Exclusive interview with Jez San OBE

Jez San

Jez San is one of the veterans who made the British video game industry. An assembly language programmer for several different processors, his first major game hit was Starglider in 1986, many others followed. He is also a chip designer, book author, online gambling expert and highly successful businessman. In 2002 he was awarded the OBE. He is also a life member of BAFTA.

Jez now owns or has interests in a range of companies in and around the gaming industry.

Perhaps we can start by setting context with you giving a very quick overview of PKR and Origin8.

pkr and origin8 are two very different companies.. with different goals, aspirations, shareholders etc.
pkr was started to make a new form of online poker that was more entertaining and shared some aspects with modern computer games…  and origin8 was established to make iphone apps, including both games and non-games.

At Codemasters we discussed doing online gambling. The video game and online gambling industries seem to me to be the same thing but with different business models, yet the two industries live in different boxes, why do you think this is?

They are very different industries  - enormously different but with some common skillset between them.  in computer and video games, you make good games.. you spend a year or two developing the game itself.. then you put it in a shrinkwrap box, and sell it into distribution, and retail etc.  some sales are online but most are at retail.   the game, once sold, is the end of it.  a sequel might come a few years later etc etc.   there are no rules on what you’re allowed to put in your game, or who you’re allowed to sell to, except voluntary age restrictions.  cheating in the game is common – either by patching it, or hacking it, or just playing in a way against the spirit of the game is all rife, and its a cat and mouse game to stop the cheaters.. but it is of little impact.   people pay a fixed amount to buy the game, or a monthly amount to play the game (if online).  the money flow on a computer game is out from the customer and in to the game sellers.  the players do not expect to make money.
contrast all that to the online gambling industry (we call it online gaming, btw).  Online gambling games, by their very nature are all about Money.  Money has to be protected.   Cheating in a computer game is a fact of life, because there’s little impact in being cheated.  But when REAL MONEY is involved, the game has to be totally and utterly fair., as MONEY is involved.   you cant afford to slip up.  one lapse and it could be the end of the company.
The software must be developed by audited companies who have screened their employees.  the key ones will have gone through a police criminal records check.  The company will be licensed and regulated by a pukka jurisdiction like Alderney or Gibraltar and hopefully not by the light or zero regulated islands like Costa Rica, Curacao or some indian reservations etc.  The better jurisdictions have a lot more regulation that must be adhered to and have the skilled operatives able to discern the legit companies and people from the faceless ones.. and the honest companies welcome the enforcement and regulation.  there’s a lot of rules to comply with.  all about protecting the innocent, the vulnerable and ensuring the games are fair.
Trust is everything!  The honesty and compliance issues surrounding online gambling are a huge obstacle for a computer game or video game company entering the gambling market.  in computer games we simply accept that there are cheats and try to avoid them.  in online gambling we simply cant allow cheating of any kind, either by the company or its players.  if ever a company was found cheating, its most likely because it wasn’t regulated properly in a safe and trustworthy jurisdiction.. and there weren’t enough checks and balances in place to ensure fair play.  in proper jurisdictions, the software that is created is audited and validated to ensure it plays fair and doesn’t cheat.  its vital that the customer trusts the game and the company that supplied it.  Trust is everything.  the customer is trusting that they can deposit their cash into the game – sometimes hundreds or thousands – or even tens and hundreds of thousands of dollars.. and the game cannot allow cheating of any form.  its essential that the customer can trust the game is fair and that they are playing against fair players.  Players must be able to TRUST where they leave their MONEY and that the games are fair.

Do you think that there is anything that the game industry should be learning from online gambling?

