Volition alumni on building Shapeshifter Games in an era of layoffs and closures

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Saints Row developer Volition was the first major studio to shut down in the current wave of layoffs and closures. Yet, as often happens, when a large studio closes its doors, this is not the end for some of the talent that it housed with a new studio rising from the ashes.

That studio is Shapeshifter Games, a new co-development house founded by Volition alumni, including studio head Matthew Madigan, creative director Brian Traficante, and studio director Rob Loftus. The developer is currently assisting InXile Entertainment with its upcoming Xbox exclusive Clockwork Revolution, operating as a fully remote studio with plans to go hybrid in the long term.

When we catch up with the aforementioned trio to find out more about the new studio, Madigan clarifies that he wasn't at Volition when it shut down. He left the Saints Row dev back in 2017, after 15 years at the company, for opportunities outside of games before returning with a stint at Lost Boys Interactive in 2021. In recent years, he had been considering whether there was room for another games studio in Champaign, Illinois, where Volition was based.

Upon hearing the news that Volition had closed, and a lot of talent was now out of work, he was determined to make this hypothetical new studio a reality.

"[This is] a small town in Illinois, and keeping that talent and that workforce and those devs in town is kind of a – I grew up here, and so it's important to keep that vibrant community here," he tells GamesIndustry.biz. "So, we wanted to see if we could maintain that core."

Madigan estimated the closure happened at 11am. By 4pm, he had called Traficante – who had been creative director at Volition – and the conversation that would lead to Shapeshifter Games began. The trio became complete when Rob Loftus, formerly executive producer at Volition, joined the team in January after helping to tidy up the studio's final affairs.

Shapeshifter has hired more than ten employees so far, all of which are former Volition (although some had left the studio prior to its closure). The team is still aiming for AAA development, envisaging that the studio could grow to 200 to 300 people, but Madigan emphasises that is a long-term goal.

The decision to go into co-development is telling; while other AAA alumni have gone straight into developing a new IP, the Shapeshifter trio is conscious of how difficult it can be to break into the market – even with veteran talent – and the tens of thousands of people laid off in the past year is a stark reminder that a business needs to be able to sustain the team it has. While the studio may create its own games further down the line, co-dev was deemed as far less risky.

"We're not going to remake Volition, but just build upon what we had, and continue on"

Rob Loftus, Shapeshifter Games

"I think co-dev is the way to go in helping to create an arbitrage for the developers," Madigan says. "We all know the development cycle: you ramp up during production, and then at release, there's maybe a small post-production team, or a live services team, something like that, but then there's no place for individuals to go. And we've seen this, it's prevalent throughout the industry. It's happened repeatedly in a very cyclical manner. COVID, I think, really amplified this wave.

"But one of our goals is to try to make a little dent in that. So, we can provide publishers with the service of a whole bunch of people, and then we can also keep our people employed on several different projects. That 200 to 300 people… Yes, it is ambitious. It's not a magic number. We could probably get five projects of five or six people each, and then that would be good, because then we could move that team around. So, there's no magic number, but I think the larger one allows us to take on larger projects, to help eliminate some of that closure and layoff risk."

Loftus adds: "Right now, we're focused on just being a company. We are a bunch of game developers from Volition who have banded together. It's just one foot in front of the other right now. What we're seeing in the industry is the complexity of AAA games has absolutely been rising for years now. And housing a AAA game under one roof is just impractical for studios. So we want to be there if they want to take some work out of house. We're focused on being that co-developer, a trusted resource for folks that we're working with. And then grow steadily towards something, like the ambition that Matt's describing. I don't think we're going to see 300 people here in the next year or so."

Madigan adds that, when forming the new studio, calls around to industry contracts revealed that "there basically is no money." Establishing and growing a new business is already a costly endeavour, and the process of creating an original IP is long – potentially a bad combination in the current climate.

However, these industry contracts did help Shapeshifter land its first project, with Madigan crediting a former colleague – studio head at Undead Labs, another Champaign studio formed by Volition vets – with putting them in touch with Microsoft and the Xbox studio ecosystem. This led to InXile being identified as a potential partner, helped by boss Brian Fargo's own history with Volition.

Loftus adds that, as you can imagine, the team's former employer is a great source of inspiration for the new business, but they are also keen to mould Shapeshifter into something distinct.

"We're game developers. We love what we do. We want to have a place where we can do that together. We want to continue some of the cultural values that we had at Volition – the camaraderie, the creativity that we had there. The attitude that we could punch above our weight was something that was always part of us. And we want to take that and bring that to this new endeavour. We're not going to remake Volition, but just build upon what we had, and continue on."

