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GameDaily BIZ: Obviously our readers couldn't hear your speech, so what's it like working with your brother?Richard (aka "Lord British"): Horrible! [laughs] It's been a disaster; he is such a pain in the rear to work with. No, as you have heard in our talk, one of the great things about being in business with your brother is that you both get a chance to have the "brotherly fight" especially when we were younger, we used to have them all the time but also ultimately you realize that the person who's on the other side of the table is someone you can really count on to at very least not screw you and take advantage of your good nature and also you know will watch your back and work hard to make you both a success.Robert: The biggest factor in terms of working with your brother is trust. Because we grew up together and even though we fought... we always trusted each other. We had some smart times and we also went out of business a couple times and it was time when we had to put back into the company and trust everyone; and going through hard times, when you come out of it you really know who you can rely on and having a brother that you can rely on was what helped us get through all of that. BIZ: So who got into making games first?Richard: That was me. So I started making games back in the teletype era, where in high school before the advent of personal computers the school had this one teletype with an acoustic modem... It was an incredibly laborious process to get very simple programs written on this [machine]. That was back in 1974 and then by 1979 the Apple II computer had come out and I had converted the games I had been writing on these teletypes over to the Apple II and finally put in graphics; then I originally self-published Akalabeth, which was my first kind of commercial release... sold nationwide by 1980.The first national publisher I used called California Pacific, after Akalabeth and Ultima I, went out of business because the owner and founder was a major cokehead and snorted all of the profits and quit paying me and so I asked Robert to come collect for me, unsuccessfully...Robert: Although he did offer us a Dorian car, which Richard refused. It would be worth something today.Richard: Maybe... And so then I went to Sierra (or what eventually became Sierra) with Ultima II, but they also went through some financially tough times. So I called up Robert and said, "Hey Robert, can you collect from these guys?" Robert: And I had just as much luck as the first time. I basically talked to Ken Williams who said "Oh I've got to pay for my printing and all this other stuff but I'll get around to paying you before too long." But clearly at this point Richard and I talked and said, "Hey look, if all these other people aren't paying you, I can be just as good as that. And maybe even better [laughs], so we should probably go into business and see what we can do." At least we understood that the first person you pay on the list is the developer and we've had sort of that philosophy ever since. BIZ: So Ultima eventually led to several iterations, and then you guys got involved with EA. Looking back now, how do you feel about the franchise?Richard: It was a great, what we used to think of as a "once in a lifetime" opportunity to get in on the truly ground floor of an emergent industry to build a valuable, sizable business and kind of ride through the windfall of that growth. Looking back specifically at Ultima, it'll still be another decade or two before it won't be the majority of my life; it went on for an awfully long time. So I'm very pleased and proud of it but also in a sense excited to have escaped it [laughs] to go onto new things.BIZ: And how was EA as a steward of it when they took over? Did things change a lot when Origin became a part of EA?Richard: Well, sure. EA is a very large company that has very diverse interests, and in fact their primary business is in sports franchises on consoles. As an organization they have, understandably, different ways of doing business and different kind of motivationsRobert: Some of the good parts about EA is that they have a lot of financial capabilities that as an independent developer we didn't have. And so they were able to spend a lot more time and money on projects, but speaking of time... they have to meet quarterly objectives and stuff that a private company doesn't. So there's good and bad with any situation, but being with Electronic Arts I think actually helped us all develop a lot in terms of just capabilities and design style and stuff like that. And they have a great marketing team, and I think it was a great experience.Richard: But for online games specifically, once we started doing that, online games are a very unique beast to develop and pace for the public. They're very long cycle developments and they require a very large quantity of staff just to keep them operational. And most of the big publishers, including EA, Microsoft or others even though EA, for example, had Ultima Online under its belt, they've looked at it and gone like, "Wow, that's a very different business than the business that we have over here that in 9 months we can invest in and predict success." This was a riskier, more expensive thing that they weren't as enthusiastic to embrace. And that's one of the reasons why we decided to go tart our own company and do it. No one else, even though we thought we proved the model with Ultima Online, no one was out