How Camouflaj cheated death in a volatile industry

In this opinion piece, I will share our wayward path of bringing République to life, from crowdfunding it as a premium iOS game to its evolution as a full console release almost four years later. Our story is one marked by our major pivots required to survive the ever-shifting tides of the games industry. The aim of this article is to illustrate just how volatile our industry has been this decade and to tell our story of survival, culminating with the most unlikely of outcomes: partnering with a publisher, GungHo Online Entertainment, who commemorated the fifth and final release of République with a digital and retail release on PlayStation 4 on March 22.

Our Bellevue-based studio, Camouflaj, was built out of a desire to tell a different kind of video game story. Throughout my fairytale-like career in the games industry-including the unforgettable days when I joined the Metal Gear Solid 4 team in 2005 and then becoming creative director on Halo 4 in 2008-I have been solely focused on exploring the unique methods games can use narrative to speak to the heart of the player in ways that books, television, and film cannot.

Camouflaj was also borne out of the miserable state I found myself in following a demotion while at Microsoft. Partly due to my lack of experience and partly due to my inability to navigate that political landscape, I realized it was time to plot my next move. Like so many before me, I wanted to leave the confines of a larger company and develop a new type of game, but the path forward was murky. Who was going to invest tens of millions of dollars in me to build a team, fund the development, then market and bring the game to retail?

The Rise of Mobile

Then, one evening laying in bed playing Epic's Infinity Blade on my iPhone, I realized that mobile hardware had reached the point where it could communicate the stories I was interested in telling. I put aside my console ambitions and focused on mobile with its lower barrier to entry and cheaper price point per game. I left Microsoft, liquidated my stock and 401K, and started Camouflaj with a small crew. Our aim was simple but ambitious: to create the Infinity Blade of narrative games on iOS with a game we called République about a woman trapped inside a secret Orwellian nation that players must use their mobile device to hack into its surveillance network and guide her to freedom.

"We look back on our decision to develop on Unity as one of the best decisions we made. In many ways, we feel as though we've ridden on the coattails of their success these past four years"

The first meeting I took after leaving Microsoft was, ironically, with the folks at Bungie. I maintained a strong relationship with Bungie from the time I interviewed for a job there in 2008, and kept in touch with them throughout my years working on Halo 4. Then, in the summer of 2011, I found myself pitching République to their new mobile publishing arm, Bungie Aerospace. We were encouraged by Bungie's unique approach to publishing and their commitment to granting a high degree of creative freedom, which is why we were disappointed when the Aerospace team officially passed on République and later put their publishing division into hibernation. Despite that setback, we walked away from that experience with a stronger pitch based on the feedback we received. It was through those meetings that we solidified our strategy to build République as a premium iOS title priced at $9.99.

The Rise of Unity

With Bungie out as a potential source of development funds and with only enough cash in the bank to cover nine months of burn, we had to move fast. Holed up in our dingy old office at the cool price of $891 a month, our team of five began investigating technologies that would enable us to push high quality character models on mobile. Out of the gate, I was convinced Unreal would power République, but after a few weeks of R&D, the team decided that this quirky third-party engine out of Copenhagen called "Unity" gave us the flexibility on mobile we needed to push the bone count for up-close-and-personal character moments.

Ever since the early days of République, we made it a point to show the team at Unity what we were working on. They loved our ambition to bring console-quality graphics to mobile and were supportive throughout development. What began with early access to Unity 3.5 features later evolved into an official partnership with the company on the release of Unity 5. We look back on our decision to develop on Unity as one of the best decisions we made. In many ways, we feel as though we've ridden on the coattails of their success these past four years.

The Rise of Crowdfunding

By early 2012, we had a proof of concept of République running on an iPhone 3GS, but nothing more. With our cash flow at dangerous levels, I shifted my focus from development to finding a partner who would fund the remainder of production. At the time, I predicted the game would cost a cool million dollars, but soon the harsh realities of game publishing were becoming apparent: nobody was going to fund this expensive mobile game and allow us to retain creative control and IP ownership.

On a particular wet and gloomy day in Seattle on February 9, 2012, my business partner and I escaped from the rain and faced the cold realities of our business over a cup of coffee. It was then that I glanced at my iPhone and noticed Double Fine's curious success on this thing called "Kickstarter"-they were appealing to the community to help them fund their next game. It was then we knew that our best and only chance at survival was to quickly pivot to launching a Kickstarter as soon as possible.

Kickstarter marked our first big pivot on République. I wrote a lengthy postmortem on our Kickstarter experience over at Gamasutra, which details our hairbreadth success in raising over a half million dollars, but the abbreviated version is: midway through our campaign we realized how PC-centric Kickstarter's community is and announced a full-spec desktop version. This supercharged our campaign, pushed us over the funding line with hours to spare, and resulted in much joy and celebration. Once the dust settled, however, I started to realize just how much we overcommitted ourselves.

