Penny Arcade interview from Videogames Impact Report

Continuing our series of excerpts from the interviews we conducted for Variety's videogame impact report, here's a big chunk of my conversation with "Penny Arcade" creators Mike "Tycho" Holkins and Jerry "Gabe" Krahulik. For those who don't know, Penny Arcade is the number one web comic about videogames and has also spawned a huge consumer videogame show, merchandise, and marketing materials. Basically, Holkins and Krahulik are the top commentators and satirists of the art form.

Previous videogames impact report interviews with "Metal Gear Solid" creator Hideo Kojima and Bungie Studios CEO Harold Ryan are already online. More will be coming soon.

[And for the record, this is the picture Mike and Jerry provided of themselves. I'm not sure if they're f*cking around and seeing if a mainstream media outlet will run a picture of Jerry holding an Xbox 360 controller upside down and Mike using a PSP as if it's a console controller without noticing, or if it's just a joke for our readers. Either way, I'm amused.]

For those of our readers who aren’t intimately familiar, can you tell me about how Penny Arcade got started?

Mike: We started the comic [in 1998] because of a contest in a Next-Gen magazine. They were searching for a cartoon to run. Jerry and I were roommates working on a bunch of different comic projects, superhero-type stuff. I made a couple of these videogame comics just for fun and entered and he saw them and wrote a few more and we ended up submitting five or so.

We did not win the contest. But we had fun making them and we thought they were good so we thought people should see them. So shopped we shopped them to all the big gaming sites at the time

Jerry: Of course our idea back then of what was a big gaming site was pretty different. There was nothing like IGN.

We had about given up until Loonygames decided to run it. After that run, we did one every Monday. The next Monday would come and they just asked for another one. We had no intention of making more. It’s just that people wanted to see them and out of politeness, we kept doing it. Eventually we bumped up from one to two to three and then we moved to our own site.

Was there a point along the way where you could feel this turning from a side hobby into a full-time business?

Mike: The lines between those two things are a blur to us. What we have is something that’s both hobby and job. I didn’t detect a firm delineation where I said, “We crossed the threshold now we’re entrepreneurs.” What happened is we got approached by one of the big content aggregators to sell advertising on our site. They said, “We can pay you for your website.” That’s when we realized it could be a job. Of course, that went south extremely fast when the dot-bomb happened months later.

We had quit our jobs in the interim period, which was really smart. Now we had no checks coming in and no jobs, so we decided to switch the comic to be donation-supported.

That was antithetical to the spirit of the ‘Net at that time. Nowadays, donation drives are not strange for small press. At the time, though, this was Satanic.

But it worked?

Mike: It did. It kept us going for a long time until we chose to switch to a mild advertising model where we would only accept two advertisers for the entire month total. We would negotiate with those people ourselves and try to find a happy medium of products we thought were good.

What made you switch to that business model?

Jerry: What happened was we met Robert [Khoo, president of operations and business development]. He came to us shortly after we decided to stop doing donations. He was working as a consultant for a game company. His idea was have them advertise on Penny Arcade. He was a fan and knew what Penny Arcade could be. He offered us a free lunch.

After talking for about an hour, he realized we were idiots with no idea what we had business-wise. He said, “I’m going to quit my job and work for you guys for free for three months. If I don’t make myself a salary and make you guys more money, I will leave. It’s been years now.

Now you have other revenue streams like merchandise and the Penny Arcade Expo show. How do you manage that little multi-media empire? Where do you put most of your attention?

Jerry: In our opinion, none of the other stuff matters if the comic isn’t good. The only reason our merchandise sells is people like the comic. The only reason people came to PAX the first couple of years is that they liked the comic. Everything we do still really hinges on the comic. Anybody we hire or bring into the company, their job is to focus on other things so that we don’t have to worry about them.

What about the new game [“Penny Arcade Adventures: On the Rain-Slick Precipice of Darkness”]? That must have taken your attention away from the comic?

Jerry: The game was definitely a big time sink. Most of the time, our other projects have tended to be comic books we make for game companies as advertising. Those take a few weeks, but really Penny Arcade was still the main focus. When the game happened, that really took priority and took up a huge chunk of both our time quite a while.

