How to Run a Studio Without a Surprise Hit

[Music] so this is a this is a series of three microtalks centered around a theme and that theme is how to run an indie studio without a surprise hit i'm christopher langmeyer i'm the creative director of an enemy hug interactive and these are my fellow speakers this is teresa duringer she's the ceo of templegate's games and this is tandy short she's the captain of kid fox games and we don't have a lot of time so i'm just gonna dive right into it if my slides will advance [Music] which they aren't click on that one okay cool all right so whatever three studios have in common like why are we all in this panel together so what we are is we're all about the same size we're all about the same age we've been around about five years and we've all got 10 ish employees but most importantly we don't have a like runaway hit that is found in the backbone of our company's budget and runway right like none of us have a product that has just moved totally a totally insane number of units out of nowhere officers are like very one foot in front

of the other but we've still grown a lot over the last five years and i want to talk a little bit about how so i'll start with my microtalk which is about how to get client work and balance it against original ip development so now i personally only have about seven minutes or so so if you're like watching this on the vault later set it to like half speed but if you're here sorry but seriously my caveat is i don't actually have the answers right like i'm going to give you a whole bunch of things that like are about our experience and what i've learned but they're very contextual to us like for example we were our studio was founded in canada operating in different countries is different different clients are different you and your team are going to be different than me and my team just because something worked for us doesn't mean it's going to work for you that being said if i could go back in time five years and talk to myself before i started the studio there's a handful of things that i think are pretty self-evident now that i'd love to tell me and i can't do

that but there might be like future me's in the audience so i'm gonna say these things to you so a bit about anatomy hug interactive my studio so like the rest of the studios we've been in business for about four years um and we've grown a lot through that time period and through that whole time from the first year to the fifth we've spent fifty percent of all hours company-wide on internal ip development and that's a direct result of the fact that we've done a lot of client work um that's obviously really great but what are other reasons why you might want to pursue this way of running a business okay you don't have you can't hide from the business stuff like you actually have to be serious about this like you have to do like you actually have to incorporate and you actually have to you know set up legal agreements you actually have to have real negotiations and you have to do accounting like if you're just hiding in a basement for like a bunch of years working on your first game it can shelter you a lot of them from a lot from those business realities you're gonna really need to know how to do once you've shipped a title and with that reliable income stream

that is not from product you're gonna be able to hire a lot more diverse team overwhelmingly the people with free time and capital are english-speaking north american white men people that look like me and the other business partner who was involved in this equation many people can't work speculatively some people need a stable job no matter how talented or driven they are if you can offer people real employment while you're running your studio you're gonna have access to a much larger pool of talent and it's gonna make everything a lot easier so now before you actually start your studio before you do anything at all there's just a few quick tips i'd like to give you um first these two things are really important if you can do it one have an entire year's worth of runway before you begin even if you don't make a single dollar in the first year you should be okay try and plan around this you might not need it for all 365 days but you'll be really grateful that you had it two if you are currently employed get credit now this seems super evident to be in retrospect but it is way easier to get credit if you have a stable job than if you are an

unemployed person who owns a studio with no value right like try and do both of these first but third and this is my fir most important takeaway from the entire talk is get a mentor right my previous statements about like i don't have the answers is because my advice to you is not contextual right like you're going to find someone who's in the space you're in who's in the physical location is who's in who's doing the kind of stuff you want to be doing who's bigger than you are someone who's already gone through the growing pains that you are hopefully going to go through that person will be able to give you much better advice than anything in this talk i can give you if you remember only one thing from my talk let it be this one point so now we're getting into the part of the talk that arguably everyone cares about um and that's how do you actually get client work and i'm gonna begin with a spoiler all right this is an age test okay it's not this spoiler either what's the spoiler this one there's no magic wand there's no secret trick there's no like directory

of client work that you can go onto online that only me and a handful full of people know about there's no like list of potential clients there's no one trick that game devs hate right like there's nothing like that it's hard to get client work and it's hard to do client work now with that in mind how do you actually do it even if it's hard so the first thing and people hate this one is always be networking i hear a lot of people grumble about this and if you manage to succeed without doing this you are a unicorn and you probably don't need any of my advice you're gonna need clients you're gonna need employees you're gonna need friends you're gonna need allies you're gonna need publishers you need everything under the sun and you don't know what you're going to need before you get before you need it these people are going to be your future clients they're going to be your future partners they're going to help you ship games they're going to help you do work they're going to give you money networking puts you in contact with other people and people matter grow your team provide solutions not labor what i mean by this is become a full service outfit try and avoid single contributor

