Founded in early 2006 and led by joint CEO and president Vlad Ceraldi and joint CEO Steve Bocska, Canadian developer Hothead Games
announced their first title in August of that year, Penny Arcade Adventures: On the Rain-Slick Precipice of Darkness
Based on the popular webcomic
and developed using GarageGames’ Torque engine, the adventure game is set – though not dated - for launch on Linux, Mac and Windows platforms in an episodic format, with new installments slated to release “every few months” after that.
The company itself features industry veterans with backgrounds at companies like EA, Radical Entertainment and Silicon Knights and has stated a goal to use “innovative production methodologies, and a keen awareness of the importance of controlling distribution channels” to target “underserved markets”. Recently, Hothead Games also announced the involvement of adventure game pioneer Ron Gilbert, best known for his work with LucasArts’ Monkey Island
and Maniac Mansion
games, with the title.
Additionally, a number of other projects are underway at the company, including Swarm
, an “environmentally-themed comedy adventure game”, and Gwabs
, a “desktop combat game” produced along with Cambrian House
We spoke to Hothead’s joint CEOs about the company’s upcoming projects, their views on episodic gaming and digital distribution, and why they’re referring to their production methodologies as “innovative”.
When and why was Hothead Games formed?
We incorporated Hothead in March of 2006. We really felt that several factors in the industry were converging in a very unique way and creating some exciting new opportunities. One factor was the growing acceptance of digital distribution as a viable means of getting content directly to the consumer. Another was that the “Atari Generation” was aging and their gaming expectations and desires changing. This is creating a new growth opportunity as all the first-generation “lifetime gamers” age our way into the top of the “population pyramid.”
Like you and me.
Exactly! And the final factor was the widespread availability of excellent and accessible third-party game engines and middleware that reduced the barriers to entry for making great games, especially for an experienced veteran team like ours.
What challenges did you face in setting up the studio at that time?
Setting up the studio wasn’t really that hard, in hindsight. One part that could—and maybe should—have been a major headache was the financing. But we have a great VP of Finance, Ken Fahlman, who took care of raising our operating cash and getting us started. All we had to do was write the business plan, show up for the investor meetings, and he took care of the rest.
And a lot of people became interested in the new approaches we were taking, our long-term vision for the company, and the fact that we were committed to challenging all of industry’s previous assumptions about how games should be selected, produced, marketed, and distributed. So luckily staffing has never really been an issue, either.
Thinking back, we did have a bit of difficulty at first finding suitable commercial rentals space in Vancouver, but eventually got lucky and found something that fit our needs perfectly right in the downtown Yaletown area.
What are the “innovative production methodologies” you feel the studio is using?
Everyone at Hothead is an industry veteran. When the entire team understands clearly what needs to be done, you can start playing with the traditional methods of game production. There are some aspects of the waterfall production methodology that have their place in what we do, so we kept those and grafted on new ideas from the Agile production camps. Although some would say that’s sacrilege, I would bet most experienced teams have gravitated towards a similar approach.
And anyone that has been on larger teams knows that the complexity of communication channels increases so dramatically, it is hard to remain efficient and focused on your core goals.
Which is why we’ve kept our teams extremely small and tight and partnered with such great out-sourcing partners—we borrowed that page from Alexander Seropian’s playbook at Wideload Games. The timeline from idea to implementation is shortened considerably even with the location and time zone issues related to outsourcing.
In regards to your previous industry experience, are there production methods that you are specifically moving away from with Hothead?
I think the main difference is in team size and flexibility. The typical studio response when the workload increases is to hire more staff. And then more managers to manage that staff. And then more managers to manage the managers. It starts to take on an almost comic quality. Joel DeYoung, our operations guy, has made it his personal mission to manage our growth by either acquiring more capacity from our current suppliers or adding new suppliers for every increase in team size.
And we expect every new employee we add to the company to have the impact of 3 to 4 people by leveraging our experienced full-timers—like our 15-year industry veteran Art We and 10-year veteran audio director Adam Gejdos—across our partnership and supplier network.
And that’s how we can remain a 25 to 30 person company but have the effective strength of a 100-plus development team—without the commensurate increase in inflexible burn rates or the complexity of communication and logistical issues such as personal management and HR concerns. It’s a ‘best fit’ production model.
We temporarily plug-in some of the best talent, contractors, suppliers, or technologies specifically for that project.
