Why Video Game Studios By Big-Name Developers Fail So Often

Hello, One Take Shrier here. I've been thinking a lot recently about game studios started by big name company veterans that have failed. And so I want to explore a few of the reasons that that happens. You might have seen stories in recent months and years about game companies started by people who used to work for big name giants like Blizzard and Riot and Rockstar starting and they started these companies and things did not work out for one reason or another. In fact, it seems like the majority of the time those situations don't work out. And so I want to explore a few potential explanations behind that happening and even talk about a successful story and how those folks do that problem. I've been especially thinking about Lightseed, which was a company started in Los Angeles by Tencent. still around, but over the summer they laid people off and quote unquote uh changed the vision of their

game Last Sentinel, aka it it'll be quietly cancelled if it's not already. Um, and uh which you might remember, you probably don't, but it was announced with the CG trailer in 2023 at the Game Awards. There was like a dev diary attached, or was it 2022, something like that at the Game Awards and um essentially went nowhere. um ambitious big AAA project started by these ex rockstar people. And so yeah, let's explore a few reasons why this might happen. Um a few things come to mind. One is that when you are going from a bigname company to a more independent company, even if you have money behind you and a company like Lightseed, which was funded by Tencent, had hundreds of millions of dollars behind it, you still might not have the resources that you used to have. um which doesn't necessarily mean money, it can also mean support. It can also mean infrastructure. It can also mean

experienced support staff. Um, for example, if you start a new company um with a bunch of your talented game developer friends from places like Rockstar or Blizzard, um, you might not necessarily have the person who knows how to get in touch with the right people at Steam in order to make sure that your game is in the right database and is being maintained in the correct way and that has access to all the resources you need on there. You might not know exactly how the certification process works when you're trying to ship on consoles or even smaller stuff. You might not uh have uh the person to call who knows how to get your I don't know Jira uh Jira updated, your Jira licenses going or your Photoshop licenses. Make sure that there are enough Photoshop licenses for everybody. You might have the kind of marketing experts or cinematics experts. If you worked for Blizzard, you could rest assured that when it was time to announce the game,

you had an entire team behind that. You had cinematic trailers in the pipeline thanks to your massive cinematic team and so on and so forth. This can get really granular. And I mean, just speaking in my own life, I work for Bloomberg. I have for uh a long time now, 6 and a half years, and I've grown accustomed to certain things that I think if if for whatever reason I'm not planning on going independent anytime soon. But if I ever did, um there would be things that I would have to really get used to. For example, Bloomberg has a built-in uh um interview transcription tool where I can upload an audio file to the Bloomberg terminal and it will produce this kind of machineenerated transcript for me. It's not uh perfect, but it's a very helpful baseline. And then I can listen to the audio and go through to make sure that I'm quoting everything right. But it's useful to have that kind of baseline. Um or for example, if I'm uh booking travel through Bloomberg, we have a tool Concurrent. It'll actually like automatically look for um potential lower rates every so often. So if this

hotel I booked happens to have a lower rate in that same date frame, it might rebook it and and give me a lower rate. So there's a lot of tools that you have when you're part of a big organization that you might not have when you are go going independent and that can have a big impact on your production speed and the quality of your game. Another big thing that happens is when you spend a lot of time at a big studio like say Blizzard um you kind of learn one way to make games and you don't really think about making games in another way because that's the way you're used to. And that can mean a lot of different things, but one that comes to mind because I think it's the most common is this idea of having plenty of time to polish something until it is close to as close to perfect as possible. And that was always the thing at Blizzard, right? Blizzard was always well known and still is well known for releasing games that are extremely polished, bug-free, or as close to bugree as possible, very slick, full of lots of little details. Um, if

