I followed Telltales quite a bit before they went out of business, I even know a few people that worked/applied to work there.
For me there were always red flags, they tried too hard to chase the dragon after the unexpected success of TWD, all of the sudden they were churning out 2-3 titles a year (17 individual episodes were released in 2017 alone) with an aging engine. They were constantly missing out release dates for episodes and unable to update their games for new experiences.
Also do not forget that licences for these properties are very expensive to procure making it even more difficult to break even.
They also added an Exec from Zynga as their CEO in 2017, which for me represent the very worst gaming has to offer in terms of low effort, exploitable gaming.
This was the final nail in the coffin, unsustainable business practices with high level execs who only care about the bottom line always breeds failure.
Its a shame, a lot of people knew the end was coming but management kept quiet until they literally had to close up shop and gave people a few hours to leave the building. All the workers there deserve better.
While I'm no fan of Zynga for a great many reasons, the writeup I was reading from June [1] went into detail about their current woes stemming from irrational former management, and was hopeful that the new exec and high-profile licenses would be sufficient to save them from falling off the edge.
Obviously, that didn't work out in practice (and the complete lack of transparency about running out of money is horrific), but the firing of the CEO and some of his cohorts, and the former CEO suing the company he cofounded for firing him, are objective facts, independent of whether you believe the story of why he was fired or why this would have been different.
Having worked for a bit as a contractor, and knowing how close to not having reliable funding for some of us the small contracting shop I worked for was at times, I'm less surprised by the lack of warning than I might otherwise be, though a place sufficiently large should definitely have been more...robust against that failure case.
The whole thing leaves a horrendous taste in my mouth, because I liked some of what they did (I never found TWD appealing, for whatever reason), but after I found out how horrendous their working conditions were, I couldn't convince myself to buy any more of their work.
And now I'd like to hope this will be a cautionary tale about trying to live on the knife edge of viability, but I suspect it will just go down as something where the founders take shallow lessons but not the substance behind them to heart.
"This Dumb Industry" is such a good name for this series of blog posts [0]. I always tell people game development is both the hardest and least (extrinsically) rewarding programming career you could pick: volatile, driven by personalities, low paying, with hard engineering problems.
Working on video games is a lot like being in a band after High School.
You shouldn't do it with an expectation of any great rewards. You should really only do it if you are so passionate about the field that you don't have a choice.
Because of the high number of passionate people in the field the risk/reward ratio will always be skewed against you and most people will not be properly compensated for their work.
From personal experience I'd say services like Patreon/Kickstarter has made it easier to scratch a living as a Creative than ever before. There's 7.4 billion people on the planet. Make a fraction of 0.000001% enamored with your Creative product (be it yourself as an entertainer, your book series, your erotic app game, whatever), and you can hold your own.
Sounds like the "1000 true fans" concept - https://kk.org/thetechnium/1000-true-fans/ - i.e., you "just" need a 1000 people who are willing to pay a net 100$ / year for what you create.
From a marketers perspective... that's not as easy as it looks.
To get 1,000 True Fans to commit we probably need to expose the product to 50,000 "True Fans". Hoping for a 2% conversion rate.
To reach 50,000 True Fans we will probably have to create awareness with a larger group of potential True Fans that have a strong connection to your Fandom, maybe 500,000.
To reach 1/2 a million people you are going to have to get well beyond a few posts to your niche subeditors or making the front page on Hacker News.
If you come up with some great advertisements and eventually starting landing your $100 per year True Fans, it might end up costing you $20 each to find them. Not a huge problem... assuming you can do it. It's tough because in addition to coding your own app you now had to learn how to be a pretty decent user of AdSense or Facebook Ads. That is very possible, but it does eat into the time you have to work on your core business.
And now you need another 200 fans to pay for the ads you have been buying.
If you double your conversion rate, you halve the needed audience size. If you target a niche with a competent product, you will not need massive reach to the general audience. Gaming is a rich medium with many underserved communities that would love to pay for what they like.
I mean 0.000001% of 7.5 billion is 75, and that you'd really need a bigger percent of the world population than that. Pretty sure I have the math right.
(Sort of a tangent, but it is called out in the article...) Why DO companies insist on starting out in the bay area? Is it really that hard to find talent in second-string tech hubs?