The business model is more direct.  in online gaming, the game supplier has a direct relationship with the customer.  I wish that in computer games that this was true.  the main reason i stopped making computer games was that the biggest negative of being a computer game developer was having to have a relationship with publishers and distributors at the expense of a relationship with the games player / customer.  one day, computer games distribution techniques will allow game developers and game players to interact directly – without publishers and distributors getting in the way.  and on that day, I will consider coming back to computer games and probably will enjoy it again.
I think that most online gaming companies can learn a lot from computer games companies.. in how to make the products better.. and more compelling.. and enjoyable etc.  this is what pkr.com brings to the table.  we have a poker game that’s more like a computer game yet a business model and compliance that is of the highest standards of the online gambling industry.  pkr;s game of poker is a lot of fun..!  its in full 3d, with avatars, and clothing, hairstyles, jewellery, poker tells and body language, moods and accents etc.  you enjoy playing, because of the experience itself.  it doesn’t matter whether you win or lose, you will probably still enjoy it.. and that’s the beauty of pkr compared to the other poker sites which are 2d, top down, very dry, lots of text and numbers.. and are a very technical form of poker game.. whereas pkr is more of an entertainment experience.  Also, and most importantly, PKR is all about the social play.  it has a social network, like facebook, built into its front end.. and it encourages people to interact.. both in terms of chatting in-game, forums out of game.. plus having friends lists and keeping their friends up to date with their accomplishments.  pkr is the most social of the online poker sites.. and that is our edge.  other poker sites may let you chat but the chat window is one line big.  you’re really not expected to chat.  they usually don’t have forums as they don’t want their users talking to each other.  they don’t have social networks or friends lists etc.  pkr has carved its own niche among online poker.. in embracing the idea that people want to play poker and other gambling games for social and entertainment reasons, and NOT, simply, to make money.

The App Store has been the biggest success of any new platform in the history of video games and you are a part of it. Where do you see it going next?

The biggest advantage of the app store is its direct relationship between the game developer and the audience.  that bit I love.  but the biggest problem is that there are few if any channels of communication to allow the marketing of the game.. and the only way that games can rise to the top of the pile and be noticed is if they are priced cheap enough to be popular.. so right now, the model of the app store is a bit broken in that usually, only cheap games do well.. and there’s almost no way for a properly priced game – that compensates its authors for the work – to be able to do sell.  of course, there’s a few exceptions, but that doesn’t make it a successful market.   The App Store, itself is doing well because of the large number of apps and games available but each one isn’t selling as well as it should because of lack of visibility and lack of an ability to promote the game.  but each individual game only makes thousands of dollars.. maybe a hundred thousand if you’re lucky.  certainly not enough to pay back the man years of effort required to make a good game.   very few Apps on the app store have earned $500k, and even less have got to $1m, yet the cost of producing a high quality iPhone game could easily get up to that level.

iPhone is not the only App based mobile platform. Android, PSP and Pre are there, amongst others. How do you see this market panning out?

I think its definitely the way to go and I’m hoping they have success.  apple did a great job of wrestling away the right to distribute Apps away from the telcos and operators.  for that they should be loudly applauded.  mobile operators are very dumb, and full of idiots who know nothing about entertainment or games.  they became too powerful and managed to deliberately stop a potential virtuous circle of App developers making apps that allow operators to sell phones and data plans.  for ages, mobile operators were a disparate group that had little or no software available on their handsets, and what was available was often crap.  now, with App stores.. this will change.  Finally, the App creator and the consumer.. can have a direct relationship.   Now we’ve just got to fix the marketing angle and lines of communication with the consumer.. and we’ll be there.

Google, Microsoft, Amazon and others are investing billions in the internet cloud. With MMOs and casual gaming our industry has moved in this direction. How far do you think that gaming will eventually become server based?

It makes a lot of sense for server based games.  or even games hosted on servers and streamed to the users.  there’s no compelling reason why the end user has to have an incredibly powerful hardware system, when all the power could be at the server end, and deliver to the user a beautiful and interactive game at full production values in real time – utilising streaming or thin client game engine.

This is an excellent way to go, for sure.  not the only way, of course.  there will always be games that wish to run on powerful home computers and consoles.  but i think we’re going to see a lot more server based and/or streamed games in the future – now that our internet connectivity is finally getting fast and reliable.  ive got 90 megs at home in london.. that’s incredible!

