Paradox Interactive’s success may be as puzzling to some industry observers as its namesake conundrums. Only last year, Epic Games’ Cliff Bleszinski pointed to the rapid coalescence of the game industry into two clumps at either end of a studio-size scale. On one end, you have the burgeoning indie scene; on the other, mega-developers. Medium-sized devs and publishers look to be in trouble, so the thinking goes, being unable to compete with the low overheads and quick turnaround of indie development, and lacking the sort of investment that gurgles around marquee titles at, say, EA. And yet Paradox, a middleweight developer and publisher of niche titles, has just had its best year ever, citing a 250 per cent rise in profit.
This figure, along with an avalanche of other investor-pleasing stats, is being announced tonight at Paradox’s annual conference, to which we’ve been invited in order to catch up with the company. Staged at Sweden’s ‘most haunted’ mansion, the affair recalls the extravagance, intimacy and sense of genuine celebration that have long since drained from the yearly events of most larger game industry companies. Paradox has also splashed out on full medieval costumes for all of its attending staff, and entertainment in the form of a battle re-enactment society and a disconcertingly inexpert fire dancer. Holding court is Fredrik Wester, Paradox’s outspoken, pithy, indefatigable CEO, and self-styled Lord Protector of the Realm, who’s appropriately gowned and crowned.
He’s the first to admit that Paradox’s rocketing figures are in large part due to the success of Magicka, a tongue-in-cheek fantasy top-down splatter ’em up conceived by Arrowhead Studios, then a team of just eight university students. The pupil-dilating figures for the game are as follows: 1.3 million copies sold, plus a further half a million for the first expansion, and 4 million individual DLC purchases. All of which rather contradicts the idea that there is no market for games of this size. The mistake, Paradox says, is in trying to make exactly the same sort of games as the triple-A publishers. At Paradox’s chosen scale, the key is getting the right hook, and putting your energy into making that as sharp as possible.
Certainly, credit should go to Arrowhead and its charmingly silly and mechanically adventurous game, but the fact that Paradox found it and helped bring it to market so successfully is no accident – this is exactly the sort of eventuality that the company’s strategy is intended to encourage. Officially founded in 1999, Paradox initially specialised in developing detailed strategy games. But in dominating this niche, it found a stable market largely unaffected by the pressures felt by other publishers. It has since come to the realisation that it isn’t strategy titles that are its forte, but special-interest games that would otherwise be trampled in the mass market.
“Being niche gives us so much more moving room,” says Shams Jorjani, a producer and business development strategist (or, in Wester’s words, ‘corporate paladin’). “If LucasArts want to make a Star Wars game, they have to make it for all platforms. They could never release just a PC game, because they have to go for the big bucks. And that means if they’re making it for consoles, they’ve got to fit the game to those controls. They wouldn’t be able to make a true sequel to TIE Fighter or X-Wing, for instance, because that doesn’t fit the console mould. That’s why you get games like Force Unleashed, which… have problems. Clearly, there’s a good game there, but it’s been muddled by the need to go as big as possible. Going big is not synonymous with good quality.”
While console ports of Paradox’s strategy games seem unlikely, then, this PC bias across its portfolio has allowed it to adapt extremely quickly to the onset of digital distribution, establishing the GamersGate download service.
“I think the problem is that a lot of people had a hard time with the transition to digital,” says Wester when we bring up Bleszinski’s theory of a squeezed middle. “I still hear people saying, ‘Yeah, we’re going to do this boxed console game,’ and I can’t really see mid-size publishers doing that. I can see the big guys doing console titles. That’s not a problem, because, when you do the profit-and-loss chart, if you sell five million units of GTA [then] you’re going to make a shitload of money. But if you say you’re going to sell 20,000 on the Xbox, you’re going to lose a lot of money.”
With PCs and their easy means of digital distribution, however, Paradox’s games have thrived, ditching the overheads that normally thwart designs of peculiar appeal, modest budgets, and relatively unknown developers. In fact, because of its care not to overreach, it has gone almost unchallenged in this space, actively targeting games in these categories.
“We know niche,” says Wester. “We’ve been doing this since 1998. I’ve been with the company since 2003, and I’ve been one of the owners since 2004. We know how to market niche games, and we know how to publish them. Everything is lined up. It’s like a factory.” He looks momentarily uncertain. “Wait, that’s bad. It’s like a really fun factory.”
“There was a misconception a few years back that the PC was dead,” says Jorjani, back on topic. “The misconception now is the middle-class developer or publisher is dead. You had 2K saying for a long time that you can’t make turn-based strategy. I agree – if you want to sell five million, it’s going to be pretty challenging to make a turn-based strategy game. But we don’t need to sell five million. When you don’t have that top-down approach, you have completely different ways to do business. That’s what Fred has pioneered all these years, and what sets Paradox apart – we almost never start by looking at how much money we could make. With Magicka, for instance, we asked: ‘What’s the worst-case scenario? What if we only sell 10,000 copies? Would we survive that? Can we take that chance?’ And we were like, ‘Yeah.’ So if we can take it, we do it.”
