Opening The Gates
Meet Kowloon Nights, a new development fund with the future of videogames in its sights
Meet Kowloon Nights, the development fund with the future of videogames in its sights
The indie revolution is over. The gates have swung open for solo developers and small studios: Steam, Nintendo, Sony and Microsoft’s storefronts splash their games across their front pages and parade them on their conference stages. With these developers has come a new breadth of story, setting, style and themes, heralding the beginning of a new era. But with new eras come new challenges.
“The game industry is in a wild state of fragmentation,” says Teddy Dief, who lead the development of Hyper Light Drifter. “Game makers have more and more options for platforms, audiences and technology, creating new subsets of our audience such as VR, streamer-targeted designs, and new experiments in genre and narrative.” For Dief, that means shouldering new risk, and seeking out huge new creative opportunities.
“We’re definitely past the golden age of ‘closed’ Steam and early Kickstarter,” says
Will Dubé, who founded Thunder Lotus in 2014 to Kickstart hand-drawn Norse action game Jotun. “It used to be hard to publish a game, but now it’s hard to capture an audience. The current challenge is standing out in an oversaturated market.”
For Counterpoint, maker of CCGstrategy game Duelyst, the latest challenge is about finding the talent it needs to develop its ideas, and for Scavengers Studio, which is making free-to-play battle-royale game
Darwin Project, being small and full of ideas presents all kinds of problems when it comes to running a live multiplayer game.
In short, each of these small studios is setting out to expand its ambitions, and each needs help. But the old era’s models of crowdfunding and publishers isn’t really equipped to provide it. Step forward Kowloon Nights, which is part of a new cadre of investors that’s specifically geared towards supporting creatively ambitious game developers. It is funding projects from each of these studios, along with a slate of others, including the next game from Fumito Ueda, the first game from Tookyoo, a new studio founded by Danganronpa maker Kazutaka Kodaka and Zero Escape maker Kotaro Uchikoshi, and Scorn, a bodyhorror FPS by Serbian studio Ebb Software.
It’s a broad slate, comprising experienced developers and green ones, big projects and small – but everything is focused on expanding genres. “The artistry is growing at an incredible pace and the creators are the core of the story,” says
Alexis Garavaryan, a co-founder of Kowloon Nights who previously helped set up Microsoft’s indie programme, [email protected] “So we wanted to build Kowloon to help give them opportunities and more freedom to create games; to emancipate them.”
Kowloon Nights’ aim is to circumvent traditional ways of getting games funded. Pitching processes are lengthy and demanding, often taking six months of meetings and development which could be folded into actual game creation, and it often comes at the cost of full creative control. For developers the alternative is doing it themselves, whether through crowdfunding, savings or sheer thriftiness, but none of these are particularly conducive to making a good game. “Honestly, I spent so many years selffunding my games,” says Dief. “I developed a mindset that the same money that feeds me is the money that feeds the game. Watching the bank account drain and wondering how I could cut costs on food and rent and life to fund the game. If I had to give up a cut of my revenue for the rest of my life to save me that risk, I’d do it. Game making is stressful enough on its own.”
Kowloon Nights’ approach is to fund games with simple and fair terms, and to maintain the studio’s creative control. It follows the example set by Indie Fund,
“WE’RE PAST THE GOLDEN AGE OF ‘CLOSED’ STEAM AND EARLY K ICKSTARTER”
which was first announced at the Independent Games Summit at GDC in 2010 by 2D Boy cofounder Ron Carmel. In a talk titled Indies And Publishers: Fixing a System That Never Worked, he argued that indie games weren’t appropriate for typical publisher deals because they were smallscale, the result of heavily iterative creative processes, and were based around digital distribution. Publisher deals arose during the heyday of boxed retail games, were signed against vertical slices and design documents, and were geared to give more money than indies needed and take back more than they could afford.
