Staying Alive: How Obsidian, Robot, and Double Fine Have Defied the Decline of Mid-size Studios

Staying Alive: How Obsidian, Robot, and Double Fine Have Defied the Decline of Mid-size Studios

Whereas some mid-size studios have struggled, these three have thrived. Here's how they're doing it.

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It was the summer of 2008, and Double Fine Productions had hit a turning point, though they themselves didn't necessarily know it. Their game Brütal Legend, a project that founder Tim Schafer had quietly nursed for more than a decade, had been unceremoniously dropped by Activision; and though there were rumors that EA might pick it up, little was certain. With his company stuck in limbo, there was little Schafer could do but wait. So he decided to hold a game jam.

"Brütal Legend was a long haul, and I felt like everyone needed a break. And there were people senior enough that they could lead their own project," Schafer remembers. "I set the project leaders, and they got their concepts ready, and they pitched them to the whole team. Then the team picked which game they wanted to work on. It was like, 'Okay, you have two weeks. Make a game in that time."

That event became known as the "Amnesia Fortnight," and it eventually became an annual game jam attracting dozens of submissions. But at that time, with Double Fine's future uncertain, it was mostly a way to blow off some steam and develop some new ideas. Among the games pitched were Costume Quest, Iron Brigade (formerly Trenched), and Stacking, all of which were later picked up by various publishers. At that point though, they were little more than prototypes. Schafer remembers the period fondly: "Those two weeks were the craziest thing we'd ever done at the time, because everyone was so excited. People talk about it like you were in crunch mode and you were working long hours, but you've never been so happy to work long hours, because you're just so excited about the games you're making. And the focus was really laser sharp. You had two weeks, and you pretty much only had one gameplay mechanic, just get it done. Everything has to be decided right then, you couldn't put off any decisions, and Costume Quest came out of that."

Soon enough, Double Fine went back to working on Brütal Legend, but they kept the ideas in their back pocket. And when plans for a Brütal Legend sequel fell through, they pulled them back out again, riding the rising tide of independent development to unexpected success. Today, Double Fine is largely the master of their own destiny, no longer beholden to publishers who can drop their projects at a moment's notice. They aren't alone, either. Robot Entertainment and Obsidian Entertainment are two more studios that have ridden new innovations in funding and distribution to solid success.

In many ways, however, they are outliers. Times have been tough for mid-size studios, which typically have fewer than 100 employees. The licensed games that used to sustain more marginal outfits have largely dried up, with many of them shifting to mobile, while higher-end studios have found themselves squeezed by increased competition and rising development costs. The tightrope studios walk is more precarious than ever. Many studios are one big failure away from insolvency. Others have shifted entirely to mobile development.

The studio leaders that remain in the more traditional PC and console spaces are feeling the pressure more than ever. While promoting Warframe at E3 2013, Digital Extremes creative director Steve Sinclair complained to gamesindustry.biz: "[Being a mid-size studio is massively harder]. Most of us are dead and gone, and the quadrupling down on a few franchises means that a mid-size developer like us that can't throw 500 people on a single project don't have any work."

Sinclair's complaints are a common refrain in an industry where many studios live project to project. Some, like Eternal Darkness and Too Human developer Silicon Knights, have closed their doors entirely. Others, like Media Molecule and BioWare, have long since been absorbed by larger publishers. The general feeling in the industry is that mid-size studios are in the midst of a big crunch, with mainstream AAA development on one side and one or two-person independent teams on the other.

The Studios: Double Fine Productions

Founded by LucasArts alum Tim Schafer, Double Fine Productions famously struggled somewhat early before settling into a niche developing smaller games for digital distribution. Double Fine is legendary for its Amnesia Fortnight, which has since become a full-blown game jam, as well as for being the first studio to successfully leverage Kickstarter.

Notable Games:

  • Psychonauts
  • Brutal Legend
  • Costume Quest
  • Iron Brigade
  • Stacking
  • Broken Age
  • Massive Chalice

Digital Extremes, for their part, is lucky. Their Star Trek game was a disappointment, but Warframe has reportedly done very well for itself on the PlayStation 4. In discussing it at E3 2013, Sinclair referred to it as a "new lease on life." Other studios, however, have not been so fortunate. The past generation is littered with independent studios that have been hit hard times and been forced to close their doors for one reason or another: 38 Studios (Kingdom of Amalur), Factor 5 (Rogue Squadron), Flagship Studios (Hellgate: London), GRiN (Bionic Commando)... the list goes on. Some were good, some were bad, but their closures are all indicative of how fickle the video game industry can be.

