How One Game Studio Wasted Six Years Trying To Beat Grand Theft Auto

Hello, One Take Shrier here and today we are telling a story about Tencent, the Chinese conglomerate, trying to take on Grand Theft Auto and not succeeding. This story, today's video, is attached and accompanying an accompaniment to a Bloomberg story that I published this afternoon as part of my weekly column, Game On, which I must say I think it's pretty cool. So, you should sign up to that. Um but also you can find a free gift link to the article in the show notes of this YouTube video, the YouTube the YouTube description. Is show notes okay to say? I feel like show notes is is a good way to describe it. Look, I'm a podcaster at heart. What can I tell you? Show notes it is. So, let's get on with the story. Around the time the COVID started, late 2019, early 2020, just before COVID, a guy named Steve Martin, who was formerly a head of a Rockstar studio in San Diego, one of the Rockstar subsidiaries, started a company called Lightspeed LA that was funded by Tencent. And they had an ambitious goal

to make a um cyberpunk open-world crime game where you played as this woman in this sci-fi version of Japan. And in addition to this big ambitious story and this large open-world vertical cyberpunk city, you could also go around the world and um drive cars and do all the other stuff that you would expect from a Rockstar style game. With generous funding from Tencent, Lightspeed set out to build a team and recruit people and try and to make this game possible. But this was a little tricky because if you are a no-name studio that nobody has heard of, it can be really tough to find and recruit talented people, especially if you're in Southern California and the studio was being built in Irvine, California, which is in Orange County, a little bit south of Los Angeles or a little bit southeast of Los Angeles. Um and so, there are a lot of competitors out there, Blizzard and Riot and Amazon at

the time. And this was a time, 2020, 2021-ish, when the market was actually very, um, worker friendly. Uh, it was it was easy to get these kind of good jobs in that area if you worked in the video game industry. I shouldn't say easy, but far easier than it is today. The the climate has turned around today and today is a very employer friendly, um, climate, not just in the games but all across the country, all across the United US industries. Um, but back then it was a lot harder to find good stuff. And so something that they did in order to woo people away from these giants like Amazon and Blizzard was pay top salaries. And so, uh, they were giving out six-figure salaries to a whole lot of people and they wound up recruiting some, um, really veteran people from a lot of neighboring companies like Naughty Dog and Rockstar, of course, and Blizzard with this ambitious goal. They announced the game at the end of 2023 at The Game Awards with a CGI trailer and they called it Last Sentinel, which was a little confusing cuz a movie had just

come out also called Last Sentinel, which kind of hurt their Google juice, but still. Um, the game looked cool, or I should say the trailer that was kind of a uh repre- trying to represent the game looked cool because CGI trailers, as we know, have really nothing to do other than vibes with the game itself. There was no gameplay shown. Um, a couple years later they would reveal uh a quartet of videos, these four marketing videos called dev diaries that, um, are truly preposterous to watch today. I rewatched them all this week and, um, really was struck by how ridiculous they are because in these four videos it they they essentially are just these very slick, well-produced marketing reels that are showing, um, a lot of the top developers on these game on this game talking about how ambitious the game is, how incredible it's going to be, um, um how hard they've worked, how they put this team together, they're doing the impossible. And it's the type

of thing that like would be marketing for a game when it came out. Except this thing was coming out before they had even shown gameplay footage from the game. And the the comments on these videos, which were hosted on the IGN uh YouTube channel, I guess it was sponsored content for them. Um the comments are are essentially just saying where's the gameplay? Like where is the gameplay? Um and some of these uh some of the stuff in this video, I mean I I recommend you watch these because they are truly absurd. Um there's a quote from Troy Baker, who is a voice actor, and he was working as performance director on the game for a little bit. Um and he says, I'm going to read this quote from him. He says, "This story is a middle finger to tropes. This takes everything you're expecting from a typical action-adventure story and says, no. This one's different." Um which is the type of thing that again is seems a little premature to be uh talking about when you haven't shown any gameplay from your game. And these kind of marketing videos can really get you into trouble when it comes to setting player

