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Wednesday, February 21, 2024

How the Games Industry Shake-Up Could Play Out

Kylan Coats came up with a plan to start a studio before he had even made a game, as an undergrad spending summers as a QA tester between classes. Back then, his mid-thirties seemed like the age to make this transition. If things went to plan, he would have the experience to succeed, but if everything exploded, he could still return to a AAA career. Coats worked in the industry for 14 years, but it was only after an unforeseen layoff from Obsidian Entertainment that his husband reminded him of this conviction. “He brought it up like, ‘Hey, you've been talking about starting your own studio for the longest time, why not now?’” Coats says.

After a good year doing contract work, more profitable than any year previous, he started Crispy Creative. His first game was an idea he’d been mulling over for a while. “Every dev always has a few of their own game ideas,” he says. A Long Journey to an Uncertain End is a queer narrative space opera, in Coats’ words. Players control a rogue spaceship fleeing between colorful Mœbius-like planets; tasks include shuttling drag queens off on grand adventures. It's not the type of game a bigger studio would touch, he says. With Crispy, not only is he free to be creative, but his work environment is healthy: Staff don’t have to kill themselves to meet a deadline, and he can nurture mental health and inclusivity. He'd been critical of leadership in the past, so starting Crispy was the moment to put up or shut up, he says.

"This is now over four years of me being independent. In about six months, this will have been the longest job I've ever had, which is really scary," he says. "But also really crazy, because I'm like, 'Why didn't I do this earlier?' I'm making so much more money, I have so much more freedom, why did I deal with the politics with big studios. And now I've talked to other people who are doing the same thing." Coats is a small part of two big movements in the games industry. One is conspicuous. Last month, Microsoft bought Activision-Blizzard for $68 billion, the biggest tech purchase ever. Eleven days later, Sony, whose stock plummeted in the wake of Microsoft’s deal, devoured Bungie, creator of Halo and purveyor of Destiny. The games industry, it would seem, is consolidating. Yet, less conspicuously, the industry is also splintering. Developers say they feel like they are part of a wave: Veterans, weary of the industry’s increasing corporatization, are leaving the AAA world to forge their own path.

What Makes a Studio “Indie”?

Independent is a sticky word. “Indie” evokes an aesthetic—pixel art or lo-fi graphics; deep themes or demanding mechanics—as much as a state of ownership, an ambiguity that can blur the facts on the ground. Independent funding varies: Developers tend to distinguish their status by budget size. Crispy, for instance, is closer to what most people think of when they think of indie development: a “single I” in response to the AAA. We're tiny and scrappy; balancing client work, spare time, and no small amount of hope to put together our first title,” says Coats.

The studio Gardens, founded by the artists responsible for Journey, Dustforce, and What Remains of Edith Finch, call itself "triple I,” since it has received, for a small team at least, substantial financial support. The founders of Gravity Well, former developers at Respawn Entertainment, which made Apex Legends, explain that they are too big to consider themselves indie; but they are independent in that they have creative control. “[We’re] able to lean in to potentially riskier creative decisions, to prioritize team health, and provide significant profit sharing from our games to the team," the team says over email.

Developers are artists, but making games is work. In fact, development, infamously exploitative and breakdown-inducing, is exactly the sort of work that the pandemic has made many of us less likely to tolerate. Couple stories on r/antiwork, in which employees with broken limbs are reprimanded for overuse of a stool, with Blizzard’s sexual-harassment scandals, and the Great Resignation, says Coats, could just as easily be called the Great Reprioritization. "When you're faced with a potentially life-ending global pandemic, you question why are you killing yourself for all this stuff," he says. "Because you could get sick next week and be in the hospital intubated."

This type of work is notorious: the crunch. Drew McCoy, game director at Gravity Well, describes himself as a "recovering workaholic." Bosses have long exploited the fact that games are a "passion industry,” he says. In his experience, you aren’t forced to crunch, but no one stops you either, a state of affairs that doesn't work for people with kids; you end up with massive attrition as older developers leave.

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In the build-up to Apex Legends, McCoy worked 80-hour weeks. The burnout afterward lasted more than a year. That he, a guy who was teaching himself to code in Basic at 9 years old, considered leaving the industry pointed to something rotten at its core. “We’re very open to everyone: If you need time off, we have an unlimited [paid time off] policy,” McCoy says. Crunch “has driven how I think about building a team and building company values and goals. Because it's just nothing but detrimental. You get worse work from people.”