Game companies need a variety of talent that can be hard to find. This includes engineers, artists, writers, and so on. The Bay Area isn't the only place you can find that mix of talent. There are probably as many game developers (if not more) in Southern California, but also in Montreal, Seattle, Chicago, Austin, Vancouver, etc.
The trick is that it really helps to attract talent if you are based in a place where people want to live and are likely to find other employment. Once you are established in your career, if you move for a company you ought to like living there. And if you like living there it helps if there is another place you can work if something happens to that company.
I've always imagined it was because the VCs bought the buildings they rent out to the startups, and probably the apartments as well. That makes the bay area a big money laundering machine where cash is guaranteed to flow from the investors through the VCs to the startups and back to the VCs again. Cha-ching!
That's not laundering. That's selling shovels (and jeans and beans and baths and beds) to the gold miners.
There may be a laundering component to it, though. If you're a fund manager, and you can't steal the principal directly, you might be able to invest it in a company that you can then require to set up headquarters in a place where you personally own rental property and service businesses. Chances are that some of the money you give to the company in your capacity as fund manager will come back to you in your capacity as landlord/business owner. Then you can turn around and invest that in your own employer, if you feel like it, so you can also buy in to all their outstanding lottery tickets.
This is just possible. It is not guaranteed to be happening.
If I give you $10, tied to an agreement that you both mvoe to town, and will eventually pay me back (in expectation) $11, and I also own property and suchlike that cause me to (in expectation) get another $7 from you in living costs, then my ROI is 80%.
If I just rent to whomever, I'm not getting the profits from the initial investment, but I'm also not driving up the rents by getting people to move to town. My expected ROI is at least a little bit lower, and possibly quite a bit lower.
Not saying it would actually work out in practice, or that this is something that's being deliberately engineered, but it at least seems plausible.
Why are sales and rental prices so high? Because demand is rising faster than available stock is increasing.
Why is demand rising so fast? Because people are moving there.
Why are people moving there? Because that's where their employers want them to work.
Why are employers locating there? For some, prestige address. For others, proximity to investment capital.
What does proximity have to do with investment? Couldn't a VC gain competitive advantage by locating in some other city that doesn't have such vicious competition for unicorns?
I don't have an answer to that. It doesn't make sense to me as a strategy, because I have incomplete information.
It isn't for a lack of trying. Attempts to go too cheap have ended in failure typically - people don't want to move to the middle of nowhere for a one company job when they have a nice well of employment already. The network effect is very real in a that critical mass of workforce talent can provide concrete advantages. That said moving to the fringe of the network seems to be a good move to get the best of both worlds if possible - Palo Alto was once the cheap option.
It probably is inflated due to ego - Juicero certainly didn't need significant talent (or have it for that matter) but if you are developing something that needs complexity like say self driving cars or their parts it could pay off.
Also, proximity to talent. If all the other game developers are in the same area, it's easier to recruit employees with "come work for us, we're 2 blocks east" than it is with "come work for us, we'll pay relocation expenses".
For developers in general, remote work is an option, but specifically for the highly-collaborative creative work that goes on in game dev (and especially the genre Telltale was running) a remote culture is a _lot_ harder to get right.
Workers follow the jobs. Where do you think all the L1s, H1Bs, O1s, TNs, and the people from other US cities come from?
About 50% of the people I meet moved here from somewhere else. It's easy to recruit people with "Come work for us. We can't give you more money, but we can offer more purchasing power, which is better. The homes within a 15 minute drive of the office--even at rush hour--are less than $1500/month."
For their story-heavy games, it seems like Telltale might have done okay with a location near the Georgia film industry, especially with the Walking Dead television show operating out of Riverwood Studios in Senoia, south of Atlanta.
I meant that I've wondered how much goes from the investors to the VCs (but then not back to the investors) via property rentals. I used "laundering" in the sense of "covering up where the money came from."
In my imaginary property model, the VCs make money regardless of whether the companies they back succeed, while the investors only win 1 out of 7 times, upon company successful exit. To the investors, it _looks_ like they've put a lot of money in the startups, but a significant portion of that goes back to property rental companies via salaries and office rentals. Which would be lower anywhere else, which is why I suspect the VCs are disincentivized to move companies elsewhere (or invest elsewhere). They make the most rent here.
