Computer gaming is a big business—and a growing force in the Boston economy. Cambridge’s Harmonix Music Systems makes the popular game Guitar Hero II, and 2K Games in Quincy built BioShock, one of the best-selling console games in the world. Even Red Sox pitcher Curt Schilling is in the act—he’s formed a company called 38 Studios, out in Maynard.
Then there’s Westwood’s Turbine, which has had not one but two hits in the market for massively multiplayer online role-playing games, where players pay for gaming software and then a subscription fee, and the company constantly adds elements to the game, set in a virtual world. Its The Lord of the Rings Online game, which came out this summer, is by some measures already the second largest such game, behind Blizzard Entertainment’s World of Warcraft and its 9 million or so players.
Jeff Anderson was Turbine’s CEO through the development and marketing of its first success, the PC game Asheron’s Call, and through The Lord of the Rings Online. He’s also overseen the shutdown of a second version of Asheron’s Call and a modest success in a Dungeons & Dragons online game. He quietly gave up the CEO title to former mobile media executive Jim Crowley in the first week of October, but remains on Turbine’s board of directors. He spoke with Xconomy freelance contributor Michael Fitzgerald before stepping down.
Xconomy: You credit some of the success of The Lord of the Rings Online to the game’s use of an unprecedented set of community tools for its players—things like an in-game wiki with the data from the largest online Tolkien encyclopedia embedded in it. The game also uses Google Maps to let players create in-world maps. Why did you decide to build in such community tools?
Anderson: When I first started working on games like Ultima Online, we were all foolish enough to think that the games were actually products. After we launched, we realized that no, it’s a 24/7 service, and people are playing when they want to, on their terms. Now we realize we’re actually running a 24/7 community. And communities are about what the community’s interested in. From a business side, we needed to give the players more ways to participate in building the Tolkien world and Tolkien community.
Xconomy: This looks like a model for entertainment companies, or other content creators. Why doesn’t, say Scholastic or Bloomsbury’s create the Harry Potter site that everyone goes to, instead of fan sites like MuggleNet?
Anderson: You’re starting to see it happen in a few places here and there around certain properties. Heroes has been one of the sites NBC has been trying to push. You’d probably be hard pressed to find any of the big media properties that don’t have some kind of MySpace page attached to a new record or band. That’s just the first step in a very long journey of integrating your community into your products.
Xconomy: Why did Lord of the Rings Online do so much better than Dungeons & Dragons?
Anderson: Compare the success of the Dungeons & Dragons films to the Lord of the Rings Films. It probably answers the same question.
Xconomy: As an industry, who do you compete with?
Anderson: Mostly television. There’s only so many hours of leisure time that you’ve got to spend; and in that way, I guess we compete with the sofa.
Xconomy: Are you winning the battle for cushion time?
Anderson: If you look at Nielsen ratings and you look at the viewership of television, I think we’re killing them right now. The amount of time and dollars being spent on old media is just decaying and diminishing.
Xconomy: So, is online gaming now where radio was in the 1920s, or TV in the 1950s?
Anderson: Absolutely. The Electronic Arts of the world shouldn’t be fooled into thinking they have it all figured out. I mean, Nintendo was written off the charts 18 months ago, and look at how wrong that was.
There’s a whole generation of kids who are looking at entertainment completely differently—they’ve grown up with computers and portable devices. Small screens will never stop being part of their lives. With both of my daughters [who are 7 and 10], them learning to mouse was more memorable for me than watching them walk for the first time. It was just this epiphany they had one day. They play games, all their friends play games. That’s a fundamentally different dynamic than anything we’ve seen in economics, in media, in entertainment to date.
Xconomy: What can you say about Turbine’s plans for an IPO?
Anderson: Clearly, we have investors. [Turbine has raised $50 million, including investments from Boston-area VCs Highland Capital Partners, Polaris Ventures, Tudor Ventures and Columbia Capital–eds.] The long-term goal is to find liquidity for them and give them an opportunity to exit. The revenue bar to achieve a really good IPO has gone up post-2001, so now you want to be at $100 million plus in revenue. What the final resolution is for us—I’ll let you know when we get there.