Wednesday, 26 February 2014

Wednesday, 26 February 2014

There Can Be Only One?

Lets face it, the industry is totally screwed at the moment.

This morning I heard the sad news that Remode are closing and become one of many casualties that we've seen over the last couple of years. Frankly this is getting ridiculous now. It's stopped being a worrying trend and started to resemble some weird re-enactment of Highlander.

The thing is, this isn't just fledgling companies. These are established, respected outfits who *should* be stable for example:
  • Kerb: Legends of the industry - the "Sex Pistols" of the dot-com era and one of very few people who could make a successful game about masturbation.
  • LittleLoud: Darlings of the media industry and beater of Kempt in several pitches (much to my irritation, but talented people nonetheless.)
  • And now Remode, who couldn't have got more coverage and buzz in the industry if they'd been on Big Brother and gone on a gun-toting rampage.
So... it's a worrying trend and one that I'm afraid is far from over. But why is this happening and what needs to happen to stop it? Well here are a couple of observations from the inside:

The pitching situation has gone mental. Up until about 4 years ago about 50% of our business was repeat business with no formal tender and we used to be able to win projects with a side of A4 and a pencil sketch. Now - everyone - wants to pitch their work out to 5-7 different companies and they want a full-blown presentation whether you've worked together or not. Last year we refused to deal with one media agency because we'd sent them 15-20 tenders with not a single success. Occasionally I have a bad idea or two but not 15 in a row.

Anyway... look at it this way: if an agency pitches for a £30k project they might spend 10 days on the pitch at a cost of around £4k. Now, if there are 6 other agencies pitching that means that there's £28k's worth of work going into winning £30k's worth of work. Clearly that's not a sustainable situation.

Quite simply, big companies and investors need to man-up a bit, make some investments and take a few risks. At the moment there's a huge tendency to load the risk up onto studios, not just when it comes to traditional publishers but also brands. Increasingly I hear of deals where customers want to pay a cut-price for development, make all the decisions and then give the poor studio a paltry cut of the (non-existent) revenues thereafter. Again, it's just not a sustainable situation. You want to call the shots, that's fine with us but it's probably better that you take the risk.

So... What next? Well from here I think a few things will happen:

  1. Publishers and platform owners will eventually realise that they can't pin all their hopes on indies and that reaching the standard required for success takes a level of investment beyond the means of most small companies/hobbyists.
  2. Studios are going to get tougher. As I mentioned above we've recently started turning down briefs for the first time ever and, frankly, we're no less successful than we were before we started doing that!
  3. Hopefully, people are starting to notice all this going on and realise that within chaos is always opportunity. I suspect a few canny, calculated investments now will make someone very rich indeed in the not-too-distant future.

Sadly I suspect there'll be more casualties before that happens.

------ Updates ------
Other Studio Closures in the last couple of years: Brighton-based Kanoti closed at the beginning of Feb 14, Hide and Seek closed Nov 13, Skive closed in 2012, Blitz games closed Sept 13,

Kempt meanwhile are busy working on a blockbuster re-make of their iOS game Stunt Guy check out the preview video for Stunt Guy 2.0 on Youtube.

Categories: , ,


  1. There can be only one... comment :o)

  2. I don't believe it's just issue around the 'food chain', it's a shifting environment too.

    A lot of 'game-bias' indies (such as ourselves, Aardman Animations) used to feed off the making playful stuff as marketing. This was basically brands (or their ad agencies) or broadcasters paying for playful fun stuff, and it worked mainly because the world was full of 'high invested stuff people could buy' and 'low investment people got free'. A brand would invest money, we'd make stuff, people got free stuff to play with as a gift form the brand... everyone was happy.

    Now, with business models shifting towards Free-To-Play, you have huge investment going into this free content... leaving the brands and broadcasters struggling to keep up. Marketing budgets may grow, but never to the level invested in by Free-To-Play studios who've succeeded.

    So this leaves work-for-hire studios stuck in the middle, trying to help out brands with marketing budgets to compete in arenas with multi-million $ budgets. Creating a discrepancy where the sheer amount of work is pushing profit margins ever tighter, work is shrinking and ultimately companies are crashing.

    As you mention though, the flip side is some of these work-for-hires are learning and transitioning into some of the successful ones... and good on em. You mention Remode, but in fact they're planning to work out how to stay focussed on IP, so I see it more as cunning strategic move than a disappointment... good luck to them too.

    Ramble done.