-Conducted by Adam Ames
TPG had the great privilege to interview the CEO of GamersGate, Theodore Bergquist. Theo spends time talking about the future of digital distribution, his competition, interacting with publishers and developers, pricing, their upcoming service, FreeGames and much more.
Please tell us a little bit about yourself and your role with the development of GamersGate.
I’m a serial entrepreneur. I’ve built, sold and acquired companies for the past 15 years. Most of them are self funded “labor of love” projects that has grown into companies. Nowadays I’m the CEO and major shareholder of GamersGate.
Where did the idea for GamersGate come from?
Five years ago when I owned and managed Paradox Interactive (a strategy games publisher) my side kick and deputy Fredrik Wester came up with the idea to launch Paradox on Demand, a download service for our own games. It was such a good business that we decided to put it in a separate entity and invite 3rd party publishers to sell their games there too. As a niche player it is tough to get into retail with a fairly small title and suddenly all our fans could buy games direct from us.
What are some of the successes and failures you learned from in developing GamersGate?
Oh, we’ve learned so much. We are pioneers in digital distribution for games and as such we’ve done some mistakes and learned from them. Can’t remember them all. However with a great team and a solid belief in our vision to serve gamers out there with good games and good promotions I think we’ve done pretty good.
In its current form, how close is GamersGate to your initial vision?
First stage was just to try out the model, once that was in place we had to scale up. It’s hard to say how close it is to our initial vision, some parts are very close, some not.
What do you look for in a title when deciding whether or not to sell it through GamersGate?
As most people know, we are more than happy to promote and publish even the small guys, so in terms of size, scope or potential revenue we never say no to a title. We want to make as many titles available to gamers as possible. However if it’s buggy, pornographic, racist etc, we pass.
Are there any differences in the negotiations with indie developers as opposed to AAA titles and or publishers?
No not really. The main difference is that it take longer time with AAA publishers to negotiate a contract, but I must say that nowadays most of the major publishers are quite fast and adoptive taking on digital distribution.
How do you respond to those PC gamers who believe digitally distributed products should cost less than their retail counterparts? There are no discs to copy, no boxes to create and no manuals to print and therefore should not cost as much.
….on the other hand you get an online account, can download your game more than once, you can store your game online, you get automatic patches, etc, etc… I think the big question is rather if the pricing overall is too high for what you get. The good thing about digital distribution is that within an hour after release you can see if the price point was right or not.
One of the knocks against the various digital distribution platforms is the user having 4 or 5 different programs in order to play their games. How do you react to this?
Yeah, I know, it’s a pain! That’s the reason why we have decided NOT to have a client and to make the overall experience of shopping at Gamersgate as easy and smooth as possible.
In terms of regular and sale pricing, how much say do you have when making games available via GamersGate?
Pricing and promotion is a constant dialogue with the publishers.
How do you feel about the digital distribution platform as a whole?
It is superior all others. I think physical retailers for games will meet the same destiny as record stores. The question is when. All gamers know how difficult it is to start playing a game. You need patches, updates, find other players for multiplayer, etc, etc. All this you do online. A game is a digital product, so to deliver both the product and the experience on the same platform is obviously the only right thing.
Tell us about your decision to allow titles sold on GamersGate to be activated via Steam.
It’s pretty simple. Some of our customers asked us if we could add theses titles so they could buy them from us and not Steam so we decided to give it a try. To be honest though, titles with Steamworks in them do not sell very well on Gamersgate. I think one of the reasons we grow so fast and customers keep coming back to us is because we don’t have a bulky set-up like Steam.
How important is it to get instant feedback about GamersGate from users through online message boards and other social networking sites?
We’ve always hailed a good communication and feedback from our customers and they give us some great feedback. We try to use it as much as we can to continue building a first class download service. Feedback from customers are the only way to improve yourself.
What is your reaction to the recent launch of EA’s Origin service and the announcements for the upcoming IndieCity and GameFly digital distribution platforms?
Competition is good. It’s also a way to benchmark your own activities and I think we’re doing pretty good. There is room for more than one player in this space.
How do you feel about the various indie bundle promotions and the “Pay What You Want” pricing methodology?
We are still in the early days of digital distribution and I think it’s good to try different models. If you ask me if I think these two models will be dominant I’d say no, just to the fact that standard pricing makes it easier for customers to know what they can – and should – expect from a title.
What can you do to make GamersGate a more attractive option for PC gamers?
Add more titles, do more promotions, work harder to make sure their end experience is the best they can get. When we launch FreeGames (ad-supported service) later this year, whereas members can download and play for free, I think we’ve accomplished a lot.
What are your thoughts on how the PC gaming industry as a whole are dealing with the problem of intrusive DRM and piracy?
The biggest problem for the whole entertainment industry is that they go chasing pirates instead of finding our incentives to those who pay. I think it’s better to reward paying customers than chasing non paying coz that’s a battle you can’t win.
How do you feel about DLC and its current implementation in the PC gaming industry?
DLC’s are great, it’s a good way for publishers to extend the franchise without having to invest too much in the beginning, and for gamers it’s good because it extends the experience. Implementation is still a bit slow in the PC industry but I think it will be dominant in the next upcoming years.
What are some of your favorite hobbies away from GamersGate?
We’ll let’s say I like to do things not near a computer 🙂 Last year and crossed Himalaya and made my way up to Everest Base Camp, next year I’ll be crossing Patagonia on horseback!
For anyone hearing about GamersGate for the first time, is there anything else you would like to say?
Try it, and judge for yourself! – End
We would like to thank Theo and everyone from GamersGate for taking time out of their busy schedules to talk about the future of PC gaming.