Reynir Harðarson
Reynir Harðarson cofounded CCP Games in 1997 with Þórólfur Beck and Ívar Kristjánsson to create EVE Online, a vast galactic battleground that boasts more than 500,000 spaceship captains of dubious repute.
Launched in 2003, EVE Online is one of the oldest and continuously growing massively multiplayer online games, and one of the harshest persistent worlds. Trust and betrayal are prominent features of the EVE universe. Players regularly lose thousands of U.S. dollars worth of virtual goods, as a consequence of corporate espionage, deception, sabotage, piracy, and all-out war.
After nearly 17 years as creative director, and some time after our interview, Harðarson left CCP Games in 2014. Along with principal game designer Kjartan Emilsson and business development executive Thor Gunnarsson, Harðarson established Sólfar Studios, a virtual reality game company.
Ramsay: When did you become interested in developing video games?
Harðarson: Like most young boys, I always dreamed of making computer games. I gravitated very early on to computers. My first machine was the Commodore 64, and I was playing games like Elite, which opened my eyes totally to computer games.
I pursued computer graphics. I did some programming, but I realized that wasn’t my forte. In my first job, I started working as a graphic designer at an advertising agency called OZ. I didn’t study anywhere. At the time, computer graphics were so new, it was only possible to do it professionally.
When the opportunity arose to work at OZ, that was a major break for me. They had Silicon Graphics workstations and Alias Wavefront. Shortly after, the dot com wave heated up, and OZ began transitioning themselves toward multimedia and the Internet. The product we started working on was called OZ Virtual, one of the first 3D chat clients. Because of our strong background in 3D graphics and graphic design, we managed to make the client look pretty amazing for the technology then.
So, we had real-time 3D over the Internet in a time when the world was running on modems still. The business didn’t really pan out, so the company transitioned to doing mobile apps; and I had no real interest in that. I wanted to turn the company into a computer game company. But that vision did not pan out at OZ, so I seized the opportunity to found CCP.
In collaboration with a friend of mine, Þórólfur Beck, we decided to leave our employers. I left OZ, and he left his business; he was doing multimedia software training. And we decided to found CCP. A problem was that we didn’t really have any money, and this was before financing through venture capital became very fashionable. So, we just created a family board game, Hættuspil, which we published in Iceland. We sold 10 thousand copies, an Icelandic record! The proceeds went to the first prototype for EVE.
Ramsay: What motivated you to start CCP?
Harðarson: It was really the dream to make EVE. It had been some years as an idea before we founded the company. It was something we really had to make. It was highly inspired by Elite, which we played as children on the Commodore 64. The first MMOs were coming out. Ultima
Online was just released, and EverQuest was in development. We saw this revolution comings and games would be changed forever. We thought then would be a perfect opportunity to get the talent together. It just had to be done.
Ramsay: What did you give up to go off on this adventure?
Harðarson: I quit OZ without any guarantees. It was a very interesting time. I just had the baby, just bought the house, and left my employer with no guarantees. My wife was not very happy with that decision.
Ramsay: Did you have any prior experience with starting businesses?
Harðarson: No, not really. I had once run a pizza business when I was 18. It went bankrupt, so yeah. Knowing this, we founded the company a little bit strangely for a small startup. The first people we hired were the CEO and the CFO. That’s before we hired the programmers and artists. We wanted to set up the company correctly because, like I said, I’m a creative guy, and usually we’re not very good at handling money.
Ramsay: Although you weren’t handling the business side, did you at least have a role in putting together the business plan?
Harðarson: Yeah, our business plan was more conservative than how things actually turned out. In the original business plan, the best case scenario was we’d have 50,000 subscribers paying ten dollars per month. We didn’t expect the game to last long, and now EVE is turning ten years old in May. We made a lot of assumptions that turned out to be wrong, and as we learned how wrong we were, the more our belief in what we were doing was reinforced.
Ramsay: What was the plan?
Harðarson: Right, the plan was to build a new breed of game company. Before 1997, game companies were traditionally built by self-taught talent who had been working from their parents’ basements, building computer games. We were seeing how the industry was changing. Things were getting more professional. There were more programmers, artists, and so on with actual degrees coming into the field. That was one of our strengths. After starting the company, we brought in artists with real graphic design backgrounds and trained software engineers; our levels of education and experience were really high compared to what was happening around us.
That part of our plan really panned out. In the last 15 years, the industry has changed quite dramatically. Making games is much harder now. The technology is much more complex, and the artistic and technical requirements for triple-A titles are today on par with what you need to create top-of-the-line special effects for movies.
So, our plan was to build this amazingly talented company with the vision of creating virtual realities. The goal was always to create MMOs. We really had no interest in creating single-player games. We felt that the time of the linear narrative was over, and plus, that’s not really our forte.
