Over the past decade, Cary-based Epic Games produced four titles in its amazing successful “Gears of War” franchise and sold more than 20 million copies. But on Monday, Microsoft, which had published the games for its Xbox platform, acquired all rights to the franchise.Why did Epic sell?
WRALTechWire talks with an industry insider about what triggered the deal.
Alexander Macris, co-founder and senior vice president/general manager of The Escapist in Durham, believes he knows why.
Changes in the gaming industry, which The Escapists exists to report about as the self-proclaimed “mouthpiece” for the gaming generation.
Our exclusive Q&A:
- Why do you believe Epic sold the franchise?
With each new hardware generation, the cost of developing games has increased exponentially. Epic used to be able to self-fund a AAA game. It could no longer do that.
The entire development budget for Gears of War 2 was less than the day 1 marketing budget of this generation’s AAA titles; the development budgets are now in the hundreds of millions of dollars per game. As a development studio, Epic is not positioned to risk that much capital on a single title.
Since Gears of War is and always will be a AAA franchise, it made sense to sell the franchise to a larger entity that had a vested interest in it.
- Could Microsoft’s desire to keep the game Xbox only been a reason?
Because Gears of War has been an Xbox franchise, it was more valuable to Microsoft than to any other company.
- Microsoft licensed Unreal 4 so do you believe Gears development will continue? Is Tim Fergusson (former executive producer at Epic who oversaw the Gears franchise) a good choice to do that?
Yes, I believe development will continue. Fergusson is the best possible choice given his years of experience.
- Had they run out of creative steam for Gears after 4 games and the departure of Cliff Bleszinzki, its creative lead, as well as other executives?
There is no doubt that Epic suffered a brain drain due to the departure of Mike Capps, Cliff B., and others.
That said, there were still great developers, like Jim Brown, at the studio. I think the sale of the franchise had more to do with business fundamentals.
- What do you believe the decision means to the Triangle gaming community?
The Triangle gaming community has definitely struggled in recent years. The Triangle hub went off its trajectory when the 2008-2009 recession hit. However, I think Epic will continue to invest in the area, as it remains one of the most cost-effective and affordable development hubs in the country.
- Epic is turning itself inside out since the Tencent deal (selling a 40 percent stake for $400 million in 2012). What do you think is going on overall? Unreal is the driver now, not new games?
Every game company is turning itself out right now. This is an exceptionally challenging time to be in the game business. The new hardware generation is driving costs up, again.
Players have begun to spend more time on free games and alternative platforms, and buy used games more often, all of which means more gaming isn’t translating to more revenue.
Some studios are responding by doubling down on big franchises – look at Ubisoft and Assassin’s Creed.
Other studios can’t or don’t want to take that risk, so they are investigating different business models. That’s Epic.
[EPIC ARCHIVE: Check out more than a decade of Epic stories as reported in WRALTechWire.]