you uh everything from just like little hidden Easter eggs in the corners of maps in Warcraft to like uh units uh having hilarious voice lines if you click them over and over again, little details that just make their games really pop. Um but if you are used to that and you are coming into an indie space uh though that method might not translate and in fact something that often happens is that a game company might be used to taking four or 5 years to really polish a game when the game they're working on might actually be more or better suited for putting out on something like early access and releasing in an unpolished state. or um and this is a good example uh of a kind of a notable failure in recent in the last year or so. If you are coming from uh Respawn and Apex Legends and making a game called High Guard and your kind of way of approaching that game is the same way you did approach Apex where you're keeping it as quiet as possible until

it's ready to go and then you're going to surprise launch it and take the world by storm. um you if you're accustomed to that old way of doing things, you might not realize or you might not think to kind of adapt to the new market and the new reality. Um and of course, Apex Legends in 2019 when it was surprise launch launched in a very different time than Highguard did in 2026. And we all know what happened there. Hygard did not turn out well. There were a variety of reasons behind that, but one of them was that Highguard did not start off with betas, building a community, starting a Discord, and kind of the the traditional way that you might or not traditional, the new way that you might um approach a multiplayer game in 2026. And so, if you are kind of an old school veteran at one of these companies, um you've worked for one of those companies for a very long time, you are used to a certain way of doing things. And it can be very hard to change that philosophy when it has been calcified and it has led to success. Um, kind of on a similar note, another thing

that happens is that when you work for these big companies, there's always this kind of feeling that things will work out, that things will come together. And you hear this often. Um, I've talked in the past uh when I've been reporting on Boware about this concept of boware magic where it feels for a long time like things aren't coming together and then in the last few months it'll coales thanks to boware magic, thanks to putting in lots of hours thanks to um just a whole lot of I don't know elbow grease. Um and then things do work out some of the time at least or or a lot of the time in these big companies cases. Um uh uh and a lot of uh leaders at some of these big companies preach this idea that like you have to have faith. You have to trust in leadership. You have to trust that this is going to come together. If you've never worked on one of these big games before at a company like Bware or Rockstar or Naughty Dog or wherever else, you just have to trust that it's all going to come together because a lot of us have been here for a very long time and that's what happens. But here's the thing, those companies have a giant cushion. They have

financial resources. They can throw money at the problem. They can throw time at the problem in some cases that if you were going indie, you might not necessarily have things might not come together. Sometimes when things come together in the AAA world, and that's not always too always the case, too, but but it is often the case as we've seen with some of those bigname studios, um it doesn't necessarily mean that that same mentality and philosophy and strategy is going to be applicable when you are going off on your own. You do not have those resources. behind you. Another problem on kind of a similar note is trying to do too much. Um I think a lot of times if you have come from a big studio with these kind of grand ambitions behind you, you might come in and just think that you can do the same thing even if you can't even if actually scope is going to be a problem here. Um Last Sinel and Lightseed might be a good example of this because that is a game. So, Last Sentinel was going to be this kind of cyberpunky openw

world game set in this futuristic Tokyo. Um, and the idea of it was that it would it would have this humongous scope. It would have this a whole lot of things you could do. It had a a story. It had an open world. Um, the idea, one of the plans was to have it so you could I don't know hijack cars um Grand Theft Auto style. You could explore this open world. You could also do missions. It was very very much grand ambitious type of game. Um and uh with that kind of scope I mean uh you're putting yourself at a lot of risk. There are a lot of var there there are tons of variables that you are kind of [snorts] approaching um without trying to think of it this way. If a video game is like a an equation an algebraic equation um uh uh like x + y = z or x plus y a plus b plus z plus d plus e plus fals z let's say. Um, and if you try to change all of those variables at once, that just way increases your

risk potential for the project. Um, speaking of Cyberpunk, I mean, Cyberpunk is a perfect example of that, right? And the perfect example in many ways of some of these problems, even though it was not made by an independent studio, it was made by CD Project, which had already had a lot of success with The Witcher. But in some ways, it's the same sort of thing where they spent a long time iterating on The Witcher and working on The Witcher and getting really good at making The Witcher. And then for their next project, they decided to do something that was completely different. um instead of a thirdp person fantasy openw world action game um where uh the landscapes and maps were horizontal and big and vast and you could ride through the open worlds on horse and um just everything was kind of tailored for this specific type of game. um they decided to make a firsterson uh sci-fi verticalbased city-based GTA style carfilled um game that just changed up so many of the variables that it became really