From a financial standpoint, starting CCP was never about becoming rich. We wanted to build a very interesting company working on the cutting edge. We always wanted to be independent, too, but we realized at the beginning that might be difficult; the only way to sell games then was through retail channels. We thought that would change, so after we bought back the license from our partners who had the publishing rights to EVE, we went fully online. We’ve stayed independent since then.
Ramsay: Who had the publishing rights?
Harðarson: Simon & Schuster Interactive, which was a small division of the book publisher, and they were going into games. Simon & Schuster was owned by Viacom at the time, so the concept was to utilize their network, like Paramount Pictures and MTV Networks. That never really took off, and EVE was the biggest project they had then.
Ramsay: Online game companies usually make online games as products. Funcom has several, but for CCP, EVE is your business model.
Harðarson: Naturally, but the business model was really the subscription business. That’s also a major difference from traditional game developers. Unlike single-player games, the subscription business is not something that grows and just fades; it’s a much more stable business proposal. That is what got investors excited about our company.
Ramsay: The initial capital for EVE came from your board game, right? Can you tell me more about that?
Harðarson: When we made Hættuspil, or “Dangerous Game,” we knew computer games would be pretty difficult to finance because we had no money. We didn’t come from any families with money, and we didn’t know anyone who had money. But my partner had a grandmother, and she owned a house, so we mortgaged her house to pay for the printing of the board game. That was a huge, huge risk. I would never do that today, but being young and a little bit naïve, that was something we did.
We didn’t pay ourselves salaries for months—years even. We just paid ourselves minimum wages, which got us into financial trouble. But if you don’t take these risks, you’re never going to do it. You have nothing to lose. That was our motto. In the worst case scenario, we’d be able to work our way out. That’s how we looked at it.
Ramsay: How did Hættuspil come about? What does that mean?
Harðarson: The Icelandic word is Hættuspil, which means “life is a dangerous game.” It was about teen angst, being a teenager, going through school, and avoiding the hazards of life, like not doing drugs. It became a huge hit among teenagers and tweens in Iceland, and it was hardcore player vs. player.
Ramsay: I think this explains EVE.
Harðarson: Yeah, it does! Actually, that’s quite funny. Hættuspil was a game for teenagers, but you could do anything with anyone. The game allowed you to change the dice rolls of your friends, forcing them to be good to someone, steal things, and do stuff like that. This created an incredible cult following. People loved to play it because of its incredibly aggressive nature. Many board games, especially family board games like Monopoly, did not have that component.
It was a mechanism we took from harder strategy games, like Risk or Axis and Allies. It was a lot of fun to play, and that’s really why it was so popular. We even contemplated, because of the success, to translate the game into all languages and try to sell it abroad. We decided against that because we wanted to focus on creating EVE, which we thought was a much more interesting, and much better opportunity than going into the board game business.
Ramsay: Was the board game self-published?
Harðarson: Yeah, we designed, manufactured, and printed it. We created the TV advertisements, and we drove around the island to sell it at supermarkets ourselves. It was a lot of work, but also a great experience.
Ramsay: How many people were involved at the beginning?
Harðarson: For the first year, we were three: me, Þórólfur Beck, and Ívar Kristjánsson. We started hiring in 1999, and we did preproduction for a year. When we started production, we had around 25 people.
Ramsay: Did you have any other sources of capital?
Harðarson: I had no money. Zero. I was working as a graphic designer on the side while we were waiting for revenue from the board game. Throughout 1999 and into early 2000, we were also working on projects to fund the development of the prototype for EVE. The largest one was Lazy Town, a children’s show in the U.S. We did a lot of production and product design. We ran the company like an advertising agency for the first year.
Ramsay: When did you start raising money?
Harðarson: At the end of 1999, we got angel investors who brought in around $200,000, and then in May 2000, we had an initial round of share offerings and raised $3 million. That secured the funding for EVE. This money came mostly from Iceland Telecom, but there were other Icelandic investors.
Ramsay: Were you involved in that effort?
Harðarson: Oh, yeah. All the way! We always planned on raising venture capital to fund EVE. In 2000, the environment was very favorable to startups, especially because of the dot com bubble. Everybody seemed to be making money off these wild startups, so we got one of the biggest investment banks in Iceland to lead the investment round of $3 million for 25% of the company.
We had a very strong prototype in our hands, and we were already showing the potential of our graphics engine, which was ahead of its time, so people were really excited. Interestingly, the dot com bubble burst the same week as the offering, and by the next week, NASDAQ had fallen, so we were really lucky!
Ramsay: Your wife wasn’t happy with your decision to quit your job and start this company, especially after having a baby. How was your family life impacted?
Harðarson: It was a very risky business, especially when you have no income. It was very stressful and really tough on the family. We would be working every waking hour, so there was no time for family. That was really difficult for my wife and my newborn son.
Ramsay: Was your wife working at the time?
Harðarson: Yeah.
Ramsay: But you weren’t bringing home any money?
Harðarson: Yes, exactly.
Ramsay: Were you working from home?
