Weathering the economic storm: Start-ups speak out

It takes a special kind of crazy to open up a new game studio in an uncertain financial climate. Yet already in 2009 we've seen a handful of people do just that, many on the heels of having lost their previous jobs to downsizing or a studio closure. Recently we spoke with three individuals behind a trio of 2009's start-up efforts to ask them how they plan to weather the economic storm and, more importantly, if seeing the rest of the industry buckle around them makes them feel just a little bit demented for doing what they're doing.

"We are crazy!" proclaimed Game Mechanic Studios president and former Electronic Arts senior designer Jason Alejandre, who noted that he saw layoffs four out of the five years he spent working at EA. "The one year that we didn't have layoffs at our studio there were still layoffs at the other EA studios," he recalled. "The leadership changed at the studio level three times and the executive management changed twice."

Still, Alejandre doesn't necessarily believe that all of the closures and cutbacks are directly tied to the current downturn. "It's a combination of this is just how the business is, and the other part is due to the current economic crisis. This is our industry. I think [why] the media is currently focused in on this more so in games now than any of the previous years is because the topic is now under the 'Eye of Sauron.'"
When it comes to start-ups, however, Alejandre believes that the economic downturn has a direct impact on start-ups. "People are getting laid off and there isn't any work available, so they decide to start a new business," he noted, calling this the "wrong reason to start a new business."

"Most businesses out there are always on the verge of bankruptcy."

"It is indeed a crazy time in the industry, but the truth is we wouldn't be making games if we weren't a little bit crazy to begin with," echoed Bonfire Studios' Bill Jackson, who called the previous twelve months "an interesting year to say the least."

Bonfire is one of two studios to emerge out of the curious shuttering of Halo Wars' developer Ensemble. The 35-person company was first announced in February, and it is currently working on an as-yet-unannounced project described as "fast, fun and addictive."

Still, despite Ensemble's recent closure, there was a refreshing trace of optimism in Jackson's responses to our questions. "We still think there are great opportunities out there for teams that have a proven track record and can adapt to the current market conditions."

He continued: "It's actually a great time to work on innovative game designs and think about ways to change our business models to support those games."

Industry vet Richard Corredera took a more somber approach, however, telling us that in a way he and his team "are planning on being next." Corredera is one of several individuals impacted by THQ's recent cost cutting efforts, having worked for two years at THQ studio Helixe as the company's technical director. After finding himself out of a job, he co-founded DoubleTap Games in February with the intent to focus on creating titles expressly for the Nintendo DS.

"Everyone at DoubleTap has been laid off in the last six months, and we are all motivated to prevent a similar thing from affecting us again," Corredera explained. "If catastrophe does hit the studio, there is really only one thing we can do at this point. We will simply salvage everything we can, and try again."

Of course, it's impossible to turn a blind eye to the crumbling economy while waiting for the worst, but Corredera expressed a noticeable confidence in his co-workers to help the entire team succeed. "DoubleTap has some of the most talented and dedicated game developers in the industry," he beamed. "Times are tough, and the risk can sometimes seem nearly overwhelming, but a good team is an excellent support structure for both management and for the individual developers themselves."

"There are great opportunities out there for teams that have a proven track record and adapt to the current market."

"The truth is that games are high risk even in the best of economies," commented Jackson. "Because of this fact, any experienced team has learned to roll with the punches a bit and keep pushing forward even when the business aspects of the project are not working out exactly as expected."

Instead of waiting for the other shoe to drop, Jackson noted that the Bonfire team has learned to separate business functions from the creative aspects of game development, a separation that he says "keeps the team focused on the next great game we are making and keeps the business guys focused on that 'other shoe.'"

"Most new and even some of the established businesses out there are always on the verge of bankruptcy a few times until they make it over the hump," added Alejandre. "That's why you're even seeing some of the studios that have had success before going out of business now."

"An example of a good way the current economy will affect new businesses is state of mind -- going into business with the understanding that it is hard work," he continued. "Knowing that ahead of time is huge, regardless of the current economic situation. For some of the smaller game companies that are looking to fill job openings there is now a larger talent pool to choose from."

Alejandre noted that at the end of the day there is no substitute for "determination and hard work." Like Jackson, to Alejandre, risk just comes with the territory. "Driving my car to work every day is a risk," he exclaimed, before adding "Wait ... I sold it in order to make this biz go."