contracts what you want to be doing is you want to be pitching things like features or ports or full games you want to be offering something that there isn't an obvious substitution for now how do you get those ones is you want to be climbing the ladder i know i just said go abroad at the beginning and network like literally all the time what we also want to be doing is your clients are overwhelmingly going to be organizations that are a little bit bigger than you really big orgs sometimes you'll get work for them but there's a ton of other people in the mix to get those jobs and organizations and studios that are the exact same size as you you probably can't hire them so remember they probably can't hire you there will be exceptions to this but generally speaking always be trying to target the people who are just a bit bigger than you and if you continue to grow year over year you're going to be meeting new members of those ladders of wrong so you're going to want to meet a whole bunch of people one year and then next year the group after that also don't always look for game studios look for games adjacent clients non-games clients the advantages of these are manifolds

being a direct contractor means you can command better rates there's not an obvious substitution to internal development and just everything's everything's easier if you can get these kind of contracts to do they'll make your life a lot more straightforward this one also seems pretty obvious to me but i haven't fought hard enough for it and it's really hurt us in the long run is get attribution you want to start from a point where your game studio's name is at the very beginning of the game you're working along with all of the other studios on it you're not going to get that but that's going to be the point you want to start in negotiations and work your way back from them attribution lets other people know what you've done and that's really important for getting future work and we've been bad about that and it's hurt us however we've been really good about this one and i know this seems pretty obvious but you get so much out of this deliver on time and deliver on budget be involved in the project estimation and get good at it people are going to tell other people that you're good at this and this is completely invaluable in this industry very few people are good at this and it's going to get you a lot of work also working on your own games it's

really good at being good at this like knowing that you're going to launch your own title on a particular timeline is really going to help you so how do you balance this against internal development now keep in mind that all of the other stuff i just said is going to seriously burn you out creatively i personally struggle with this a lot development on our game suffers from my focus on business issues and i'm not entirely like clear on how i'm supposed to compartmentalize those just be aware that getting delivering client work is going to take a lot out of you and is going to take a lot out of your focus on a creative endeavor like launching your first game let me know how if you figure out how to solve this i still haven't figured this one out this lack of focus has really tangible impacts on your internal development don't assume that just because you have 50 of the time that you're going to make a game in half the time it's probably more like three times working on something a lot gives you a lot of deep focus and allows you to involve in deep collaboration which really improves your productivity if you're pr if you're like switching between different games like clients

games and your games you're not going to be as effective if you have a timeline that says it's going to come out in a year it's actually going to be three now fair beans i stole that from gwen phrase talk it's really good um three steps for finding a successful industry if you like what i'm saying watch that one too now to do this work and this is pretty obvious in any devland but you want to have people who can wear a lot of hats like just because someone can do a bunch of things on your game you might need them to do stuff for clients that have nothing to do with your game maybe they have a graphic design acumen maybe they have like 2d animation skills but you're making a 3d game you're going to people who can wear a ton of hats to make this work and last but not least protect your team from sales thrash it's going to be really tough you're going to be out there trying to get new contracts don't expose your team to all of this you're already stressed out about it you don't need your 3m 3d modeler panicking about whether or not you got that contract be somewhat transparent so they understand the health of the studio but every single potential client doesn't need to be your employee's problems

anyway i'm running out of time and i hope this was brief but helpful and it was really tough for us to do this and i'm sure it's going to be tough for you so if you want any help reach out to me on twitter or talk to me after the talk i'd love to get a little bit more in the weeds on this i just don't have the time thank you so much all right um i'm theresa derencher and i'm going to speak a little bit more towards the specifics of how to run a studio without a surprise hit using hardware and ip partnerships so we've all heard about the indie mega hit darlings the hotline miami's fez's bastions and braids but i would venture that at least some of the people in this room are not working on the top five grossing indie games however unflattering it is to address the subject it's worth being honest about the truth is that most indie games

