Dev Studios Today

I was just talking with some people about how a Dev Studio needs to be structured these days in order to survive. So many studios are dying – even AAA companies – and why?

Mainly because they exist check to check to make payroll and they have no buffer to handle when milestone payments are late. The larger the title, the higher the budget and people requirements are and therefore the larger the problem if/when a payment is late. They aren’t necessarily overstretched while the money is coming in, but they certainly can’t survive a hiccup.

This is what happened to Factor 5, and has happened to other studios before them.

So what to do about it? How do you set yourself up to survive this?

Well the obvious answer is to have enough money in the bank to survive it. Obviously not many people can self fund an entire title, but having at least 6 months max burn in the bank is a MINIMUM I would expect a AAA studio to have in order to survive cancellations. Sadly not many of them do.

So how do you get that financial buffer? Well, you save for a start. It may make you feel great to hand out massive bonuses to your staff from the last project, but some financial prudence to not do stuff like that until you can be sure you can keep your guys on payroll for at least 6 months if worst came to worst is better. And most of the time if you actually tell your employees that this is what you are doing – doing your best to insure their employment in the future, they’ll be pretty happy about it. Obviously some token appreciation bonus is required but there is no need to blow more than 10% of your income from the last project on that. The rest should go for a rainy day.

And speaking of that – nicer offices are often nice, but quite honestly that doesn’t make better games. Better hardware does. Better bonuses does. Happier developers do. I don’t know of a single developer who’d rather have swankier offices or a larger bonus. Think about it.

And yes, build some slop in your budgets. Make your actual development a potential profit center. Not too much, obviously. Anything over 30-35% and someone at the publisher will start to smell a rat, but using their own money as a buffer against a publisher behaving badly and not paying a milestone on time has a nicely subversive feel to it, don’t you think? Space/Time studios in Austin did this and it enabled them to survive to get another gig when NCSoft canceled their game.

But still – the obvious answer to this is Don’t Make AAA games. But that’s a hard pill for anyone to swallow. If you got into this industry to do exactly that and have a magnum opus inside you that just must come out, that kind of advice isn’t for you. Plus if everyone believed that we’d not have seen Call Of Duty or Halo, so while it’s valid it’s not always correct.

So ok, you want to make a AAA game? Great. Don’t only make that. Make some casual stuff too.

Now conventional wisdom has it that if a developer goes to multiple teams too soon and doesn’t grow them correctly then bad things happen – particularly for a AAA developer – loss of focus, competing for resources and so on. And this is all true. It doesn’t mean it can’t be done, just that it is hard and you’ll need people at the top who know how to do it. New owners at the top all trying to ram their own pet projects through is a recipe for disaster.

So how do you do it? Well, do some casual games as well as the AAA stuff. Stuff with a very fast turnaround – nothing more than a year. Have 2 or 3 going at once – that way you can rotate staff off of a AAA project onto some smaller stuff that is way faster to ship, then they can go back to the AAA team with renewed enthusiasm. Nothing beats burnout faster than changing gears and working on something smaller and quicker to market.

Overlap your AAA titles with the next one, so while Main production is going on for title 1, title 2 is in pre-pro with a skeleton crew. That way when title 1 finishes up main production and goes into beta where it’s mostly programming that is required, all your content creators pile onto title 2 which should just about be ready for them. While it sounds like you have 2 AAA titles going at once you don’t really – you have one with overlap from the next one.

The best way to organize this is to have 2 core groups of developers – a small team of programmers, designers and technical content creators – who act as your pre-pro team. One starts up a project, gets it going to the full production phase and then see’s it through to the end being the last to turn out the lights. When they hit full production, group 2 starts their pre-pro phase, so they are ready for full production as group 1 starts to wind down – they take the brunt of your development team on their shoulders once project 1 hits beta, and follow the same process as the first team does.

This is, by the way, a better approach than separating the development team from the pre-pro team – having one team that only does Pre-Pro and one that does The Actual Development makes for a disjointed development – often what is made isn’t what the pre-pro team was actually prototyping. You need people to stay with the project from start to finish in order to see the vision through – hence the need for two basic core groups.

Diversification is the key to survival in this industry. Of course for this you’ll need dedicated business development guys – people who’s sole job it is to get you that next contract for a casual (or AAA) game. They need it to be ready to go the instant you are done with the last one so there’s no down time and paying for people while they sit around. It brings money in (sure maybe not enough to pay the entire studio burn, but if the AAA stuff goes south unexpectedly you can usually pick up some more casual stuff pretty fast just to get everyone paid while you pick up the pieces of the AAA title and go pitch to someone else – plus your team will be available that much sooner to get back on the AAA title).

Now you’ll note I say some Casual games (and by that I mean quick to market stuff – not necessarily all flash games) – why not do a couple of AAA titles instead? Well, mainly because it effectively doubles your exposure in terms of failure. With this arrangement you can just about absorb one AAA title going belly up. If you have 2 then you will probably end up letting lots of irreplaceable people go if that happens.

Sure, it’s planning for failure and there is some truth to the wisdom that if you plan for failure then it’s far more likely to come, but in this day and age with developers falling left right and center it’s probably better to have contingency planning than blindly imagine it’ll be alright just because you are awesome.

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