Going independent is a risky decision for any development studio. No longer are you safeguarded by a publisher’s riches, instead the company becomes its own benefactor and one bad move or release could be costly and see years of hard work go down the gurgler.
However despite the risks, developers enjoy the creative freedom that being independent allows. But creative freedom doesn’t come without its caveats, being that the studio is now responsible for all aspects of its operation, some of which (such as marketing) are traditionally handled by publishers.
Frogwares is a studio that has carved out a successful career in developing detective adventures thanks to its popular Sherlock Holmes series and the Lovecraft-inspired The Sinking City. Late last year the Ukrainian-based developer announced that they were going independent, with their first act of self-publishing being The Sinking City on the Nintendo Switch.
But transitioning to an independent studio doesn’t always go as planned for a variety of reasons, and for Frogwares the move was soured by previous licensing partners refusing to transfer ownership elements of their games back to them, resulting in several titles being delisted from digital storefronts, despite Frogwares being the rightful IP owners.
Recently we caught up with Sergey Oganesyan, Frogwares’ communications manager, and had a chat about why the studio wanted to go independent, licensing agreements and what is next for the studio.
The newly independent Frogwares team in their Halloween costumes
WellPlayed: How has life been treating Frogwares since going self-publishing after the launch of The Sinking City?
Sergey Oganesyan: It’s been pretty good, not going to lie. We released The Sinking City on the Nintendo Switch – it was our first self-published title, so yay! Our team got Sherlock Holmes Crimes and Punishments back online on the PS4 and Xbox One – it took a decent chunk of time and effort that could have gone elsewhere, but, oh well. We just released The Sinking City on the recently available Hong Kong eShop, and this is just the beginning.
Our back catalogue of around 15 games is still selling pretty well, which is a huge deal considering that we are planning to fund our future games ourselves. We are making certain internal changes to ease us into the whole self-publishing thing, got ourselves a dedicated team that will be handling new releases and, apparently, certain re-releases, haha.
WP: Despite being a veteran studio, The Sinking City was your first new IP in some time. What did you learn from its development?
SO: It was a huge deal. We learned a ton about game production on this scale – meaning, action-adventures as opposed to just adventures that were our previous Sherlock Holmes games. We probably learned even more after we released the game and received feedback from the players – feedback about open world design, combat philosophy, story structuring etc etc, feedback that will absolutely be the foundation for our next games.
Business-wise, we probably learned even more. We created a marketing team during the early development stages of The Sinking City that has expanded to several specialists nowadays. We are still learning the ropes, but at this stage we are ready to go self-publishing and release all our future games ourselves.
WP: What were the reasons for going self-publishing? What are the benefits?
SO: Aside from the obvious – not having to split revenue – we are free to make our own business decisions: platforms, storefronts, discounts, messaging, all of that is up to us to figure out. This has its pros and cons as we need to be up to the challenge.
WP: Surely there are risks involved when a studio goes into self-publishing?
SO: Now, why would you think that? 😀 The first thing you need to realise when you do that – you are on your own, and all the production and financial risks are now on your shoulders. You got a team to feed, a game to make, a release date to commit to, and if something goes wrong – to find the right words to explain the situation.
Devs usually focus on the thing they know best – game development, that is, and leave everything else to their business partners: marketing, communication, distribution, pre-order strategy, sales etc. But if you are going self-publishing, you must have the people to handle all of that. You are not just developing games, you are also selling them. You need to accommodate both marketing and business activities in your production schedule, and cover the costs. How are you going to handle making a demo for your game? Are you sure it’s been properly planned? Making a demo that will “sell” your game – to journalists, to players, to business partners – is crucial, but it can take a few months, depending on the state of the game. If you don’t have a huge team, this will increase the production timeline, pushing the release date back, impacting your budget and making your life much more complicated. That’s just to name a few.
WP: You had a bit of trouble with past publishers delisting your games from Steam late last year despite owning the IPs. Firstly, how does that happen if you own the IP? And secondly, did this get resolved and did the games get relisted?
SO: Yes, after our licensing agreement expired, most of our games were delisted from the PlayStation and Xbox stores. As we explained in our previous statement, the content ID or title ID (essentially, store profiles of our games) weren’t transferred to us, and thus our titles were eventually delisted from the storefronts. We found ourselves in a situation where we fully owned our games, but not their store pages, because we weren’t the ones who created them. The games that were only available on PS3 and Xbox 360, we are probably not going to get them back up. However, what we could do is to get the current-gen title, Sherlock Holmes Crimes and Punishments back up, which we did.
WP: If not, what’s the next step for Frogwares in this matter?
SO: Well, this page in our history is turned. We did all we could to fix the situation, and we are happy we can move forward as the sole owner and publisher of these games.
WP: Have any other developers reached out to you with a similar experience?
SO: Yeah, absolutely. It is unfortunately a common practice. We spoke to a few studios but these were private conversations that we cannot disclose.
WP: So for those of us who aren’t savvy with business deals, what does a licensing agreement mean and how does it differ from a traditional publishing deal?
SO: In this case, a licensing agreement means that a company was licensed by a copyright owner to commercialise the product, meaning they would handle the distribution and collect revenue whenever the product was sold. A licensee is an intermediary between the owner and the seller, and does not hold any IP rights. A traditional publisher is usually an investor which often owns the product they invest in. This was never the case with us and the companies we have worked with.
Sherlock Holmes: Crimes and Punishments was rightfully relisted on digital storefronts
WP: Is there still an exchange of money for a game’s development in agreements like these? I assume so but less than a standard publishing agreement so is there essentially a funding sacrifice you need to make in order to remain the IP holders?
SO: This really depends on the agreement between the two sides, and while I cannot disclose any classified information, I can tell you that we usually take the bigger part of the financial risks.
WP: How common are licensing deals in the industry?
SO: They are the wide majority. The trick is that licensees pretend to be publisher more often than you might think, and regular web sites and stores don’t have a slot for ‘licensees’, they are usually called ‘publishers’ while they are not. The difference in term of rule of law is huge. A publisher is usually a producer of the game and has producing rights. A licensee has just some commercialisation rights. It can be very tempting for a licensee to take itself for a publisher. It is worth far more money in terms of assets.
WP: So if you own the IP and the publisher is simply the licence holder, who has final say in business decisions such as making The Sinking City a timed Epic exclusive?
SO: Well, again, this depends on the agreement you and your partner signed. But usually distribution decisions are up to the publisher or the licensee.
WP: Could you ever see Frogwares working with a publisher again?
SO: Well, we are planning to publish our games ourselves, and we have been preparing for this moment for quite a while now. It’s a life-altering opportunity for us, so it’s hard for me to see us going back. Never say never, though.
The Sinking City is currently an Epic Store exclusive on PC
WP: One would assume you’ve begun work on your next game, any chance we can get a tease of what that might be?
SO: While we can’t reveal a whole lot, what we are working on is going to be our biggest game to date. And it’s a game that matches our DNA – a story-rich single-player detective adventure, but in a new perspective. It would be a game that uses a lot of knowledge from The Sinking City gameplay as a foundation with major improvements in key areas.
WP: Thanks for your time, best of luck with everything.
SO: Thank you, Zach, for giving us the chance to speak!