there there was Sony Online Entertainment, a division of Sony that was pretty good with some of their products... but that's only one other company. There's really very few major publishers that have been pursuing it, so that allowed us a second "once in a lifetime" opportunity... BIZ: It's hard to believe, that was almost ten years ago, right?Robert: '97, yeah.BIZ: And it seems like online games now have really come a long way and a lot of the big guys are getting into it. I would say that, at least in the U.S., the big publishers appear to be hyper focused on retail. Do you think that's something that's hurt the growth of online gaming?Robert: Not from an online standpoint. It's interesting because most of the world from an online games standpoint doesn't use retail. So if you look at the biggest markets, which are Korea and Taiwan and even China, there is no, or very little, retail presence for these products. And it's really sort of because the way the game market developed. The game market in Korea built up around a PC-based Internet cafe sort of business, and it never had retail. So the products were basically downloaded. And if you go up to a typical gamer in Korea and you say, "Hey I'd like to sell you this product and then you can pay me a monthly fee on the back," they'd go, "You're crazy. Why would I pay you upfront for the product?"Richard: "In fact, I want to play for a while for free before I even pay your monthly subscription."Robert: Exactly [laughs]. That's what they'll say. Whereas in the U.S. it's almost the opposite because we just grew up on a different sort of thing, a different system; in the U.S. if you don't put a product on the shelf and if instead you hand them a free disc, they say, "What's this free disc? It's worth what I paid for it." And so it has zero value. As a matter of fact, it's very hard to imagine them even putting it in their computer and trying it because they know it has zero value, otherwise you wouldn't have given it to them... And so the Americans have a different mentality. So it's turned out that the retail infrastructure in the U.S. has been very useful for online games and the reason it's been very useful is it has provided a way for companies like NCsoft to market and get presence. Most customers, they go into a store, they want to know something about a product, and they have educated people basically in the stores who say, "Hey this product has these attributes, the other one has these attributes." They help the customer to make a good, knowledgeable decision. And so, much like the PC cafe works in Korea, the retail game store works in the U.S. I don't think that they're a hindrance; they're actually a very good help to us in the U.S. given that we don't have PC cafes. BIZ: So City of Heroes/Villians seems to be quite successful. How did that project come to fruition?Robert: We had joined NCsoft back in 2001 and soon after we basically sat down and said, "How can we build the business?" We looked around and it was interesting because the only successful online games anywhere in the world were medieval fantasy role-playing games; and that was a worldwide phenomenon. Yet if you take medieval fantasy RPGs and ask, "What segment is this of overall gaming?" It's very small. So we asked the question, "How do we take online gaming into mass market in the U.S.?"... We clearly thought you have to get out of medieval fantasy role-playing, as the only option. Not that it's a bad business, because it's a very good business; it's our business. But still, we thought in order to really build it to the full potential we needed to get outside of that. So we started looking around and ran into Cryptic Studios, a great developer in San Jose. And it was interesting because every other major publisher had turned them down. Probably the only reason they went with us was everyone else turned them down [laughs]. We were the only ones stupid enough to give them money [laughs]. Richard: If I can interject, what's funny about that is when we first saw the game we immediately knew it was a great game. We also understood why most people had run off because it didn't fit the only mold that everybody else had been seeing works. Robert: Everyone said, "Hey, it's not medieval fantasy role-playing. Why would we want that?" Actually, when we signed it I got a call from most of our competitors, who we obviously know very well, and they all said, "What are you doing? Why would you pick that up?" I said, "Well we think we can turn it into something." And after more money than we thought and more time than we thought, we came out with it and it had some very unique innovations, which I think have changed the online game business and it has expanded the genres. I think that's the model obviously we're trying with Auto Assault and a lot of our other products to basically build the business outside of one genre; that's how we're going to go forward. GameDaily BIZ: Can MMOs really be mainstream though? What's really going to get it accepted as a way that everyday people will spend their time and money?Robert: To say, "Can they become mainstream?" or "Can they become mass market?" all you have to do is look at Asia, and look at the penetration over there.BIZ: But there's a huge cultural gap between what goes on in Asia and what's happening here...Robert: So are you asking, "Can they become mass market?" or "Can they become mass market in the U.S.?" which is a different question.BIZ: In the U.S.Richard: I believe it's easily