Jerry Bowerman talks about the Gaming Industry in Austin
What is your background?
When I first got out of college I was an investment banker, but since 1993 I have been either doing video games or computer games or something like that. I did take a break after the sale of Sierra (we had non-competes). I co-founded a company to create one of the first business communication systems over the Internet. You could actually broadcast yourself over the Internet with a PowerPoint, instant surveys, whiteboard, audio, video and all that going with it (before there was WebEx or anything like that). I mean this is back using Real 2.0, Real 3.0, in early 1997. We took a lot of bad habits from doing PC games and applied them to enterprise software and got smacked a few times. We had some great accounts like Nortel which used our system for a company meeting back when they actually had employees and it crashed our whole system. That was a great learning experience.
After that I worked at Electronic Arts in Seattle and Las Vegas. I was asked to move to Vancouver, BC and “create the largest game studio on the planet”. By 2006 it had over 1,700 employees.
Where are you from originally?
Seattle. There are a few of us that grew up there and hate it. My wife and I decided to find another place to live so we went through an 18 month process to find another home.
What were the big criteria for coming to Austin?
Well, it was the same criteria for everywhere we looked and I don’t remember all of them but education for our boys was really important, climate (days of sunshine!), political climate, cost of living, and technology were a few of them.
So what did you do when you came to Austin?
When EA found out I was moving to Austin they asked me to stay on and work from my home. They were really quite good to me – a real class act. But, it was hard to be “connected” from my home office and so I resigned for good after a few months of being in Austin. Then I joined Sevin Rosen Funds, a Dallas based venture capital company, as an Entrepreneur in Residence.
The Sevin Rosen guys were great to work with but I found when it comes to consumer software the VC community in general is scared to death of Microsoft, Google and Yahoo. I spent a good chunk of my career competing with various divisions of those behemoths and, you know, they are not the big bad boy everybody thinks they are. I should qualify that – I mean they are predatory but they move incredibly slowly and they are willing to buy their way into a lot of businesses. That can be good for an entrepreneur.
Around a year ago I got a call out of the blue from the president of Lucasfilm. They wanted to make changes at LucasArts and I ended up consulting to them for the better part of 2008. As my consulting work was winding down they asked me if I would be interested in joining their board of directors. That was an easy answer – YES!
I really enjoy gaming and technology and one of the things I want is to get more involved with is technology growth in the State of Texas. Through my contacts I get a call a month from a startup that needs help. I run into the challenge that a lot of them find it’s really hard to differentiate yourself from the competition. Typically they haven’t factored in the cost of customer acquisition – or even how to attract new customers. They often feel their product will “sell itself”.
The industry structure is also challenging with the way publishers setup the business. What do you think?
Many independent developers dream of creating their own intellectual property by being able to save some of their advances or ship a hit and make a ton in royalties. For most it is much easier said than done and so many independent developers resort to selling. Some publishers buy gaming companies for the talent and not the game itself. If an independent developer doesn’t have their own IP the deal is usually tiny.
What do you think about the iPhone market?
I think the iPhone is great for the iPhone owner, great for Apple and not good for developers. History has shown time and time again in “open markets” the price trends to zero over time resulting in losses for +95% of the developers. Also, many developers have an interesting idea but are not solving enough of the problem and to get customers to go from something that’s free and painful to something that costs money and is pain free you have to improve the overall experience by about 10x.
What business models have you found that work?
One idea is to attach your game to a company with a product to sell and use the game to attract and entertain customers through the website. That way there’s something to monetize such as the product the company sells.