The decision to crowdfund the game was made out of desperation-either we shoot for the moon on Kickstarter or we die-and I believe we made the right decision. The funding we raised was neither debt nor equity, and gave us the flexibility to build the game the way we wanted to. The Kickstarter campaign also put our game on the map, and was an incredibly powerful marketing tool for the game. While some backers were right to be frustrated by how late the final version arrived, we are still proud of the fact that we are delivering a game many times bigger than we initially pitched, which also led to a much bigger bill than I initially expected...

The Rise of Episodic Gaming

With our bank account back in the black after the successful Kickstarter, we settled into the development on a "4 to 6 hour" story-driven game for iOS and PC. Our ambition was to translate console-like gameplay into a "one touch" experience on mobile with high-spec graphics. Coupled with the challenges of building a team from scratch while surrounding tech companies eagerly poached our young talent, the first year of development was as turbulent as you would expect. (Here's another lengthy postmortem, this one about our initial release)

"Our business was rejuvenated by another marketplace shift: Telltale ushering in the new age of episodic gaming with the breakthrough success of The Walking Dead game"

Much of the internal stress resulted from the boom-or-bust early days of Apple's App Store, and the speed at which price points were falling from the sky. By 2013, the idea of releasing a new iOS game at $9.99 seemed extremely overpriced, with most premium games like The Room settling in at $4.99. Compounded with my overscoping of the game, we needed to rethink our pricing and content release strategy. Then, like the Kickstarter revolution before it, our business was rejuvenated by another marketplace shift: Telltale ushering in the new age of episodic gaming with the breakthrough success of The Walking Dead game.

Like so many other developers, Telltale's success with the episodic model blazed a trail for many of us to survive the falling premium price-points crisis. After months of analyzing the episodic model, we decided to break our top-heavy game into five parts, $4.99 per episode, and pre-sell the whole collection up front for $14.99 via a season pass. Suddenly we had a proven pricing strategy that allowed me to have my cake and eat it too-instead of cutting content, all I had to do was slice the game into parts, focus production efforts on releasing the pilot episode, and use season pass revenues to fund the remainder of the production. Ironically, Double Fine would take a similar path to releasing its Kickstarter-funded title Broken Age.

Looking back, just like our initial pivot to crowdfunding and commitment to a PC version, the sudden appearance of Telltale's episodic model paved a path that would ultimately save our business. While the game would eventually take many more years to produce, the majority of revenue has come from season pass pre-purchases, allowing us to keep the lights on and continuing our commitment to premium pricing for the game, for better or worse...

The Rise of Freemium

After 18 months of inner turmoil and the eventual shift to an episodic release schedule, Camouflaj reemerged and released Episode 1: Exordium on December 19, 2013 for $4.99 as a standalone episode on iOS and, of course, $14.99 for the season pass. After over two years of fighting tooth and nail to get to release, it's hard to describe the euphoria that filled the halls of Camouflaj that day. We had overcome so many challenges in creating a high quality pilot episode, which manifested itself in République securing a VIP seat on the front of the App Store during the most lucrative sales weeks of the year. As I packed my bags to return home for Christmas, I fielded phone calls from journalists and industry friends congratulating Camouflaj on the success of our initial release. They joked about where I was going to park my Ferrari once the payment from the App Store arrived...

When it seemed that our commitment to a premium-pricing model was going to pay off, I was excited that it looked as though we'd be bringing in enough money to fund the remaining four episodes. The weight of two years of financial stress seemed as if it would disappear, allowing us to finally, finally be able to just focus on what Camouflaj is all about. My father remarked at how similar this whiff of success felt like our photo finish on Kickstarter.

"Again I was fielding phone calls, but this time they were condolences on the death of 'premium pricing' on iOS... there's no question that holiday 2013 was a major turning point for iOS monetization"

By the time I returned from the holiday break, I knew that République wasn't smashing sales charts on the App Store. In fact, revenues fell short of projections given to us by many industry insiders. Again I was fielding phone calls, but this time they were condolences on the death of "premium pricing" on iOS. While I don't think it's fair to chalk up the disappointing launch solely to price, there's no question that holiday 2013 was a major turning point for iOS monetization. A friend at Apple echoed my suspicions: instead of $4.99 games owning the mind share of the tens of millions unlocking new iOS devices like the previous holiday, shoppers in Holiday 2013 had a lifetime's worth of "free" games to try out without needing to plop down the relatively large sum of money of $4.99 up front for République and other featured games.

Like many previous letdowns (and future ones to come), I was determined to press on by focusing on our successes and learning from our failures. We had a bright spot with the 18% conversion rate to our $14.99 season pass, which was enough to fund Episode 2: Metamorphosis, but we were still going to come up short if we just stayed the course on mobile, but shifting to a freemium model was out of the question due to the lack of time and our commitments to our 11,611 backers. Again, I reduced my time spent on development and refocused my efforts on business development, resulting in much-needed funds in exchange for a special Android port of the game. Partnering with development house Darkwind Media, we launched on Android with the release of Episode 3: Ones & Zeroes in October 2014. Knowing that the additional revenue coming from the Android version wasn't going to fund the remaining two episodes, it was time to pivot again...