There seems to be quite a bit of interest in the game developers cooperative, and I’ve been having a number of conversations about building such a thing. This being the case, it’s likely worthwhile to get into an overview both of what a cooperative is, and why it’s such a good solution for developer needs at this time.
The idea of cooperatives as they exist today was first formalized in 1844, in the Rochdale Principles, and updated by the International Cooperative Alliance a few times in recent years. A number of U.S. commercial entities exist in this form today, including REI, Ace Hardware, and the Associated Press. -You’ll see more on the diverse range of US co-ops at the trade organization, NCBA.
Perhaps the element most central to the cooperative model is that it is owned by its members, and controlled on the basis of each member getting the same single vote in running the organization. This member ownership means that it cannot take in external investment, so it must earn its own capital, and only take on debt when members choose to do so. Many cooperative entities end up with the flexibility to loan members funds for their various initiatives, and the community of cooperatives is a supportive one.
A cooperative, being member-run, is very much built on specific, yet living, bylaws, and the efforts of an elected board. As we look at the needs of developers, and the ways that a cooperative group can facilitate them, it seems that a core requirement is for a board that can leverage the power of this group in an effective way.
This brings us to the benefits that a cooperative can specifically bring to game developers today, in a time of great growth in the industry, despite the turndown in the rest of the economy. -A turndown that primarily affects game developers in its constriction on liquidity, because, as we are well aware, games continue to sell.
Until the modern era of game development (the past couple of years), game distribution was throttled at publishing and at retail, and this meant that a fairly fixed base of developers could have real businesses creating interactive entertainment. The throttle at publishing being on obtaining a deal to enable large scale marketing and development costs, and at retail, simply garnering placement. These barriers have fallen away with digital distribution, and there are all sorts of ways to push out content, in various media. However, game development can’t readily become the sort of “user generated content” that other media can, as the requirements of developer skills and time investment for a worthwhile interactive experience mean that games involve significant crafting.
But, now we have a situation with a vast number of games, developed by small new shops, hitting the market via digital distribution, especially in places like Apple’s app store. These games don’t need a budget from a publisher, and it would be hard to fund such initiatives anyway. -Although they certainly could use the distribution clout of a publisher in doing the deals of product distribution. And they don’t need an enormous marketing budget, but could very much use some support in getting the word out. A great majority of these games will fall away from public notice, because their placement or marketing will be insignificant or nonexistent, and game developers can’t afford to support a “long tail” model that they’ve long known won’t work for the category.
There will continue to be efforts by digital distribution retailers and portals in this category to focus merchandising and presentation to optimize (or simply restrict) what effectively moves to the top of the deck. It is as we move forward in this environment that developers need to create an entity through which to represent their own priorities in specific business negotiations.
A games cooperative will need to launch with an active and experienced board. -One that has the clout in the industry to move forward deals. The nature of a cooperative is such that the board is elected by membership, and conventional wisdom is that three-year terms are ideal for getting the best of folks. Starting up, an initial board will be up for re-election on a staggered basis.
The first stage of the co-op’s existence will primarily deal with business development; then, as revenues begin to come in, the cooperative will be able to put funds toward marketing, and finally the cooperative will be able to loan members development funds.