Creator of Earthworm Jim and Gaikai on his early games, selling companies, and how consoles won't be called consoles anymore.

Having just sold cloud gaming company Gaikai to Sony for $380 million, David Perry has been in the news a lot lately. He made it clear, though, that his session at the Develop conference in Brighton, England was going to be on Earthworm Jim, one of his earlier creations. And though he kept his promise for most of the session, a number of questions from the crowd prompted the Gaikai chief executive to talk about more recent topics, such as cloud gaming and the next generation of consoles.

Perry: "The core is what it's all about."

David Perry was working in the UK as a developer when he got the call to move to California and make games for fast food chain McDonald's. "Whatever you're getting paid, we'll pay you more," said Perry, recounting his phone conversation with Virgin Games. The resulting game, Mick and Mack: Global Gladiators, was disliked by McDonald's execs according to Perry, who claimed "we wanna buy fries!" in the game, but it won a game of the year award from Sega, which allowed him to make the Cool Spot game for 7Up afterwards.

Another licensed property followed, this time for Disney in the form of Aladdin, which Perry says was made in four months. "We were looking at every property out there," he recalled. "We were looking at Knight Rider, but we said, 'Do we really want to work on a David Hasselhoff game?'" Instead, Perry set up his own development house, Shiny Entertainment, and worked on an original IP that would become Earthworm Jim.

The first two games were critical and commercial successes, and boasted a unique hand-drawn art style. However, in 1995, games were rapidly moving into the 3D space. "I was very worried," said Perry. "All my animation team used pencils. I had this building full of pencil-using animators. I kind of snuck in some copies of 3D Studio Max. You could see the artists going, 'I can't work this way!'"

In the end, Perry decided to sell the company to Interplay--a decision he called "the worst mistake I ever made." "I underestimated their capabilities, and the next game they made was MDK--a cutting-edge 3D game. I thought, 'Oh my god, we have a future, we're not just going to slip into the night'. We went very aggressively into 3D technology, we were all pushing the limits on that."

While Perry and Shiny continued work on games such as Messiah and Sacrifice, a team called VIS Entertainment in Scotland made Earthworm Jim 3D. "I never played it," claimed Perry. "I said to the CEO of Atari, 'If I rebuild the Earthworm Jim team, will you fund it?' and he said he would. We rebuilt the team."

However, they would not go on to make a game under Atari. "Atari said we were low on cash and they said they weren't going to start any new projects. It was embarrassing for me," said Perry.

While Perry said he is currently working on a new game, it's not Earthworm Jim-related. Instead, it's a 3D Deathchase-inspired charity project for the iPad. However, he did tease that he has 90 to 95 percent of the assets he'd need to hit the ground running on a new Earthworm Jim game.

Finally, on the question of this potentially being the last generation of games consoles, Perry had this to say: "I don't think consoles are gonna be called consoles anymore. I work for Sony now. The core is what it's all about--[a games console has] got to make the most badass games as possible."

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