That which does not kill you...

"Working in a small company is like being on a small airplane--you feel the ups and downs a lot more than you do on a jumbo jet. But that doesn't mean the plane is in more trouble. It's just more clear what's going on."

--Double Fine Productions founder Tim Schafer, on what he's learned piloting his studio through multiple patches of turbulence over the years

It's not an uncommon situation for the heads of small developers to find themselves in. Development drags on, deals fall through, the unpredictable comes to pass, and all of a sudden cash flow becomes a very pressing problem. Introversion's Mark Morris and Choice Provisions' Mike Roush were gracious enough to speak with GamesIndustry.biz recently about some of their own turbulent periods, how they pulled through, and what possible lessons other developers could take from their ordeals.

Introversion

This year marks Introversion's 13th anniversary as an independent developer. In the fast-changing game industry, that's more than enough time to flirt with absolute collapse and brings things back from the brink multiple times. To hear Introversion managing director Mark Morris tell it, the company has taken full advantage of that opportunity.

"The overriding feeling, and maybe I'm projecting here, is that we've triumphed over the difficult times and have come back fighting every time we've run out of money," Morris said. "It is almost a joke, because we've run out of money quite often. And we really, really don't want to run out of money again, because I think it would be ridiculous."

One of those times was back in 2010, around the Xbox 360 release of Darwinia+. The game's release marked the end of a years-long development slog for what was originally intended to be a quick and simple port of the critically acclaimed but commercially average PC game. Things quickly got complicated, however. Just getting the contract with Microsoft signed took a year. And once that hurdle was cleared, the team quickly ran into problems with its first excursion on consoles. They had trouble working with Microsoft's APIs, and the Xbox maker's QA process kept throwing new roadblocks in the way.

"[Multiwinia] just really bombed. We missed the entire audience, I think."

Mark Morris

In that span of time, Microsoft had also determined that all Xbox Live Arcade games needed to have multiplayer. The original concept of Darwinia had some multiplayer components in it, so Morris said it seemed like it should be easy enough to hire external programmers to finish it up and get it out the door. Unfortunately, the resulting game wasn't up to standards. It became clear Introversion didn't have the funds to finish up Darwinia+, but it could probably fix the multiplayer component if it focused on that. So for the next few months, Morris said the team focused on finishing up the multiplayer mode and eventually released it as the stand-alone 2008 PC title Multiwinia. However, the stopgap measure that was meant to buy them time to finish up the Xbox 360 version, as Morris put it, "totally tanked."

"It just really bombed. We missed the entire audience, I think," Morris said. "Everyone who played Darwinia, which wasn't that many people, didn't like Multiwinia because it was a completely different game. And the whole rest of the audience didn't want to play it because they thought it was associated with Darwinia. We made a sequel which was a completely different game that didn't appeal to anybody at all."

Morris said the company limped along for another year as it finished up Darwinia+. The studio had been scaling back salaries and cutting ties with freelancers in order to stretch their limited funds far enough to see the game through to release. Introversion never skipped payroll entirely, but Morris believes it would have been an option.

"Would I have asked the guys to work for free? Yes, I think so," Morris said. "Because I would have said to them, 'You know everything is currently staked within this game. If the game sells well, then we carry on trading. If you walk out now, we can't put the game out and that is definitely the end of this. And I think they would have responded well to that."

Darwinia+ finally launched on February 10, 2010 for 1,200 Microsoft points ($15). Morris said within 10 minutes of the game going live on Xbox Live Arcade, it was clear it wouldn't do well enough to save the company.

"We were tracking the leaderboards, so we could just sit there with it running looking at how the leaderboard was filling up," Morris said. "I say we knew. You never really know, but it was so slow. At that price point, it wasn't going to sell the numbers we needed to keep trading. We left the office that night with heavy hearts."

Morris called it the worst period of his life, "without a shadow of a doubt." He described his leadership style at the time as "quite dictatorial," imposing his own vision for the company on the rest of the team. That vision saw Introversion as a studio that was going to be just fine in the end, but things seemed very much not fine after Darwinia+ fizzled.

"At the point that it launched, we'd accrued quite a large amount of debt to various people," Morris said, "because one of the ways we'd been able to get the game through the door was saying to everybody, 'Hang on, we'll pay you soon. Don't worry. This is the situation.' And they all kind of understood. But our financial director, Tom [Arundel], is one of the most rational people I know. And Tom spent a lot of time in those final days genuinely convinced that we were trading insolvently, provably trading insolvently, which is a criminal offense. So he was arguing that we needed to stop immediately, completely down tools, or there was a very real possibility that we would face prosecution."

