Shack: People seem to leave Blizzard to found new studios quite frequently. Can you offer any thoughts as to why this is, or what factors contribute?

Mark Kern: I think Blizzard actually has the lowest turn rate of team members for any studio. They retain people for a long time. A lot of us have our five year sword, then if you stay ten years you get a shield, so I think it's a little strange to say a lot of people leave Blizzard. But when they do, it's usually for a change. They want to work on something different. It's like a big university. You get there, you learn a lot about how to make great games, then you get some ideas of your own and you're really eager to try them. I'm pretty happy with the studios coming out of Blizzard; I think they've done really well.

Shack: So what was the change for you with your development at Red 5?

Mark Kern: Well, we're really moving out of the fantasy RPG space, as we've said before. We're not really discussing what we're doing, but we saw that World of Warcraft broadened the market for these kinds of games. There are a lot of gamers now who understand why it's cool to play a persistant universe, why it's cool to play online with other people, and I think they need new experiences if we're going to keep growing this market and create experiences that cater to them.

Shack: What are your thoughts on the perceived oversaturation of the MMO market? Some developers have noted that World of Warcraft has been a significant boon to their subscriber bases rather than a harmful competitor, provided their games are clearly distinct enough from WoW.

Mark Kern: Oh, I think everyone's going to see beneficial numbers as long as they're not trying to be World of Warcraft because, really, that game does it really well, and why would you play anything else? If you're going to compete with Blizzard, you're going to have to spend a whole bunch of money, and a whole bunch of development time. I think what's more interesting is that, as you said, it kind of floats all boats. Now, this other vista is opening up, and people really want this persistence in their games, and they're looking for how to get it. Games like EVE, for example, I think benefit from World of Warcraft definitely.

Shack: How did you guys end up with publisher Webzen, and what was behind that decision?

Mark Kern: Well, you know, I think Asia is just ahead of the game in terms of seeing this as a huge market. I think that, in Asia [outside Japan] it's pretty much the dominant form of gaming. Every game has online and persistence of some kind, and they don't really play boxed games. What we found was, everybody was kind of caught by surprise by World of Warcraft's success, and when we talked to US companies, they were just getting started with their initiatives. They would ask us to come on board and maybe help jump-start their program, but we didn't really want that. We did that before, building it from ground zero with Blizzard, but we wanted to focus on the content and the new ideas, and really leave sales and marketing and other operations to an experienced partner. What makes Webzen really interesting is that they are total gamers. The CEO is a gamer, he was the art director for MU Online, one of the most successful MMOs in Asia. They totally get the concept of these games, and they're willing to try new things.

Shack: Do you think North American and European gamers are going to become better acquainted with the Webzen name? We've seen a couple more Western-targeted games announced with them but most of those are still in development.

Mark Kern: Yes. I think that Webzen's strategy is a little different from, say, NCsoft. I think NCsoft is making a lot of bets, a lot of small bets to try to get a huge portfolio of online games out there. Webzen almost takes the Blizzard approach--taking it slow and steady, concentrating on a few good teams, backing them as much as we can, giving them the freedom to explore the genre and to do a polished game. That approach is something that interests us a lot more than the NCsoft approach.

Shack: When you talk about Webzen and its presence in the Asian market, do you yourselves have designs on the Asian market? We've seen a few Western games adapt themselves later to the Asian market, and some Asian games come over here later. Are you going to go for a more worldwide appeal from square one?

Mark Kern: I read some stuff about Red 5, and people say, "Oh, you're making an Asian game," and I think they miss the point. One of our strengths is that we have the ability and the understanding to make a game from the start to appeal worldwide. That's very important when you're talking about games on the scale and cost of a world-class MMO. I don't think that you can think about your own market first then try to adapt it. That doesn't lend itself to succeeding in those other markets. WoW was the first one that was built from the ground up to accomodate Asia as well as the West. That doesn't mean making an Asian game. It's sort of like how people here like to read manga. If Japan started exporting US-style comic books to here, I don't think they'd call that manga, and it wouldn't be very popular. Same thing with us trying to make an Asian MMO. What you want to do is make a Western MMO--because they like those games--that is, from an aesthetic and a mechanical standpoint, compatible with how they play those games and offers things that they like to do.

Shack: I don't know how much of this you consider outside of MMOs, but do you think that worldwide cross-compatibility will become more crucial to the games industry as a whole?

