is moving.