It’s the opening day of Penny Arcade Expo in Seattle and a 7,000-seat auditorium is filled to capacity. Dozens of people are lined up behind the two microphones with important questions for two geeks holding court on stage:
“If you were super-villains, what would your powers be?”
“I was wondering what your guys’ plans are for the post-apocalyptic world?”
“I just wanted to say that you guys are my celebrities. I wouldn’t be nearly as nervous to meet someone I’ve seen on the screen as I am to meet you.”
Jerry Holkins and Mike Krahulik, two best friends in their 30s who create an opinionated online comic strip about video games, couldn’t look less like celebrities. Holkins is short, bald and pudgy, while Krahulik is tall and wire thin. Both are dressed in noticeably untrendy glasses, black short-sleeve shirts, jeans and sneakers as they patiently answer every question throw their way for almost two hours.
In fact, the duo are cartoonists, commentators and convention hosts, the forces behind a brand called Penny Arcade that draws 3.5 million visitors a month on the Web, more than 60,000 people to an annual convention and the devotion of advertisers eager to reach an elusive audience. Their business manager describes the venture as a “micro-media conglomerate.”
It might not stay “micro” forever, though, as the growing popularity of gaming is expanding Penny Arcade’s audience and its business opportunities. Growth plans include a second yearly convention and a TV series, but that creates tension about not only how much Penny Arcade can do, but whether it needs to compromise any of its appeal to a fiercely devoted core audience in the process.
It’s quite possible you’ve never heard of Penny Arcade. That’s because in an age when mass media are being replaced by niche, it’s the perfect example of content that speaks to a specific crowd, like Outdoor Channel for hunting aficionados or the Huffington Post for political liberals. If you wonder what the gamer in your life who doesn’t seem to watch TV or read magazines does with his or her time when not holding an Xbox controller, check out penny-arcade.com.
Holkins and Krahulik have spent more than a decade on the thrice-weekly strips, in which their animated alter egos Gabe and Tycho poke fun at trends, news and personalities in the world of gaming. There are numerous other online comics, video series and blogs that mock the same targets, but Penny Arcade’s consistent track record and comedic chops have earned it a special place in the hearts of hard-core gamers.
“The role of Penny Arcade is clear: They’re the voice of gamer culture,” says Ken Levine, a Boston-based designer of the hit video game Bioshock who gave a speech at PAX last year. “They express the subtext of who we are in an incredibly sophisticated and ironic manner.”
If Holkins and Krahulik are gods to their fans, then Penny Arcade Expo, generally called PAX, is their church. Started in 2004 as a spinoff of the strip, the annual event is now almost half the size of the much better known Comic-Con International, which many PAX attendees have come to regard with disdain as a barely disguised marketing tool for Hollywood.
“Comic-Con is an abattoir,” says Holkins.
“There are ‘Twilight’ fans at Comic-Con now!” exclaims Krahulik. “There’s nothing wrong with them, but they’re a whole other group from us.”
Video games once seemed like the last refuge of the uncool, but even they have gone mainstream. Grandma owns a Wii now and fraternity houses are throwing Rock Band parties. “A lot of the guys who buy my games today are the ones who gave me wedgies in high school,” observes Levine.
Penny Arcade is for those who grew up on the receiving end of wedgies. Nerds may be cool all of a sudden, but that doesn’t mean they want to read what the cool people read and hang out with them. They want their own media, their own parties. And that’s what Holkins and Krahulik provide.
“I love these guys because they’re real geeks who have flourished by being geeks,” gushes 17-year-old Will Hellworth, who traveled from Santa Monica to attend PAX earlier this month. “They’re our people.”
Listen to Holkins and Krahulik talk and the topics of conversation are pretty similar to the ones you’d hear at the local GameStop on a Friday afternoon: the newly redesigned PlayStation 3 (“A gravestone for a once powerful brand,” proclaims Holkins), for instance, and the new Batman game Arkham Asylum (“Everybody has to play this!” says Krahulik).
Holkins is louder and more aggressive, while Krahulik often stands back from group conversations. But they have much more in common. Friends since high school, the two work together in the same office in Seattle and often finish each others’ sentences. “We do share a brain,” admits Krahulik.
Nowadays, both are family men. Krahulik has a 5-year-old son while Holkins welcomed his second child, a daughter, just days after PAX finished.
“The structure of our lives is just like it was for our dads, but we’re blessed because we’ve made jobs of doing what we love,” Holkins says.
The duo have been creating Penny Arcade strips, with Holkins handling most of the writing and Krahulik the art, since 1998, when the two recent high school graduates were roommates living in Seattle and submitted one to a magazine contest.
Unable to find a regular home for it in print, they moved to the Web, slowly building an audience while continuing to work at tech-related day jobs. “I remember we would talk about comic ideas over the phone and you would draw them while working at the register,” Holkins says to his partner about Krahulik’s stint at Circuit City.
