The Collapse of Free Radical Design

There was a period during the last generation of consoles where Nottingham's Free Radical Design was at the top of the console development business, producing some of the most-loved, entertaining and distinctive first-person shooters on the home systems. As the FPS game became accepted on consoles, Free Radical were quick to zig while others zagged. Po-faced war games, space shooters and ports of PC favourites were being churned out at a remarkable rate, but Free Radical created all-new IP featuring flaming invisible monkeys, a mash of environments displaying a complete lack of respect for genre conventions and the kind of inventiveness and humour long since gone from the UK development scene.

"It was great. It was really good fun, the studio was smaller, everybody knew everybody, everybody knew what everyone else was doing," recalls Steve Ellis, one of the three co-founders of the studio. "The projects were smaller so we got more freedom to work on them as we thought we needed to as opposed to being led by publishers. It was good times."

Formed in 1999 by three of the original GoldenEye 64 team, David Doak, Karl Hilton and Steve Ellis, during the PlayStation 2 and original Xbox generation Free Radical Design was on a roll - creating and releasing three TimeSplitters games and third-person adventure Second Sight in six years. Following the release of TimeSplitters: Future Perfect in 2005, the studio was ready to shift to the new generation and decided to take its home-grown formula with it to the PlayStation 3 and Xbox 360.

The old engine was looking a bit creaky and rather than upgrading it to what was needed for the next-gen we decided to throw it away and start again. In retrospect that was probably a mistake

Steve Ellis

"We'd always created our own technology for the TimeSplitters games and I think that's part of the reason that we were on time and ahead of the curve in terms of quality, certainly with TimeSplitters 2," says Ellis. "Making our own tech was something that was important to us and we wanted to carry that forward. However, we also thought that the old engine was looking a bit creaky and rather than upgrading it to what was needed for the next-gen we decided to throw it away and start again. In retrospect that was probably a mistake and certainly that was part of the problem when we began working on Haze."

Haze was FRD's new collaboration with French publisher Ubisoft, a future first-person shooter that would take advantage of the studios new technology across two different formats - PC and Xbox 360. But Haze was also the first game where Free Radical Design didn't own the intellectual property outright, with costs proving high enough to force the studio to co-own the game, a deal that would eventually see the title crippled by interference and poor communication between the creator and the publisher.

Co-ownership was "an unavoidable consequence of the increase in budget," according to Ellis. "We couldn't do a deal with anyone where we would keep the IP so that made a difference.

"When we were working on TimeSplitters 1 and 2 we were completely left alone, [publisher] Eidos didn't look at the game, they didn't have milestone builds that they looked at and decided whether to pay us. They paid us at the start of the month, every month, and we got our heads down and worked on the game, we delivered a version for QA and that's really the first time they looked at the game.

"From a developer's point of view that's a great way of working because you're not constrained by having to jump through hoops in order to get paid, those hoops that internally-developed games don't have to jump through. As we started working with Ubisoft on Haze that wasn't the situation anymore, they were very much involved in the day-to-day running of things and the decisions that were made, in a really weird and indirect way."

Back in 2006 fellow co-founder David Doak told GamesIndustry International that owning intellectual property was crucial to a studio's survival, stating that "if we hadn't owned our own IP we would have gone out of business." Year's later that statement would prove to be prophetic.

Ubisoft didn't see it as interference, it was putting in place a system that has since been accepted as a significant part of the development process - using metrics for design.

"They had this central group of people which are their game experts and decide how games should work, they almost try to turn it into a science, they devise formulas and try to apply it to various things throughout the level to scientifically work out a difficulty curve," details Ellis. "That might work for them, but trying to impose that on an external studio is a difficult thing when you're used to working in a completely different way. Trying to impose it on a team that doesn't all agree with it and buy into it is a recipe for disaster."

Ellis also openly admits that there were problems with Free Radical's own approach and desire to rebuild its technology from the ground up.

"In retrospect it was a much bigger undertaking than we thought it would be," he says. "The upshot of that was we started missing our dates, we had to go back to Ubisoft and say 'this isn't going to be done and we need more time'. To Ubisoft's credit they gave us more time."

There's nothing worse than having a team full of people, all working 16 hour days and trying to hit a date that we all know can't be hit

Steve Ellis

But asking for more time is another part of the development process that gets dragged out. Ask for an extra three months from a publisher and you can waste half of that making sure that you really do need it. "Unfortunately for the reasons of the tech problems and other things Haze ended up in that situation more than once. We may have had three extra months but we spend two of those messing about first."

But the biggest problem came when Ubisoft decided to make Haze a PlayStation 3 exclusive. Originally revealed for Xbox 360 and PC in 2006, the following year Sony announced the game would be exclusive to its own system, a console that in its early days suffered from the perception that it was a difficult machine to work on.