difficult to work on. That game had a lot of issues. I think it the biggest one is that it shipped too soon. But um I think that changing up all those variables rather than changing a few here and there can lead to problems. That's not to say you can never do it. And there have been examples of big success in the past. Um, uh, Guerilla Games went from the Killzone series to Horizon Zero Dawn and found a ton of success despite the fact that they completely changed everything they were they were doing and everything they'd done before with that game. But still, it can be a problem. Another problem, lack of a strong creative director. Um, I think that uh, Last Sentinel and Lightseed ran into this problem. um in part because uh the people who ran that studio came from Rockstar Games and at Rockstar there's kind of this um really interesting uh kind of multi- visionary approach where there are a lot of people at the top of the studio, the kind of inner circle of the studio who have been there for decades and they all collaborate together and work together and each of them has their own kind of discipline and there there's never

really been a single person who's like the main creative director. Um the Hower brothers play a big role. Dan Hower used to write all those games before he left. And Sam Hower also just kind of played a big role as a producer on the game, but there hasn't traditionally been a single kind of aur quote unquote um the person who you might see as like a hideokima or a Neil Duckman who is really making a lot of the key creative decisions on a game. And so when uh 10 uh when Lightseed started working on Last Sentinel, they also didn't have a key creative director, which led to some problems because when you have too many cooks in the kitchen, when you have a lot of different directors, each of each of whom have their own kind of motivations and incentives and ideas for how the game should go, it can lead to problems. And that's not to say that having a single director can't lead to problems because it can also lead to bottlenecks or um the director just changing their mind all the time or like in the case of something like Judas making like five different games and taking 14 years plus to to actually ship

something. Um, so this is something that that uh kind of both both approaches can have their pros and cons, but sometime I I think in general you it's it's cleaner and smoother and can make for a better process if you do have that single person who gets the final say and is making the calls. Because one of the kind of this could be a whole video on its own, but I think one of the biggest problems in game development that people run into is not making a decision and or making a decision but then changing your mind on that decision. The kind of maybe the secret the the secret sauce, the skeleton key to uh smooth video game production or at least uh easier video game production is make a decision and stick to it. that that should be kind of uh hung up on as a plaque on the wall of every single game studio. Another issue, by the way, with some of these studios that they ran into, especially in recent years, is having too much money. Um, which kind of

seems hilarious, but it is a problem. Um, in 2021/2022 just after COVID or like around the COVID/zeroin interest times, there were a lot of investors out there, especially venture capital, that were just writing humongous checks to video game companies. If there used to be this joke that like if you had Riot on your resume, even if you had worked there for two years, you could go and get a check for $50 million from your local venture capital firm. Um, and this is a problem because when you have too much money, um, it can lead to complacency. It can lead to unreasonable expectations. It can lead to more pressure from investors when suddenly the interest rates have gone up and the times of Zerp are no longer there. Um, and it can create a level of pressure that really just doesn't uh help actually making a video game and can cause more problems than it solves. Um, another kind of video topic that maybe I'll do on its own one day is the power of limitations and restrictions

and the creativity that can come as a result of that. Sometimes when you have less money and therefore you can hire fewer people and you have less time and you have fewer options that can lead to you making smarter decisions and being forced to make decisions more quickly. um you don't kind of feel like you have that slack behind you and at the same time if you have too much money suddenly you feel like your scope has to grow to accommodate for that. I heard a story um I've heard a few stories like this actually about people who started companies back in 2021 and they were kind of working with a scope in mind that was I don't know I'll make up a number here but let's say it was a scope of a $10 million game um and that therefore needed x number of people over y amount of time and they talked to investors and investors were like we'll give you $40 million we'll give you $50 million and that caused problems because suddenly these companies are hiring more people to account for that they're raising their scope They're adding more features. They're making bigger worlds. They're making more characters and