Granted, we might have to pay more for those experts, but only for as long as they need to be part of the development. Overall quality increases, but our costs become more flexible. By staying small, we can also control our environment which also increases communication and overall effectiveness—better communication means to us more iteration on our ideas and ultimately, a better game experience. Our entire office is one large open office space where everything is on wheels, everyone has laptops, and there’s a reliable wireless network.
Yeah, the working environment has been one of Vlad’s big innovations here, and it’s working great. Especially the “everything on wheels” part. If anyone stands in one spot for too long, Vlad asks them to put on a pair of Rollerblades.
[Laughs] Yeah, I probably would. But it seems to be working really well. Just last week, Joel decided to reorganize the entire company into smaller strike teams to adapt to natural changes we were facing during production. It took us about five minutes for everybody to make the whole move. Even when Mother Nature wants to throw a wrench into our production plans, our methods allow us to continue making progress on our games. When power was out during a storm this past winter, and once the battery backup systems gave out, the guys had another few hours from the rechargeable batteries in their the laptops. When the laptop batteries gave out, we still managed to find remote locations with power and get work done. Our size and production flexibility is a huge competitive strength.
Why have you decided to aim at underserved markets? What niche do you expect the company to be able to fill?
We’re a small company. We don’t have the means or the resources to compete head-to-head against the industry giants within any of the long-standing traditional business models. So we realized that our best strategy would be to target an underserved market with a really focused brand. If you’re familiar with parts of Blue Ocean strategy, you’ll understand exactly what we’re trying to do.
And we really want to be known as the ‘HBO’ of games. When you hear that there’s a new HBO show launching, you know exactly what to expect as far as the quality of acting, writing, and production goes. It is a great brand with fantastic shows that reduces some of their cost and risk by generally using talented-but-unknown actors. In the same way, we are not going to try to be a network like NBC or CBS or ABC—we’ll let a Microsoft do that. We want to become known to our specific audience for the combination of smart game design, strong production quality, and outstanding gameplay tuning—all focused on the gameplay experience. But we generally won’t be trying to compete on technology or high-volume, high-resolution art content.
Why do you believe “an awareness of the importance of controlling distribution channels” is important?
Developers are chumps.
[Laughs] I was waiting for you to say that.
Well, it sure has been true the past. We’d work our collective asses off and would only be able to keep a very small piece of the pie. I know there are a lot of reasons to help explain this—who puts up the money, who assumes the risk, etc.—the creative talent in our industry still aren’t very well-represented. Every year or so, some industry luminary will go off on a rant about this very topic, yet not much happens. But digital distribution is changing all of that.
It’s like what the VCR did for the movie industry in the 1980’s—it gave independents direct access to consumers.
Exactly. Before that time, the difficulty and expense of getting an edgy, experimental, or special interest film to the box office was just too great. And getting space for video games in retail today is like the difficulty and expense of getting a movie to the box office. It is not surprising that two of the most famous film festivals that highlight independent creators paralleled the rise of VCR growth. Sundance originated around 1978 and Raindance in 1992. We believe a similar rise with independent game creation and distribution has begun and while it will not replace the current model, it certainly will augment it to the benefit of game lovers around the world.
How do you think digital distribution will change the industry over the next few years?
I think it will just continue to grow in popularity. We’re already seeing the signs of it approaching mass-market acceptance through services like Live Arcade, Wii’s Virtual Console, GameTap, and Steam. I think people will continue to explore interesting new ways of creating revenue streams like item-based payment, episodic gaming, and advertising gaming models—and find ways to really make them work.
And keep in mind also all the benefits digital distribution provides to gamers. The convenience of getting content delivered directly into your home, being able to extend or update the content more frequently through downloads, try-before-you buy playable demos to reduce the risk of regretting your purchase, and more control over how much you spend for the quantity of the experience you desire.
We’re finding more and more research showing that these approaches will be able to gain a foothold in North American and Europe as well as they already have throughout parts of Asia. Our Gwabs Desktop Fighter
game is currently planned to use an item-based model, in fact. And it also has very strong potential for online advertising revenue.
Gwabs Desktop Fighter
is a head-to-head online fighting game that you play directly on your Windows Desktop. You use your very own icons as throwable projectiles and your windows as platforms to jump around on. It’s like Super Smash Brothers
online on your PC, but using your desktop as your very own level editor. The base version of the game will be free to play with two unlocked characters. We’ve been prototyping the game the past little while with our development partner Cambrian House, and barring any hiccups, you should expect to see it available for download in the not-too-distant future. There’s a bit more information about it at the gwabs.com site, but we’re keeping most of the remaining details under wraps for now.
Will we see Hothead’s games in traditional retail spaces, and, if so, what are your options for retail distribution?