expectations. In general, I think a a good motto is to under promise and over deliver. This is a whole lot of over promising in these four videos, which as it would turn out would also become the theme for this studio and their relationship with Tencent. So, over the course of development, this game was not really making a ton of progress. It was getting built, the world was getting built. There's there's there's all sorts of stuff being added to it. It had a lot of time working on it, and there were a lot of people who had a lot of experience and talent um putting a lot into it. But what they didn't have was the team size of a Rockstar. So, they were trying to make a Grand Theft Auto competitor with a fraction of the team size. Red Dead Redemption 2, for example, the most recent Rockstar game up until at least until Grand Theft Auto 6 comes out. That was a team of more than 2,000 people. Whereas Last Sentinel was a team in the hundreds, a few hundred. I don't know the exact number, but significantly less, a fraction of

the size of a Rockstar team. Just by the law of physics, it was impossible for them to live up to the bar that they were promising to live up to. Um so, things floundered, let's say. Uh a lot of people that I've talked to who worked on the game and I've talked to a few, um complained about a lot of things, a lack of vision, kind of um some things not decisions not being made in a prompt manner. Um some people complained about Steve Martin, the founder and studio director, his management style was definitely polarizing. Um and people people had a lot of feelings about what it was like to work at the studio and work on this game. Um it's it's always impossible to capture what all hundreds of people feel when you're just talking to you a sample size, but still it can be a useful representative. Um so, needless to say, this game slipped deadlines a few times, um was over budget, and was generally not making not living up to the promises

that it was laying out. Um by 2026, still had no been no public gameplay. The game had been in development for 6 years at this point. And there was a play test earlier this year, according to people that I spoke to, where the reactions to the game were almost unanimously negative. People were not were not thrilled about it. We're not pleased. They they said it wasn't fun to play. They did not enjoy the experience. Um so, then uh Lightspeed took that presentation. They brought it to China and talked to Tencent, and Tencent also said like we are not we're not thrilled with this. This is not what we expected. This is not what we were hoping for. This is not a Grand Theft Auto competitor. Um so, uh Tencent gave them an ultimatum. They said, "Essentially, you have until July to get this together, to put together a better build, and uh, win us over, otherwise, it's not going to happen." Um, and they brought in other people. They brought in this other team that had been working at Lightspeed to come help out, um, and try to do everything they could, uh, to make a better build of the

game, something that was maybe more representative of their ambitions. And they did make some improvements, improved combat and missions and and some of the other aspects of the game, but it was still pretty clear that like this was not going to hit the bar of graphical fidelity and polish and just kind of like overall expectation that you would ex- that that people would expect from a game that is trying to take on Grand Theft Auto. This wasn't going to be a 90+ Metacritic game. Could have been good. Um, maybe if it had gotten a bunch more time, it could have been great, but over the the scope that they were expecting, over the time frame that they had left, it just was not going to come together. But still, they took it back to Tencent in July, and showed it to Tencent, and while, uh, this and the staff was just kind of waiting. So basically, what happened is Steve Martin and this other guy, Todd Papy, who was the creative director, um, they flew to, uh, who was the creative director who came in? He was actually one of the people who came in during that last 3-month section. Um, they flew to China, met with Tencent, came back, and then there was just kind of this waiting period where the staff of

Lightspeed were just waiting to about 2 weeks to see what would happen. Cut to this week. Uh, on Tuesday, uh, there was a Zoom meeting, uh, and all hands team meeting, uh, where Steve Martin said, "Tencent has informed us that they are not moving forward with this project. Um, too risky, market is too risky, etc., etc. So, uh, where some of you are going to be reassigned, and some of you are going to be laid off and get severance packets." Um, and that'll all be going down in the next couple hours. Um, and then, uh, they all went out for drinks at the the nearby bar, where they were just kind of trying to figure out what was going on, piecing things together. They're all standing and drinking while like looking at their phones and looking at Slack to see who's been deactivated, looking at their other kind of office software to see like who still has a job title, who who might have been cut, etc., etc. Um so within those couple hours it's revealed that uh about 80 people were laid off. That's according to Tencent. Um and other