Despite all that, though, Double Fine, Robot Entertainment, and Obsidian have been able to survive and even thrive in the current environment despite their limited resources. This is how they've done it.

Kickstarted

In 2012, Obsidian's Josh Sawyer approached his studio's leaders with a proposal. A few months before, Double Fine had experienced great success in using Kickstarter to fund the development of an adventure game. Sawyer wanted to do the same for an isometric RPG.

Sawyer loved making isometric RPGs. At Black Isle Studios, he had worked on some of the best, including Icewind Dale II and Baldur's Gate II. Given the success of the Double Fine Kickstarter, it only made sense for Obsidian to leverage their fanbase for an initiative of their own. But Sawyer's reasons for launching a crowd-funding campaign went deeper than opportunism or a passion for the genre.

Pillars of Eternity: Obsidian's mid-size project.

"We're an independent mid-size developer, which is very weird in this day and age. So I felt we should make mid-size projects," he explains. "Based on the success of Kickstarters, I think there's a big market out there. We had to do this right now before someone else tried to do it. We were in a unique position to pitch something like this."

Sawyer was also keenly aware of Obsidian's limitations as a developer. At the time, Obsidian was mired in the development of South Park: The Stick of Truth, which would not come out for another two years. Though fun to make, projects like South Park and Fallout: Vegas had put a great deal of strain on Obsidian's infrastructure. Without the flexibility afforded by being owned by a publisher, Sawyer was concerned that Obsidian was effectively playing a zero sum game in which failure could prove devastating.

What's more, they simply didn't have the resources to compete with the likes of Ubisoft and other big name developers. "Our studio at the highest is 150, and that's the highest it's ever been. What's the newest Assasin's Creed? Like 400 people? Obsidian usually has two or three teams working concurrently, and they have 50 people or something like that," Sawyer says. "So it's hard for us to try and punch at that weight. So looking at other ways to make games that are smaller scope, and just the style of it means we can have a smaller team. I think we would like to find more midcore development where we're not competing with Call of Duty or something like that."

The Studios: Obsidian Entertainment

The successor to Black Isle Studios, which was one of the most acclaimed RPG developers of the mid-90s. Having previously worked on such classic RPGs as Fallout 2 and Planescape Torment, they've recently returned to their roots with Pillars of Eternity—a new isometric RPG funded in part by Kickstarter.

Notable Games:

  • Star Wars: Knights of the Old Republic II
  • Neverwinter Nights 2
  • Fallout: New Vegas
  • South Park: The Stick of Truth

Sawyer eventually got his wish, with the Pillars of Eternity Kickstarter campaign launching in late 2012, and being fully-funded not long after. Sawyer has thus far been pleased with the results, and there are already plans for an expansion pack, and possibly a sequel or two as well.

Crowdfunding, of course, has its share of well-documented drawbacks: Contributors are demanding, rewards can be expensive and time-consuming to produce, and any delay or unexpected development carries the risk of producing a tremendous backlash. Double Fine discovered as much when they announced they were splitting Broken Age, their crowdfunded adventure game, into two parts, which caused many to assume that they were running out of money. Schafer later told GamesIndustry International, "We were just expanding the game and paying for it ourselves, not asking for more money. That was really a lesson for us, learning that even though our backers are really well informed, the rest of the world hadn't really heard of us since the Kickstarter happened."

But with the risks have come great benefits. Publishers like Double Fine and Obsidian can now lean on their fanbases, who are more willing to put money toward a niche game like Broken Age or Pillars of Eternity than traditional investors. Without crowdfunding, Obsidian might never have been able to make another isometric RPG. As Sawyer explains, "[Isometric RPGs] just died for a very long time."

Robot Entertainment, for their part, has taken a different approach. Like many developers, they are relying on the recent trend toward early access releases and effectively monetizing their beta. The Texas-based developer has introduced a Founder's Program for their upcoming free-to-play strategy game Orcs Must Die! Unchained, which is broken into three different tiers. The Master Pack, currently valued at $150, nets purchasers $200 in in-game currency, five heroes, five codes for Orcs Must Die! 1 and 2, and a handful of other benefits, the most tantalizing being access to the alpha.

In addition to the Founder's Program, Robot Entertainment is working on licensing their game for worldwide distribution, with the fees being used to help development. Gameforge currently have the distribution rights in Europe, and Robot is also exploring deals in Europe.

It's hard to overstate the impact such options for funding have had on independent studios. Kickstarter, initiatives like Indie Fund, and licensing deals have given developers an unprecedented amount of freedom. Schafer puts it in context, "There's a lot of crossover, it's not just one monolithic system anymore. Because of that, we don't really have to take bad publisher deals anymore. If someone offers something with really onerous terms like, 'We want to take away your IP' or something, we don't have to take it. We can sign publishing deals where they make sense and they're actually good."