are not household names mine included um so well it's really obvious what to do if you have a total hit which is keep at it awesome or if you have a total flop you know maybe maybe do something else there's a question of what do you do if your game is somewhere in between and it's a really tough question it's kind of embarrassing to ask and um it's a question i've had to ask myself with my first indie game canon brawl it made about four hundred thousand dollars in sales and about 130 000 in contest winnings it took two people three years to make minus steam's cut it's about 70 000 per person per year it's not nothing but it's certainly not time to buy a yacht so where do you go from here if your game is kind of like somewhere in between after a big launch it can be really tough to get going on the next thing or

even know what that next thing is but that's the most important thing for you to be doing right at that moment so you just have to pick a direction and for me with canon brawl we got started because it had won a contest so we found another contest and that was the oculus vr jam and don't worry this talk is not going to be about contests but it can be helpful to identify one thing which is who has too much money and not enough video games well not vc for a lot of economic reasons i can't get into in a 10-minute talk funding is not usually available to small creative studios like ours um usually but there is an exception and that is with speculative hardware so we saw with vr there was a burst of new funding in the scene but we've seen it before with other kinds of hardware like the ps vita and the ouya and our team's been pretty

bullish about this speculative hardware we've developed for gear vive rift tango starbreeze even siftio and while it can be really fulfilling to develop for this exciting new medium and you're jumping into a community that's really lovely you're all figuring it out together and it feels like you're laying the tracks for the future i would say there are some practical reasons to run away the sdks are changing out from under you there are no standards but more importantly there are no users so to give you a sense of my first game in vr this was called bizarre and it made six thousand dollars total on steam at least that's gross revenue gross being the operative word there so without money at this point i would say never develop for speculative hardware except if there's money so

if you have a new platform coming on the market especially one in an arms race between hardware manufacturers or platform interests where they're pouring money into it and they need content to show off the product there is going to be some vc funding for games content that's going to make it look good um you're also going to see grants that are coming directly from the platform stakeholders themselves like we've seen with the oculus vr research grant for 250 000 recently um in addition to that you're going to see uh other companies that want to expand their brands into this new platform space the new hotness so we saw airlines tv shows approaching our company to see if we could um help them with that so if you've taken the risk of becoming an expert on a piece of hardware where there are relatively few users so relatively few developers you're putting your name in a kind of small hat for winning contracting bids bazaar had absolutely abysmal sales but

it put us on the map as a studio capable of vr development and that's how we were able to get the funding to make race for the galaxy in vr from oculus or to do the team with discovery channel and do the app for their um content on rift and gear now you can't always know if that cat is going to the hat not the cat is going to exist uh you can take some educated guesses and look and see who's pouring money into the platforms but i'd say the biggest way to mitigate your risk here is to keep your projects to six months and less that way if the hat never shows up you didn't risk it all so never develop for a speculative platform except if there's money and also except if there's ip so there's a common catch 22 if you're a studio interested in getting involved with ipwork is that nobody wants to risk their evergreen ip on an unknown developer so it can be really hard to get that first one going

but if you can approach an ip holder with a platform that they're not getting their door knocked down on there's not as many competitors you can get your foot in the door and build a relationship with them and that's how we've gotten some really top-tier board game ips at our company this is how we got ascension they've already got a phone app but we were able to approach them with a vr app and get that going and once you have one ip you can really use this to swing from one to the next and the next especially for us with board games because many designers have designed more than one game publishers have published more than one game so it really helps your flow so we started with ascension vr then we made race for the galaxy roll for the galaxy and now we're on charts of infinity which is in beta this week if anyone wants to give feedback on that um and these are all board games on the phone they are all share the same set of features they're all in the same genre so board games have a really interesting property

which is that they come with expansion packs and these are these delightful little chunks of work that are super flexible on your schedule and they have a really predictable return we find 15 percent of our sales our base game sales will re reap back with our expansions your superpower as an indie studio is you are a unit a team of people who work really well together especially on small projects so you can get a project done faster than a pm at a triple a company can even get the sign off on the head count to do similar work so leverage that move around your projects on your schedule so that if someone comes to you and they have something that needs to get done yesterday you just drop it and drop what you're doing and you say yes we can do that and that's what expansions are really good for that um but any small chunks of work will will work for that also if funding gets delayed for a project then you can move those expansions up in your schedule