people are going to be reassigned to different projects. There's another project within the studio that is actually being led by Todd Papy, the guy I mentioned earlier. It sounds like they're working on another kind of open-world Cyberpunk game, which is interesting. Um and there are other projects throughout Tencent that other people are going to be reassigned to. And it's not clear what's going to happen with this game, with Last Sentinel. Tencent is actually saying it's not canceled, which is bizarre because the messaging internally at Lightspeed was they're not moving forward with this project. Um which means that there are two real possibilities at this point because again, most of the people who were working on this game have either been laid off or reassigned. So two possibilities at this point. Possibility one is that they take the assets from what they made with Last Sentinel and put it into put them into another game, repurpose them in some way. Possibly repurpose them into that other Cyberpunk open-world game that they're making, although I believe that one might be set in China if I remember correctly. So I I I don't know exactly how that would work, but I guess it's a possibility. Option two

um is that uh either the game never happens or it's redu- released in some sort of like lower scope version, some diminished version that is not what they set out to make because again, most of the people who were working on this game are either laid off or working on something else. They are no longer working on this game. So for Tencent to be publicly saying it's not canceled, that's a little little misleading. Um I'll read their statement what they sent to me, which is that they are planning to shift the creative and development direction of Last Sentinel to meet player expectations. And they said Lightspeed LA remains open and continues to build games. Um so, uh essentially that game that they have promised, the Grand Theft Auto competitor, is not going to happen. So, the um the if if you heard uh Troy Baker's promise that this would be a middle finger to tropes, unfortunately, we will not get to see that middle finger. That that hand will remain closed. The finger will remain unseen. Um this is kind of it's this is an

interesting story for a lot of reasons. Um and I think there's some kind of like personnel issues and management problems that I think are pretty common in the games industry, but it's also, I think, a cautionary tale because it's yet another example of something we've seen a pattern of over the last five years or so, which is people from a big-name company like a Rockstar, a Blizzard, a Riot, a Bungie, um going out on their own, starting a new studio, getting a bunch of money from some sort of investor, whether it's a Tencent or a NetEase, like a big Chinese company that wants to invest in the United States, or um VC money, um venture capital money, private equity money, any sort of kind of money that is like not coming from the games industry, a traditional source in the games industry, is investing into these people because of the prestige of the companies that they used to work for. And um they're they are starting these new companies, and most of the time things do not work out in some way or another.

A lot of these companies that were started around the same time as Lightspeed have either not released anything or shut down or released something that turned out to be really bad or couldn't reach players. Um and the results have been pretty catastrophic for a lot of people, for a lot of staff, for a lot of people who are investors. Um a lot of people just lost money on these initiatives, and we've seen it at a high level with a company like Dreamhaven, which was started by a whole bunch of former Blizzard people including co-founder and CEO Mike Morhaime, and they released two games that um I thought were kind of cool, but like never really reached the commercial um performances that they needed them to. Um we saw it with Frost Giant, which was another ex-Blizzard team that made an RTS called Stormgate that really was not did not live up to player expectations. We saw it with a bunch of ex-Riot people, they made a game called Supervive that also did not quite hit. We've seen it over and over again um in this space, and this is yet another example. And I think there's there's some good reasons behind this

just being a difficult thing to pull off. Um I think there are a lot of reasons why a company started by like ex- like former people who worked for this big um a prestigious company can't seem to recreate their success. Um a couple of reasons that come to mind um one is I think that when you have too much money, too much investment, that can be really difficult. Um in the case of Lightspeed LA, they had hundreds of millions of dollars. Um and I think having that kind of money can put you in this place where you feel like you are so safe and secure that you can just take your sweet time doing whatever you want, and you can be as ambitious as possible, and and set out to do all the things in the world even if realistically that is not actually all that possible. Um and sometimes that money comes with strings attached and you don't even realize it. Um that can it can really be dangerous having hundreds of millions of dollars behind your studio as Lightspeed LA did, especially if that hundreds of millions of dollars does not equate to having thousands of people because you