Mark Kern: Well, you know, you've got about half of WoW subscribers in China. I think that's very telling. Can you ignore that? Is that going to stay only in online games? I don't think so. If you're a publisher--well, I talk to publishers, Western publishers, and they say their goal is to be the number two or number three worldwide publisher in 2008. My next question is, "Then what's your online strategy for Asia?" and they say, "We don't really have one." They haven't found the right boxed games that will succeed there. That shows me that people have their blinders on, they aren't paying attention to this as a worldwide market. As games become interconnected, and as players become interconnected, it absolutely has to become part of your strategy.

Turn the page for Scott's recollections of receiving a Red 5 recruitment invitation.

Shack: Red 5 seems to be looking to carve out a reputation for itself as a premiere developer, maybe with almost an iconoclastic attitude. You guys were known for having sent out really elaborate recruitment letters consisting very personalized invitation messages, that kind of thing. What's the thinking behind that?

Mark Kern: Well, Scott got one of those letters, so maybe he can talk a little about what it was like to receive it.

Scott Youngblood: Sure. I'll just describe what it was like getting one of these "golden tickets," as they're referred to around here. This overnight package shows up to my office at Sony--I had no idea what it is. I opened up this letter-sized box filled with foam and in the center of it is this highly glossed smaller box. It caught my attention, it was kind of weird. On the outside was a number one with a slogan and a perforated edge, and as you read it you pull it open and you get another box. IT was like a doll within a doll--you know those?

Shack: Yeah, the Russian dolls.

Scott Youngblood: Right, the Russian dolls. You're getting more and more excited--thinking, "What the hell is this?"--as you're peeling your way to the center. Once you get to the center, there's a fifth box, which has an openable flap, and inside what totally blew my mind was an iPod with my name on it and a code number. So I put the earphones in, and there's this specifically personalized message from Mark to me that went, you know, listed the games I'd worked on that were influential, and then had a pitch for me to come check them out. I was completely floored by that whole experience. Everybody gets recruitment calls at work--come work for us, blah blah blah--but nothing like this had ever come across my desk.

Mark Kern: You know, Chris, a lot of people, when I read articles about the program, really get hung up on the fact that there was an iPod. It really has nothing to do with the iPod. That was just a vehicle for the recording. We really wanted to reach out to people, because we felt we had a special opportunity, and special opportunities don't go on the job board, they don't get listed on Monster.com. We're not just looking for anybody. We sort of wanted to hand-pick a hundred people we thought were doing really good work in the industry and reach out to them, if only for an introduction. The whole point was to carry the message for Red 5, and to reach out to these individuals. It's a symbol of how we think out of the box, the quality of what we do, and how we treat people here. We strive to create a really good culture, and that's something you really have to work on that. We've had a really good response rate, and now there's been a secondary effect that resumes are just flying in here.

Shack: In terms of that hand-picked approach, and maybe either or both of you could comment on this, but what was the rationale behind going for somebody like Scott? He's been lead designer on Tribes, worked on something that was more of an isolated online experience with Majestic, and recently the Syphon Filter games--none of those are MMO-related.

Mark Kern: I'll throw out what I think, and then Scott can interject. If you look at what Scott's done, he's kind of been out there beating bushes before anybody else would for online gaming. I think that when Tribes came out, people had a hard time even understand what a team versus team shooting game was. If you look at the stuff he's done on Syphon Filter, there's like a mini version of Xbox Live built right in there. It's kind of amazing to pack that right in. I admire his work just in the online field, and also as somebody who thinks outside of the box. We don't want to create just another fantasy-based MMO. In fact, a lot of the WoW team weren't MMO makers before we set out. We had very few people with that kind of experience.

Scott Youngblood: For me, the appeal is that I've been a fan of the MMO genre for years--I don't stutter when I call myself an addict. I've always wanted to do more, better things with those games, and the strategy that they've exposed me to here was totally appealing to what I want to do in the future.

Shack: In a design sense, what's your take on the balance between user control of the world and more rigid designer control of the world? That debate goes on in the genre constantly, and most games go one way or the other fairly resolutely. Do you think there's more room for a medium?

Mark Kern: Scott, do you want to speculate?

Scott Youngblood: Well, the game player in me would say that there's definitely room for improvement there. I don't want to specifically say anything about what we're doing and give away any of our cool features, but...how could it not go that way?

Mark Kern: I think a big problem with MMOs now are static world, and there are a number of approaches to that--user-generated content is one of them. I think there are successful hybrids out there, they just haven't been seen yet.