so once you've found um a genre it's helpful to stick to it you can line up your next projects you can see once we started doing board game stuff on the right we started getting more and more projects just flowing from one to the next the pink ones or the projects our studio has done also if you stick to a genre you're going to get a lot more return on investment for your tools so doing board game type of tools we have a lot of ui tools where we can do a lot of transparency icons and careful attention to draw order in 3d space you're going to get more value out of that in your second your third and fourth title so you also again want to think about who has too much money and not enough video games sometimes that's your players there's a big mistake i made with canon brawl which is it didn't have an existing genre when it came out there wasn't really a player base for a real-time artillery game so we had to work do the work of not only building the game but building a community for this kind

of work not the same thing with board games so you can just deliver something that the community is looking for and it's a little easier here's a picture of where our money comes from as a studio you can see we've moved from the longer project to the short the shorter ones that are about six months and we make a lot of our money on direct sales but we still supplement that with grants work for higher partnerships and contests and race for the galaxy has been probably our top seller um it's one of the top card games on ios but we've also had plenty of failures the point of all this is that you as an indie studio can do what you want whether that's working on a kooky piece of hardware or working on a kooky game idea but if it doesn't if you don't win the lottery with that you you're not out of the game you just have to balance out your workload with some safer bets we have this idea of what it is to be indie to sometimes create this beautiful glorious magnum opus that takes

seven years to produce and that's very valid this is another way to be indie it's definitely not that this is being nimble it's reacting to opportunities and staying alive to make those projects that you do love withstanding successes and failures hello um i'm tanya x short i'm the captain of kid fox games and i'm here to present um i guess maybe a more traditional idea of what it is to be an indie and that uh we still haven't managed to pay ourselves 70 000 a year that sounds great but we are scrappily clawing our way up every year increasing our salary through increasingly successful games hopefully you might know us most through boyfriend dungeon we also last a week announced we were going to pair with bay 12 games to publish dwarf

fortress and all of this does come back to a strategy that we settled on about five six years ago when we started we weren't sure what we were doing we were just sort of working together on trying to make a studio together that would survive that we could become better designers together um oh the the formatting is not great but it's fine um we want to make some of the best games in the world and in order to do that we have to be happy in order to be happy and make better and better games we have to survive and so when it all comes down to is every time we ship a game we're already in the middle of thinking about what is the next one and how do we help the next one be better than the last one not just better in terms of i don't know review scores or sales or whatever but better in terms of how we make them and how we feel proud of them so overall we have made a lot of choices that many would call maybe uh fiscally conservative

safer less risky business practices um now kickstarter doesn't really fit into any of those goals in theory in theory you know it obstructs your quality of life it doesn't let you really practice your craft and you can't sustain a studio on it that's for sure um but this actually does fit into our underlying strategy of being opportunistic and by always trying to control our own destiny so what i mean by opportunistic is the our very first game transition is a really good example our first game was shattered planet and it was a mobile and pc game and we were approaching beta and the deadline was coming up fast we were a bit behind it would end up getting delayed and our advisors who had helped fund that initial seed of the the game were getting very nervous but i heard about this cool new opportunity called the square enix collective and it was nothing at the time it was just a press release on gamasutra

but i cold emailed them hey can i pitch you something and they said yeah if you send me a good pitch in the next 48 hours um so i actually set aside shattered planet our advisors are freaking out what are you doing you need to focus on beta and instead i came up with the initial idea that would eventually become moon hunters and the reason i did that was because i needed the team to know that i believed in them more than just the success of one game that we were more than that that we were multiple games that we were going to survive and that we were going to have more beyond that no matter what happened to shattered planet there was going to be a continued kit fox so this sort of bleeds into the fact that we are very opportunistic about figuring out how our next project is going to find funding and how it's going to help us survive even if it doesn't sell very well ends up with us maximally diversified which absolutely impacts our strengths and weaknesses as a studio we're sort of maximally like i said we

are maximally diversified we've been around almost six years now and we've released three major projects we've announced three more two of which we're publishing and we have another thing to announce actually uh you'll get a sneak preview of that at the eg experimental gameplay workshop on friday if you stick around but please don't announce it i don't know it's supposed to be unannounced um for another few months and we'll see how that goes um but the point is that we we are now having two games simultaneously side by side in production our own ip for pc and console um despite the fact that none of our games have sold incredibly but it's because we've diversified in terms of having the number of titles and the variety of titles uh that we actually started with a core which we think we can think about in a few different ways um you know steam has been our core the whole time um but system driven our role-playing games is the core of what our audience expects from us and so we think all of our games have something in common that appeals in that way um so whether you know it's it's uh dwarf fortress or or moon hunters or