At the time Darwinia launched, Introversion's staff was down to the original four directors and two or three programmers, Morris said, but it was still too much. So Morris gathered the team together for a Skype call one morning, told them the studio hadn't worked out, and that they needed to find other jobs.

"Our financial director, Tom [Arundel], is one of the most rational people I know. And Tom spent a lot of time in those final days genuinely convinced that we were trading insolvently, provably trading insolvently, which is a criminal offense."

Mark Morris

"In that call, I had braced myself for a huge amount of abuse from them," Morris recalled. "But their view on it was, 'You didn't do anything wrong. You didn't make any catastrophically bad decisions. It was a series of bad decisions that got you in a hole. And then you did everything you could to get out of the hole, and it didn't work out. Don't worry about it.'"

Introversion's creditors were another concern. The company was in such bad shape Morris was afraid to even seek legal advice. After all, Introversion owed its lawyer quite a bit of money already and the directors were worried he might "turn" on them if he knew how deep they were in it. Instead, they went to a second lawyer for advice. The advice sounded simple enough--write everyone to tell them what happened and offer to pay them back--but it turned out to be the best move. Rather than fighting over the scraps of a failed Introversion, the creditors uniformly worked with the studio to give them every chance to turn things around.

With the employees gone and the directors all looking for new jobs, Introversion was all but dead. There were two last ditch attempts to save the company. One of them, an Xbox Live Deal of the Week promotion for Darwinia+, helped, but not nearly enough. The other long shot was adding Steam achievements to its 2006 strategy game Defcon in the hopes that would convince Valve to make it a featured Steam sale. That one did significantly better, providing a cash injection of about $250,000 that Morris said saved the company. Once Introversion started making money again, Morris said the first people the company hired were the ones it had at its low point.

"There's no bad blood," Morris said. "It's all been said. The punch-ups and bloody noses have all been given and received and are in the past. When you're still working with the guys you were working with before, I think it's a sign that all is forgiven."

Since then, Introversion has scored a major success with the alpha-funded Prison Architect, which Morris said is selling five or 10 times better than the company's previous best-selling title to date, Defcon. When asked for advice he would give to other developers facing difficult times, Morris pointed straight to the new funding models, and how often he hears developers looking for feedback on failed Kickstarters.

"The real revolution is the ability to monetize the game very early in the product lifecycle," he said. "If you're not making money after, I don't know, six months development on a game, then you need to find another game. And if you don't have the cash to start developing it, then you probably need to split the company up, go back and get jobs and try again. Come up with another game idea and get it out there."

Though he spoke matter-of-factly about that need to split a company up, Morris would no doubt empathize with any studio head reluctant to give up on their studio. After all, Introversion's longevity as an indie studio is a source of particular pride.

"Before I was an entrepreneur, before I set up a business and run it, I never understood why people would put these big signs up saying, 'Trading for 100 years.' As a customer, I don't care. You might be completely off the ball; I want a new product, a good product," Morris said. "But now that I'm inside and doing it, if somebody asked me the most important metric for me, it's not going to be the amount of money we've made, how many games we've sold, how many countries we're in, how big the staff is, or anything like that. It's going to be how many years we've been able to keep trading and keep making video games, because I think that really shows tenacity and resilience from all of us."

Choice Provisions

Last month, Gaijin Games changed its name to Choice Provisions for a variety of reasons. There were trademark issues around the name, the team was uncomfortable with the negative connotations of the term "gaijin," and they were worried its close association with the ultra-challenging Bit.Trip series of games could hurt any efforts to broaden their fanbase. But the name change coincided with a bit of turbulence, as co-founder Mike Roush said the 18-person studio found itself in some "fairly sticky territory."

After releasing Runner 2, the studio moved away from its one-title-at-a-time development process. They had been working on four games in parallel, trying to juggle contract deals with publishers alongside more independent, self-funded projects. That juggling act was disrupted a few months ago when a game they had been working on was cancelled by the publisher "for reasons unknown." While Roush said the company wasn't in dire straits by any means, he said that Bit.Trip games had been a well-planned-out company, and having that plan upended by factors beyond their control "really freaked us the f*** out."

