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Online Game Pioneers - An Interview with Funcom's Gaute Godager

Morgan Ramsay Posted:
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Gaute Godager cofounded Funcom in 1993 with four others: Erik Gloersen, Andre Backen, Ian Neil, and Olav Mørkrid. Funcom was never the most successful publisher of massively multiplayer online (MMO) games, but at 22 years old, Funcom is one of the oldest.

Funcom is now best known for MMOs, but the company once developed single-player games, such as: A Dinosaur's Tale, based on the 1993 animation directed by Steven Spielberg; Disney's Pocahontas, based on the 1995 box office hit; and The Longest Journey, the acclaimed 1999 point-and-click adventure.

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The release of The Longest Journey commemorates the year that Funcom refocused almost exclusively on developing and publishing for the PC, after a tumultuous history with console games. In 2001, the company unveiled Anarchy Online, an early digitally distributed entrant in the MMO market, with Age of Conan following in 2008 and The Secret World in 2012.

After 15 years, Godager, the last Funcom founder standing, retired from the company and perhaps video games altogether. Currently, Godager works as a clinical psychologist, diagnosing and treating psychiatric illnesses at an inpatient clinic in Norway.

Ramsay: Today, you're a psychologist. How did you get interested in psychology?

Godager: That was kind of weird. I was just shopping around trying to find what I was meant to be in the world. I studied computing, but I wasn't too hot on the math. I studied law for two years, but that was insanely boring. And then I just landed on psychology. I read the introductory book, and I was hooked.

Ramsay: And video games?

Godager: Before I started university, I was developing a game by myself on the Amiga for several years. I thought the game was interesting and a really big challenge. I was arrogant, thinking I could make the game all by myself, which was possible back in the late 80s. When I completed my psychology studies, the Amiga as a platform died in front of me. I had spent several hundred hours for several years, making this game I thought was really cool. I went to my reseller and said, "You tricked me! You said the platform would last forever!" I was very naïve, of course. One tends to be at 20.

So, he said, "I'm sorry, but I know people who are actually making games; they might be interested in what you know." That's how I met the other four founders of Funcom: Erik Gloersen, Andre Backen, Ian Neil, and Olav Mørkrid. Of course, they were making games on Sega and Nintendo systems. They just used the Amiga as a development platform, but my skills were useful. We hooked up and started Funcom in 1993.

Ramsay: How exactly did you meet them?

Godager: The Commodore guy gave me Erik's address and phone number. Erik became the driving force. He was the one who had a love of money and a love of making huge companies. He was the visionary. I tagged along, like an opportunist, if you know what I mean. I didn't have his great faith in the others, but I tagged along, supported it, smiled, and said my speeches.

But we hit it off! I think we hit it off because Erik had such a great belief in the possibilities. He was older, knew the video game industry, and knew what it would take. Andre knew how to raise money and make a good presentation. Tyr was a comic artist, so he could do help with presentations and stuff. Olav was a brilliant programmer. And I could make tools.

Ramsay: What was Erik's vision for Funcom?

Godager: Erik wanted to make great games, and to put it very bluntly, he wanted to get rich. In 1993, publishers threw money at developers. Everyone was growing, everyone was making money, and publishers were eager to fund small startups. To make our first game, our publisher gave us $85,000, which was nothing to them. It's unbelievable that you could make a game with that kind of money, so Andre shelled out enough from his own savings for us to run a basement office in Oslo for four months.

We had four months to get going. We invited publishers over to wine and dine them, to show them we have a good setup. When the publishers arrived, we had our friends bring over their own computers and fill the offices. There were actually only five people working. Of course, we weren't paid either, but at least we had shares in the company. We had enough people to make it seem like the company was running.

When the publishers came over, they could probably see through our hoax. There was a low probability of us making a successful title, and they probably knew it was a long shot. But having us work on something was still so cheap for them, like $10,000 to fund the first milestone. So, what we did was we made a quick contract with the first publisher to start us off, and then other publishers bought in.

Funcom grew quite quickly, from five people to almost 100 in two years. Of course, since we needed the first game to be a hallmark of our capabilities, the game cost us four times as much to make as we got paid. We really didn't know what we were doing! The publishers knew that; they had similar arrangements with other developers all over the world. Some studios made it; some did not. They took a Darwinist approach to game development.

Ramsay: How were the shares split between the five of you?

Godager: You must understand that Olav and I were very naïve, in terms of how to make companies. The shares were very skewed. Olav and I got 5% each while Erik got ten times as much, and the investors got one third of the company. That shows you how some people go into a startup, prepared with an understanding of the mechanics, while others just want to make games and be part of something fun. I was on a waiting list at the university, so I just wanted something to do while I waited for my studies to continue.

Ramsay: There were no objections to the split?

Godager: No, and that shows you our lack of understanding. I was okay with the 5% though, so I stuck with the company for the longest time. I wasn't there to make a lot of money. I was there to learn, and to do a good job. I was very interested in making games and I had a good set of skills, which ended up as the most valuable set of skills, of the founders, to the company.

I worked at Funcom for 15 years. The first founder was massaged out after only nine months. The second went after two years. It's very common that some people are very good at starting companies while others are very good at running them. The ones who are really good at starting up are looking for their exits. When's the exit going to happen? How much money are we going to make? But Funcom wasn't making money. Funcom almost never makes money. The game industry is extremely hit-based, and we've never had a massive hit. We've had good sales though. We've survived.

But because Funcom almost never makes money, every time there's a shift in leadership or ownership, the investors want to know where we can cut costs. And where do we cut costs? "Here we have this guy who owns a huge chunk of the company, and the company could really use that equity in other ways, so let's find a way to get rid of him." That's normal. That's what I've been seeing in the game industry. It's a very harsh environment. You're only as valuable as your latest hit. If you don't have a hit, you're nothing.

That's why the other founders drifted off. The last one to leave stayed for seven years or more. I had chosen to leave because I was tired of that industry, and really tired of the long hours. 15 years was more than enough for me.

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Morgan Ramsay

Morgan Ramsay, bestselling author of Gamers at Work: Stories Behind the Games People Play and Online Game Pioneers at Work, has interviewed more than 50 leaders in entertainment, technology, and sports, such as EA founder Trip Hawkins, Gaikai CEO David Perry, and NFL punter Chris Kluwe. Follow him on Twitter (@MorganRamsay) or visit his website at theramsayinterviews.com.