Interview With Stardock CEO Brad Wardell

In the ongoing PC gaming interview series, we get a glimpse into the mind of Brad Wardell, CEO of Stardock.  Brad talks about how Impulse was created, Steam, GOG, ImpulseTV and much more.

Adam:

Walk us through the development of your digital distribution system starting with Component Manager through Stardock Central and now with Impulse.  What were some of the struggles and successes during this time?

Brad:

Back in the 90s, the only realistic way we could sell software was either at retail or to ship someone a box. Shipping boxes was very labor intensive for us and retailers were…challenging to deal with, especially if you were a small company.

So we decided to make a virtual store, which, back in 1997, was a pretty new thing. The idea would be that a person could download our “store” and then purchase our programs right from it. The user would then download and install the program right from the store. It had to be done “just right” because back then, people were using 28.8k modems so a lot of our work was put in to break our products into “components” hence the name “Component Manager”.

A few years later, we re-did our store to support our PC games and called it “Stardock Central”. Stardock Central included built in chat, a mod browser for downloading additional content for our products and was a lot friendlier to use.

A while after Stardock Central was out, Valve released Steam which, unlike Stardock Central, sold not just Valve’s games but third-party games as well. When users started coming to us requesting that we put our games on Steam so that they could purchase all their games at the same place. This concerned us because we had done all this work in order not to be beholden to any particular retailer and we saw that this new “Steam” thing could end up being the CompUSA (which was a bit of a boogieman back in the 90s at retail) of the digital world.

So we rebuild our digital distribution system from scratch so that we could seamlessly support not just our own software but third party software as well. The result was Impulse.

Adam:

When you launched Component Manager in 1998, did you have an idea of how big digital distribution would eventually become?

Brad:

We believed that digital distribution would eventually take over. But we thought that every developer and publisher would have their own thing. We didn’t imagine that it would consolidate into a few digital retailers.

Adam:

What are your thoughts on other digital distribution companies like Steam and GOG?

We’re big fans of both of them. For one thing, Stardock is a technology company so we tend to have a great deal of respect for those who produce high quality stuff.  The thing that I think many people don’t realize about Steam is that Valve was the first to recognize that not every developer or publisher would want to create their own digital store. It only seems obvious in hindsight but what Valve did was really ground breaking.

Moreover, and this is something that should be emphasized because I’ve seen Steam detractors wrongly assert this – Steam isn’t #1 just because it was first. They have consistently been out in front in the changing market.  The biggest challenge for Stardock with regards to Steam vs. Impulse (besides the obvious disparity of capital resources) has been trying to find ways to leapfrog them onto the next phase of digital distribution.  So far, Steam has beaten us to the punch every time – first with Steam itself and then with Steamworks.

With regards to GOG, what makes GOG special in our minds is that they decided not to even try to compete with Steam or Impulse but rather focus on classic games. This is a very solid business move because in terms of margins, classic games blow away new games.

Adam:

What things can you do to make Impulse more of an attractive option for PC gamers?    

Brad:

There are a few things that Stardock has to do with Impulse to increase its market share. The biggest problem we have had has been capital. Impulse gets investment from Stardock’s other two business units (PC software and PC games). But we don’t have a Half-Life 2 equivalent in our game catalog to hire the kind of developer and release engineering staffing that Valve has. So we have to be a lot more tactical about it.

Going forward, the community features of Impulse are going to become an increasing focus for us in order to give PC users a more cohesive experience. We also have a number of projects in development to make it easier for both game developers and software developers to put their titles up on Impulse.

Adam:

There are some who believe digital distribution is slowly killing the PC retail gaming market.  Do you see a time in the future where retail PC games no longer exist?

This is a chicken or egg thing really.  In the long run, anything that can be digitally distributed will be digitally distributed. We developed Component Manager because the retail situation for software and games was so unstable for us and this was back in the 90s.

Adam:

In 2008, you released Sins of a Solar Empire with no DRM at all.  Who made this decision?  Was there any push back from Ironclad or any other problems with them about this topic?

Brad:

Stardock and Ironclad felt the same on this. Our priority was to ensure that our customers got the best possible experience with the game. It’s not that we’re anti-copy protection or anti-DRM. There’s been a lot of misconception on that point. It’s that we don’t want our customers to feel punished for buying our games versus “warezing” them.

Adam:

What is the relationship like between a publisher and a developer? 

Brad:

It really depends. Each publisher and each developer is different. With Stardock and Ironclad, the integration between us is pretty significant.  With Gas Powered Games and Stardock, it was much more traditional.

Adam:

Do you have plans to work with any other third-party developers?

Brad:

In recent years we have been a lot more conservative in what we publish than previously. For Stardock, we are very emphatic about long-term support for our titles. And when we don’t develop the games ourselves, we’re reliant on our developer partner to work with us on providing that support. We don’t want to be in a position where our users are expecting new features and new versions and not be able to deliver because the developer has “moved on” to other games.  So our agreements now insist on long-term meaningful support on games from developers.

Adam:

How do you negotiate pricing on Impulse?  How much say do the publishers and developers have?  Is it any different during a sales event?   

Brad:

Our position is that the publisher/developer has all the power. We won’t put a title on sale without the express okay of the publisher and only at a mutually agreed upon price.  This sometimes puts us at a disadvantage versus other digital distributors who will just lower the price unilaterally.  While most contracts technically allow the digital distributor to set the price as long as the royalty % is maintained, we don’t leverage that for our sales. It’s always by mutual consent.

