20-Sep-2005 Epic's VP on UT 2007, next-gen pricing, second hand games and the challenges facing next-gen developers You'll probably remember the Leipzig Games Show, when Epic Games ever-ebullient Vice President Mark Rein revealed the existence of Unreal Engine 4 to a salivating world, which we broke in our exclusive news story here.
It was an intriguing interview but possibly the most shocking revelation of all was the fact that the Unreal Engine 4 has been in development for over two years. Not content with ruling the next-gen, it seemed Epic were already targeting the next next-gen as well.
But that wasn't the only thing Rein had to say on that day and now, after nearly a month on and off the road, we've finally managed to catch up with transcribing the full interview.
Why developers hate second hand games, the perils and pitfalls of next generation pricing, the possible death of retail and the future of Epic's next-gen titles themselves - all come under discussion and you'll find the ever quotable Rein has plenty of opinions on all of these topics and quite a few others. Enjoy.
How are things over at Epic right now?
Mark Rein: Well we're growing like crazy. We need people, you need to work at Epic! Currently we've got 14 positions available, and that's only the ones we're advertising for. If somebody great came to us and they're really fantastic, we'd still hire them. We announced lots of great guys are using Unreal Engine 3: NCSoft, Namco and a few others have come forward.
The technology is coming along really well. We did the deal with Sony for instance. If people want to work in games and not work in a stuffy office for a big corporation, if they want to work in games either on the games side, or the technology side and they want to make industry-leading money and work with the best people, they really need to send us their resume.
It's front page news because of the deals we've done with MS & Sony. Gears of War is looking fantastic. We're showing off some new stuff at the Tokyo Game Show to help Microsoft in the Japanese market. It's the kind of game that could really appeal to the Japanese, so we'll have a little stop gap demo, we'll have a massive show at X05. That's what we're really aiming for.
What do you make of the Leipzig Games Show? A Euro E3?
Mark Rein: Well, we came here last year and it was great, and this year is going to be big. You can't really tell on press day because they don't fill all the seats, but I just have this sneaking feeling that this year is going to be bigger. Microsoft announcing the prices is a huge thing. It's so cool.
X05 would've been too late and they could've held their own event, but they chose Leipzig and I think that's really cool. Sony announced a price drop and I really think that this is the European E3. Leipzig isn't the largest city in Germany, but people make do with the lack of direct flights. I've seen no problems with hotel capacity. The largest number of people coming to the show are German, so there's no problem getting trains here. It's an old city that's in good shape, and it's been developed and it's a great place to have a show.
We were up in Edinburgh recently and very much enjoyed your rant on second hand software. How did that go? Do you think you made your point?
Mark Rein: I think I won over the audience on that one. A lot of people came up to me afterwards. I want to see the price of games come down and I want to see the market grow. When J Allard and Robbie Bach talked about reaching a billion users, they didn't mean the machines they were going to sell, but the market touching a billion people.
I think that's only possible to achieve those goals if we become more mainstream. A very smart man, Dave Jones, told me the other day that ultimately, games need to be the same price as DVDs. If we could sell these kind of quantities, that would be do-able. I mean, I don't know if we can get down to DVD prices anytime soon, that's going to take exponential growth to the size of our marketplace, if we could get a percentage of the resale revenue. I don't mean a guy selling on Ebay, I mean the stores.
If you walk into EB in the US, they try and sell you a second hand version of a game before a new one. I think that's bad. It would be fine if they share that revenue with us. They can also be marketing partners with us as well. We can have an official refurbished games policy. That's the problem. Those resold games use server resources, tech support. The majority of guys calling up saying "I don't have my serial number", I'm sure a lot of those are resold. It costs us money. Those customers think they paid for it, and they're entitled to support. The reality is, we didn't get paid. They didn't pay us.
That brings us onto the price point of next generation games, there's been a lot of talk, is it something that concerns you?
Mark Rein: I hate to hear people talk about "We're going to charge more because it costs more". Sure, it costs more because you're developing using better technology and making better games. Not just because you're wasting money developing your own tools - there's a lot of people that are doing that.
You could consider me a little disingenuous on this because I've got technology to sell to people, but there's other technology you can buy, not just ours. People who are trying to re-invent the wheel are spending way more money than they should. Our own games, we're seeing a 30-50% increase in cost, but we're expanding our teams and make much better games.
UT 2007 is way more detailed than any UT games we've done prior to this title. It's not processed three times, and it's not costing us 30 million USD. There's no excuse for us to raise the price. I hope retail and rental dovetail into that and hopefully reduce the people playing our games that aren't paying us. When we worked with Atari, they sold our games for $39 and we actually agree with that policy. Reduce the price of our game, not increase it.
It's a little more difficult to do that on consoles because you're paying royalties to the manufacturers, but you're paying royalties to subsidise the machine and marketing. If we were able to share with them the money they make from rentals and retail, that could help lower the price. I hate hearing people want to raise the price. If you can't afford it, you shouldn't have it. My point is that if we can make it more affordable, we can grow the market. One of the ways we can do that is to use Unreal Engine 3 and take advantage of the productivity gains you can take from that.