Orcs Must Die!: The franchise that drives Robot Entertainment.

As with everything, of course, there are challenges as well, which Schafer freely acknowledges. "We're kind of taking our own risks too, like with Broken Age. If this project takes another month to finish, instead of going to a publisher and asking for more money, we perform our own risk analysis and decide whether it's worth pushing it back another month. Which is exciting, but it's an awful lot of responsibility."

Schafer's past relationships with publishers, of course, have been difficult, to put it mildly. He praises Midnight City, which is publishing Costume Quest 2, as a "new generation of publisher," and it seems fairly clear that he's referring to past partners when saying, "They don't want to tell us how to make our game. They just want to partner with us, and it's a lot more of a light touch. It's a whole different thing. It's a lot more of an equal partnership than a parent-child relationship."

Robot Entertainment CEO Patrick Hudson is similarly happy to be free of the yoke of the traditional publishing model, "The most beneficial thing for independent developers today is that we have direct access to players in a way that didn't exist before 2009. Typically, you had to go through a publisher and get the game on the shelf at a retailer. Now we can go directly to the customer on pretty much any platform we want to, even console. That's a huge, huge benefit."

He adds almost ruefully though, "Of course, now the barrier to entry is so low that it's made the competition super intense across every platform."

And therein lies the rub. As much as crowdfunding, livestreaming, and the growth of digital platforms have benefited outfits like Double Fine and Robot Entertainment, they've opened the door to a veritable flood of competitors. Casey Lynch, who now represents Midnight City, describes it as a double-edged sword: "Discoverability, oversaturation and quality control are becoming ever-more frequent speed bumps in the launch and success of titles. This has lead to new opportunities for mid-level developers to work with well-connected support teams from publishers like Versus Evil and Nkidu, to indie agencies Plan of Attack or Reverb, even bigger indie groups like Midnight City, Devolver, or 505 Games."

Despite the flood of new competition, though, Double Fine and the rest have mostly managed to float above the fray, which can be attributed to an advantage that comparatively few developers enjoy—their pedigrees.

Winning the Popularity Contest

For Robot, Obsidian, and Double Fine, past performance truly is an indicator of future success. Thanks in large part to their notable histories as developers, all three boast built-in fanbases that are the envy of other studios. Obsidian was born of Black Isle Studios, Double Fine has legendary LucasArts alum Tim Schafer at the helm, and Robot Entertainment is the direct descendant of Ensemble Studios, which was responsible for such classic strategy games as Age of Empires and Age of Mythology.

Robot Entertainment designer Jerome Jones happily acknowledges that his studio's existing fanbase is an advantage: "We're really lucky on the community side right now. We have really good fans on [Orcs Must Die! Unchained]. They're so protective of us. Maybe it's because we're smaller and they know us personally."

The Studios: Robot Entertainment

Formed from the ashes of Ensemble Studios, creators of Age of Empires, in 2009, Robot Entertainment continues to carry the torch for PC strategy games. Along the way, they've developed the critically acclaimed mobile game Hero Academy, as well as the free-to-play Age of Empires Online. They're currently working on Orcs Must Die! Unchained, which takes the tower defense mechanics of past entries and adds a competitive element.

Notable Games:

  • Orcs Must Die!
  • Orcs Must Die! 2
  • Age of Empires Online
  • Hero Academy
  • Orcs Must Die! Unchained

Sawyer likewise references Obsidian's community a good deal. "I used to work at Black Isle and we had a very active forum there," he says, "and some of those people I've been talking to for 15 years."

Of course, a built-in fanbase is no guarantee of success, as Double Fine themselves demonstrated with Psychonauts. Despite a rather passionate cult following, it was characterized as a commercial failure at launch, which dogged Schafer and Double Fine for years afterward. For an example, meanwhile, of a game with a certain amount of historical pedigree that nevertheless failed to attract funding on Kickstarter, look no further than Jim Walls' Precinct, which was meant to be a spiritual successor Police Quest. Though there was a certain amount of interest from fans, Walls found it difficult to sell prospective contributors on a large, ambitious game without a proof of concept. For every Star Citizen, there's a Mutant League Football or Shadow of the Eternals, which fail for reasons ranging from confusing messaging to a lack of developer credibility.

With that in mind, Robot Entertainment, Double Fine, and Obsidian all benefit not just from being responsible for historically popular games, but for having a proven track record of quality. Nowhere is this more apparent than at Robot Entertainment, which was able to develop a hit franchise almost immediately in Orcs Must Die!, as well as a successful mobile game in Hero Academy.