"There was a deal behind the scenes that we saw no part of, but that deal meant Ubisoft was incentivised by and forced us to hit a date that was unachievable," claims Ellis.

"It was new territory to be having the tech problems we had and we can't really blame anyone but ourselves for that. But all of the other stuff made the problem a lot worse. There's nothing worse than having a team full of people, all working 16 hour days and trying to hit a date that we all know can't be hit. There's me and the other management telling our teams that they've got to hit the date because without that we're not going to get paid and we'll be out of business. It's a no-win situation."

In 2006 Free Radical also inked a deal with LucasArts for a game that was never officially named but is believed to have been Star Wars: Battlefront III. It was another step away from owned intellectual property for Free Radical, but the lucrative nature of the project and the chance to work on one of the most revered franchises suited the team. And on top of that, there was a really strong relationship between Free Radical's founders and LucasArts president Jim Ward and VP of product development Peter Hirschman.

"They were big fans of our work, they liked our take on making games, they liked the way we work and they wanted to do this project. It was a big thing, we were very excited and for a long time it was going very well." So well that Ellis echoes David Doak's comments at the time that this was the best developer-publisher relationship the studio had ever had.

"Over the years we often ended up fighting with our publisher for one reason or the other because making a game where the developer keeps the IP is always a contentious thing. For a long time we would describe that as the best relationship with a publisher we have ever had. We got on well with the production staff that we worked with, we had good access to the LucasArts management and we didn't fight very much at all, we were just getting on with making the game."

In fact, it was going so well that by the end of 2007 LucasArts asked Free Radical to work on another Battlefront game, according to Ellis. "We were still at that time probably a year out from completing and releasing the first game and they asked us to sign up for the sequel.

We were a year out from completing [the LucasArts project] and releasing the first game and they asked us to sign up for the sequel

Steve Ellis

"That was a big deal for us because it meant putting all our eggs in one basket. It was a critical decision - do we want to bet on LucasArts? And we chose to because things were going as well as they ever had. It was a project that looked like it would probably be the most successful thing we had ever done and they were asking us to make the sequel to it too. It seemed like a no-brainer."

But at the beginning of 2008 there was a shift in focus at LucasArts, with president Jim Ward stepping down in February and the axe falling later in the year on more internal staff including Peter Hirschman.

"The really good relationship that we'd always had suddenly didn't exists anymore. They brought in new people to replace them and all of a sudden we were failing milestones. That's not to say there were no problems with the work we were doing because on a project that size inevitably there will be, there's always going to be grey areas were things can either pass or fail. And all of a sudden we were failing milestones, payments were being delayed and that kind of thing."

Ellis doesn't feel the pressure from LucasArts was justified and the company became reluctant to get involved in the high stakes marketing that a triple-A title demands.

"It was a change of direction for LucasArts as a company rather than for the games that we were working on. I think what had happened was the new management had been bought in to replace the old and given an impossible mandate. It was a financial decision basically and the only way they could achieve what they had been told to do was to can some games and get rid of a bunch of staff. So that's what they did but it was quite a long, drawn out process."

Drastic measures lead to LucasArts canning both projects in development, the first of which was almost complete. Ellis wouldn't be drawn on the actual details of the game, but enough footage of Star Wars Battlefront III has long since appeared on YouTube and LucasArts no longer removes the videos on copyright grounds.

In order to break free from each other, Free Radical reluctantly agreed to compromise on the contract with LucasArts, according to Ellis. "Unfortunately the sum amount of money that we agree to in order to avoid going to court over it was much smaller than we had contractually agreed at the start. We had an impossible choice. We could either try and fight them to get what we thought we were due or accept their offer of a smaller amount. We didn't have loads of money in the bank so we had to take the money and try to find something else to make up the shortfall."

The break was all the more galling as the first LucasArts project was almost complete, says Ellis. "It was pretty much done, it was in final QA. It had been in final QA for half of 2008 it was just being fixed for release."

"LucasArts' opinion is that when you launch a game you have to spend big on the marketing and they're right. But at that time they were, for whatever reason, unable to commit to spending big. They effectively canned a game that was finished."

And while the second project for LucasArts was only at the early tech stage, Free Radical had staffed up to take on the new job. "The killer there was we had hired a load of new staff for that project and it's hard to get rid of staff quickly. It's a thing that you never want to do. You don't want to be the company that lays off people at the start and end of projects."

LucasArts effectively canned a game that was finished

Steve Ellis

News of the problems with LucasArts began to leak out, but in 2008 Ellis told GamesIndustry International that there was not going to be any redundancies.

"I was certain that was the case," offers Ellis. "Because coincidently just as the LucasArts thing was finishing, a couple of really opportunities came our way. One of them was an acquisition that sounded like it was a serious offer that was going to happen. And another was Activision came to us and asked how would we like to make the next GoldenEye game?"

If that happened, the team would be going back to its roots, working on a sequel to one of the best-loved Nintendo and console first-person shooter games.