Adam:

Why are new release digital versions of games not discounted?  From the view of the customer, there are no discs to copy, no boxes to create and no manuals to print and therefore should not cost as much.

Brad:

That’s because COGS is insignificant. That $50 game only cost $1.25 to produce. That’s box, manual, discs, etc.

Adam:

You have always been vocal about the downfalls of DRM and piracy.  You even constructed the Gamer’s Bill Of Rights.  With your views being strikingly different from many other leaders in your industry, where do your beliefs come from?  Do you think your words have an impact on others?           

Brad:

Probably the main difference is that Stardock is mostly made up of gamers.  I came the Usenet world so my point of view tends to come from having been a consumer and game developer. Publishing came much later – long after my views on these matters had formed.

I think the Gamer’s Bill of Rights has had considerable influence over the years. We’ve largely seen the elimination of DVD/CD checks on games.  But there has been a lot of suggestion from the developer community that we need to update it based on technological changes that have occurred since it was originally written.  For instance, is it really a big deal in 2011 for a game to require Internet access when you first install it just to verify it’s a legitimate copy?

Adam:

For every great PC port released, there are 100 that come up way short either with awful controls or gimped visual options.  Why do you believe this happens and what can be done to fix the issues?    

There’s no easy solution for this. Most PC ports don’t sell very well whether they’re done well or done poorly. A big part of that is because they’re usually released later but another reason is because, to be honest, the PC game experience is so inconsistent based on hardware and software differences on a per customer basis.

Adam:

With the vast majority of media outlets focusing on console gaming, do you believe there is a lack of quality PC gaming reviews and information available?  If so, how do you go about marketing your games and using what little media coverage there is?

There’s a definite lack of PC gaming coverage today. There are few dedicated PC game publications left.  In our case, we rely on word of mouth, web advertising, and of course Impulse to get the word out.

Adam:

What is your stance on publishers paying journalists to go on all expenses paid trips to preview/review high profile games?

Brad:

Well, my view is that I need to become a journalist.

Adam:

What are your thoughts on the Humble Indie Bundle?

Brad:

This was a phenomenal idea that was also really well executed.

Adam:

You were very vocal about the problems some your games have had shortly after launch.  You could have easily come out with some politically correct, standard CEO jargon and left well enough alone.  Instead you acknowledged the problems and vowed to correct them.  Why put yourself out there like that?   

Brad:

That probably gets back to the Usenet thing again. One of my motivations to make games in the first place was frustration with how games were made and sold in the past.  So when Stardock screwed up the launch of Elemental: War of Magic, I was pretty horrified – and humbled. You definitely get a much better appreciation on how these things happen. We gamers tend to assume that games come out in horrible states because the publisher just wanted to make a quick buck or didn’t care about their customers. But I think it’s really useful for gamers to get a better idea of how these things happen.

At GDC this year, I’m going to be giving a “Failure” talk so that other developers can learn the steps that lead to success on a game project and then contrast that on what events occurred that lead game projects to fail.

Adam:

Tell us a little bit about the recent acquisitions of Jon Shafer and Dave Stern.  Can you talk about any upcoming titles that Jeff or Dave will be a part of?

Brad:

Sure. It really started when we brought on Derek “Kael” Paxton. Prior to Derek, I effectively handled the game design at Stardock. I’ve never considered myself a game designer but didn’t really appreciate the value “designers” bring to the table.  But with Derek, I quickly saw how much value a good designer can add to a game and began thinking about other games we wanted to do.  I had known Jon awhile and since Civilization V was released there might be an opportunity to work together on some cool new things.

Similarly, I did the writing on our games in the past but I had learned during the work on War of Magic and Destiny’s Embers (the book) how much help a professional writer could bring on. I was also acutely aware that many gamers felt our game worlds were bland and had come to agree with them. Seeing the work they have already done internally has convinced me that there will be a marked difference between Stardock games of 2011 and on versus the past because of the richness these talented people bring.

Adam:

In February of 2010, you launched ImpulseTV where Impulse users can view gameplay footage with audio commentary from Jason Ocampo and Brian Clair before making a purchase.  Are there any future plans to expand this idea?

Brad:

Definitely. We have new episodes in production as I type.

Adam:

According to Wikipedia, you enjoy beekeeping.  Is that true?  What other hobbies do you have outside of Stardock?

I’m really getting into human cloning. The basement of our building has a number of large “jars” where we grow more developers and other key personnel for future expansion. Sometimes, I go and tap on the glass to see if they smile. J

But yea, I do a lot of beekeeping in the Summer. I just wanted a hobby that didn’t involve computers. I’m also into electronics. But mostly I just like to do stuff with my wife and kids when I’m free.

Adam:

For the people who may be hearing your name for the first time, is there anything else you would like to say about PC gaming or Stardock?

Brad:

Probably the best way to describe Stardock is to explain that it’s a Nerd’s Paradise.  Most of what we make here comes from hobbies that our guys and gals had that simply got out of hand. Since we’re privately held, we’ve always been able to just work on whatever we want.  So the place is full of Monty-Python quoting, Magic the Gathering playing, Medieval History loving people.  It’s a pretty neat, but silly place to work at.  But we have a lot of fun and we get to make a lot of really cool stuff.

We would once again like to thank Brad for making time to do this interview.  Check out all of the software Stardock has to offer on their site as well as Impulse.

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