But I don't actually know anything factual, like how many VC people privately hold heavy investments in bay area REITs. Even a well-intentioned (dedicated to making their client companies successful) VC would be a fool to not invest in REITs, now that the cycle is here, but after a few years of that and seeing where their money really comes from, I wonder if they can keep their good intentions.
I'm really not involved in the startup scene much at all, but my impression is that the amount of startup funding available elsewhere is just nowhere close to what's available in the Bay Area.
That might have two implications: First, more startups are able to get funding in the first place, and, second, of the ones that get funded, the average amount of money they raise is much higher.
If so, then it's not necessarily that more companies insist on starting out there, so much as that it's a sort of survivor bias: The Bay Area's business climate is just one that is able to grow more startups to a big enough size that you hear about them.
I would love to see a breakdown that shows the amount of money companies spend to be in the Bay Area versus the amount of money they raise, compared to the money companies would save not being in SV versus the amount they can raise there. It might be worth the added cost, it must be worth the added costs, but it's strange to just say "they can raise more money" because they also spend more. There may be fewer VCs in Pittsburgh, but cost of living is also lower, there are plenty of challenge-hungry programmers and MBAs there, and CMU is (subjectively) a better CS school than UC-Berkley.
The answer I keep hearing is that it keeps the founders near the VC money, which doesn't make sense here as I don't believe Telltale was pursuing that.
I've always wondered how much cash Double Fine burns through to stay in SF.
> I've always wondered how much cash Double Fine burns through to stay in SF
The documentary on Double Fine releasing Broken Age sort of touches on this as it chronicles the journey from idea, kickstarter, development, and release. In there there were some small layoffs or needing to shift people to bring in more money. Tim goes through some visual changes as well as the stress mounts.
The talent pool is deepest in the valley/SF and the VCs do have connections within it. You're also close to your VCs, and some VCs do provide helpful guidance to founders (that's what YC is all about).
I always figured it was because many SV startups are selling to other startups/VC portfolio companies at first (more open to new products, less risk averse with vendors, etc..) so it makes sense to be where your customers are.
its absolute insanity, and there is a huge competitive advantage by not doing that, and hiring smart people somewhere unpopular who don't want to live in the Bay Area or Austin and are looking for neat jobs to nab.
> trends like online shooters, Battle Royale games, loot boxes, or any of the other fads that have pulled teams off course with the false promise of easy money
Citation? Because I always thought that game studios switched to these because they were “easy money”, not because they were fads. Critics and journalists disliking a thing is different than it not being a successful strategy.
In the Battle Royals space the place is littered with the corpses of devs and publishers who kept on the fad. PUBG got there first, and then FortNite leapfrogged them, and to be blunt all of other attempts are names with little or no recognition. Remember The Culling II? Yeah, neither do I. And I don’t remember the dozens of other games that have tried to copy the formula and never even got the trivial recognition of something like Radical Heights, which killed its publisher Boss Key.
Fade in games go something like this: a workable formula makes someone a lot of money. They rise and at a certain thresholds major publishers take note and iterate, crushing the original. Then other publishers inject said mechanics into their flagship games until people are so sick of them that they can’t stand it. There is a reason why all of the big upcoming shooters like CoD IV have battle royale modes.
To a lesser extent fads can burn out without studios ever really getting into it because it’s too small (relatively speaking of course). Surgeon Simulator set of years of “simulator” games ranging from I Am Bread to Black Screen Simulator. Eventually we got Shower With Your Dad Simulator which subverted the genre a bit, and set of another explosion of imitation. These indie fads tend to follow that pattern of initial massive explosion followed by secondary ignition when some slight twist on the formula introduces some air to the. mixture, and this repeats with smaller explosions until the last dregs of fuel are exhausted.
Zombie modes are another example, as are hero shooters like OverWatch (the “big thing” before BR). Remember LawBreakers? Exactly.
Although a lot of the commentary and criticism from people is the bad culture but I really think this was a secondary problem, after all bad culture from the top (autocratic behaviour plus harsh deadlines?) might not kill you. (Apple, Tesla, etc.)