Shapeshifter Games has been thrust into the limelight a little earlier than the team was expecting. There was no official announcement as such; a LinkedIn post and the trio's updated profiles caught the eye of the media and stories of the studio soon spread. But Loftus says that, given the current climate in the jobs market, the team was always going to be cautious about how they unveiled their new venture.

"Starting a company usually is a moment where you're high-fiving each other, and it's a celebratory moment," he says. "But just the week prior, companies had announced huge layoffs. So, you're stating this in the middle of that environment. It's not a moment to celebrate. It's a moment to be just hopeful for what's to come."

He continues: "There's a lot of talent out there. We've been spending a lot of time speaking with developers that have been affected. There are our former colleagues at Volition, but several other studios have also laid off great people and we're reaching out to several of them. It's hard to have a lot of those conversations, because we want to grow slowly and methodically, and towards the goal of creating a sustainable studio where people can do great work. So, it's daunting, because it seems like every day, there's a new list of people that we all get sent. And it's tough to look at that, because we only have a few opportunities now. We'll have more as we go. I just want to communicate that I feel the responsibility of that, when we're going through it. It's hard."

"Co-dev is the way to go in helping to create an arbitrage for the developers... We can keep our people employed on several different projects"

Matthew Madigan, Shapeshifter Games

Inevitably, the conversation returns to the fall of Volition. Loftus notes that there are limits to what he and Traficante can say about the Saints Row studio's final days without veering into speculation – "I'm sure somebody's going to write a book about this at some point," he notes – but adds that even he has been surprised at how badly the wider industry has been affected by closures and layoffs, particularly within parent company Embracer Group.

"We thought at the time that it was going to be a lot more limited to maybe us, and of course then we saw that it wasn't. We were at the beginning of a lot of those changes, those layoffs that happened with Embracer, and of course, the industry at large. And we're just looking for the pendulum to swing back in the other direction."

As devastating as it was to see the decades-old studio close last year, to some it was not entirely surprising. While none of Volition's games were outright failures, the 2022 reboot of Saints Row had struggled to meet expectations and the studio's previous title Agents of Mayhem launched to a mixed reception and disappointing sales, resulting in its own round of layoffs.

Traficante says that these were just factors in a "complicated and speculative spectrum of issues," adding: "The challenges of accomplishing titles like that, at that scale, all the normal factors that go into all the routine challenges of making those products, and managing teams like that, and executing at a high level… There's nothing that I think is going to provide something that, one, 'Oh, there's the thing. That's the thing that happened.' There were a lot of challenges across the board in growth and expansion."

Much of the blame has fallen firmly at the feet of the Embracer Group, whose aggressive M&A strategy has seen it grow to a seemingly unsustainable size, reaching the point where a collapsed $2 billion deal has necessitated a company-wide restructure that has already seen numerous closures (including Volition) and more than 1,400 jobs lost.

When asked what it was like to be on the inside, to see the group growing larger and faster than perhaps any other company in the industry's history, Loftus says there was actually an air of excitement.

"You look at who they purchased during those periods, large studios that don't just develop, they also publish, like Gearbox. And you look at some of the IPs that they picked up during that period, and you think about the possibilities of what that could mean. So, that can be exciting. As a developer, you're thinking of the possibilities. But at the same time, you wonder, ‘Wow, when's this going to stop? Or is it going to stop?'"

Traficante agrees: "Even when it was Dark Horse and Asmodee, outside of video gaming, you just start brainstorming on all the collaborations that could be possible. So, it was always exciting from a purely creative and development point of view. From the business side, though, that's trusting the experts, and there had to be a strategy where this was going someplace.

"It was pretty exciting to wake up and read the news just about every Monday, and hear about one of your favourite IPs. Like, 'I played that, I loved that. That's my favourite thing. How great! I'm a Lord of the Rings guy. I'm a Tomb Raider guy.' Reading these things was like, ‘I'm even closer. This is fantastic.'"

Madigan also experienced this, having been at Lost Boys when the company was purchased by Gearbox, thus bringing the Tiny Tina's Wonderlands co-developer into the Embracer Group. But he emphasises that the widespread layoffs shows Embracer is not the only one to be suffering.

"The whole industry took a downturn," he says. "Volition was the tip of the iceberg in that respect. There were already several other layoffs before that.

"The other thing is Embracer was trying to expand gaming, and they were doing a really good job. I think had the economic situation been a little bit different, their risky – some people would call it risky, some people would call it aggressive strategy – but there's the potential that they could really have expanded gaming. And [maybe they] will, because Embracer, they're not folding up shop. They're just trying to overcome this and still produce good games."

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