Interview: Andy Payne, Mastertronic, ELSPA

We talk exclusively to the boss of budget gaming leader Mastertronic, who also happens to be on the board at ELSPA. Sizable agenda includes 1990s Sega, Sold Out, console budget space, cash for reviews, piracy, illegal downloads, clueless executives - and Manhunt.

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Making Money

Kikizo: Perhaps because of retailers pulling down prices all the time, they seem really sold on the budget sector. But in terms of publishers, obviously there are some key ones who are active in the sector like Codemasters and Eidos...

Payne: Well just to stop you there, Codemasters and Eidos are both struggling with their own budget ranges. They have always had good PC output over the years, have always tried to manage their price point down to around £12.99 or £9.99, so Flashpoint in its original format would have been working its way down towards £9.99, at which point they would then look for a £4.99 option, which would have been Sold Out. So both companies have an issue in that trying to run their own range means they have got to have the content behind, and that is getting less and less per publisher, because there are fewer products, coming through slower, and the time between products is getting longer. And the resource focus on the range is a drain; no salesperson wants to be working on the lower end price points when there are higher prices there.

Kikizo: From a quality point of view at least, they are two that stand out, but there still seem to be a lot of publishers that don't want to touch this market. Why don't they want to, and how do you convert them into working with you?

"It's quite hard to find any positive words about a game when you read the PC Gamer review."

Payne: Well all publishers I'm aware of want to get the maximum for their products. Some decide to manage the price point themselves internally, others will use specialists to republish, So with us and Sold Out, what we have been doing is showing revenue to publishers without their brand getting corrupted. And if we can keep the product selling at £9.99 for a year and then move that on at the same time we sign it over to Sold Out at £4.99 for two years, it means that up to three years worth of extra revenue comes in, on a product that the publisher is finished with, and probably wouldn't generate any more revenue from. It is not always great for a product but it is something more than nothing. And the compilation market, for me, doesn't exist any more. People don't want compilations when they can go and but three for £20 and choose from thirty titles, why would they want a compilation forced on them? Compilations really are only a gift market, or for early users who have just got a PC and here's ten games for it.

Kikizo: And the OEM market, how would you say that fares in comparison these days?

Payne: If you look at the old days, the interesting thing that happened with things like Commadore when they made their own machines, they spoilt the software games market by every year calling up the key publishers and look to license a number of key titles and then sell those with the machine, and before you knew where you were, it went from one title initially to fifty titles. They actually sold the bollocks out of it all because they gave too much away to sell their machines. Obviously, Commadore wasn't a company that was necessarily interested in software sales, there was no licensing agreement as there is with [today's] consoles, but quite quickly it destroyed the market.

OEM is also something that we don't particularly like, because it's just so-called added value for a PC, which is just seen to be "free stuff" - so some really good games like FarCry, for example, are just given away with an Nvidia-enabled PC. And most of the time people who buy it won't understand the game, or have any idea what it's for, or maybe never even get around to trying it. And indeed if they tried to get into it, it would be too difficult for them anyway. So instead of the OEM market providing kind of starter kits, they don't; they go the other way in trying to provide top products, that are only top products to PC gamers, most of whom don't buy those bundled machines anyway.

So it's all a bit absurd and personally I'm not sure OEM particularly grows the market. And the cash per unit that the OEM guys will pay is just chicken feed, but they will always counter that by saying they are going to do a million units out of the Far East. And are they? Well who knows?

Kikizo: If a new game sells poorly despite good reviews and critical acclaim, how soon can a publisher typically bring the title to you for republishing?

Payne: They can start to think about bringing it three or four weeks after the launch, because by then they will know whether they have a product that is going to sell or not.

Kikizo: What if it's a slow burner?

"There's no such thing any a slow burner any more; retailers are so ruthless about their space."

Payne: There's no such thing any more. Not really. I mean retailers are so ruthless about their space that you really can't have one any more, it just doesn't work like that. There is a really good example - a critically acclaimed driving simulation, which generally every magazine you pick up (providing the reviewer had half an inclination to play a driving sim and wasn't just an FPS action boy who resented being given it for review) most reviews rated this product really highly. It went to retail, it wasn't packaged very nicely, other products were out that were easier to play and more glamorous, so as a result it didn't sell as well as critics though it should do. And it was dead in four weeks.

That product will come to us from June 2005. So we have got enough time to make sure that any product that's in what we call the channel, is sensibly written down and sold through before we then bring the budget version along for £10. Hopefully, users who were in two minds about whether it was worth it, at £10 will find it an easier purchase. But the market is getting harder; there are slow burners, but they aren't allowed to burn slowly, because retail wants sales.



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