The targets of Penny Arcade strips have included executives such as Activision Blizzard Inc. Chief Executive Bobby Kotick, mocked for his frequent use of the word “exploit” to describe how he manages game brands; major companies such as Microsoft; and anti-video-game-violence activist Jack Thompson. Mostly, however, they peek in the mirror and mock gamers for their obsessions with such things as “Star Wars,” World of Warcraft and the PlayStation 3.
Eight years ago, a Penny Arcade fan and business consultant named Robert Khoo advised a client to advertise on the website and was shocked to discover that it wasn’t possible. So he took Holkins and Krahulik to lunch, presented them with a 50-page business plan and made a simple offer: “I will work for free for two months. If I’m not paying for myself by then, I’ll leave.”
Today, Khoo is the president of operations and business development for Penny Arcade, which means he runs the company while Holkins and Krahulik produce strips, write blog posts and focus on a charity they started, Child’s Play, that brings toys and games to children in hospitals.
Together with a nine-person staff, Khoo sells advertising (but only for games approved by Holkins and Krahulik) and merchandise, produces marketing material for game companies and operates PAX.
“It’s the same model as a company like MTV: We produce content for a specific audience and monetize it,” he explains.
One of the company’s biggest advertisers this year has been BioWare, a game development studio owned by Electronic Arts that rented booths for two of its games at PAX and hired Holkins and Krahulik to make a promotional comic for its upcoming release Dragon Age: Origins.
In order to get the duo excited about Dragon Age, BioWare flew out the game’s lead designer to Seattle in June to personally show it them. “They’re not so much a press outlet as they are passionate gamers who are honest, which gives them a lot of credibility,” says David Silverman, a brand manager for BioWare who has Penny Arcade comics ripping and praising previous games he worked on hanging in his office in Redwood Shores, Calif.
Six years ago, after the trio attended a disappointing fan convention in New Jersey, Holkins and Krahulik told Khoo they’d like to start one of their own focused entirely on video games. Unlike the industry-only E3, however, it would be open to the public.
The business guru thought it was a fleeting idea, until they checked in again two months later to ask about his progress. In four months, he put together the first PAX, which 3,000 people attended.
Even in the modern mega-sized PAX, it’s not hard to pick Khoo out of the crowd. Among the tens of thousands wearing T-shirts and jeans -- if they’re not dressed like a favorite video game character -- the trim 29-year-old is the only one wearing a suit and constantly on a BlackBerry.
A gamers convention
The fans who paid $45 to attend, meanwhile, are enjoying a video gamer’s paradise. Panels with titles such as “Beyond Dungeons and Dragons” abound. On the sixth floor, there’s a giant “freeplay” area full of computers and consoles. Room 203 is stacked with hundreds of board games organized in alphabetical order, from Axis & Allies to Zombies!!!, that anyone can check out for free.
On the fourth floor, thousands of attendees line up for hours, playing on a Nintendo DS while they wait for concerts by geek-friendly musical acts such as MC Frontalot and Jonathan Coulton.
Outside the theater is a small signing area where fans meet PAX celebrities such as Wil Wheaton, a writer and actor best known for his roles in “Stand by Me” and “Star Trek: The Next Generation,” who has become popular with this crowd through his blog, wilwheaton.typepad.com.
“PAX celebrates our culture and gives us a common place where we can be adults at summer camp,” says Wheaton.
Maintaining that atmosphere gets harder every year as more and more people play video games and Penny Arcade grows into a bigger business. Next March, for instance, it’s launching PAX East, a spinoff conference in Boston.
The company has to do it all without extending beyond the capabilities of its founders, who provide what Krahulik describes as the “tone” for everything Penny Arcade does. “A big part of what I do is to make sure they don’t burn out,” admits Khoo.
That tension is evident on the first day of PAX as the duo walk the convention floor trailed not only by a reporter and photographer but a camera crew shooting footage that will be used for either a Penny Arcade documentary or reality TV pilot.
Holkins and Krahulik are polite, but they’re clearly not thrilled by the scrum of hangers-on surrounding them like Lindsay Lohan shopping on Robertson Boulevard. They’re much more interested in trying out upcoming games such as Star Trek Online and Splinter Cell Conviction and interacting with attendees at their own convention.
“The thesis from the beginning was that this is the show we wanted for ourselves,” says Holkins.
“PAX is just a big party and we’re the hosts,” explains Krahulik.
Those who haven’t always dreamed about a party thrown by a pair of video game cartoonists are certainly welcome to check out Penny Arcade, but Holkins and Krahulik are at best indifferent. They’d be perfectly pleased if the rest of the world returned to its long-standing indifference toward video games.
“I don’t need the imprimatur of the larger culture,” Holkins says firmly, “to put its stamp on my enthusiasm.”