"As you can imagine that was something that was very well-received by a lot of the staff, it was going to be a great project to work on. But as we jumped at the opportunity it suddenly disappeared. We never got a real explanation about why it disappeared. I suspect it was to do with rights about which platforms a GoldenEye sequel could be released on."

The sequel to GoldenEye was eventually put together by Eurocom for the Wii, a system Free Radical Design had no experience with. "[Activision] probably wanted it on Xbox 360 and PlayStation 3 and then realised they'd been a bit premature with that and they could actually release it on those platforms," says Ellis. "Things like that caused us to hold on a bit longer and perhaps not pursue other opportunities as aggressively because it really sounded like that was a possibility."

The acquisition didn't happen either - "they bought something else instead," says Ellis - and with no projects and a high headcount, the reality of the situation began to really hit home.

"We had our hands tied by employment law because it's slow to get rid of staff that you've had for a long time. A lot of people were on three months notice and before you can either trigger that notice you have to go through a three month consultation period so you need six months worth of money. After the 2008 that we had, we didn't have six months of money. I remember it quite clearly, the day that it became clear that it was actually going to have to go into administration was the day of our Christmas party."

"I'll always remember being at that party and having members of staff saying they were really enjoying working at the company and thanks for the Christmas bonus. We always gave a Christmas bonus and we did that year because that amount of money wasn't going to make a difference to the prospects of the company. That was a Friday and the following Monday we had to go into work and start the ball rolling with the administration."

The day that it became clear that it was actually going to have to go into administration was the day of our Christmas party

Steve Ellis

At the end of the year control of the company was handed to administrators Resolve, which paid staff up until the end of the year but then started drastic cuts in order to save what was left of the business.

"It was felt that if were able to reduce the size of the company then we would be able to find an acquirer. At that time we had nearly 200 staff. I had to stand up in front of 143 people and tell them they didn't have jobs anymore. And then tell the rest they did have jobs for the time being and they definitely would get paid but it was an unknown for how long."

The following week was a "dark period" according to Ellis, with staff turning up to please the administrators but no real work to get to grips with. In the meantime Resolve got busy seeking out an acquirer, with many names banded around during those early weeks of 2009.

At the eleventh hour it was announced that Crysis developer Crytek had swooped for the company, advancing its console ambitions (at the time it was mainly known for high-end PC shooters), but the move came as a surprise for Free Radical management.

Ellis claims that Crytek managed to buy the business with funding through a government regional development agency. "From my point of view it was frustrating because they basically didn't pay to acquire the company," he says. "They were given money by the government to buy the company - the same people who were unable to support Free Radical were able to fund a foreign acquirer of the company. They got themselves a great bargain."

By this point only two of the original founders were still with the company. David Doak, once seen as the figurehead for the company, had left earlier the previous year after taking time off to consider his future.

"At that point it was me and Karl running the company. I'd had enough for a long time as well with everything that was going wrong. I wanted out but not until I was sure that the company was secure and people's jobs were protected as much as they could be. Once that happened it just seemed like an appropriate time to go our separate ways. I think Crytek were disappointed that I didn't stick it through to see what it was like but it seemed too much like starting a new thing I didn't really want to start. Rather than get everything established and then quitting and causing disruption I just did it right at the start."

Karl Hilton stayed following the Crytek acquisition and now heads up the studio which has since worked on the multiplayer features of Crysis 2 and is now at work on Homefront 2 for publisher THQ.

Steve Ellis is back working on games after taking the best part of three years off. His new company Crash Lab is putting together a number of titles for iOS, and he's back to enjoying making games for the fun of it, in a small team that can experiment for the hell of it and fund itself without the interference others. "What I didn't want to do was start something I didn't enjoy," he offers.

After such a turbulent time at Free Radical Design it's no surprise that Ellis isn't really interested in returning to the old world of big box video game development. "I'm not a huge fan of big team console development because everyone has such little investment in what they're doing," he says.

"The best days of Free Radical were always when we were a small team of 25 people where everyone knew what everyone else was doing, and if you wanted to do something you could. You didn't have to justify it to a publisher, you didn't have to write it all down on paper, you didn't have a committee of people looking at it, change it and decide if it's a rubbish idea. You could come up with an idea in the morning and have it running by the afternoon and decide if it's any good by actually trying it out.

"That's a good environment for making games."

Update: Crytek managing director Avni Yerli has contacted GamesIndustry International to deny that the company received any financial assistance from the UK government to purchase Free Radical Design.

"We never received funding for this from the government or through any other government sources. At the time, we were glad to step in and take the chance to acquire the company and its talents.

"It was essential to us to keep the existing team intact and save as many jobs as we could. We are pleased with the decisions we made in relation to the acquisition, and have managed to build a great relationship with our team based in Nottingham leading to a substantial growth of the studio."