Jun 032012

*In the interest of disclosure – I worked for Laughing Jackal for a few months back in 2007

The news of 38 Studios and Big Huge Games recent closures got me thinking about which factors dictate why some developers implode in the most spectacular fashion, whilst others can continue moving along and even thrive despite relative obscurity.

Reasons for failure are innumerable. It’s far too easy to write a piece about failed studios which featured any (or several) of the following:

  • Over-ambition: “Let’s make this really awesome open-world game where you can do anything you like! Design? Leave it to me, I’m an ideas man! We can worry about the design later.”
  • Under-ambition: “We only make hyper-realistic sailing simulators”
  • Leaders with no relevant experience/Studio as a vanity project: “I love playing games! Of course I know how to run a studio!” This one is a bit like me saying, “ME LOVE FOOD! OF COURSE I CAN RUN A SUCCESSFUL RESTUARANT!”
  • Incompetent owners/managers who’d sooner run a failing company (with a 20+ year heritage) into the ground than sell.
  • A culture of bullying – “If you don’t work 90 hour weeks I’m going to fire you and spend your bonus on hats and keyboards.”

*I could list plenty of other reasons, but I’d rather not spend the next 1000 words or so poking the corpses of long-dead dev teams with tragicomic examples of witless leadership.

What’s more interesting to me is how some smaller developers have succeeded. Looking at Hungry Giraffe last week got me thinking about Laughing Jackal and how similar devs and publishers have survived and thrived, and what this tells us about the wider games industry.

Make no mistake about it, the last 4 or so years have been tough, and in few places has it been felt more than in the UK. At one point the 3rd largest development community in the world, the last few years have seen the numbers employed in games fall by approximately 9% (ironically many left for Canada which overtook then UK in 3rd place). Retail sales have been in decline since 2008.

The games industry today (especially in the West) is part of an ideas economy. If you have nothing new, interesting or different to offer, then rest assured that whatever it is you’re doing, someone else will come along and do the same thing cheaper, faster and probably better.

The success of the likes of Laughing Jackal has hinged an ability to look beyond the obvious and identify neglected areas of the market where there is still strong demand.

Back in the mid-to-late 2000s whilst other companies made a dash for Xbox360 and PS3 (often with disastrous consequences) LJ and its “sister” publisher label Midas (same staff effectively) were licensing and localising obscure Japanese PS2 games and selling them in supermarkets at an impulse purchase price-point. This was a smart move as there were still millions of PS2s in circulation which were effectively “forgotten” by the wider industry. For the past few years their other “sister” company (Ghostlight) has been picking up specialist JRPGs and have effectively become a partner for the likes of Atlus in Europe. This at a time when almost none of the bigger publisher outside Japan consider this “niche” market to be worth their while. Now they’re also making PSP Minis and high-score based F2P iPhone titles.

The likes of Bossa, Media Molecule are also great examples of this type of “blue ocean” thinking. Bossa took the city-building social idea and knocked it on its head with competitive play, awesome B-movie styling and monsters (and won a BAFTA for their efforts), whereas MM made a “AAA” PS3 game, but they did it with a (relatively) small team taking a highly creative approach in a genre which they basically had to themselves (and got bought by Sony and won numerous awards for their efforts). I’m not convinced they’d have been quite as successful if  Bossa had attempted a full-price retail PC title, or if MM had attempted to make a “Halo killer”.

Small and independent studios in today’s game dev scene are like guerrilla forces in a pitched battle: if they go head-to-head with bigger and more powerful enemies on open ground, then more often than not they will be crushed. The secret to success seems to be to find the one piece of terrain that’s unique to you – the space you can defend – and launch your attack from there.