sort of boyfriends you're still gonna have a good time with one of our games if you're into system driven role-playing experiences and by having that core we can we can help move them from game to game more easily if our social media is all connected so rather than having a moon hunter's twitter and a boyfriend dungeon discord we just have a kick kit fox twitter we have a kit fox discord and we have the wonderful victoria tran running that for the last couple of years um it was driving me mad for the first four and she does a way better job so i'm really glad we have her but the fact is that we've centralized it as a strategy because even though random gamer number five doesn't really care about kit fox there's no reason for them to care about my brand um they're more likely to move on with us to the next game if they bond with us as a brand but also they get to know us as people so rather than getting really attached

to one game and one game's mechanics which hopefully they also enjoy the game they actually attach to us and want us to succeed with our next game and we have seen that as possible between our twitter and our discord as they grow and all of that is possible because we've chosen to self-publish at every turn and again this is one of those uh if you can get away with it absolutely try to do it because in the long term we benefited so much from cutting our own salaries and doing our own publishing and learning our own marketing um all of our games can be found in one place on store fronts whether it's steam or itch or nintendo you can go look at kit fox and see our games and there's no other brands competing with us for that airspace you know devolver isn't there saying this is a devolver game which you know i respect them but i'm glad that when you go there there's no distractions you can just see what are the kitfox games and speaking of fans being able to find us and and for us learning how to talk with them and bond with them

oh no that was incorrect um we also sort of identified this chain of helping them grow to engage more and more deeply with not just the the the game and the ip but also just sort of bleed their own identity into uh being bigger and bigger fans of us and a lot of them come into the purchase step of course but by helping figure out like how do we grow our fans to to be super fans um we've spent a lot of energy for example having pax booths even though we don't in on paper have any good reason for that we we feel very deeply that that is part of our success over time so kickstarter is part of that uh decision to try to become to make better and better games because it helps us centralize our fans it helps us cement our brands and it helps us self-publish and so even though that money will never sustain us in the long term uh it does in the long term serve all of those uh corporate uh sustainability functions um i thought i

would take a second to just actually be a little bit more transparent about our finances uh diversification you can see in the two charts you have the development costs and the revenue of our games they're they're never quite the same there's a canceled project in there that cost us money but actually maybe paid in some way and i'll i'll talk about that in a second like early on our payroll was our primary cost um absolutely but then the next year so this is 2015 2016 you can see there and then the next year because we had ship moon hunters and it did okay we had to start paying back loans and royalties and this was all very complicated by the fact that we had income coming in from multiple titles as well so trying to calculate like what was actually going on with our bookkeeping was more complicated but that's okay now what i wanted to really note here was that we talk a lot about game sales and you you probably got the hint from from the people talking here previously but uh you know that's that's the sexiest money but it's not the real money that a lot of us live on for our first million dollars game sales

were only fifty percent of that we had kickstarter we had some um well i did i call them investments yeah investments uh and we had kickstarter oh yeah and what if the i can't even read it's too small on my thing um i work for hire right um yeah we did some contract work that was very exciting um and it helped us survive long enough to be able to use game sales as our primary motivator even last year we did some work for hire that i can tell you about later so we haven't technically done all of these revenue sources but it's not that much of an exaggeration we get our money from everywhere we can and we stuff it into our bank vault and then at the end of the year we look and see if we can pay ourselves just a little bit more and maybe someday we'll reach industry average and that'd be great and just as a side note we we did talk to a few of the other studios in montreal and the top three they did get their first million dollars from sales but the bottom three did not uh one did very well on kickstarter some years ago uh

one got most of theirs through uh government which i'm not sure if that's a grant or a loan or what's going on with the government but yeah um and then one had their first million dollars just straight from a publisher the point is there's no one right way but if you ask yourself what your goals are for yourself as not only as a studio but as a creator then you can see where your studio should be going from here and how to get there but it matters what your goals are different studios have different methods different constraints there's never one right way to run a company and anyone who claims otherwise is trying to sell you something thank you you