New Rating Requirement Makes Life Harder For Smaller Game Publishers

Image credit: Limited Run Games

A recent mandate by Sony that requires new games being published for its platforms to be rated by the ESRB has created obstacles for physical versions of indie games. In at least one case it’s led directly to the cancellation of a project that was already underway.

In the past, special edition physical runs of games that were only being sold online didn’t require age-appropriate ratings from the Entertainment Software Rating Board, or ESRB. Small mum and pop publishers were able to produce physical runs of indies games for the PS4 without needing to obtain a rating.

But according to conversations with several small publishers, Sony and the ESRB reached out in mid-August to let them know all games would need ratings going forward, regardless of how they were being sold.

Ratings for digital games are free. Under the new requirement, physical runs of games must go through the same “longform” process that large publishers go through for AAA games being sold at large outlets.

Around the same time that Sony informed developers of the changes, the ESRB circulated an email about a new “value tier” it would be making available to publishers to try to ease the burden of the fees (the ESRB doesn’t disclose what they are or how they’re arrived at).

While the fees for ESRB ratings are based in part on the development budget for a game, they can still cost smaller companies a lot. Among other things, the ESRB email stated:

“In recent months, a growing number of publishers have released physical versions of products that have previously been available solely through digital means. For some digital-to-physical products, the cost associated with the “long form” rating process has been a significant challenge – even at the discounted Value fee tier. This is especially true for products with small development budgets and/or limited manufacturing runs.”

As long as a game cost less than $US1 million to develop and was rated for digital release at least 90 days prior to submission, the ESRB will allow publishers to opt to pay $US3,000 ($3,905) for a retail release rating.

While some small publishers I spoke with said this would help them out on some games, especially if they plan on publishing tens of thousands of physical copies, it’s a substantial increase for those producing a run of physical editions in the hundreds or low thousands who were originally paying nothing.

“A growing number of publishers have released physical versions of products that have previously been available solely through digital means (which includes physical packaging that contains a download code or product-specific POSA card),” said a spokesperson for the ESRB when Kotaku asked about the changes.

“Those games must be submitted using the Long Form process. However, to accommodate publishers of digital games with a small development budget who didn’t initially anticipate releasing their game in a physical form at retail, ESRB recently introduced an even more heavily discounted rating fee.” Sony did not respond to a request for comment.

Ruiner, a violent cyberpunk shooter that arrived digitally on PS4 in late September, was originally going to have a physical disc version released in the future. Developed by Reikon Games and published by Devolver Digital, Ruiner had come up on the radar of Special Reserve Games, who had previously put out physical editions of Absolver, Shadow Warrior 2, and Strafe.

These packages often included not just hard copies of the game, but also art books, statues, and other boondoggles. Special Reserve Games planned to do the same with Ruiner until it became apparent that new rules being handed down by Sony would make the project prohibitively expensive.

In a statement on Twitter in late October, Special Reserve wrote, “In late August, the ESRB announced a new mandate for all physical releases across all consoles would soon be required, and shortly after we announced our intention to produce Ruiner, we received word that this mandate would be applied to it and future new game releases.”

The process of obtaining this rating comes with a fee that puts the production costs for new releases like Ruiner out of the acceptable range for us to produce physical discs for PS4. This decision was agonizing, and we have tried multiple ways to reach a compromise, but sadly, we have had to change our plans to produce our intended collector edition PS4 discs for Ruiner.”

“What I can say is that for a game like Ruiner, the mandate to acquire the rating for our very small batch run was going to increase our COGs (cost of goods sold) by 35%,” said Special Reserve Games CEO Jeff Smith in an email. “That is significant, especially when this mandate was imposed while we were already in production.”

Profit margins are slim for companies like Special Reserve Games, so new requirements like this can be the deciding factor when looking at potential projects to pursue. “We aren’t making a pile of money off the physical runs but rather we are keeping the legacy of gaming and game collecting alive and well,” said Smith.

Iam8bit is another company that produces high-end physical releases of digital indie games. Earlier this year iam8bit published a limited run of 9,000 PS4 discs of Hyper Light Drifter, which included maps and reversible artwork in the case. At the time, the company was able to release the physical version of the game without paying to have it re-rated. Now, that’s no longer the case.

But Iam8bit doesn’t see a problem with the new rules. “It’s meaningful,” said Jon Gibson, a co-owner of the company. “We support the ESRB, because here’s something that fans don’t really consider. iam8bit isn’t just selling ‘exclusively’ online. We exhibit at PAX, GDC, PSX, Day of the Devs, San Diego Comic-Con, Bitsummit and other conventions. Those conventions are ALL AGES, and the ESRB rating represents the quickest shorthand possible for a parent eyeballing a game to assess its content.”

Limited Run Games, a similar company who recently put out Housemarque’s Nex Machina in physical form for the PS4 as well as Cliff Bleszinski’s LawBreakers, takes a different view.

“My only problem now is the ESRB seems to have a monopoly, there is no one above them and our business can live or die based on them,” Limited Run’s co-founder Douglas Bogart said in an email.

“I just don’t see why direct to consumer releases should require a rating when our customers know what they are buying. Not to mention we live in an age of technology where information is literally at your fingertips. If a mum or dad wants to see what the game is about they can just look it up on their phone.”

The other half of Limited Run, Josh Fairhurst, suggested that in some cases the per unit costs for a small indie developer trying to put out a small number of physical copies of its game getting the rating could nearly double production costs. Special physical editions of AAA games like LawBreakers wouldn’t be feasible either under the new rule.

“A lot of the developers we work with have created really obscure and small titles, many which may have sold pretty poorly digitally,” he said. “That money we’re paying the ESRB [now] could have kept our partners fed for several months while they created their next game.”

While the part of the games market affected by these new changes is small, it’s growing. Gamers overwhelmed by bottomless Steam libraries or feel the intangibility of digital releases leaves something to be desired have increasingly been turning to small publishers to get physical releases of their favourite indie games.

For those niche publishers just entering the market and trying to find their feet, however, things just got harder.