Shack: What are the big problems with the MMO market, either in terms of game design or business model?

Scott Youngblood: One of the big problems we looked at is simply the accessibility of games that are out there right now. It takes a significant chunk of time to be a meaningful contributor to these worlds. One of the main areas we're looking at improving is making our game accessible to people with a lot less time on their hands, so they still feel that they're accomplishing something worthwhile with their time.

Mark Kern: Even more specifically, games are accelerating the majority of their game mechanics but I think one area that is a huge time sink--even in World of Warcraft--is the guild area. I think that's very painful right now. People want to be part of a successful guild, but a lot of players are locked out of that because they don't have the time to devote to it, and then players who do put that much time into it are reevaluating how much time they're spending, because they're not getting much out of the guild in the end. Not to say too much, but that's one area we're really focusing on.

Shack: In that vein, MMOs do generally try and appeal to those who can spend a lot of time, because that hardcore market is the one that sticks around. Are you still going to try to provide that more hardcore experience as well, and what are the challenges in integrating those philosophies?

Scott Youngblood: I think that we're not going to ignore the hardcore gamer. There are definitely the elements that they find rewarding and satisfying for participating in the experience, but it is a hard challenge to balance both of those elements in game design. What we're not going to do is compromise one for the other.

Mark Kern: You know, we actually have a pretty cool idea we've been kicking around here which lets the hardcore be as hard as they want to be but involves participation from everyone else. Both are important.

Turn the page for more on the design and business of MMOs.

Shack: Mark, you were with Blizzard for quite some time before World of Warcraft. As you say, much of that team didn't have lots of experience in there, and due to the recent surge in MMO popularity we see that fairly frequently. Game design is relatively young, and MMO design even younger. People largely seem to be trying to piggyback on. It's hard to use experience as a metric for success. Where are we in the evolution of design of MMOs?

Mark Kern: It's funny, because I think MMOs are both very young and very old. They're young in that the scale of opportunities with stuff like WoW and the Asian market is a new phenomenon, and there are all these new gamers paying attention. It's old in that you kind of have this long heritage going back to the MUD days, and that has kind of led to some inbreeding, and a lot of sacred cows, and I think we're kind of in a rut. I can say that I've actually deliberately gone out and not hired any MMO designers as a result of that. Definitely everyone here is a hardcore MMO player, very seriously, but I think that I'm looking for something different, for fresh ideas.

Shack: So when you go to GDC or events like that, you don't necessarily pay much credence to the MMO design philosophies being espoused at game panels? People tend to make very strong judgments and directions about MMOs, more than most genres these days.

Mark Kern: Yeah, I think the formula is changing. Some people out there have some semblance of what the formula is and how they work well, but that's not the future of these days. You have to look around and see what's coming.

Shack: How big can this market get? People talk about how it's already oversaturated, and there's a case to be made for that, but we still see WoW numbers go up and more games come out. Do we have any idea?

Mark Kern: I'll say this. You've probably heard the stat that only ten percent of boxed games--let's exclude MMOs for now--are profitable, right?

Shack: Yeah.

Mark Kern: I think that's true for a lot of markets. But if you look at MMOs, we don't even really have top ten games, we have the top two or three. I think just by that metric alone, there's a lot of room to grow--especially if you look at Asia, which does support a ton more of these games and does tend to have their local top ten. Just as a sheer matter of percentage, I'm surprised there aren't more MMOs. It kind of reminds me of the StarCraft days. When we were working on StarCraft, people were jumping like crazy onto the RTS bandwagon and there were literally hundreds of RTS games scheduled to come out the year that StarCraft was. We said, "Geez, is this market going to be totally oversaturated?" and the answer was no. As long as you make a great game, there's always room for that, and I think that's true with MMOs today.

Shack: I think one reason there's a perception of there being so many MMOs is because the non-MMO section of the PC market seems to be waning. MMOs are growing relative to the rest. Do you have any thoughts on that, with both of you coming from such strong PC development backgrounds? (S) That's a tough question. I can only use myself as kind of an answer for that. I used to be a hardcore PC player--that's all I did, spent time up in my room with headphones and my eyes glued to a monitor. I think that as players are aging, their time is gravitating more towards a more casual experience, and I think that a lot of the PC games tend to be a more hardcore experience.