Indie Fund, which is guided and partly banked by such indie luminaries as The
Witness maker Jonathan Blow, thatgamecompany’s Kellee Santiago and Capybara Games’ Nathan Vella, rewrote the system with indies in mind. And in funding the likes of Hollow Knight, Her Story,
Gorogoa and That Dragon, Cancer, it’s done much to shape the modern indie-gaming landscape, paving the way for what Kowloon Nights cofounder Jay Chi calls “the golden age of interactive entertainment”.
“Even 10 years ago there was discussion about the rising costs of development. It was almost impossible to make games within a certain budget,” Chi says. “We’ve seen the effect that had on the industry, lots of consolidation. What happened since that has enabled a business like Kowloon to be viable today is the reverse of that trend, with the freemium game engines and open digital marketplaces and marketing channels, streamers and YouTube.”
Chi is something of a serial funder, also being involved in Maker Fund, which has bankrolled Surgeon Simulator maker Bossa Studios, and Clustertruck and Hello Neighbor publisher Tinybuild. But the bulk of his experience was the 11 years he spent at management consultancy McKinsey & Company, where he worked across the game industry, a role that’s given him a bird’s-eye view of its growth.
Surprisingly, that view has convinced Chi, along with the other founders, to have particular interest in funding in ‘premium’ games: singlepurchase, often singleplayer, almost traditional games, rather than free-to-play, which is where you’d expect investors to be sniffing around. But the way Kowloon’s team sees it, today’s free-to-play market is saturated, and the reason why it focuses on the top end of the indie spectrum is the very thing that terrifies so many developers today: the much-heralded indiepocalypse.
“There’s still a certain type of developer that can stand out from the crowd,” says Chi. “We love small indie teams, but it’s a well-known fact that these less experienced teams are having a hard time. There’s a lot of supply in the market. At the same time, there’s also a market where developers are leaving years of triple-A experience and founding studios. There are a lot of teams, but there’s a limited supply of them.”
And he believes that investing in such studios now is a good idea because there will be lots of player demand for their games in the near future. “We believe that over the next decade there will be more people playing games than ever before in marketplaces that are traditionally not popular for games,” agrees Ryan Payton, another member of the team and the founder of République developer Camouflaj, and a producer on Metal Gear Solid 4.
The source of a great proportion of those players is China. While Indie Fund is very much skewed to North America, Kowloon Nights is international in outlook, with a particularly firm eye on China’s rapidly growing middle classes. Premium games, Chi argues, might have traditionally been tied to Japan, North America and western
“THERE’S A CERTAIN TYPE OF DEVELOPER THAT CAN STAND OUT FROM THE CROWD”
Europe because that’s where players have been willing to pay for games, while only freemium models really worked in China because of high levels of piracy. That has now changed. “We’ve found that there’s an increasing economic wellbeing of gamers in China and there’s more willingness to spend $15, $20, $30 on a game on Steam,” he says.
After all, Valve’s July Hardware & Software Survey states that 25% of its users have Steam set to Simplified Chinese, and western games are beginning to have strong successes in China, such as No Brakes Games’ Human: Fall Flat. Chi, who lives in Hong Kong, says that many of them seem to put their fortunes down to pure luck, but by localising well and targeting their marketing, they can be much more assured. And that’s something that Kowloon is more than happy to help its studios do, including navigating them through China’s strict censorship laws.
“Gamers across the globe are more alike than we think,” says Garavaryan. “Cuphead sold well in China even though its art style doesn’t have a cultural grounding in the region. We didn’t think it would appeal, but it did super well, partly because of its difficulty level and because it got taken up by streamers.”
Kowloon Nights’ name, of course, evokes an area of Hong Kong where the commercial worlds of the west and east merged; in that sense it sees itself as a bridge between the old gaming worlds of Japan and the west and the new ones of China and beyond. “Which is how Hong Kong has functioned historically,” Chi says. But that also means it needs to weather shifting Chinese policy and regulations. China is currently not approving any games, following reported administrational restructuring and internal concerns about violence, addiction and anti-socialist values. The team is reluctant to comment, given that it simply doesn’t know when the freeze will end, and it’s in the same place as every other gaming business in the region, including such giants as Tencent. But when the thaw surely comes, Kowloon is in the perfect place, and it’s tied to the region, since many of its investors hail from there.