But it would seem the most important aspect is really the declining sales every year that could likely be due to business decisions from the top or simply a cash management issue where the cash at hand was not getting replenished at hand fast enough which again could be a business decision gone wrong based on overly positive sales expectations.
Could a side issue be that the game format just wasn't sustainable? The sales steadily declined after Walking Dead because it's just more of the same?
FWIW, I thought the first Walking Dead was super interesting. It reminded me of those old Choose Your Adventure books. I had a blast playing it because it _felt_ like there was weight behind the decisions. After beating it, I started a fresh game so I could go through a totally different path / play style and... the illusion shattered. The choices didn't have any notable effect on the game.
And that was that. I just wasn't interested after the first game.
Yeah I feel the same. The Sam&Max titles by telltale are wild. There's weird shit going on in these games, especially later on.
However, after the walking dead, the walking dead, wolf among us, minecraft story mode... they kinda feels the same. And as you say, the games are not a divergent graph like witcher 3 or the avenged is. It's more of a fork/join graph, with very low distance from fork to join.
From there, I had no interest in their other games, tbh. I bought Minecraft Story mode entirely because I like Petra, but that's about it.
Jim Sterling went into this a few times, likening TT to a magician with one really exquisite trick. The problem as you put it and he explained, is overexposure shatters the illusion. Instead of trying to invent new tricks, or at least new ways of presenting them, they just went mad exposing people to the same device ad nauseum. It didn’t help that many of their recent titles were very grimdark, which gets tiring, or that their engine was old.
The article starts off saying it was probably both:
"A company where the president picks dumb products, wastes money, and hires unqualified losers is dysfunctional. A company where the president builds a cult of personality, fires people who criticize him, and hires unqualified friends / relatives is toxic.
After reading The Verge article, it sounds like Telltale suffered from both problems. They were dysfunctional in the traditional sense of making lousy business decisions, but they were also dysfunctional in the more specific sense of being run by one or more jerks."
Maybe Apple managed to survive (thrive!) despite of the jerk, but that doesn't mean one wouldn't bring down a company on a less robust standing that may have otherwise still managed to keep the right trajectory.
"The culture is toxic." : The problems are caused by one or more individuals, who may be insurmountably difficult to fire. Actually firing the offending people is likely to correct the course quickly.
"The culture is rotten." : The problems are caused by dysfunctional processes, which may be insurmountably difficult to amend. Firing people won't help, unless their replacements are an order of magnitude more competent, and empowered to enact changes.
I don't think rotten can be fixed unless toxic is fixed first. In this sense, toxicity is the more immediate problem, in that it prevents detection of deep structural issues and potential repairs from being approached in a timely and constructive way.
He may have not been a complete jerk, or the same type of jerk.
Maybe he only wasn't nice to people but didn't hire his incompetent friends, etc. Maybe he was so good at other stuff that a negative jerk effect was not enough to offset the positive parts.
But my point was that according to the definition given in the article I don't think you can say "the jerk effect" was zero at TT, I think the author made a convincing argument.
I would summarize it more simply as a failure of business to manage their money. Ed Catmull calls it "Feeding the Beast." They tried to turn interactive narrative into a factory that cranked out new titles.
It's a shame. I haven't connected with stories in video games for a while. I still long for the emotional depth of Mass Effect and TWAU. Telltale was one of the good ones.
Yes VCs aren’t stupid (well mostly) - they know you won’t be able to hire as many similarly talented/experienced people in Atlanta. Want to hire some ex-faang empoyee? Fogetaboutit.
And what’s in Davis? For all intents and purposes it’s just more expensive Atlanta
> you won’t be able to hire as many similarly talented/experienced people
But we're talking about starting a company. Typically you'll already have a technical co-founder or someone, no? If you grow you can grow to SF. Has no VC ever asked, "Would you be willing to relocate to <CHEAPER CITY> for two years?"
> In 2006, Davis was ranked as the second most educated city (in terms of the percentage of residents with graduate degrees) in the US by CNN Money Magazine...
Have you been there? It's nice. :-) It's close to the Bay Area and has lower costs and UC Davis. (And you don't have to put up with the constant cold winds! It's toasty there all year 'round!)
I don't think you have spent much time in the other Valley: The Central Valley. Cold winters and hot summers...
