How One Studio Saved Itself From the Downturn
October 26, 2012 Page 3 of 3
You guys have been around for a long time, maybe it's fair to call Tantalus "old school." But in a way, Wii U and iOS aren't exactly "old school" platforms. How has that transition to new platforms gone for you guys, particularly as a developer in Australia, where devs have been struggling?
TC: We went through a tough period here in Australia. I think most people know that a lot of studios closed, both locally-owned and subsidiaries of publishers like THQ. The tide has turned though, and we're seeing new shops open all the time, increasingly focused on mobile.
From my perspective, I definitely waited too long to make that transition. Things were going well for us and, like a lot of people, I figured that business model was sustainable. At the same time I was looking at what my friends were doing, guys like Rob Murray at Firemint and Shainiel Deo at Halfbrick, and admiring the strides they were making into what, for me, was still a fairly confusing space.
My response was to try to buy those companies, but of course those guys were far too smart, and both studios went on to much bigger things. So eventually, and really in a quite conservative way, we started to change what we were doing and confront the new world.
You've also mentioned restructuring your business, rethinking your model, and interfacing with your staff different. Could you explain that more in-depth?
TC: In the space of a year, a while back, we went from being very profitable to losing a ton of money. This was a huge affront for me, as every one of my 12 years in this industry I had managed to turn a profit, and I had never had to let one of my developers go because I couldn't afford to pay them.
But then of course there was this perfect storm, with the financial crisis and the industry itself transitioning. And I was a total idiot. I figured we could ride it out, that I'd be able to sign new deals as I always had, and that we would be able to sustain our headcount. I felt a huge sense of responsibility to the people working for me, and then you have pride and ego playing their part in the process as well. And like a lot of studios, we held on for far too long.
I'm happy that our guys were able to stay employed for longer as a result, but ultimately you don't do anyone any favors by pretending the world hasn't changed. At the end of the day we were able to avoid massive layoffs, and there was no single "dark day" where we had to let a heap of people go, but over the course of a year our headcount reduced and absolutely there were some really rough days where I had to tell very talented people that we could no longer support them.
So in response to this I spent a lot of time thinking about how I could do things better, from a studio perspective, and I made a lot of changes. Fundamentally, and I realize this is a little controversial, I came to the conclusion that in an industry as volatile as video games, it's impossible to put your hand on your heart and say to any of your developers that their job is going to be secure for the next five or 10 years. I feel like anyone who does that is kidding themselves, and so I determined to be much more transparent about our business, both in terms of its challenges and its successes.
We pay our people more than before, but they know that continuity from one project to the next is dependent upon me finding another project, either something we sign or something we fund ourselves. So far we've managed to do that, and in fact we're hiring, and I feel as though being more open and realistic about the way this industry actually works is the right way to go. And our guys have responded really well to it. In fact, a lot of what we've done was at their suggestion.
Another thing I decided to do was acknowledge that in asking our people to wear their share of the downside of the business, they should also be entitled to some of the upside. Because of course sometimes you have a game that does really well. So we have an arrangement now where every year I share 20 percent of our profits with our staff. This is in addition to other bonuses and it enables me to be absolutely up front with everyone about how our companies are performing. I feel like it's a pretty fair system.
Page 3 of 3