Analyst: Publishers Would Make More Money By Treating Developers As Stars

Analysts look at bottom lines. They make recommendations for people to make money. Cynically, you’d think an analyst would recommend sequels, annualization, keeping the talent making them behind the scenes.

That’s not necessarily what Evan Wilson, senior research analyst at Pacific Crest Securities, advocates. He sees financial successes coming from elevating talent, and making them a reason a consumer is interested in your project from the get-go.

“There are very few people in this world who know how to create hits. Not create a hit, but create multiple hits,” said Wilson in an e-mail exchange. “Those creative minds should be recognized and remunerated in the video game industry for their contribution as much as other forms of media. From a business perspective, that might be more expensive, but if the reward is better selling games the trade-off is worth it.”

But that’s not how the industry works right now, unless you’re a Will Wright or Hideo Kojima. Isn’t elevating creative minds a risky, expensive gamble? Why would Wilson — an analyst who should be identify how shareholders can profit, not developers — recommend that transition?

“I’m a stock analyst,” he said. “It’s my job, first and foremost, to improve the performance of my clients’ investments. That is done by not only recommending what is underestimated in share prices, but also helping them steer clear of what’s overestimated.”

A big problem, he said, is tha publishers view developers as interchangeable cogs.

Ken Levine is revered for “BioShock,” but if Levine were to up and disappear, would that stop Take-Two from making “BioShock 2″?

“Development would go right along without him [Levine] and that would be a shame,” he said. “If George Lucas died today the probability of another Star Wars installment would go to 0%. If Stallone died today, the probability of another Rambo installment would go to 0%.”

Because of this, Wilson believes it’s difficult for the industry to cultivate classics and elevate creative folk. “In the video game industry developers usually do not have ultimate control over intellectual property,” he said. “[In most cases], publishers do…I think much of this has to do with the perception of video games as ’technology’ and not ’stories.'”

He pointed to the “Call of Duty” series. Even though “Call of Duty 2″ is widely considered to be superior to “Call of Duty 3,” which one would you expect a new console owner to buy? “Call of Duty 3,” obviously, because it’s newer.

“Who’s FAULT is that? Gamers or retailers?” Wilson asked. “Both? Neither? I don’t know.”

Wilson kept coming back to EA, a company that’s emphasized sequels, licenses and annualization. “[That method] does create predictability, which is a near-term positive,” he said. “However, it also in many cases restricts innovation. I’ve been critical of EA for the last few years and it is common knowledge among gamers that their brand has been tarnished due deteriorating quality.”

Yet on the opposite end of the spectrum, you have Will Wright. “Name a groundbreaking new piece of software that has emerged from one of the large U.S. video game publishers in the last few years?,” he asked me. “’Spore’ could be a rare example. Any surprise it took a ’Will Wright’ to create it?”

Not really, but does that mean you need to create a series that sells 100 million copies to have creative freedom? Readers, if Levine didn’t have a hand in making “BioShock 2,” would you still buy it?

Have a hot tip? Is there a topic that Multiplayer should be covering and isn’t? Maybe you don’t care if Ken Levine makes “BioShock 2.” Drop me an e-mail.