Mike: The comic is the most stable part of our jobs. It’s the kind of thing where everything else revolves around it. It has very specific times when it needs to be written and drawn. We complete other projects as we get to them, by and large.

Beyond the comics, your site also features you guys blogging about videogame issues a lot. Do you consider that a side project as well? Or is it integral to what Penny Arcade is?

Jerry: When we started, it seemed expedient to have our own archive of the strip. Eventually, we bought the domain ourselves, which was very exciting at the time. We set up a site, but our HTML knowledge was such that we could make tables, but didn’t understand how to balance them. We had these menu items on the right, but the header and footer we liked made this space on the left side of the page that looked weird with nothing in it. So I started to write posts, sometimes about videogame news, sometimes about the comic, sometimes just about weird stuff

Another reason is that gaming culture is pretty immediate. It moves quickly from day to day. It moves quicker than we can catalog it with three strips a week.

Given that you can’t be as immediate in your comics as most blogs are, how do you decide what topics to address and what to say? What role does Penny Arcade serve in the world of videogame blogs that didn’t exist when you started?

Jerry: We always try to make our position either unique or at least funny. A lot of times it feels to me like we are on the opposite side of the mass gamer community talking on the forums. But something that PAX taught me is there is this massive majority that just isn't vocal. It’s the vocal minority that posts on those threads.

Now that Penny Arcade is so popular, do videogame companies try to curry good favor? Do you get sent every new game and system for free?

Mike: I think people know better than to try to manipulate us. If we even think a person is trying to manipulate us, they know the penalties are grave. They can end up in the comic.

[Notes that they don’t get sent much stuff for free.] I do think paying for your game helps what we do. Getting it for free has got to color your impressions. I think it’s OK that we’re not on every mailing list and we don’t get every game.

It’s been a big thing recently about how some game reviewers wanted to mimic the experience of the average player. They had everything under the sun to do that except buying their own game

Getting back to the “Penny Arcade” game, how did that come about?

Jerry: We had met a few of these guys before they became [developer] Hothead. We had gotten to know them personally and when they ended up breaking away and forming an independent studio, they approached us even before they announced company. They had worked with IP before and were able to make interesting games out of other people’s products.

We weren’t entirely sure we wanted to do it at first. We said we would do it only if we had tremendous control. I wouldn’t have signed for something that looked like Penny Arcade but was motocross. It had to be something we could all agree on.

Mike: [Jerry] said would have been fine with an eight-bit looking RPG with a great story that was basically just text. I would have been happy with 3d brawler.

So you had to compromise on something that’s not what either of you wanted?

Jerry: The story of Penny Arcade is the meeting of our two minds. Both of us giving in just enough to make the other person willing to stay and work with them.

And are you happy with how the game came out?

Jerry: We don’t look at anything we have done and say “fuck yea.” We’re artists and nerds. It’s not a part of our makeup. I never sit back from computer and say, “How do I top that shit?”

That said, the game is fucking awesome.

And it’s an episodic game, so you’re doing more, right?

Mike: We’re obligated to make three more. To be honest, it ‘s been way harder than either of us had anticipated.

But I’m glad we did it and excited to make the next one better and then the one after that. I don’t know if I knew what I know now if I would have agreed to it. It’s so hard. I cant believe people do that regularly.

So does it give you more appreciation for the videogame developers you write about and sometimes make fun of on Penny Arcade?

Mike: Oh yeah. No question.

Penny Arcade Expo is coming up and from what I hear it’s going to be much bigger than before. Do you play a big role in planning it?

Jerry: Our role is to be cultural ambassadors for PAX. Most of our PAX work is super high concept. But the show itself is pretty much us acting as that connection between the show and attendees.

Mike: As an example, a few months ago one of our ad guys came and said that a few of the companies wanted two story booths. We decided that just wasn’t right. We want to keep that sort of thing out of the exhibition hall.

Can any company exhibit? Or do you decide who can come and who doesn’t, just like with advertisements on the site?

Jerry: We turn down lots of exhibitors. Our standards are slightly looser than for advertisers on the site. But not by much.

[Unlike E3 and GDC], PAX is not for the industry. That’s the difference between ourselves and them. We’re not delivering them a “captive audience.”