Developers are also fed up with other long-standing impediments. At Obsidian, Coats says, leadership was entrenched: He had to threaten to quit before he got “senior” in his title. Coats says there were few female leads, and female developers left because they didn't see a future for themselves. Sarah Sands, executive producer at Gardens, left the industry twice for similar reasons: Being a woman in gaming meant she was paid less than her male peers. She was persuaded to go back by promises of the chance to push for a more diverse staff, a commitment to mental health, a 35-hour workweek, and robust benefits. Just the other week, in the middle of a sunny day, she went roller-skating and returned to work energized.

Too Big to Make Great Games?

Crunch is not specific to AAA or even games, nor does it define the industry—and some studios treat their staff better than others. But making games is not just work, of course: It’s also a collaborative art. Auteurs are possible, but in McCoy's words: “This is my version of a team sport. I've never been a sports person; I grew up with a keyboard in my hand." As revenues have mushroomed, so have teams: gargantuanly so, says Chris Kaleiki, a game designer and builder at Notorious Studios. He says that when he began at Blizzard in 2007, the entire World of Warcraft team could fit in one office. When he left, there were more than 20 offices, and staff events were held in rented theaters.

This snowballing is typical. The statement "once your team size crosses 100 people, everything changes" rides near the top of Gravity Well’s website. The team believes that the single biggest shift, and a common complaint of those who have been in the industry for any length of time, is the moment that a team can no longer fit in one room. Jon Shiring, cofounder at Gravity Well, has been working in games since 2001 and says that, in the transition from the PlayStation 2 console to the PlayStation 4, teams went from 30 or 40 people to hundreds. Something breaks at 80 to a hundred, he says, when you lose even surface-level relationships. At Respawn, he'd stop people he didn't recognize to make sure they were meant to be in the office; as the team grew, he even started stopping other artists.

Limiting team size has been Gravity Well’s pitch to attract jaded developers. (Cristina Pohlenz, software and games developer at Gravity Well, says that when she worked at Nintendo, she never worked in a team of over 40 people.) Respawn simply got too big, says McCoy. "When we started, it was a small team. We were fiercely independent, and we could do things the way we wanted to do. And as the studio grew into multiple teams, and was acquired by EA, some of those things naturally had to change."

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With hundreds of developers”"nameless people on a spreadsheet," in McCoy’s words—creative control is diluted and entrenched. You may spend all your time sitting in a cubicle drawing trees, says Sands, or you’re a producer parsing Excel. You become a cog in a machine. Creative decisions trickle downhill, through layer after layer of corporate obfuscation, while there’s a sense that higher-ups hold jobs they don’t deserve. An art lead at Obsidian, says Coats, might have been the same person for every project, regardless of skill set. “Oftentimes the execs and directors aren't working those hours or are getting paid big, fat bonuses from when the game ships, and you are hoping you won't get laid off," he says. "You're kind of cutting out the middleman: Let's just make the game ourselves and not have to worry about all these other crazy, overpaid execs far above us, and set your own pace."

Return on investment is another familiar problem. As the amount of cash increases, so does the number of businesspeople. Publishers and investors want their money back, and what worked in the past feels like the safest bet: old series, or games similar to ones that came before. If you want to make a queer resource-management space opera, for instance, you better have some profitable examples of that kind of game to back up investment. Players experience these calculations as a sort of echo, which is why a game like Fortnite leaves endless battle royales in its wake.

This self-fulfilling prophecy is familiar to anyone who has worked in the entertainment industry: As budgets increase, creativity suffers, particularly because the product itself must look like it was expensive to make—polished to perfection yet devoid of character. You can't try weirder mechanics or deeper themes or challenging characters, says Coats. It's just easier to make certain kinds of games, the kind several developers independently labeled "comfort food." ("Roblox for adults," says Coats, referencing the metaverse; or as Robert Yang, an artist, writer, and developer of noncommercial games, put it, "the moneymen just want a bigger gun-flavored slot machine.")

This process plays out as you might imagine: One person, says Coats, keeps bringing up the "crazy thing." Then they get a reputation around the studio, and everybody learns: "Don't say the crazy thing." This bureaucracy almost killed some famous games–McCoy says that developers had to force Activision to bench WWII shooters for a new, contemporary reinvention of the Call of Duty series: The result was the critically acclaimed Modern Warfare.

Publishers also interfere in other, more troubling ways. Coats says that while working on Armored Warfare, the publisher, Mail.Ru (now VK) demanded Obsidian replace all but one male portrait from the non-white ethnicities, leading to a “whitewashed” version of the game for Russia. (VK and Obsidian split in 2017, and VK’s international subsidiary My.com took over development.)

Coats says that Obsidian exerted a softer kind of pressure, similar to other studios he has worked at. There were never questions on including white, male, straight, cisgender, and able-bodied characters. But if a character was different, their existence had to be justified so as not to offend the stereotype of a certain kind of gamer. “If you couldn’t convince leads, and sometimes even the owners, the character would be cut or changed to a whitewashed version,'' Coats says.