demonstrable that digital entertainment can become mass market and being online only opens new features being available to you; it doesn't spoil anything that has come before, so to speak. So in my mind, the issue is not whether they can but "What are the feature sets that need to be included to make it be so?" And these, what I consider first generation games, in the mold of either Ultima Online or EverQuest and pretty much nothing else, they all tend to have the same basic structure of what I describe as the "level grind." If you look at most offline games, they're games where you, the player, get to be the pinnacle of existence and save the world or dominate the scenario that the offline game is describing. In online games, the vast majority pretty much all of them to date are still in the mold of, "Hey come in here and level grind with us, where your life is pretty average and the whole point is to get stronger." There's nothing to win, there's nothing to accomplish, there's no point in time when you uniquely feel special compared to other people. And in fact, your day-to-day activity is to go get a mission that takes you out into the woods where the monsters continually respawn level 1 over here, level 2 over here and you "farm" them for your XP, you go back to town and buy something a little stronger and then you repeat; and you do that for your entire existence. Robert: And Richard started this whole system.Richard: [laughs] But the funny thing is, that was great for generation 1 thinking and even that has grown enormously to where you have games now worldwide with millions of subscribers, but still that's just scratching the surface. And so when people start worrying about MMOs and "Can they become mass market?" what they're thinking of is, "Well can that particular kind of game become mass market?" And the answer to that is probably no. The [real] answer is, "What do you do in an online game space to create games that are mass market?" In my mind, that means you get out of the level grind and you get back into games where you feel very special, you feel uniquely successful in the world. And you get into things like instead of who does the most damage over time to each other as you stand there and beat on each other where they even give you the readout of damage over time, 5.325, and whoever has the higher one of those numbers is ultimately going to win and instead you start setting up environments where they're much more strategic and how units on the field are deployed in my mind's eye and how I want to engage these opponents, not whether I'm willing to stand there and flog. And you create instead of just these static games where the whole point is to level up, you create missions and scenarios that lead you through a story that culminates in you graduating as the most special person on the planet. BIZ: One of the common complaints I hear about MMOs is, "Oh I just don't have the time," or "When I leave the world for a bit and come back it's all changed." You know, these people don't want to be like that Korean person who sat in front of his PC playing for days until he keeled over.Richard: Yeah, totally right. What I left out [before] was the 30-minute play cycle. If you think about it, U.S. gamers unlike Asian gamers who are willing to sit in a chair for three days, American gamers want to be able to sit down, find something to do, accomplish it, feel good about it and get out of the game. And if you look at most MMOs to even get into the game, to find a friend, to then start on a mission takes an hour. Then to just do something together and coordinate it amongst you takes multiple hours, and any one session is guaranteed to be hours in length. And then the worst part of the level grind in my mind is that any creature more than two levels farther than you is usually death to you; anything that's two levels or less than you is valueless to you. And so if you're not grinding at the same rate of dedication as your friends, you can't even play with them after a couple days because you get outside of each other's level brackets. And going back to the solo-player games, like I used to do in the Ultima series there are a lot of other games that were much better balanced than Ultimas have been historically, but in a well told story it's not your level that lets you go past this point on the map; like with most MMOs, there's this "fence" called monsters two levels higher than you that you cannot penetrate, and that's the way they meter new content to use through that "fence" known as levels. And the way I did it in Ultima and the way we're doing it in Tabula Rasa is you still want to feel like you've accomplished something before you can move on to new content; that's your reward, the new content. But the reward should be having solved the problem or discovered the key or gotten a special clue that you need, a secret word to give to the black knight to get past him; it's not your level. And so we've created a game where level is much more irrelevant, that as you explore the world it's also full of waypoints... if I log on to a game an hour after Robert, he's wandered an hour away and so it takes an hour just for us to get to each other to start playing. Tabula Rasa for example is set up with all these waypoints so that anywhere you've already been you can get to [quickly]. And that way for us to get in and to get to the game we can just teleport basically. BIZ: So you guys have had a lot of great concepts, and Tabula Rasa is a pretty