Harðarson: No. We had office space. We had very small offices in very strange places; it was quite exciting. But we would sometimes sit down in our weird little offices full of pizza boxes and ask ourselves, “Are we crazy? Why are we doing this?” There was no chance that we’d succeed, but we had already jumped into the pool, and there was no turning back.
Ramsay: What hours were you keeping?
Harðarson: We would work every waking hour and all weekend. We would just work endlessly; it was as simple as that. And that even got worse when we went into full production on EVE. We were, practically, living at the office. In the last year of development, we were sleeping at the office more often than we were sleeping in our own beds. It was very crazy and a lot of work.
Ramsay: Would starting CCP have been easier without a family?
Harðarson: If I was single, it would have much less risky. Also, in Iceland, we tend to have children quite young, so it’s not uncommon for 23-year-olds to have kids. A lot of our peers had children, and not knowing when we could pay them was really worrisome. It’s not just you and your friends at that point. Families are depending on you. That added a lot of stress to the equation.
Ramsay: Can you tell me more about your cofounders? I can’t pronounce their names. How did you know them?
Harðarson: Þórólfur Beck, yes, just call him Toti, Toti Beck, or Mr. Beck. We had been friends since we were five. He’s incredibly good, very motivated, driven, and generally very creative. Toti is a lot of fun to work with, so I thought he’d be the perfect partner for this. Ívar Kristjánsson is also an old friend of mine. He had just finished studying finance in university, so he was the perfect guy to handle the financial part of the operation.
Ramsay: How did you convince them to join up with you?
Harðarson: Toti and I talked about it a lot. We were super excited about the idea, talked each other into going forward, and just decided to jump in. It was a moment of insanity, and, I guess, we were drinking whiskey at the time. CCP was the hardest thing I’ve ever done, and I’d do it all over again.
Ramsay: What about your first hires?
Harðarson: We initially had a problem with recruiting because some people thought joining such a new company was too risky, and the proceeds from the board game was only $260,000, so we could only grow to a certain size with that limited amount of cash. But were able to hire a graphic designer, our lead programmer, and so on. We focused on art and programming, but more on art. Later, we brought on our CTO, Hilmar Pétursson.
Ramsay: How did you identify your staffing needs?
Harðarson: We worked on real-time 3D engines, and server and database technology, at OZ, so we had some years of experience. We had a running start, but we didn’t have a code base. There was no middleware. We wrote our own 3D engine, our own server, and almost everything was developed in-house. But the scalability part was unknown. We were planning for a universe of 50,000 simultaneous players, and that had never been attempted before.
With game design, we were very much in theoretical waters because nothing like this had been tried before. We looked to sandbox games like Ultima Online and less to the theme park games like EverQuest. But our game wasn’t really a game. It was more of a simulation, relying on the emerging behaviors of the players, which made EVE almost impossible to test without players.
Ramsay: What do you mean by “simulation”?
Harðarson: We would build this universe across regions. In the central regions, there would be some controlled security, and in the outer regions, we would have land up for grabs. Our theory was that players would gravitate to where the risk was higher because the rewards were potentially greater, and they would claim those regions as their own and fight over territory.
The game engine was designed to around perpetual, endless warfare. There was no real story. There was no quest line. We built an economy system, where everything in the game would be built by players. The systems would be claimed by players. They’d organize themselves, write their own stories, and go on their own adventures—all consequences of the interaction between them. There was nothing we could actually test or play, so that was a huge risk. Will the simulation actually work? We didn’t know.
Ramsay: What was your process for designing the game then?
Harðarson: We’d theorize a lot. We’d talk about thought experiments. We’d make paper prototypes for user interface elements, or how you play the game. We made small gameplay prototypes, like how the fighting system might work. Should we use these kinds of weapons? What are the combat strategies? We were actually able to test some of that out at a small scale, but we invented pretty much everything as we went along. It was our first game.
But our team was a huge melting pot; everybody was involved in the process. There was a lot of pride in that. We empowered people to be part of the creation process and have input, so we weren’t just giving orders. Everybody had a say. Everybody could talk. We all had a very strong sense of ownership, and we all believed that what we were doing was something groundbreaking and radical. It was almost like a religious cult. We had faith.
Ramsay: Do you remember the technical requirements of your simulation?
Harðarson: I don’t really remember. I know we designed the game to be incredibly tolerant of latency and bandwidth. We knew that to create a simulation of this scale, the game would have to blow up fairly quickly. Fortunately, space simulations allow you to do a lot of trickery to minimize client-server communication and make the client very latency resistant.
Ramsay: How did you expect to support 50,000 simultaneous players?
Harðarson: We had EVE split up into multiple regions, multiple solar systems, to distribute players around the universe. This didn’t pan out as we expected. Some stations became more popular than others, and players would form trade hubs, where a lot of players would congregate. At launch, this caused a problem immediately because there was more and more and more load. Now, for these incredibly contested spots, we run them on super-fast machines with the fastest hardware available to accommodate thousands of players. We can now scale the server cluster for when more players come in.