Magicka isn’t a grand strategy title, but a game about comedy wizards involved in slapstick carnage. It’s an unusual stablemate for Paradox’s fastidiously accurate empire-management titles, marking the company’s willingness to embrace oddball games from every genre. While it continues to serve up sober strategy games in abundance – Victoria II, Napoleon’s Campaigns II, Crusader Kings II, Magna Mundi – Paradox’s slate for 2012 demonstrates increasingly catholic tastes. Warlock: Master Of The Arcane is perhaps the least dramatic departure, delivering a stripped-back fantasy refit of Civilization with a little Heroes Of Might And Magic on the side. Then there’s Salem, a crafting MMOG about collaborative labour and emergent social structures set in America’s colonial past. And while the name Gettysburg: Armored Warfare might sound like a neat fit for Paradox, it belongs to a slightly barmy shooter-RTS hybrid that jazzes up American Civil War battles with sci-fi weaponry.
Judging by the Paradox-fuelled buzz, however, its greatest hopes are pinned on A Game Of Dwarves and War Of The Roses. The first, from Zeal Game Studios, promises to be something like famously impenetrable roguelike city-building game Dwarf Fortress, but given an accessible 3D visualisation. War Of The Roses, meanwhile, has been pitched as a medieval Battlefield. It’s a multiplayer melee combat game from Fatshark, the maker of firstperson shooter Lead And Gold: Gangs Of The Wild West. With oversight from Battlefield producer Gordon Van Dyke, it looks to use much of the structure of DICE’s series, featuring cooperation between combat classes and a persistent character advancement system.
All these games show Paradox’s penchant for quirky, mid-sized projects that would never survive focus groups. Indeed, there’s no better illustration of its sensibilities than its reaction to EA’s Syndicate reboot. Seeing fans outraged by the property’s switch to FPS, Paradox announced Cartel, a spiritual sequel to the squad-based RTS. It’s for this commitment to idiosyncrasy that Wester refers to the company as an ‘independent publisher’, a fittingly paradoxical term. Jorjani: “After Magicka, there was a noticeable shift in the types of pitches we got. Indie developers started to say, ‘We never considered working with a publisher before, but we’ll talk to you.’ Half of the pitches we get now are from completely [unestablished] studios.”
Although there’s been a recent upswing in indie interest, Paradox has long had a role in nurturing fledgling Swedish studios. As Jorjani explains, “Paradox is one of the few actors in the Swedish games industry that does development, marketing, sales and distribution.” Even Minecraft creator Mojang popped in for a few pointers when starting up. Now Paradox is looking for a way to formalise its role, introducing an incubation programme whereby indie startups are given office space, equipment and advice.
“We spend a significant amount of time on acquisitions, finding new projects,” says Jorjani. “So we thought, ‘Let’s just take 25 per cent of
that time we’re spending and invest it in helping startups.’ It’s a way for us to find new projects. The game industry in Sweden employs only 12,000 people, but roughly 800 students graduate every year with a game degree in Sweden.”
Wester cuts in: “Where does innovation in the games industry come from? Mostly from young teams who have nothing to lose. If you have something to lose, you go for the safe route every time. You’ll drive safely, add a little for a sequel, then get a 30 per cent return on investment on a two-year capital binding. Everything’s Excel based! Of course, we have our comfort zones as well. If you take Europa Universalis, we know how many games we’re going to sell, we know what level of polish we need. So we can release a Europa Universalis game and know how much we’re going to make. And we take some of that money and put it back into the fun factory, and give the rest to our – what are they called? – our indie Oompa Loompas, so they can innovate.”
What Wester prizes most in his indie partners is focus. Paradox’s games won’t be able to compete with mega-budget titles on feature checklists, but if they can do one new, interesting thing then the game becomes a good bet.
“I’m very blunt,” he says of his relationship with developers. “I want people to succeed. But if you come to me and say you have a game that’s better than World Of Warcraft, I will tell you [that] you don’t. You don’t have the fanbase Blizzard has, you don’t have the sheer amount of money, you don’t have the experience. But what you might have is this one thing. And if you want to deliver that, and only that, we can work with you.
“There was a Swedish company, Star Vault, which went to some shitty stock exchange list saying, ‘We’re the next WOW and we’re building it in Unreal Engine.’ I knew it was going to be a failure. The expectations they put on everyone, the shareholders, the customers – it’s bad for the whole industry. If I went out there and said we were the next Blizzard, investors would come rushing to us. But if I didn’t deliver in two years, they’d be like, ‘Wait a minute…’ And that’s a problem for the industry as a whole: people over-promise and under-deliver… But I understand that. People are passionate about what they do in this industry, and don’t have business experience, so their projections are based on their passion.”
Passion is clearly what Paradox relies on – the passion of developers who obsess about Stalingrad or the Dark Ages, the creators of innovative indie curios, and the eager startups. Helping them reach an audience who will share that passion is Paradox’s challenge and, going by the company’s figures so far, its good fortune.