What other challenges do you see for engine builders and the market generally in the next few years?
Mark Rein: Well, new operating systems primarily and Windows Vista, but I think the big challenge is to increase quality, yet be more creative and increase the content you're doing. I'm an optimist. I've seen some great next generation games. Midway have one, but haven't announced it yet.
It uses our tech of course, but we've seen Huxley from Webzen looking awesome. Just seeing them in HD, Sony did that concept of Gran Turismo and it was a concept obviously, but it's what they imagine it to look like on Playstation 3 and I'm thinking 'Holy Smoke'. I'm sat at home wishing I could play Gran Turismo in Hi Def. I think the industry is doing a good job of attacking these things. Sony and Microsoft have done great things, like XNA from Microsoft for the 360 and OpenGL and Linux on the PS3, I think that's great. They're recognising a good end-to-end system is going to make better games.
Recently one of the most interesting developments has been Steam and online delivery of content direct to the consumer. Will retail wither and die? Is that something you'd like to see?
Mark Rein: Well, if they don't start sharing their revenue with us on a more fair basis, I think more developers are going to go that way. It's not like they sell these resale games for 5 USD. They sell them for 5 USD less than they retail for originally!
I think if they don't start finding more ways to be open with the revenue stream, and encourage us to make that more a part of the business, then obviously people will tether their games like Steam has done. It's an unfortunate inconvenience that you've got to take your game home and before you can play you have to open an account online at Steam. It just shows that's the only way to combat piracy.
My hat goes off to Gabe and the guys at Valve. That kinda shows we're all going to have to do that to combat piracy. It's a distribution channel. The reason publishers won't disappear is that most developers don't have a lot of money to finance their own games, so that doesn't help. More importantly, having an online distribution system is great, but unless people know about it, it's not going to work. Retail is an important part of marketing. They hand out flyers, they do television ads on their own, they put stores where you're likely to go. Maybe we should have a back-channel with retail. Maybe down the road, maybe retail is the most efficient way to transport games efficiently.
Unreal Tournament was 6GB compressed. Next Generation games are going to be 20GB plus, and how we're going to fit them on DVD9's I don't know, they'll probably be a few of them. On the PS3, we're going to be using the majority of the space on those Blu-ray disks. So, online isn't really the best option in some instances.
Downloading 30Gb isn't really feasible. What online could be, is the back-channel to get additional content. Patches and things like that. I think what Valve has done is great. It'll be interesting to see where marketing fits in. Now they're going with EA in the future, the biggest publisher of all. You can't do one without the other, otherwise no-one knows about your game. Unless you have the huge marketing budgets that major retailers have when launching your game, so I think there's still a very important role for retailers.
Which of your games are you most excited about? What about Unreal 2007? What's your favourite part of development there?
Mark Rein: I think the big strides we're making are in AI and the ability to communicate with your team-mates, be they AI or human. The seamless background loading is going to be a huge feature and not just because of our new Conquest feature (that name's still work-in-progress), but it'll enable us to have these unlimited seamless maps. When you play online and you're in a lobby, the ability to keep these people together through their experience will really enhance the community quite a bit.
Unreal Tournament, the original, is still our biggest-selling game ever. Because we sell our games now in instalments, no single instalment is going to sell in the same way as a single game across multiple formats. We're really recapturing a lot of the original, with less jumping around - it went a little crazy with the double and triple jumps. It'll be toned down and a little more skill-based.
The new game modes are pretty cool. If you took Unreal 2004, put it in Unreal Engine 3, upgraded all the artwork, I'd be the first one to buy it anyway. Clearly the visual improvements are exciting. That alone justifies the purchase, but there's a whole lot more. Also, there's Gears of War on Xbox 360. There's not really much more to say on that right now, but it's going great. It's going to be a flagship game.
You mentioned Stranglehold as one of your key next-gen picks?
Mark Rein: I've seen in-game, in-engine footage. This game looks amazing. It's John Woo, an action game. I don't want to say anything because it's confidential. Midway have licensed Unreal Engine 3 studio-wide and Stranglehold is the first game they're working on and they're already doing some innovative stuff.
Off the record you mentioned Unreal Engine 4, you've said it's two years in, it's groundbreaking... what else can you tell us?
Mark Rein: A lot of people don't know this, but it has been in development for two years. It's not a full team yet, well, it's one guy and I'm sure you can guess who it is. It's innovative, it's groundbreaking, it's totally the way that games will be done in the future.
I don't think that it'll be a full team for a while, but when people come to work for Epic, they're working at the cutting edge of the PC and games business. We're really looking for the absolute top level talent. Nobody should think they're too well paid, or too entry level to apply. We're totally looking for talent. Go to www.epicgames.com, hit the jobs section and apply!
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