Perhaps. But it’s not our primary focus at this time. We see traditional retail channels as rounding-out the tail-end of the monetization of our games through things like episode compilations, bundles, and special edition boxed sets. But first and foremost, we’re focusing on proving out the digital distribution model and building a world-class portal for the independent development community.
Can you explain the “innovative machine learning system” used for Swarm?
This is probably a better for our resident expert Dr. Michael Hayward to answer, but I’ll take a crack at it. Machine Learning is an artificial intelligence technology that literally “learns” how you play by creating a probabilistic model of your contextual in-game behavior. The concept of machine learning has actually been around in academic circles for decades, but it has never before been combined with a video game in any meaningful way.
is going to let players literally hand-train a lovable herd of critters to do their bidding and bring down an evil polluting corporation. We’ve been pleasantly surprised at how this train-and-release mechanic creates such a tremendous feeling of attachment, ownership, and responsibility between the player and their characters.
Is the adventure genre one of the under-served markets you’re focusing on?
That’s probably not the right way to think of it. Granted, we’re always looking at genre trends and trying to spot opportunities to revitalize or reinvent a lagging segment. But our concept of “under-served markets” is more about targeted a particular lapsed or ignored audience—what I like to call the “Casual Hardcore” gamer. It’s a gamer who has hardcore gaming tendencies, but only a casual amount of time available to play the games. But that’s a topic for a whole other article!
How did you become involved with Penny Arcade?
A few people I was working with kept talking about this ‘Penny Arcade’ thing about seven years ago. I checked it out and liked it, so we tried to get Gabe and Tycho into one of our games as secret characters. But the publisher eventually passed on the idea. A few years later, I got a chance to be on an industry panel at the first Penny Arcade Expo (PAX). We kept in contact ever since. When we started Hothead, one of our programmers here, Cary Brisebois, was a huge fan of Penny Arcade, knew Gabe and Tyco, and helped get us all together.
How collaborative is the design process with them?
We’re in contact with each other almost on a daily basis. Anyone who has worked on license games knows this is not usual. I guess that’s one reason we describe what we are doing as a partnership deal rather than a traditional licensing agreement. The Penny Arcade guys were great at learning how to adapt their craft for the games industry. Though, I’m pretty sure they had more than a few ‘Holy shit’ moments when they learned how much talent and effort is involved in a game production—but we’ve been rolling along really well for quite some time now and the collaboration has become pretty streamlined and a hell of a lot of fun, to boot!
How did you feel about the reaction to the trailer?
[Laughs] Hmmm…that’s an interesting question. Well, it was nice to see that over 500,000 people viewed it in 24 hours through a single site without any promotion. It is always reassuring to know you’re working on something that people are going to care about. As experienced game developers, we were pretty much ready for all of the comments. I have to say that I really liked the passion that came through from the fans. We’ve been through this sort of process before lots of times in our careers. If we hadn’t, I think it could have scared us. And we generally like to err on getting feedback early and being able to adapt than waiting until you think you have it perfect and then not have the time to do anything about it!
Still, I’m always amazed at how many people draw conclusions about a game based on its’ visuals without have had a chance to experience the gameplay itself—something Hothead would argue is the most important element. If I’ve played my last great-looking-but-no-fun game then I could die a happy man.
How important do you think it is for the game to be multiplatform?
While it is always a good business decision to have a game on as many platforms as possible, we are doing it because we believe a gamer should have a choice to play a game on whatever system they want. There are a lot of great game platforms so we are operating system- and platform-agnostic. We would like to add more platforms as we continue production and for future episodes and games.
How are you approaching the episodic nature of the title? Do you think there will be any problems sticking to a schedule?
With great trepidation! This is a new model for video games and there are very few pioneers to learn upon. We definitely believe that there will be challenges sticking to a schedule, but we are working on many of those issues pre-launch. You should probably check back with us when we are in the thick of the next few episodes. And if you get warned off with a shotgun blast then you will know how things are going.
What are your goals for the future of Hothead?
Again, I’ll go back to Vlad’s HBO of gaming analogy. We’re building a brand that I would love to become known for its new combinations of game design, high production quality, and outstanding gameplay tuning. We want our brand to attract like-minded independent developers or partners with exciting new projects or concepts who understand how to target our “Casual Hardcore” audience and harness the opportunities emerging in digital distribution.
A lot of our planning for the next 12 months—that is, beyond launching the three games we currently have in production—is focusing on solidifying our brand by building out a distribution portal with a high-profile partner we’ve signed with for exactly this purpose.