ARC has been a phenomenal success with cores now being manufactured in over 300 million chips a year, and you created it. How difficult is it to turn a technology idea into a successful company like this?

It was very difficult as it was such an innovative idea.  ARC built a powerful and yet configurable microprocessor and allowed its customers to fine tune its instruction set.  this kind of power in the customer’s hands has never been available before.   We started ARC when we had just finished the Super FX chip for Nintendo.  After creating several chips for people who never brought them out… (we designed the 3d engines for Philip’s CDI-2, and for an Apple games system that never came out, as well as a Hasbro VR machine…)  So in the end we decided that it was too risky to be a tech house reliant on other people’s efforts to bring out the chips.. so instead, we built a completely configurable processor.. so that we can license the core technology and building blocks and let others customise them in any way they wanted to make their own products.  We had some very large licensees and its likely there’s an ARC inside your laptop, and your set top box, and maybe even your camera or mobile phone.  ARC’s main trouble was that it wasn’t an industry standard – like ARM – so it didn’t make enough revenue per license to make it very profitable.  I don’t think its ever made a profit.  I sold out of ARC in the last few years.  It did well for me personally, in that – as major shareholder – i got to sell my shares for a decent amount of cash.  ARC was once a Billion Pound company, and i once owned 20% of it (hence my position in the rich list in 2000-2004).  Luckily I sold out with relatively good timing, and ive put some of the cash into new things like PKR and Origin8 (as well as Ninja Theory, Codeplay, MyDeco and some other cool companies).

What happened at Argonaut must have been very traumatic for you. Are there any lessons for the game industry here?

as mentioned, the whole business model of the computer game industry is wrong.  Also, the power of the industry wrests with the wrong people.    Those that make the games – the developers – earn the smallest piece of the pie and get the least credit.   This is WRONG.   no other media industry treats its content producers – aka STARS – so badly.  You don’t go buy a Random House book.. you buy a JK Rowling book.  You don’t buy a Sony album… you buy a Michael Jackson album.  So why the fuck would you buy an EA game? Who cares who the distributor is.   I’m very glad I’m not relying on the computer game industry to butter my bread.  One day, the industry will get it right.  The people who make the games need to be better credited and compensated.   And the people who buy the games need to be educated that its not the distributor or publisher that matter but the people who created the games are why they enjoy what they’re playing.   There are very few ‘Stars’ in computer games.. The Carmack’s and Molyneux’s of the world are very rare.. and there really should be a lot more.

You should be on Dragon’s Den with all your investments in young games related companies. CodePlay, Anthropics and The Chilli that I know of. Should game industry entrepreneurs looking for an angel get in touch with you?

sure.. I’m always happy to hear from bright people with passion and a good idea.  Preferably they need to have it all figured out, including a business plan.. before they will get much out of me.  I am looking for new investments.  but I value innovation and a sound business model above most other things.  experience counts too.  I’ve got cash.. and I’m not planning to spend it in any way except very wisely.  I will consider investing in new concepts and new ideas with good people.  but always in things I understand (hair brained crackpots with crazy shit, don’t apply!).

3 comments ↓

#1 Teddy Software Info on 08.12.09 at 12:31 am

that game Starglider in 1986 what system was it on? also i know alot people like the gambling games but i for one do not gamble even if money not invovled just not into it as much but if i had money in it and i was gambling you can bet your butt i want a relationship with the games player customer and computer games distribution

#2 John Maurer on 08.26.09 at 7:01 pm

I read in the game developers news group that you are looking for a game company to invest in. If you would like to learn more, please send me an e-mail at jmau0438@aol.com. I would be more than happy to send you a my business plan, though I would appreciate your confidentiality on its subject matter. I really look forward to hearing from you.

John Maurer

#3 PKR Poker on 09.08.09 at 9:01 am

Yea pkr is a really good company they continue to grow while other poker rooms suffer.

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