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These restrictions derive from a fear of enraging a certain kind of customer. “We had to take out all these female characters and take out all these characters of color, just for that region. The publisher demanded it," Coats says. Even for the rest of the world, he says, the team was asked to remove other inclusive content. “There was a fear: Don't offend gamers, don't offend the people who are going to be into this type of game," he adds. (VK and Obsidian did not respond to repeated requests for comment.)

The Future of “Indie” Studios

These are depressingly familiar restrictions. Yet there is a sense that it is easier than ever to escape them. The tools to make your own games are now more accessible, for one. Developers no longer have to spend months constructing an engine; they can build the game in Unity or Unreal, or prototype it first and get funding later. Veterans are in a better position here than hobbyists, having digested the less-thrilling aspects of game development, like budgeting and workflow. The pandemic also normalized freelance and remote work, allowing small studios to procure talent from across the globe. "It's cheaper than having an office," Coats says, gesturing to the Zoom-blurred space behind him.

Yet the major change is ease of funding. "The opportunities that exist right now to get funding, whether it's through venture capital or publisher, are astronomical compared to even five years ago," says McCoy. And why not? Gaming weathered the pandemic smoothly. We know this, since many of us did little else but play games. Venture capitalists were paying attention, too, and consequently invested $4.7 billion in gaming startups in 2020, a 193 percent increase over 2019. The Activision-Blizzard purchase, along with the now constant prattle about the metaverse, only increases the value of smaller studios, who could turn out to be the next Activison. Even with sights set lower than that, games like Among Us, Fall Guys, and Valheim show that indies can compete with AAA behemoths, and if you own the studio that makes the hit you will see a lot more of the cash.

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While publishers remain an option, Gravity Well’s Shiring thinks that VCs are better suited to the industry. They’re looking for breakout hits, not break-even bets, and the risk that they’re willing to take on, he says, is more compatible with people who want to create something new.

It's a stretched comparison, but this influx of cash bears some resemblance to the way Pulp Fiction, and Miramax, made indie cinema commercially appealing in the ’90s, attracting financiers eager to gain a return on their investment plus some sexy cultural kudos at Oscar parties. The point is that at least some of the studios popping up now will aim for a quick acquisition and payout: Call yourself independent to escape the toxic press of AAA, exploit the intellectual and aesthetic kudos of “indie,” yet introduce all the same creative strictures that have driven the developers away from you. “As a noncommercial dev, for me ‘indie’ was about art and politics, about more people expressing themselves through games and exploring new ways to play,” says Yang. Now, he says, “indie” is mostly just a publisher and marketing term to describe less-than-AAA funding.

Meanwhile, funding for noncommercial games—produced with the conviction that they might be culturally valuable—remains dire. It’s a problem tied up in legitimacy, argues Yang: It’s challenging to convince arts institutions that games are worthy of sponsorship. In 2019, he told The New Yorker that it was critical to nurture "arts-and-culture platforms and festival circuits,” similar to film, and convince "funding bodies that games are worth more than their sales numbers."

But the pandemic has stymied this goal. "Live events and in-person festivals were the main strategy for convincing society to recast games as a public good and vital form of personal expression, to try to nurture a different kind of audience," Yang says. “Then the pandemic began. Progress has probably gone backward in this respect." With this scene struggling, Yang sees games continuing their march toward total entertainment business, with AAA studios locked in perpetual cycles of live service games, annual updates, and microtransactions.

On the more commercial front, the big companies own a lot of the best series, and consolidation feels inevitable. In this vein, developers have mixed feelings toward ownership. Of course, developers fear losing their creative control or studio culture, but they also can’t refuse a billion dollars. McCoy gives the example of Double Fine, run by Tim Schafer, as a studio that appears to be flourishing under the stability of ownership, particularly because Microsoft’s Game Pass circumvents the need for massive amounts of marketing. (Though Game Pass’s future benefits for indies are, at the very least, mixed.)

The games’ industry has been defined by breakaways. It was, after all, a group of Atari developers that broke off to form Activision in 1979. For his graduate thesis, Coats made a game for the original iPhone, which helped him land a job at a small studio; this studio was eventually bought by Activison, which has now been bought by Microsoft. For now, Coats is self-funding and will see how it goes. He relishes that someone can’t take his idea from him if he doesn't sell enough copies. “We're making much weirder stuff here," he says. "If we can make our initial investment back, if we can break even on our first title, that's amazing. Making our first title is meant to show that we can make a title, that we can make money off of it. And then that opens doors for our next title. We can pitch a bigger budget to bigger publishers for that. We're taking baby steps and growing."


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