Kowloon is structured to shield its developers from the expectations of its investors. They don’t have input on the projects Kowloon funds – or even know what they are. In turn, Kowloon is adamant that its logo never appears on the games it funds. “If we’re visible as a fund, we’re afraid that people would follow us and not the titles we release,” Garavaryan says. And though he won’t share exact terms, he says developers “capture a very significant proportion” of profits, with the idea that it breaks with the more typical funding model where developers receive up-front cash and then watch as the proceeds flow back to their investors. The way Garavaryan sees it, this model means that a studio doesn’t have an incentive to make good games. “In our case we have the same goals, the same incentives,” he continues. “The studio and ourselves want the game to be as good as possible. If you know you’ll capture attention as a studio when your game comes out and your reputation is on the line, and also that you’ll capture a significant proportion of the returns, that’s very motivating.”
Remarkably, Kowloon’s deals are structured in such a way that if a project is successful, the studio will never need funding again. That might seem to be against Kowloon’s interests, but the way Chi sees it, he wants to fund projects from the best studios, and they all want freedom and good terms. “When they’re working for their IP and for their own future, it encourages them to work extra hard for the game. And we get to fund the best games, leading to the best success.”
“THERE’S AN INCREAS ING ECONOM IC WELLBE ING OF GAMERS IN CH INA”
One of the jewels in Kowloon Nights’ portfolio is the next game from GenDesign, the studio that Fumito Ueda founded after leaving Sony in 2011. Back then, The Last Guardian was still in production and Ueda still under contract to complete it. “We didn’t start GenDesign from nothing,” Ueda tells us. “We had The Last Guardian project to help get the studio off the ground. From there we shifted focus to the next game.”
GenDesign comprises a team of ten veteran developers, many of whom who also helped make Ico and Shadow Of The
Colossus, and is based just outside the centre of Tokyo. It is not what Ueda describes as a “soup-to-nuts development house”, which is responsible for the full production of a game. Instead, it prototypes concepts and guides core features, providing highlevel direction for design, art and engineering for larger production teams, just as it did for The Last Guardian, on which the bulk of the work was done by Sony’s Japan Studio.
It’s precisely GenDesign’s need for senior developers that presents Ueda with his keenest challenge as he leads the studio into its next game. “One aspect that I’m not satisfied with at the moment is the struggles we have in finding new talent,” he says. “While we have excellent staff that know how to work with me and help realise the ideas I come up with, we need to fill the ranks of the team. That’s our most immediate need.”
This scarcity of talent is the result of the current state of the Japanese game-development scene. Much is still tied up in the mobile game industry, which is still burgeoning, while, as Ueda says, there are fewer and fewer ongoing console projects. “This creates a difficult climate for GenDesign to recruit top tier talent who want to make great games.”
On Ueda’s side, however, are new opportunities to change the way he works. “In the past, it would take a week or two for an idea in my head to be realised in the game,” he says. “However, now that we have modern tools at our disposal, we can fully realise a new idea in a matter of days or hours. The way we’re building our next game just wasn’t conceivable years ago when we developed
The Last Guardian and Shadow Of The Colossus.” He remembers the extended time it used to take to simply create a thirdperson character controller and camera system; now his team can get such fundamentals up and running quickly, opening up GenDesign’s resources into more creative areas.
This new and more iterative way of working has torn up the traditional ways, in which Ueda’s team would create a huge design document at the start of production and then execute on it. Given the extent to which Ueda’s previous games have traded on technical innovation, whether The Last Guardian’s procedural animation, graphics techniques in Shadow Of The Colossus or
Ico’s radical removal of UI elements, it’s a process that would seem a more natural fit. But the lack of a fixed game to pitch to publishers and partners presented Ueda with a new problem. And that’s where Kowloon Nights has stepped in.
“I met Jay Chi while at Sony Computer Entertainment many years ago, near the beginning of The Last
Guardian’s development,” Ueda says. Moreover, Ryan Payton helped with the development of The Last Guardian. When
The Last Guardian wrapped and Ueda started talking about his next game, Payton reintroduced him to Chi, who told Ueda that he didn’t need to set a schedule and project milestones at the early stage the project was in.
