Massive Entertainment: Game Development, Design & Monetization

Martin, can you please provide an introduction to your background in gaming and what you are up to today?

My name is Martin Walfisz and my background in gaming really starts in the 80s, where I started to game and play on the Commodore 64. That really turned me onto computers and, I have to say, I really have a computer geek background. I may be less of a geek now but still, I identify as a computer geek. In the 90s, I studied software engineering at university and then, in 1997, I founded Massive Entertainment, which is one of the world’s largest game studios today.

Currently, I work at Nordisk Games, as an investor. I am a senior partner, investing in game studios and game developers, primarily, in Europe. Before I became an investor, I was a game developer for a good 23 years and I really have a background as a computer geek and a programmer. I love games and I play as many games as I can.

Can you provide some context to the gaming development landscape in the early 2000s, or even late 90s, when you started Massive?

We started Massive in Sweden and, back then, in the late 90s, there were not many game studios, at all, in Sweden. Maybe there were two or three. DICE already existed and then there was another studio called UDS, that doesn’t exist anymore. Then we founded Massive. Sweden was really a backwater for computer games, back in those days. Where it really happened was in the US and the UK and, to some extent, Germany and France. None of the people who started working at Massive, in those early years, had any experience doing games, including me, of course. Actually, to be honest, most of the people that started working at Massive didn’t even have experience working. We were mostly students or other people who had never really had a job before.

Were you producing mainly for PC or also for console?

We started on PC, just because it was so much easier. Everyone could buy a PC. We focused on PC games for the first seven, eight, 10 years of the company. Then eventually, the company moved more into console. I have to say, I stayed on board for about 12 years, so I focused mostly on PC. When I left, the company moved more to console.

How would you look at the major structural changes in the industry, over the last 20 years, for PC specifically?

PC has always been there and in the industry, we used to say that it was quite cyclical. When the new consoles came out, PC was a bit less interesting. Then when the current console generation started to feel old, PCs came back. I think that has shifted a bit in the last 10 years. The PC is its own living organism, regardless of the console cycles. It’s a bit like mobile games and mobile devices; it’s just there and quite ubiquitous. Also, as Asia has become more and more prominent in the gaming industry, PC has also picked up, because outside of Japan, consoles were never very popular in Asia.

How about the distribution strategy changes? Today you have Steam and Epic.

Yes, that is a huge shift. Digital distribution has really changed everything. It’s so much easier for developers to self-publish and have immediate access through their consumers, through the players, by using Steam and the other distribution channels.

How do you compare the ability to build an audience or drive engagement, in PC in the early 2000s, versus today?

20 years ago, when you wanted to build a PC or a console game, it was really the same. You really needed a publisher and you needed someone who could put the game on the shelves. You needed someone who could take care of the marketing and the distribution and get it into the hands of retailers and consumers. It was a pretty set process. You build a game, you find a publisher and, maybe, the publisher finances parts of the game and then they do the marketing; they have distributors all over the world and then it makes its way to the retailers and consumers.

With digital distribution, that is very much short-circuited. Any developer can reach the consumers immediately. In many ways, it’s a much better world now.

Is it harder to get noticed by gamers or build a brand or audience, with this huge explosion of content online?

Absolutely. Previously, the challenge was to get noticed by publishers, so they would pick you up and help you get onto the shelves in stores. Nowadays, the competition is everywhere, so it’s definitely much harder to get noticed.

How has the economics of producing games changed over the last decade? Let’s take, firstly, the cost of producing the game.

I don’t know if the cost is 10x or 50x. If you look at big PC and console games, when they started, a good 20 years ago, if a game cost $2 or $3 million dollars, it was a relatively big game. Today, the really big games can cost $200 to $300 million. Basically, it’s 100x increase in production costs, for the top AAA games.

Although, the economic model or the monetization model has changed, where it is less hit driven and more recurring revenue, in-game monetization opportunities?

Absolutely. We still have a big portion of the industry that is still hit driven. Again, if we look at PC and console games, and especially console, they tend to lean towards the AAA or very large AA productions. I think the big change that we shouldn’t forget is that there are just so many more players. 20 years ago, the audience was very much a niche audience – computer geeks, like myself – whereas today, pretty much everyone plays games.