trying to manage that team. I mean, things got unruly and can get unruly in a big way. So, too much cash can be a problem. One other thing, this is kind of similar to what I was saying before, but it's worth noting. The market has evolved and times have evolved. And the older you get, the the harder it can be to recognize that a lot of the people who have started companies in recent years are in their 40s or 50s because they're experienced video game veterans. Um, but that means that they have a certain way of looking at games. They have a certain taste in games that might not necessarily be what the market wants. these days. Um, that's not to say that game developers should be chasing trends and that everybody should be going and making Roblox games or friends slop, but I think if you are putting a whole lot of money into something expecting it to sell what I don't know, Dragon Age sold 15 years ago, um, then you might be in for a rude awakening at the end of the day. Um, okay, that's all

the negative. Let's talk about a story where actually um something where where some exea developers found some success and that is second dinner. The studio started by ex Blizzard employees um way back in 2018 who used to work on Hearthstone. Um notably Ben Broad who was the director of Hearthstone and helped create the game back when it was first starting out many years ago. Um, so Hearthstone, by the way, if you're not familiar, is the Warcraft uh card game. And that's important because when starting on what would become a very successful game called Marvel Snap, the people at Second Dinner decided, we're going to make a card game. Um, they got they started the studio with the Marvel license already kind of in place. They had that deal in place and they decided to make a card game. And in fact, a fun little fact about the development of that game is that Broad once told me that they he had the idea for what Marvel Snap would become, the core mechanics of it, um, probably weeks or months into the founding of the studio.

And then it just took another 3 or 4 years to develop all the meta stuff around it, the progression systems and the matchmaking and the tournament systems and everything that was kind of built around that game is what really took a long time after that, plus all the graphical polish and stuff like that. So, they knew what they wanted to do. Um, which really helped solve a lot of the kind of potential problems that studios like this can run into, which is just endless floundering, lack of decisions, scope changing, game changing. They knew what they wanted to do. They didn't change too many variables. The big variables were, okay, what are the rules? What's the rule set of this card game? Very different than Hearthstone's rule set, but still it's within this framing of a card game, which makes it much easier to wrap your head around. Um, and uh, they stayed relatively small. I think they're much bigger now, but they kept themselves relatively small. Um, stayed to their scope, kind of kept kept uh, on track and eventually released that game and found a lot of success in it. Um, for various reasons, in part because that

Marvel license helps quite a bit. In part because it's a very easy sell, very easy to say, "Hey, we made Hearthstone. We got another cool card game." And Marvel Staff did extraordinarily well. that that was a game that kind of penetrated the mass market and still does well today. Obviously has its own not to say that there were no flaws or problems at Second Dinner or on Marvel Snap. Um but still it was a successful story because they kind of avoid a avoided a lot of the pitfalls that I mentioned earlier. Um, so yeah, I mean, if you're looking around at the landscape and wondering, "God, I keep seeing all these headlines about X whatever company um, developers starting this new studio and then it seems like they get cancelled or it leads to nowhere or it just kind of fizzles out." Um, these are some of the pitfalls that people run into. Um, of course there's more. I mean, we're talking about a landscape now where it's really hard to find a success and uh to find success. And even some games that I think have been pretty cool have failed to find

traction in the modern marketplace. But still, it's uh it's difficult to um to succeed uh even under the best conditions. and falling into some of these traps that I mentioned, I think can uh uh kind of prevent you from even having a chance at success in the modern market. But seriously, if you work for a game developer, I think do yourself uh do your studio a favor and just like write write on a sign somewhere. Just like make a decision and stick with it. Just hang it up everywhere. Um, [laughter] especially if you work for uh certain studios. Um, just do your do do yourself a favor. Well, maybe don't do that. Don't get fired. All right. I'll see you all next time.