But what we did not anticipate—because it had never happened before in games—was the formation of massive corporations and, on top of that, huge alliances of tons of massive corporations. We had predicted that these social structures would fail at 150 people; that did not turn out to be the case. A corporation could have hundreds of players, and an alliance could have multiple thousands while still behaving almost like a single entity.
So, we would early on see incredibly massive battles between thousands of ships, crashing our servers because they just couldn’t handle it. We had to up our game. We’ve been constantly optimizing. We’ve been doing this now for ten years. Now, we have the largest battles in any game; a single battle in EVE is like a whole shard in World of Warcraft. The scale is just so massive.
We thought these would be nice problems to have, and we’d deal with them when they happened. They were incredibly fun challenges to deal with, and we danced with them; having these problems meant our game was a success.
Ramsay: Early on, Simon & Schuster Interactive was your publisher. Had you always planned for EVE to be published by a third party?
Harðarson: Yes, that was the original plan. Internally, we had no expertise in marketing, customer support, or distribution, and, at the time, distribution was king. You needed a publishing deal to get your boxed product into stores. In 2003, the idea of buying software or games online had not yet really taken off, or for that matter, buying anything on the Internet. People were still very paranoid about using their credit cards online; it was a very different world back then. So, working with a publisher was absolutely necessary for us.
Ramsay: How long did your relationship with Simon & Schuster last?
Harðarson: We entered that relationship in 2002, and Simon & Schuster closed their game publishing division in the summer of 2003. EVE was launched in May 2003 after a six-month delay. By summer, it was very difficult for us to get EVE into any stores, so we bought back the rights and started selling the game online ourselves. That was a great, great decision.
But that also meant we had to build up our own customer support, which we did, in cooperation with our largest shareholder, Iceland Telecom. They had lots of experience with billing and support. We were only 25 people making a game; we couldn’t operate like a publisher, but later, we took that over.
Ramsay: How did you buy back the rights?
Harðarson: We sent our chairman to negotiate that deal. I do not know what he did, but he bought it back for a very fair price. The rights were just lying in a drawer; they weren’t going to do anything with them. It wasn’t their business anymore. Just getting some money was a winning scenario for them. That was fantastic for us! If they had not sold us the rights, we’d have been dead.
Ramsay: Since EVE was a very large project and you needed a very large number of players for this game to be fun, why did you choose to develop this game, instead of a smaller, possibly more practical title?
Harðarson: That is a great question. We wanted to push the boundaries of technology. The reason we went for a single shard and this epic size was we wanted to push the boundaries, to do something impossible. We weren’t making computer games as a business; we made them as a passion. It’s not about the money. It’s about creating something beautiful. It’s about creating something new and revolutionary. We wanted to create his massive world where everyone would be playing together in a virtual reality. That we did that is something that has constantly amazed us. It’s something incredible. And, frankly, when we look at theme park games, we just don’t understand why some even bother. I mean, what is this? Where’s the insanity and the beauty in what they’re making? EVE is harder to explain. EVE doesn’t really make sense because the experience is just such an emotional thing.
We tried to push the boundaries, of graphics technology, of server technology, and of game design, and because of that, we attracted the best people. It was a self-fulfilling prophecy. You cannot make these games without the best talent, and the best talent want to make beautiful things. And that’s why people jumped with us into this opportunity, this madness, this dream we had. But as soon as people start thinking like accountants, that’s not a business I want to be in.
Ramsay: You never thought “if our game fails, we’ll go under”?
Harðarson: Oh, sure. We almost went under numerous times. The money we got to develop the game was not enough. The money we got from Simon & Schuster was still not enough. We had to raise more, and sometimes we had no idea if that was possible, especially when the dot com bubble burst and there was no venture capital anywhere in the world. They saw us as an Internet business, so we almost went bankrupt multiple times. And then there was 2003 before we bought back the rights, the game had sold only 30,000 units in the summer, and it wasn’t possible to buy the game anymore. We weren’t financially viable as a business, but so what? We were on an incredible adventure.
Ramsay: As the creative director, what are your responsibilities?
Harðarson: I did a lot of game design, but I was also the head of the art department. I was also heavily involved in the development of the graphics technology and 3D engine, although I was not on the programming side. I was also very heavily involved with designing the user interface. With a company this small, you have to wear many hats, and that’s what we all did.
Ramsay: How did your creative role interface with the operation of CCP Games as a business?
Harðarson: I have never been involved in the operational part. I’ve never been managing people. I’ve never been doing any finance. Other people are just much better at it than I am. There are skills I have that they don’t possess, and there are skills they have that I don’t, so I let other people manage people. I think it’s important to know your strengths and weaknesses.