"A really positive aspect of the indie space is that everyone is really into helping each other out. It's not like our game is secret and hidden behind closed doors. That's always been my goal for the company—I want to make it a little creativity machine." - Tim Schafer, Double Fine Productions

"You have a little bit of success and you start to get a little bit of attention," says Hudson. "I think we've probably been pretty fortunate in that we caught on with a pretty good title in Orcs Must Die!, which did well enough for a sequel."

Obsidian has been a bit more up and down, producing their share of successes (Fallout New Vegas... mostly) and busts (Alpha Protocol). Over the years, however, they've developed a reputation for being a studio willing to shoot for the stars, even if they occasionally crash and burn in the process, which has earned them a loyal fanbase and a solid reputation. With Pillars of Eternity, fans can rightfully expect that Obsidian is developing a game right in their wheelhouse, with the quality being correspondingly high.

Double Fine has been more up than down, but of course, their popularity hasn't always translated to sales success. With the Broken Age Kickstarter, however, they successfully tapped into the intense desire for a new Tim Schafer-developed adventure game. On top of that, they've demonstrated a real eye for smaller projects that can provide a large return without requiring a large amount of resources, as the success of Costume Quest has shown.

In fact, Double Fine has done a particularly good job of catching the popular wave of smaller independently developed games, having become an indie developer collective of sorts over the past few years. Walk into their offices, and you'll inevitably run into an independent developer who is using the extra space provided by the studio to work on their game, occasionally wandering in to provide feedback on whatever Double Fine is working on.

"A really positive aspect of the indie space is that everyone is really into helping each other out," Schafer says. "It's not like our game is secret and hidden behind closed doors. That's always been my goal for the company—I want to make it a little creativity machine. It's a thing now that rolls of its own volition. It's not like it was in the first 10 years, where it was one idea after another of mine, and everyone was kind of looking to me to make decisions. Now I'm sharing that responsibility."

A Good Feeling

If these three studios have one thing in common, it's the pride they share in their accomplishments. There's a degree of "us against the world" to their culture, the sense that they are succeeding despite limited resources. Jones, for instance, often notes that Robot Entertainment has only 50 or so employees, many of whom were originally at Ensemble. It's a measure of how close-knit the studio is that when it comes time to hire a new team member, they have to interview with every last member of the development team.

"One person can say that they don't feel comfortable hiring that person and here's why," Jones says. "The good news is that when you get hired, everyone knows who you are and everyone voted yes on you being hired. And that's a good feeling when you get hired, right?"

That same sense of pride extends to his work. Jones can hardly contain his glee when talking about Orcs Must Die! Unchained, which he calls one of his favorite projects to work on since Age of Mythology. "It's been a while since the entire studio has worked on one game together, and there's really a great benefit when everyone is working on the same game. You start rooting for the same things and everyone kind of gets excited together. Working on Orcs Must Die! and Hero Academy at the same time, you get this sort of split where the guys working on one game aren't as invested as the guys working on the other. And right now, we're all working on this game together, we're all really excited, and we're all really invested in making it work."

Schafer strikes a defiant attitude when it comes to talk of the struggles of mid-size developers, "A lot of people said that companies of our size couldn't hold on anymore. You had to either be a massive developer, or you had to be like two people. But I think we've been able to do multiple projects at once, and share resources, and grow without being huge, but not just be two people. We want to take advantage of all the years of working together, growing as a team. We can be 30 companies of two people if we wanted to. But we'd lose something that we gain by working together as one studio."

Sawyer is confident, even cocky, when it comes to Obsidian's ability to succeed now that isometric RPGs have a niche again. "Pillars of Eternity was something we knew we could do, and we knew... you knew... we could do. We could pitch an Infinity Engine-style game made by the people who did Neverwinter, Temple of Elemental Evil, and Planescape and have people say, 'Yeah, I think you can do that."

For a variety of reasons, all three have managed to find success in the the notoriously volatile video game space, leveraging the latest trends with the advantage of their historical pedigree and strong track record. The bottom may yet fall out for mid-sized indie developers. If history has proven anything, this industry can turn on a dime, and with it the fortunes of even historically successful studios.

But right now? Right now, life is good.

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Kat Bailey

Editor in Chief

Kat Bailey is a former freelance writer and contributor to publications including 1UP, IGN, GameSpot, GamesRadar, and EGM. Her fondest memories as a journalist are at GamePro, where she hosted RolePlayer's Realm and had legal access to the term "Protip." She is USgamer's resident mecha enthusiast, Pokemon Master, and Minnesota Vikings nut (skol).

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