The 80 Level Research team conducted a series of interviews to learn more about the current state, difficulties, and prospects for the evolution of user-generated content in games.
User-generated content (UGC) has become a new trend and a prospective area of investment in the game industry. 80 Level’s Instagram poll shows that 59% of people working in gamedev want to have UGC in their own games. The increasing interest in users creating content supports the fact that game creation and sharing platforms are reporting significant growth of daily active users.
To reveal the current state, difficulties, and prospects for the evolution of user-generated content in games, the 80 Level Research team conducted a series of interviews with experts from game dev studios and experts that work with UGC. You can find some highlights from our report down below. Don’t forget to download the full version of the report here.
Popularity of UGC
UGC is beneficial to game developers due to the economy of scale (initial investment in the tooling for UGC and its maintenance pays off as the same system works for many creators). Another UGC bonus is the opportunity to use community forces without the need to hire. Amateurs with fresh perspectives can come up with great innovative ideas and solutions that big companies would’ve never thought of. Creators can improve a game and bring the main value for regular players — replayability. People spend a lot of time online and want more immersive experiences which can keep them entertained.
Easier recognition, accessibility for developing mods, and participation in a studio’s game creation process are the pillars of creators’ motivation. Creators are ready to experiment with Web2 and Web3 Metaverse platforms, which demonstrates their economic interest and the importance of gaining an immersive content creation experience.
Tobias Enholm, CEO & Co-Founder of Dims UGC platform:
Tobias thinks that the reason why there is such a huge interest in the UGC niche is that many people spend a huge part of their time online, and there is a need for experiences and content on every level.
It is profitable to have a community that creates content. As the respondent said, “the economy of scale.”
True innovation comes from creative communities, where mods prolong the life of games, but the potential of UGC is not fully revealed as it is difficult to bring innovation to the game on top of everything.
Developers & Creators
The collaboration models between developers and creators include different stages of work with content: from optimization, scaling, and launch to marketing, distribution, support, to even overall management of creators’ properties across platforms. The developer/publisher may buy the rights to copyrighted content or pay a share of the sales to creators. Forms of support include giving creators a fair chunk of royalties, allowing them to move the content from one platform to another, and hiring them as independent contractors or actual employees of the company. This kind of collaboration greatly simplifies the recruitment process for game studios/platforms and, at the same time, it provides a great opportunity for developers to level up their resumes.
Scott Reismanis, CEO & Founder, ModDB, Mod.io:
Studios often recognize amazing creators from their community, and that's how a lot of people got their job in this industry. Today, if a game studio wants to commercialize content, the safest approach is to start working directly and officially with their mod creator community. It means using something like mod.io - a solution that’s designed to build a bridge between a studio and its creators, offering everything from integration with their plug-ins, to a custom-built monetization service.
The main challenges of UGC are technical and legal complexities. Developers face the problem of providing their platforms with moderation, security, and monetization tools to allow users to create content. The majority of large game studios don’t have special skills for building these processes and want to create their own content even if UGC is cheaper or free. There may also be a risk of plug-in incompatibility when implementing monetization on a platform. From a legal point of view, the interviewees noted the difficulties of arranging UGC payment processes. The reasons for it are the high overhead costs (requirement) and maintaining fairness for creators and enabling growth for users.
Even if a company manages to build a platform for UGC, another problem can appear - gamers’ reluctance to use it. There is a “network effect”: developers attract players to the platform through content creation, but players only choose services that already have content. So, the studio should make an effort to motivate people to use its platform.
Tal Shachar, CEO & Co-Founder, Infinite Canvas:
It's technologically difficult to build a platform that allows people to create, distribute, and monetize their creations. This platform also has to have moderation and safety tools to ensure that people aren't being taken advantage of and that they're not creating things that would violate various terms of service or certain social mores. This is a very big challenge for developers.
It's not only difficult from the technology standpoint, but also from the legal side. It's hard to come up with the right rules for handling the payment process (whether it should be done through some legal entity or individually). It’s hard to define what's fair and what will allow people to grow and succeed.
The question of content ownership becomes one of the central dilemmas as a consequence of the different interaction stages between developers and content creators. There are two perspectives on who the end owner of content created by one party and managed/promoted by another party should be. Some platforms do not recognize content creators’ legal rights or even own the majority of them (as well as users’ Intellectual Properties) (e.g. Roblox, Activision), whereas others do encourage and support content creators (Mod.io, Valve, Paradox).
A proposed way from informants to solve the question of legal ownership is an automated smart system that helps creators receive payouts legally and states all the details of such a partnership.
Kevin Østerkilde, Software Engineer, Algolia:
The relationships with creators are organized differently, depending on the company. As an example, Valve has an SDK that can be publicly downloaded and be the base for mods. On the other end of the spectrum, there are companies that are against modding, Activision being one example of this. The third view can be described by the example of Microsoft and Halo. You can create a Halo mod, as long as you're not using any of Microsoft's assets. If you recreate them from scratch instead, then you can upload them.
Payouts to Content Creators
UGC creators are important to game studios, so there are ways to retain creators via monetization. Game studios offer payouts to content creators if their content is included in official releases or DLC. Additionally, the developer can upload their content to the game’s workshop and receive a share of its revenue. Game studios express interest in implementing mass payout solutions to UGC creators. Developers believe that content creators’ work should be rewarded.
Companies can use a monetization system or platform like mod.io to decide the rules for how content is going to be commercialized. There are a number of business models that apply to that, whether that be patronage or a UGC marketplace. They could also incorporate modded content into a season pass or the next DLC update, then pay the creators who contributed to that package.
Creators are incredibly important to game studios, and this value can be multiplied exponentially if monetization is available for the creators. This allows the creators to act in a more professional capacity, thus creating better content over longer periods of time. Monetization enables UGC creators to stay in a gaming ecosystem while continuing to grow and expand it – in partnership with the studio.
Future of UGC
User-generated content will become more widespread in the future and will be implemented in many games. There is a constant demand for content, and UGC will become a solution to satisfy it and prolong the lifespan of games. Interviewees predict that in 10 years, 5 of the top-10 games will be player-created. The popularity of UGC is growing, so individual creators will collaborate more with each other and create UGC more collectively. However, UGC probably won’t work for some AAA companies; some enterprise developers might want to sell their own content and have all the rights to UGC belonging to the studio, which is rather controversial for creators.
Tal is assured that UGC is going to be a huge driver of growth for the industry as a whole. The reason why we're seeing more and more people and developers open up to these types of tools and creative abilities is simply that there's a lot of creativity and talent in the world.
Lots of people could make amazing experiences or content, they just didn’t have an opportunity to do it before. When you give people the tools and make it easy for them to create and distribute their content, they can come up with stuff that a big company might not have ever thought of.
Platforms will have to balance their own interests and the interests of creators and players. There’s going to be a lot of experimentation. Shachar hopes that creators will continue to own and retain more and more control over their IPs
You can download the full report here.