Ubisoft wounds games-tech industry

Ubisoft just bought Qazal – one of the last providers of networking tech for games. Congrats to the Qazal folks; although the price isn’t mentioned, I’d imagine a lot of them have picked up a nice windfall from this.

The problem

Two problems: one immediate, anti-competitive, affecting games using this tech; the other long-term, and damaging for the *entire* games industry.

Your competitor owns your tech

Simple. Ubisoft is a large publisher, big enough that whoever is publishing *your* game probably competes directly with them.

Even if you don’t use Qazal yet, if you’re a developer you now have the problem that Ubisoft has an extra stick to beat you into submission when you’re looking for a publisher for your next game:

“Yes, this publishing deal screws you over, and you get 50% less royalty than with our competitors. But you want to use Qazal, don’t you? Well, unless you accept this 1-sided deal, we’ll make sure you either can’t use Qazal, or we’ll quietly – unofficially – make sure you get terrible support, screwed over, etc”

NB: Qazal guys have made it clear they won’t stand for this. Unfortunately, Criterion guys said much the same thing when EA bought them. Turns out that guys with sticks can protest all they want, but the guys with machine guns tend to win the argument.

“You’ve killed us all”

Remember when the Swine Flu started, govts panicked that this virulent disease – started no-one quite knew where – might become a pandemic? Maybe just one chance interaction between pig and man that would bring down mankind. Maybe …

Over the past few years, there’s been a series of aggressive, destructive, anti-competitive acquisitions of games-middleware companies.

It seems *likely* that the Ubisoft/Qazal purchase will be more of the same – no matter what they say. It may prove to be the straw that breaks the camel’s back.

Already, development teams – or, more accurately, the people that run them – are actively avoiding using middleware. The common refrain is “we’ve been so badly burned by Renderware/Demonware/[insert here] that we now have an exec-level policy that we must not use middleware unless it’s from a company that has practically zero chance of being purchased by our major competitor”.

In the short term, EA and Activision got to laugh at everyone else and dance and sing and claim their brilliance.

But already there are lots of smart industry people who have avoided founding new middleware companies (and I suspect there are plenty that started but died) because of this: too many of their desired customers are refusing to buy, on principle.

It may take 5+ years for the full impact to be felt, but I’m confident it will be felt.

To be clear: we’re not talking about things like Unreal3 here, we’re talking about focussed technology solutions to game-development problems. The dominant players of the industry bemoan the escalating costs of production, but the great innovations in cost – cheap, effective, nimble tech – have traditionally come from small middleware startups. Not from monolithic tech spinouts like U3.

What’s in it for Ubi?

No matter the protestations of innocence, AFAICS there’s a problem of mis-aligned interests.

Ubi will materially suffer *not at all* if Qazal is no longer licensed – the revenue (so far as I can see) is relatively tiny, and it’s non-core to their business. Unless they want to become a “tech selling company”, they will never care much about it. They won’t even care that much about the lost “shared R&D costs” they’ll just be happy to have the smart people in-house.

However, Ubi now has an enormous sword of damocles they can use both to bully and to materially harm their competitors: at any moment, they can turn off the tap.

You can write the cleverest contract in the world, to protect your project, and yet STILL Ubi may screw you over. The team leads may not notice – protected by said contract – but the TDs will (wasted investment of time and research/training with Q).

And the CTO will be livid (because the lead time to build up an internal expertise is measured in years – and they’ll have to start from scratch just to persuade the Finance division to let them have the money, which could take a year or more on its own).

3 thoughts on “Ubisoft wounds games-tech industry

  1. PlayNoEvil

    The middleware industry has been dead for a while now, this is just another nail in the coffin. Demonware and Criterion were the end of the line, pretty much.

    But, really, publishers owning development studios is the same problem. The focus, timelines, and incentives are just wrong.

  2. adam Post author

    “publishers owning development studios is the same problem”

    …interesting that you relate these together.

    IME, the problems of publisher-owned dev studios are small fry compared to the day to day problems that already exist in the industry. I’d be interested to see an up-to-date analysis of where you think pub-owned devs fail, and why it’s so bad?

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