High stakes, big risks in video-game world

Mr Jason Rubin looks surprisingly relaxed for a video-game developer poised to release a title that could potentially make or break his US games development house, Naughty Dog.

The 31-year-old American developer has worked on the Sony Playstation title Jak and Daxter for more than two years, at a cost of $12 million (€13.7 million). The product finally goes on sale in the Republic next Friday at a recommended retail price of £44.99 (€57.17).

Success or failure should be known within weeks. "Everytime we make a game the 'gamers' expect us to make it better," says Mr Rubin. "We need more people now [to work on projects] and time is money."

The escalating cost of development for the gaming industry is raising the stakes for many small development houses. Sinking thousands of man hours and millions of pounds into development can be a risky venture.

"There is always a possibility of bankruptcy. It's like the movie industry now," says Mr Rubin.

In the past, Naughty Dog took the unusual step of financing its titles most of the way through production before asking for funding from publishers. This was possible because of the success of its previous titles, says Mr Rubin.

"Usually broke developers borrow from publishers, but for our last game we got a third of the way without financing," he says. "The better you are the more margin you get off each sale."

Even so, on Christmas Day last year, Mr Rubin and his business partner, Mr Andy Gavin, sold Naughty Dog to Sony for an undisclosed sum, which made them both extremely wealthy individuals.

No wonder he's still smiling!

"Sony wanted a good title," says Mr Rubin. "So we made Jak and Daxter exclusively for them."

The fantasy video game follows the exploits of two friends, one of whom - Daxter - has been transformed into a weird creature, after falling into a vat of sludge. A player's mission is to return Daxter to his human form by completing a series of adventures.

"It will take gamers at least 15 to 30 hours to solve the platforms and get through," says Mr Rubin. "The graphics [of the Playstation II] makes the game feel more like a cartoon."

Naughty Dog beefed up its development team to 36 staff to complete Jak and Daxter, but work still ran over by a week, according to Mr Rubin. Timing is crucially important in an industry where 40 per cent of annual sales are made in the last two months of the year.

The tighter deadlines, more staff required and sophisticated programming demanded by a maturing industry have hastened the trend towards consolidation.

"You can't fit 36 people into a garage," Mr Rubin says wistfully.

But despite all the risks, success can bring huge rewards in an industry worth an estimated $20 billion in annual sales. Naughty Dog's Crash Bandicoot games series alone sold 22 million copies worldwide, at an average price of $25 per sale.

Therefore, it is no surprise that software giant Microsoft entered the market this month by subsidising its own games console, the Xbox.

Microsoft is selling its console at a loss of up to $100 per unit in order to gain a foothold in the lucrative games market. It expects to make cash by selling software.

"Microsoft are coming into the pot not because they believe in gaming, rather because they fear that Sony will become the set-top box of choice for the future," says Mr Rubin. "It's more about the operating system, the browser and the media player software."

As president of a Sony subsidiary it is no surprise Mr Rubin is a staunch supporter of the Playstation, but he also believes one system should become a standard.

"You don't have to go to three different types of theatre to see a certain movie," he says. ...

But Microsoft and Japanese console-maker Nintendo, who both released new consoles this month, will face an uphill task to take market share from Sony.

Sales of Playstation have been brisk since its launch; by this Christmas it is estimated that there will be 675,000 of its consoles in the Republic. There are 1,238 games available to Sony console-owners, compared to a limited number for both Microsoft and Nintendo customers. Mr Rubin believes that Nintendo focuses too much on the children's audience and it has not appreciated that video games are now a lifetime experience for many users. "In five years we will see more middle-aged people playing video games," he says. "The other day I got an email from an older person who had played the Crash series. He said he had been in World War 1!"

But the big change is that the next generation of young adults will view gaming as a natural pastime and not something geeky, according to Mr Rubin. And with the next generation of consoles offering DVD players and an internet port for connecting to the Web, there is every chance gaming will be at the centre of home entertainment.