“We’re able to explore the core of our next game with a high degree of freedom,” Ueda says. “As a game developer, I want to concentrate on the creative aspects and not have to field requests from others about what type of game to make or what genre to pursue. We partnered with Kowloon Nights because they met my strict conditions surrounding creative freedom.”
Chi’s offer came at a good time. Payton had talked with Ueda about his experiences of crowdfunding République back in 2012, which just scraped through its $500,000 target with six hours to go. “While it works great for some creators, I think the requirement to give backers frequent updates just wouldn’t fit my way of working,” he says. And as for the nature of the game that GenDesign is iteratively piecing together, well – right now it’s exploring several different ideas, and will only settle on one when it’s partnered with a publisher. “Our aim is to create something of a similar scale to our previous titles, and to continue pushing the envelope.”
“NOWADAYS, WE CAN FULLY REAL ISE A NEW IDEA IN A MATTER OF DAYS OR HOURS”
“Developing Scorn has been a long and difficult journey,” says studio head Erik Gloersen, who had studio director roles at 2K Czech, People Can Fly and more. “We had to scrape together funding wherever we could find it, but we didn’t want to compromise the quality of the game.” The game is Scorn, an uncompromising body-horror FPS, and its scope meant that Ebb was having to separate it into two individual releases before Kowloon’s funding came in. Kowloon’s approach to creative freedom was immediately attractive to Gloersen, and the prospect of keeping its IP extremely valuable. “I assume that Kowloon Nights shares our philosophical approach to game development.”
Hyper Light Drifter lead Teddy Dief is not making a VR game, a horror game or a puzzle game. That much he’ll share, but it’s early days for his new project, since he only started writing (so it’s narrative-led, then) and prototyping in January, when he left his role as a creative director at Square Enix. Kowloon has given him the funds he needed to pay collaborators. “Kowloon Nights is all the right things for us; they’re legitimately interested in supporting new types of games because they know it is smart business to stand out in the crowded stores.“
Darwin Project, a free-to-play, tenplayer battle-royale game about teamwork and betrayal, was released in Steam’s Early Access and Xbox Game Preview programmes in March this year, so Kowloon’s funding hasn’t been about getting the game developed. Instead, it’s been about its longterm support. “Darwin Project’s innovative features, the Show Director, spectator interactions, and emphasis on social skills, don’t really have precedents, and it was clear from our first tests that there was a lot to learn about how players use those systems,” says co-founder Simon Darveau. “To record player feedback and regularly improve Darwin Project we sought a partner that wasn’t afraid of taking risks and let us maintain our creative autonomy.”
Having released two games, Viking action-adventure Jotun and Metroidvania Sundered, Thunder Lotus is something of a veteran of the scene, but studio lead Will Dubé still wanted a partner to share the risk for its next project. Retaining creative freedom for it was paramount, however. “Losing control of your IP can be a huge blow and can have a negative effect on your team. Working on something that is 100 per cent yours is scary, but empowering, while taking away IP ownership can strip away motivation.”
AlPixel’s atmospheric narrative adventure game will have players exploring a dying city across 21 days of game time, at the end of which lies the city’s ruin. “Funding has always been our biggest challenge,” says designer and programmer Luis Díaz. “Our team must be able to pay rent until the first revenue starts trickling in, not to mention the cost of marketing, PR, QA and localisation that better the game’s chances at release.” He’s well aware of how many other games his will be competing with. “The good news is that we are now funding and releasing projects that would have been too weird for the marketplace a couple of years ago.”
Keith Lee left his role at Blizzard as a producer on Diablo III to found Counterplay and releaseDuelyst, which blends collectible card play with turn-based tactics. Its next game is unannounced, but its core as a combat-focused action game was already set when Lee first met Kowloon’s Chi. “We still needed additional funding to enter full production to finish our vast array of character and environment assets,” he says. “The job market is the tightest we’ve seen in years, so hiring experienced developers continues to be our greatest challenge.”