are instead hiring a bunch of people in Southern California and paying them top salaries, which if you go back and check my my previous videos about like why games take so long and um why games cost so much, again, that's all labor costs. Um despite what you might see online, it is not consulting fees or hiring hundreds of HR people, which is truly so ridiculous that uh I probably don't even d- need to address that sort of thing, but it is labor costs. Labor costs are are the reason that games cost a lot of money. Um So, and then sometimes it's also like you don't have the resources that you expected. When people who are working on Rockstar on Grand Theft Auto need something done, whether it's something small like, "Hey, I need access to Atlassian's whatever, like this this piece of software." Oh, okay, cool. We have a license. Um that that is much easier to just immediately pull off in a big organization than it is at a startup. Um could be bigger picture things like having infrastructure for

I don't know, testing or IT support or networking or other just kind of big picture items that you need. Um and those are the things that you can kind of get accustomed to and then come over to an a startup, an indie studio, and realize like, "Oh my god, I don't have access to this stuff anymore." That's adding a whole bunch of time to our schedule. Um could be just that like the market has evolved. And I think there's this problem of a lot of these studios just kind of like not just the market has evolved, but also the production apparatus has evolved. And a lot of these studios are run by people who are in their 40s or 50s who are used to things just getting done in a certain way because they've been working in the video game industry for 20 years and they're used to players reacting a certain way, they're used to the market reacting a certain way, they're used to production operating in a certain way. And getting accustomed to the modern era, I think can be really difficult for those people. Things have really changed and sometimes veteran staff have not changed with them. And I think I I mean anyone who's worked in at really any

office world, any sort of corporate world for a significant amount of time, more than a 10 years, let's say, I think has grown accustomed to doing things a certain way and can be resistant to change even when that change could really help them. So, this is a very common, very human thing, but it's something that really stands out when you kind of like leave your your home ground, your familiar territory, and go out to start something new. Um so, yeah, there are a lot of reasons that this sort of thing can happen. Um but, uh and and there are a lot of kind of again, internal drama stuff that um I can't I I've heard some kind of bits and pieces about all that stuff. This isn't I I'm not doing some big, huge investigation into Light Speed the way I have other studios where I talked to dozens of people um working who worked on the game, but um I've heard so so, I'm not comfortable like sharing some of the stuff I've heard cuz I haven't corroborated it, haven't confirmed it with 100% certainty, which by the way, uh future video, I think, uh a little bit of a teaser, a little foreshadow

here, future video will be about how I do stories and why often times I don't report on things because I haven't confirmed them. I don't know them with 100% certainty, and I'm not going to report anything unless I know it with 100% certainty. Anyway, um so so, I I can't get into all to all the nitty-gritty details, especially surrounding management issues and just kind of like polarizing style and that sort of stuff. But, one thing I can say is that I think if you are starting a new studio and starting a new IP and starting a new game that is big and ambitious, um you might want to show your work and kind of prove yourself before you start making a dev diary where Troy Baker talks about how this is going to be the best story you've ever seen, and uh it's going to be a middle finger to tropes that you've seen in sci-fi games before. Um I think maybe show your work instead of telling people how great it is is kind of a good philosophy because there's really nothing to gain about getting people really excited for something if you can't actually deliver on that, as was

the case with this game. But, sometimes in the video game industry, you have a lot of people who are really good at selling things, really good salesmen, really good pitchmen, um who can't necessarily execute, but it's pitching and hyping that will get you the big money, the big checks, especially during that time around COVID when the video game industry was frothy and investments were everywhere. A little tougher these days. Have a good weekend, everybody. Remember to check out the Bloomberg story linked in the show notes, and I'll see you all next time.