Mark Kern: It's important to note that we're platform agnostic. We see MMOs as a platform unto themselves. We have basically a ton of hardware running these games which is largely untapped for things like innnovative gameplay or AI. I don't think we should be too concerned whether it's a PC or a PlayStation or a handheld DS. What's interesting is that we've got a network of players and this server architecture--what do we do with it? I think that in the long run we're trying to create games that run across multiple platforms, where you have the option of being here or there.

Shack: Do you have any plans in that area now, or is this speculative?

Mark Kern: This is definitely something we're preparing for, but we haven't made any concrete steps at this time.

Shack: So you don't think there's any limitations in the current console hardware or anything like that?

Mark Kern: Well, the hard drives definitely make MMOs much more feasible on the console platforms.

Shack: Why go with the Offset Engine? It's not as high profile as some.

Mark Kern: MMOs have very specific requirements, and when you look at some of the other well known engines, they're not out of the box ready to make an MMO. You end up having to strip like 80 or 90 percent out of it. There are more MMO-specific engines, but none of them have been tested in a live environment. I think your game is the last place you want to see that testing happen. You want to see success with other commercial games, so you know it has reliability and it works. Offset was intriguing to us for one thing because they're local, just a city away. The other thing was that it wasn't finished. We weren't paying for all these extra bells and whistles. We got a really fantastic renderer, and we're building our own custom systems into it. Ultimately I think that's a much better way to do it, especially coming from a background where you've worked with an MMO engine and you know what you want out of it and have very specific needs. This allows you the freedom to do that without wasting unnecessary time or money.

Shack: Do you know if they're going to try and do more aggressive licensing with Offset?

Mark Kern: You'd have to ask them about that. I do know that we're the only current game licensing there.

Shack: With a company like yours that's recently formed, do you feel fairly confident in the economics for something as ambitious and expensive as an MMO?

Mark Kern: Actually, you know, the economics for a studio doing an MMO are a heck of a lot better than the economics of doing a boxed game, for an independent. As an independent [with a standard game], your box is on the shelf, and you have two or three months to see if you got your market right, then the revenue dies unless it's a mega-game. MMOs really finally make sense, especially for independent studios, as a way of having this steady, annualized income year over year, even if your game is a small one. That's money to be invested into your game and to you to be a real company, not just living hand to mouth as a small studio going from publisher to publisher.

Shack: Red 5 received a cash investment from [venture capitalist firms Benchmark Capital and Sierra Ventures]. That kind of funding is something I've heard people talk about for years at events like GDC but it still seems like a very rare occurrance compared to the traditional developer/publisher model. Should people be pursuing venture capitalists, and why isn't it happening more often?

Mark Kern: I think the traditional business model for independent developers has and continues to suck. Relationships are very one-sided, and there's no way a venture capitalist is going to look at that and say you can build a viable business. MMOs are very different, and part of what makes Red 5 attractive is that it's a business model that makes sense, it is in a market that we believe and our investors believe is growing tremendously. People are also excited about the new markets in Asia. I think that's significant. Finally, as online distribution becomes available, we're looking for the best operating partner rather than the best publisher that can get a box on the shelves. We're looking for people who can understand online services, that end user internet channel. They need great content to fill those networks, and that's our job. It's almost like syndicated television.

Shack: You mentioned wanting to create a unique culture at the studio. What's going into that?

Scott Youngblood: Again, I can use myself as a reference for that. I've been in the industry for a number of years now and worked at a host of different development environments, and I can safely say that this is far and way--and I've only been here a week--the most comfortable, fun experience I've had in a long, long time.

Mark Kern: We're looking for more. [laughs] Keep those resumes coming. It's been really awesome since the program went out, and we really appreciate all the attention we're getting, and we'd like to meet more.

Shack: You said you're at about a hundred developers now?

Mark Kern: No. That's not something we disclose, but we're less than that. I think it's important to say that we're looking to preserve a small team. We're not looking to hire an army here. We'd like to be at a hundred now, but we're pretty damn selective. [laughs]

Shack: Are you in full blown development now?

Mark Kern: We just wrapped up most of our preproduction, and we're starting full production now.

Shack: Got a completion timeframe?

Mark Kern: Well, what do you expect the next Blizzard-formed studio to say? [laughs] When it's done!

Shack: What's the deal with the name? Is that a Star Wars reference?

Mark Kern: Like we say in our FAQ, if you get the name you should send a resume because you'll probably fit right in. [laughs]

Shack: Thanks for your time.

Mark Kern: Thanks, Chris.

Red 5 Studios has numerous development positions listed on its official site.