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Gaming CEO: You Can't Stop Players From Trading Virtual Property

Mark Kern, former team lead for World of Warcraft and now CEO of the new Red 5 Studios, sits down to talk about the virtual property market, user-generated content, and more.

Red 5 Studios, a recently formed independent online game development studio, on Tuesday announced $18.5 million in Series-A funding from Benchmark Capital and Sierra Ventures. The company is run by president and CEO Mark Kern, who served as the team lead on Blizzard's phenomenally successful World of Warcraft. Kern spoke with InformationWeek about virtual property and the future of online gaming.

InformationWeek: Have you thought about how you might integrate virtual property into your games?

Mark Kern: I don't think you can stop it, first of all. The interest is there. People spend a huge amount of time online, and even in an entertainment-based game like World of Warcraft, there's value being created in the items being collected in the game. And the market will happen outside of the game if it doesn't happen in the game. That said, I think that from our perspective, we've always kind of shied away from that because software is an imperfect world. And if we're providing a market for these items in our game and there's a problem with our software, that obviously opens up a liability issue.

IWK: How does that apply to the projects you're developing?

Kern:: We think the game has to be married to the business model. We're about game play first and making the best game possible. And then we look at which business models will fit that. We make both a creative case and a business case for it. I think that we're still open at this point. It's really early. I'm really encouraged by things like the Xbox Live Marketplace, for example, for certain things that are really of value to gamers.

IWK: Do you see value in user-generated content?

Kern:: User-created content is a very powerful force. Does it lower the cost of development? In some ways it does, in terms of maybe you don't have to provide as much content from an art perspective. But your coding task is certainly going to be much higher. You're going to have to have a lot more programming effort to support user-generated content. The other issue with user-generated content is unless you have really good tools, 90% of it is going to be, well, crap. You need good tools for users to be able to lift the ride and raise all boats on the quality of the content that users can contribute, and you also need good tools for locating the best of the best of the content.

IWK: With so much game technology middleware and infrastructure available out of the box, where is the real innovation in game development today?

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