unique idea. How big is your funnel and how does and idea get through?Richard: What's interesting about game development is we've always been big believers that great ideas are a dime a dozen; the ability to execute is incredibly rare... I'm a big believer of doing lots and lots of ideas and even fragments of ideas and you kind of assemble this hill of "here are some ideas that work together but I can't see how to finish it, so let me sweep up a different group of ideas, and you finally get this big enough hill and I can see the missing parts and I'm confident I can engineer past these other gaps to create a great game." That's the way I individually work. But as a company, as we're trying to expand like when we went and found City of Heroes as a case study, there are so few confident developers of MMPs that we had to be somewhat opportunistic to find companies that had not only the kernel of a good idea but more importantly the backbone of talented development skill to be able to have some hope of what we thought was finishing it. There's lots of wannabe developers out there that have the beginnings of lots of wannabe MMP games... but the vast majority of them either have no experience at it or are missing some major piece of their development organization or some major piece of design vision that often can only come with experience. And what we look for is either people who have the complete package or have so much of the package that we know we have extra bandwidth with which we can help them make that extra step. BIZ: Ok, I know we have to wrap this up, but really quickly... space, lunar modules, space suits, astronauts. We've heard these things; you want to fill us in on what's going on?Robert: Our dad was an astronaut so it kind of runs in the family and as we first started getting positive money out of things like Origin, our dad as he retired from NASA immediately encouraged us to invest in space. That's also when we learned how astronauts are chosen for their piloting skills and scientist skills, not their business skills. So a lot of those ventures didn't go very far, but growing up with this we still have space enthusiasm that's kind of a natural offshoot of growing up in a high-end science family. BIZ: So it's true you guys own a lunar rover?Richard: I'm the world's only private owner of an object on a foreign celestial body... I realized at a young age that if I was going to go to space myself the probability of being selected by NASA is basically zero; so the only way to go is to pay for it yourself... BIZ: So you're on the X Prize?Richard: I'm one of the original investors or backers of X Prize and I'm on their board... I'm a big part of that.BIZ: So when's the consumer going to be able to hop on a ship?Richard: Two and a half years. About three years. And he's a pilot so he'll fly and I'll be riding. BIZ: That's really exciting. Finally, the future of MMO or MMPs; where's it going to be in three years?Robert: I think it's going to be a lot bigger business because casual will have come in, and a lot of different styles of games will have come in. And there will be a lot of different business models A lot of people think that in order for this business to grow that we need to reduce the price of MMOs but MMOs are actually very cheap in terms of dollars per hour of content. So really what we need to figure out is not how to reduce the price but how to maximize the value, how to give people the right amount of value in terms of business models. So I think we're going to have different business models and it's going to become a very big company business, much more rapidly than it did in single player games business because the costs are escalating so rapidly that only large businesses really can afford to play in this.BIZ: Would you want to get involved in trading like SOE has?Richard: Getting involved in the trading of items is unique... clearly that day will come. I personally worry that it's a little premature in that for your subscription fee you're getting access to our entertainment service. If we charge you for a sword and for some reason it gets stolen, it gets lost, it gets destroyed or you just don't think it's as valuable as we claimed it was because we changed some of the rules of the game you have pretty good grounds to sue the company. Robert: But not only for the value of the sword, but for emotional damage and all the other things that might be involved if you lose the sword... It's questionable whether we'll be involved in that or not, but who knows? If we do get involved you have to have airline quality bag ends when it comes to track a $5 sword.BIZ: Are you supportive of that model? There are a lot of publishers that think it's bad for the business... Richard: Skipping all the legal issues... if you had a virtual world where the participants who were painters or actors or dungeon builders could charge at the door for their art or their limited edition print to hang on the virtual home, if they could get paid through the game for that activity you would quickly sort out the good people from the bad people, and the good people would come and be rewarded and do more of it. So I actually think that having a digital economy in the game that truly, in real dollars, repays the people who provide value to the community is ultimately a good thing and only will benefit the publisher and the people in the community; but there's lots of mucky legal issues to work through first. BIZ: Thanks very much for your time guys.