It’s often a trap that small companies fall into: they take their best people, and make them managers. It happens all the time because why wouldn’t the lead programmer also be the manager? The problem is that when you make him a manager, he can no longer program. But we try to not do that. Let’s have our best programmers do programming and have our best artists do art.
And everybody’s happiest that way. Our experience is that once you promote someone to a manager position, he’s not going to be happy in that position. He’s just going to be a rather mediocre or bad manager, and his talent is just going to be wasted because he’s not doing the thing he’s really good at.
Ramsay: Tell me about launch day for EVE Online.
Harðarson: EVE launched on May 6, 2003, and we had been working for the past six months straight leading to launch. We practically lived in the office. We were sleeping under our tables. We had been having incredibly bad server and client stability issues, and we were still running a beta test, but not a very large one. We were incredibly stressed out, but for some miraculous reason, we managed to iron out most of the terrible issues. When we launched, it was tranquil.
We sat down in our office, logged in, and saw the first player fly around. It was an incredible experience because this just became real. EVE was no longer theoretical, no longer just a piece of software running on some hardware. Now, EVE was a real world with a real person, who we did not know, flying around. It was quite a beautiful moment. We even went to the local game store, and there was a queue outside; people were waiting to buy EVE. That was quite exciting.
We were incredibly tired though, and the problem is that once you launch, you can’t just go on vacation because that’s when the real work starts. We were crunching for months after launch, fixing issues, and all kinds of things. We had very limited quality assurance capability. We couldn’t test the game on every combination of hardware, so we had a lot of compatibility issues.
But everything actually worked out great. Launch day went much better than we expected. We didn’t crash the servers, and there wasn’t a catastrophe. That was a huge relief! And people were really excited. Of those who bought EVE that first year, 20% of those who bought the game in the first week are still playing ten years later. Our players either loved the game or hated it.
Ramsay: When did you hit 50,000 simultaneous players?
Harðarson: A year after launch, I think. But the business had also changed by then. Then, $9.95 was no longer the standard for subscriptions. We were charging $15 per month for subscriptions because all of the other games had raised their subscription fees. That made a huge difference in our revenue, so we were profitable by early 2004. We still owed money though.
Ramsay: How long did it take to earn back your investment?
Harðarson: Well, the thing is we’ve never paid out dividends. We have always used the proceeds from EVE to fund the company, build the company, and fund our other game projects. Currently, we have EVE and two other games in development: one in Shanghai, Dust 514; and the other here in Atlanta, World of Darkness. The total cost of making EVE ended up at $10 million, which is roughly a month and a half of revenue now. So, whether we earned back our investment depends on how you look at it.
Ramsay: You launched EVE, the game was up and running, and the universe was alive. Is maintaining a live game is different from building one?
Harðarson: Yes, yes, absolutely! There are so many things that can go wrong because you’re going to keep that game going for years. That’s difficult for some people to understand, especially developers who are done when they release a single-player game. They can move and do the next thing, but we had a lot left to do to make EVE perfect. We were making expansions, planning to fix this and do that, and we were building momentum around that.
In the first week and months after launching EVE, it was a very tough time because we were so exhausted and still had to service it. We were only working on things that were not really fun, like fixing bugs and just trying to make sure the servers didn’t catch fire. We were just very much in the trenches; it was very exhausting. We turned that around by early 2004, and we got into the new and exciting rhythm that we’ve been in ever since.
Some companies take a very different approach to what they call a live operation. Many companies build a game, and then have a small, live team supporting it. From what we had seen, I’d call that abandonment. If you look at Ultima Online, especially just before the turn of the century, it was just finished and then left in the hands of maybe ten or 15 people. They had no grand plans; they just wanted to make new games. With EverQuest, there were new expansions and content updates, but their big focus was EverQuest II.
We didn’t want to go down that road, so we’ve been continuously growing the development team. We had 30 people working on the game at launch, and now we have 250 people working on the game. In the ten years since launching, we’ve totally rewritten everything in the game. We’re constantly making changes, most of the time for the better. That is the nature of the game. EVE was never a product we’d sell once and then we’d been done with it. There’s no reason why EVE couldn’t go on for decades. After all, EVE has been growing every year for the past ten years.
Ramsay: Would you say that the launch was successful?
Harðarson: I would say it was not really successful. We sold about 50,000 units, but we were hoping to sell about 100,000. It was not terrible, but it was not good enough.
Ramsay: What impact did that have?
Harðarson: We had to let few people go quite shortly after launch. It wasn’t a lot. I think we let go around six people, but that was 15% of the company.
Ramsay: Had you overspent on the technology?
Harðarson: The whole project cost a lot more than we initially planned. We were planning to do this for $5 million, but ended up at almost $10 million. By modern standards, that’s low for a massively multiplayer game.
Ramsay: What did you expect for the game from that point?
Harðarson: We expected EVE to peak in the first two years and then dwindle down. Remember we planned for EVE to last between three and five years. That had been a very common pattern in other MMOs. I didn’t really expect us to be any different. Other games would come out, and maybe a better space game.