If the situation didn't improve in a hurry, the studio was going to have some tough choices on its hands. Of course there was the option of layoffs to make the studio's burn rate more in line with its income and development load. And the studio also had a war chest to dip into that could sustain development for a while longer, but dipping into that meant there would be no safety net if other unforeseen circumstances befell them. It could also have reversed its long-standing policy of no overtime and mandated crunch in an effort to finish the work quicker.

"[T]here was a sort of air of 'Oh yeah, everything is okay and we work really hard so everything will always be OK.' Then all of a sudden that paradigm shifted."

Mike Roush

"What we really saw was it was a chance for us to make a decision," Roush said. "When you have a company of 20 people... you get to a point where the company is just a giant ball that's rolling, so it was also an opportunity for us to step back and say, 'Hey, what do we want to do with the company?' Do we want to continue on at this size, or do we want to shrink down and do little things by ourselves, get back into game development with our hands getting dirty? It was exciting and scary all at the same time."

While the situation necessitated Roush take a step back to consider the company's bigger picture, he didn't exactly stop working on the little picture stuff in the meantime. Fortunately, the studio had already been shopping around a game called Laserlife, hoping to migrate developers to it when the cancelled game was finished. But with the gap in the schedule, Roush's first order of business was to try accelerating the timetable for a Laserlife deal with one of the companies he'd been talking to.

"Literally, we dealt with probably 50 percent of what we needed to do the same day we got cancelled," Roush said. "Everything was dropped and we had meetings. I think part of it is that we are sort of tenacious around that. We didn't see it as something to treat as a failure; we wanted to treat it as an opportunity and not look on the dark side or be pessimistic. I think because we went into it with such a good attitude and basically saying, 'Let's go,' I think that's what stopped us from just pushing the panic button, losing our s*** and going bonkers."

The deal was soon signed and Choice Provisions had emerged without sacrificing its war chest, its headcount, or its crunch-free work environment. Though the crisis was over almost as soon as it began, Roush said it served as a wake-up call for the studio.

"I think arrogant is the wrong word to use in this situation, and I wouldn't say we felt impervious either, because we definitely don't feel that way," Roush said. "But there was a sort of air of 'Oh yeah, everything is okay and we work really hard so everything will always be OK.' Then all of a sudden that paradigm shifted. So if we've changed anything, it would be in our own psyche that our guard is up a little bit more."

That tweak to the psyche is evidenced by some of the more tangible changes the studio has made. Roush said the studio found and fixed a number of ways it was "leaking money" over the years, like blowing thousands of dollars a year on subscriptions and services they no longer actually used. Choice Provisions has also been investing more in its war chest, creating larger "buffer zones" to fall back on should the need arise in the future.

"Unfortunately, you can't necessarily feel super safe around even a signed contract or a signed gig."

Mike Roush

"Having that buffer zone couldn't be more important," Roush said. "Ultimately, it gives you an option, and that option is freedom. Some of our financial advisors are like, 'Why do you have all that money in the bank account? You need to get that invested!' But having that there lends power to the company."

As for advice he would pass on to others in his situation, Roush stressed the importance of being prepared for worst case scenarios when they sign a deal for a project.

"Things in the contract where they can cancel at any time without warning, they put that in for a reason," Roush said. "I always thought it was BS and just something to [cover] their asses, but that being said, in this case, they cancelled without reason. Unfortunately, you can't necessarily feel super safe around even a signed contract or a signed gig."

All in all, Roush thinks Choice Provisions is a wiser studio now. But part of the reason it's still around might be because that wasn't always the case.

"For the first three years of Gaijin Games, we didn't have anything and we didn't have any money," Roush said. "So we couldn't fail. So our attitude has always been, 'Oh, of course we're not going to fail.' Now with 18 people, failure is an option, but I think [Choice Provisions co-founder Alex Neuse] and I are just too stupid to understand that, so we keep going."

"The Best Thing"

As frightening as the turbulent times can be, the changes in direction or process necessitated when navigating them can set up a small studio to succeed like never before.

"The best thing that ever happened to Introversion was that moment when we nearly went under," Morris said. "It wiped the slate completely clean of all the baggage we'd been carrying. The technical baggage from the code we'd been developing, the way in which we made games, everything. What we were able to do was take all the knowledge that all of us had built, and then reform the business a couple of years later and come out absolutely head and shoulders more successful than we'd ever been in the past."

Roush was similarly happy with his own outcome, saying, "The happy ending story is we're actually better off than we were before, which is kind of weird, and we still have four games coming out. So in some very bizarre way, the cancelling of that game ended up being the best thing that could have ever happened to us."