We were going to start building a second product after two years, but what surprised us was that the game just continued growing. We felt that our best option was to continue developing the game. And what really surprised us was that within the company, there wasn’t a great interest in doing anything new. Everyone wanted to continue working on EVE. Two years later, we started hiring people from the community who knew the game, loved the game, wanted to build this game, and they came from all over the world to join CCP.
Ramsay: How is EVE doing today?
Harðarson: At this moment, we have exactly 411,759 subscribers in the West. In China, we have almost 200,000. In total, we have more than a half-million subscribers, ten times greater than what we planned. EVE is doing great; it has never been better. We expect EVE to grow at least 10% this year, but EVE has been growing between 20% and 25% every year. On the development side, we have 250 people working on EVE, and every year, we’re spending more on EVE than we did to create it. We’re at almost ten times the manpower just working on EVE than we did at launch.
Ramsay: How has the world of EVE changed in that time?
Harðarson: It’s a lot more populated. Everything is happening on a much larger scale. We have alliances of tens of thousands of people battling it out. Nothing even close to this has ever happened in video game history. The EVE universe is a lot richer than it once was, too. There was practically nothing in the universe when we launched, but every six months, we add something new into the game.
With EVE, the median age of our subscribers is higher than most games. We have a median age of 26 years old. We see people of all ages playing the game, of course, but the point is that the market is growing every year and a whole new generation is coming in and not dropping out.
Ramsay: How has CCP evolved with the game?
Harðarson: Well, we built up all of the infrastructure to be a publisher except retail; we just don’t believe that much in retail. We sometimes distribute EVE in stores, but retail is dead; it’s not the future, so we have no focus on that. We also have our own marketing teams. We do all of the public relations.
But until now, we’ve had these functions for only EVE. That’s why we felt it was a logical step to create three games, so we could fully utilize this organization that we built for publishing and virtual world operations. We’ve gone from a 30-person garage operation to a fully fledged publisher with three game teams.
EVE also built for us quite a reputation in the industry. We’ve been able to hire an incredible amount of fantastic talent from all over the world, willing to move to a strange location like Reykjavík because of the love for the product. They have a love for the company too; we’re doing something different.
CCP is a lot more international now. The company used to be almost purely Icelandic when we had just 30 people. Now, Icelanders make up maybe 25% of the company, and we have offices in Shanghai, Atlanta, and Newcastle.
Ramsay: When did you decide to really develop more games after EVE?
Harðarson: In 2006, we started talking about our next product, and we started talking with White Wolf Publishing, one of the biggest tabletop roleplaying publishers in the world. White Wolf is actually number two after Wizards of the Coast. They have a series of games in the World of Darkness universe, starting with Vampire: The Masquerade.
We’ve always been fans of White Wolf. We played their games when we were teenagers. But when we talked to them, we didn’t intend to do a game with them. At the time, we wanted to expand the EVE brand to more products, so we were making a collectible card game based on the EVE universe. We went to White Wolf to better understand that business, and then we found out they wanted to capitalize on their IP with a massively multiplayer online game.
Although we weren’t interested in a licensing deal with White Wolf, we decided to exchange information. We started cooperating, and for some reason, the conversation came up: “why don’t we just merge our companies?” Neither of us wanted to do a licensed product; we wanted to do our own things. In late 2006, CCP Games and White Wolf Publishing merged, and we started preparing to develop the game I’m working on now: World of Darkness. Two years later, I moved out here to Atlanta, and we built our US offices on top of White Wolf.
Ramsay: White Wolf had created other properties, like Trinity, Exalted, and Pendragon. Dark Age of Camelot was out, so I suppose a Pendragon MMO wouldn’t be innovative, but Trinity was sci-fi, your wheelhouse. So, why choose to develop World of Darkness into an MMO?
Harðarson: World of Darkness has a much wider appeal. It’s dark, it’s about vampires, and it’s about people. One problem we have with EVE is that the game is all about spaceships, and our demographic is like 97% male. Girls aren’t really as interested in spaceships as guys. I don’t know why, but it’s just a fact.
And we know from experience with the World of Darkness tabletop and live-action roleplaying (LARP) games that there is a lot of female interest in the vampire thing. That actually surprised White Wolf when they published Vampire: The Masquerade because tabletop role-playing games had been dominated by guys, stereotyped as geeks in high school and college. There had been very little female participation. Let’s say 10% of the players were women, and then suddenly, that became almost 50%, especially in LARPs, where people would meet together, play their parts like actors, and dress up. World of Darkness resonated strongly with both genders.
Ramsay: You mentioned three games. There was EVE, and then there was World of Darkness. What’s the third?
Harðarson: Yes, we also decided to build an expansion for EVE called Dust 514, and we decided to do this in Shanghai. Originally, Dust 514 was supposed to be a small, interesting product, but it blew out of proportion and became this fully fledged triple-A shooter on the PlayStation 3. It’s coming out very soon. But the key is that all of this has been funded through the success of EVE. We would not be able to do any of this without EVE growing and growing. Currently, we have around 550 people in three major studios.
Ramsay: Have there been any setbacks?
Harðarson: I think our biggest mistake was underestimating the challenge of building three studios at the same time. We totally underestimated the difficulty. Social dynamics change when you hire a lot of people. It causes confusion and chaos, so development has been taking much longer than we expected. And that, of course, means we’re spending more money than we originally planned. But everything is quite happy in CCP land; we’re in a good spot.
I would say that 2011 was our worst year. We totally overestimated the growth of EVE, and we made mistakes in three expansions. We were introducing features to the game that players didn’t really like, and in the summer of 2011, we had this revolt in the player community, and there was incredibly negative feedback all over the Internet. We saw our subscriptions drop significantly for the first time—well, significantly by our standards. Instead of gaining 15% more subscribers, we lost about 10%, and all of our plans were then up in the air.
It is amazing how much cash you can burn in a very short time when your plans fail. We had to make very hard decisions, and we laid off around 100 people. We should have been more cautious because that was incredibly hard.
We now try to grow within our means, always making sure we have enough cash in the bank to weather catastrophes like that. We’ve never had to do that in our history. We’ve always been incredibly accurate with our predictions, but now we know that things can go wrong quite quickly.
Ramsay: Before we talk more about Dust 514, I’d like to know what exactly inspired you to create a sci-fi, spaceship-driven MMO.
Harðarson: EVE was obviously very much influenced by Elite. I played that game a lot back in the day on the Commodore 64, as well as Master of Orion, Free Space, and Wing Commander. I was also very much influenced by the science fiction and space settings of movies like Star Wars and Blade Runner. But the game design and philosophy were not only influenced by space games; we also drew from Civilization, Magic: The Gathering, and Ultima Online. EVE’s influences came from many directions.
Ramsay: Prior to EVE, MMOs were focused on player vs. environment gameplay. By 2000, Ultima Online had even lightened its own player vs. player experience. Why did you focus on player vs. player?
Harðarson: So, we thought player vs. player was a much more interesting and rewarding experience. The theory is that when you play chess against a computer, it’s marginally interesting, but when you play it against a friend, there’s a meta-game happening around you. You bring your history you’re your friend to the board, and winning against your friend is much more satisfying. Counter-Strike, Quake, and StarCraft are good examples of where we would see competitive play as super interesting and very exciting.
We also felt that a computer-generated narrative is difficult to deal with at a very high quality for a very long time. It’s like trying to solve the impossible problem, and we’ve seen many MMOs fail here. And MMOs have to last for an extremely long time. If had written content for EVE, we’d need ten years of content; that’s a lot of stories and a lot of dialog. We thought the way to do an MMO then was to build a universe with endless emergence, constantly refreshing itself by the actions of players.
And space operas are about combat, empires fighting empires. That’s essentially the heart of the player vs. player concept. If you tried to make a player vs. environment game in space, that’s just going to be weird; it’s not going to feel real. We didn’t want to do that; we wanted to make a real world, a place you could believe in. One of our game design principles is verisimilitude: we try to maintain believability. Once you start straying away from believability, you very easily go down, clinging to abstract solutions, and in the end, the game is full of strange and abstract things that don’t really make any sense.
Ramsay: How does Dust 514 fit into your vision for EVE?
Harðarson: Dust 514 is an extension, an evolution, of EVE. With Dust 514, we are building on EVE, providing more things for players to do, and fleshing out this space opera. With EVE, you build star bases and claim sovereignty over star systems, but we also always wanted to have troops on the ground.
In 2006, we started that project. We wanted Dust 514 on a different platform because we wanted to make a new first-person shooter experience. We didn’t want to make something where you’d have EVE on one screen and Dust 514 on another. We wanted to have EVE on PC, and then you’d go to a console to play as a mercenary on the ground. It was a more sentimental decision, more fitting. EVE is the machinery for operating space ships and empires, and then you’d use another technology to deploy your mercenaries.
Ramsay: You didn’t know what was fun about EVE until launch day. Did Dust 514 have the same problem?
Harðarson: It’s not as difficult because Dust 514 has session-based mercenary contracts, which is very similar to many other shooters. The exceptions are that there are space battles, vehicles, and an in-game economy. If you lose that expensive vehicle, that’s it. You have to spend resources in the game.
Dust 514 is fairly easy to test because you need only 32 players for a session, but the bigger, untested waters are how territorial warfare and contract mechanics will play out within EVE. That’s more of a thing we can’t test, and we’re very excited to see how that goes—and a little bit scared.
Ramsay: For a time, EVE was your only source of income, so when there are interruptions in service, how does that impact the business?
Harðarson: Every hour of downtime is lost revenue, and would reflect very badly on the company if we couldn’t maintain full service. When LulzSec attacked us, we were down for two days—that’s two whole days of lost revenue. That’s a lot of money. This is very serious stuff.
Ramsay: When service interruptions are caused by intrusions, usually to steal credit card information, downtime in those cases is a double hit, right?
Harðarson: Especially back in the days when there was a lot of resistance to using credit cards online. People were very, rightfully wary of giving credit card information to companies that were security risks. We understood that from the beginning, so credit card information was never stored in our databases, but instead went to a third party. We understood that if somebody hacked into our databases and stole credit card information, that might mean the death of our business. It would be a single point of failure where we would just lose everything. So, we’ve never stored credit card information, and still don’t.
Ramsay: What happens internally during that downtime?
Harðarson: We’re constantly working. The security teams go into overdrive. In the case of LulzSec, we were afraid they would use this attack as smoke and mirrors to do something more serious behind the scenes. That’s why we shut down the servers ourselves. Fortunately, that turned out to not be the case; they would have to be quite sophisticated to be able to do that. Their denial of service attacks were fairly low tech, mostly just bombarding us with lots of data. They were taking down websites, like CIA.gov and stuff like that, so they were never a serious threat. But we cannot take any chances.
Of course, it’s a little bit scary when suddenly your product isn’t working, it’s your only source of revenue, and you don’t really know how long it’s going to last. So, we juggled the hardware and rerouted Internet traffic all over the world to withstand future distributed denial of service attacks much better.
Ramsay: EVE is frequently in the press as players continue to lose thousands of dollars worth of virtual items. As a designer, how do you feel about that?
Harðarson: That is what the game is really about! It’s about trust and betrayal. It’s about people working together or working against each other. Just like in the real world, sometimes you can’t trust everyone, but in some cases, there are honest mistakes, like a Titan pilot jumping into the wrong system and losing the ship, which is worth roughly $5,000. But that’s also what makes EVE interesting and exciting for players. Mommy’s not holding your hand all the time. There’s an adrenaline rush. Every choice has more meaning and weight.
There was another case there was this guy had set up a banking operation inside EVE, and banking is not regulated at all. In reality, it was a Ponzi scheme. He ran out, sold his ISK—which is our in-game currency—and paid for his college tuition. We had a lot of angry people, and this hit the press. But this is the reality of the game, and what makes EVE so interesting.
We can’t interfere with those activities. Who are we to judge? He wasn’t breaking any rules of the game. This was just totally emergent behavior. Almost every time this happens, it gets very wide publicity and we don’t lose players. In fact, we start gaining more subscribers because people are very intrigued. “How can a thing like this happen in a game? What is this game? I want to see what it is because these stories don’t really happen in other games!”
Ramsay: Speaking of trust, you said that not everyone can be trusted. I understand that you have an internal affairs division.
Harðarson: Yes, we’ve had incidents within the company; in one particular case, we had an employee using his power as a programmer to directly alter the data on the game database to help his character. That was a major breach of our trust when that got out, so we started the internal affairs division to monitor us. They also handle some of the more difficult cases, like using in-game currency to engage in money laundering and other illegal real-world activities.
We take internal security very seriously. When something like this happens, we’ve breached the trust of our players. We should have fired him on the spot, but we didn’t fire him until three days later because our CEO was not in the country. It was mishandled internally, and the players got the impression we were okay with this behavior. They were massively outraged. It was not good.
Ramsay: Now, of course, you have a very good relationship with the players, in large part thanks to the Council of Stellar Management?
Harðarson: When we were developing the game back in the 2000s, we started to get a lot of useful feedback from the forum, and we weren’t really expecting the feedback to be so good. We wanted to keep a dialog with the players open, to understand the game and what was happening inside the game.
We’ve felt that way since we had the first EVE Fanfest in 2004. We met some players face-to-face for the first time, and we had a lot of conversations. We realized that player feedback was an incredibly valuable resource for us to move forward, especially with a universe of this epic scale.
So, we created the Council of Stellar Management (CSM), a democratically elected council of players who we’d fly to Iceland a few times each year. They’d meet with the development team, and talk about the issues in the game, what was important to them, and what was not.
We no longer have a relationship where it’s us vs. them, us just marketing to them. We’re working together, and we have a common goal. The CSM just turned out to be fantastic, even mind-blowing. I’d highly recommend everyone start their own player councils if they want good community relations.
Ramsay: When you look back at all you’ve accomplished, the road you’ve traveled, and the challenges you’ve overcome, what are you thinking?
Harðarson: It’s been an amazing adventure. It’s been the greatest adventure of our lives. It has been very much a work of passion and love and incredibly rewarding, but also incredibly hard at times. We are very lucky to have been able to start this company and actually get the ship sailing. We are very lucky to have been able to recruit incredibly talented people over the years. I think a lot of our luck comes from our mindset. We’re not in this to aspire to mediocrity; we’re in this to do something that really matters. It’s an incredible privilege.