Winter avg highs are in the 50s (F), and summer avg high are >100°.
I didn't realize Winter got that cold there (but having spent a winter in Colorado I no longer complain about the cold in CA. :-) But Davis gets a lot of sun in Winter. I'd pretty much expect to either: have enough $$$ to afford (to lease or build) a properly architected building that has passive climate control; or NOT have enough and have other concerns than not-quite-perfect climate. I prefer SF's climate(s) to that of the the Central Valley, but it's hardly hellish there. (Unless you're stuck in traffic on the freeway and your car's air conditioner is broken. That is a level of Hell I think.)
> Yes VCs aren’t stupid (well mostly) - they know you won’t be able to hire as many similarly talented/experienced people in Atlanta.
Considering all the "talent shortage" whining, it doesn't seem like they can find many in the Bay Area either.
> Want to hire some ex-faang empoyee? Fogetaboutit.
Most startups should fogetaboutit anyway. They don't need ex-FAANG employees, will waste precious runway hiring them for little marginal gain, and will be hard-pressed to give them all meaningful work to do (leading to spending even more money in short order to replace them).
The shortage in the sfba is of different kind - too much competition. So all you have to do is to offer larger pay or something non-monetary like career opportunity and you got yourself a great engineer. In some other locales it could legitimately be shortage of qualified staff.
To your second point, faang employees are much more likely to pass any interview process (based on my extensive interviewing experience at my current gig) so you’re saving money on recruiting at least.
This may be generally true, but I don’t think it is specifically in the case of Telltale. They made interactive fiction. Should that really require superstar programmers? Where they probably should’ Been spending their money is on artists that produce things their audience looks at and goes, “Ohh cool, I want that.”
How did telltale have 90 developers to lay off in 2017? Wasn't their bread and butter a pretty simple quicktime event engine and their differentiator storytelling?
The video games industry is where we consistently hear some of the worst stories of workers being mistreated and lied to under dysfunctional management in toxic cultures. Constant crunch time for games that don't even succeed in the market.
What would anti-union libertarians say about the labor conditions there? Workers should just avoid the game industry until more tolerable and better-paying workplaces arise? How is organizing workers not a valid solution to the problems there? Do they think that unions will somehow make the situation worse?
Collective bargaining relies on negotiating blanket policies for all the workers. In some industries, that is fine. If all your brick layers get paid the same and given the same breaks, and all your brick-laying supervisors get their standard supervisor pay, that might be for the better.
It doesn't work that way for knowledge workers and creative types. Some people are rare talents, some people are just okay. Some people fill wear 5 different hats and cover responsibilities outside their title. One artist may be the visionary behind your greatest success, another just follows orders, but both are on the same team and at the same level of the hierarchy.
If you force a system where everyone makes the same salary based on how long they've worked there, the best people will leave. But if people negotiate for themselves, it isn't collective bargaining anymore, and you don't have a union.
Want to prevent burnout? The union negotiates for rigid 9 to 5 hours. Many creative people will hate it. Or you let people come in when the want, but they have to fill out a timesheet, can't work overtime without the approval of both a manager and a union rep, and have to adhere to rigid guidelines.
Unions can't work without bureaucracy, but creative people and creative organizations don't work well with bureaucracy.
A union isn't a bureaucracy it's a collection of people with aligned goals. If an entire industry is entirely full of shit I don't understand why they couldn't collectively bargain for whatever within reason is required to improve the situation.
I can only suppose that people with perspectives like yours have convinced themselves and others the possible is in fact impossible for no discernible reason.
It's bizarre that people working in an industry that claims to be all about innovation and disruption immediately assume that unions cannot innovate from their Industrial Era forebears.
And the actual, real life results for most unions today... is not great. I am not even talking about industrial era stuff. I am talking about existing examples of unions.
If this innovation and disruption of the union industry was so easy, then someone would be doing it. But they aren't.
And I have no reason to believe that techies would be any better at solving the inherent problems of unions, better than all the other people who have tried. IMO, it would inevitable run into exact the same problems as the ones you see today in existing unions.
How else should we judge things, than based on their results?
How can there be any results if so few have tried reviving unions, in recent years? That’s like writing off electric cars in 2003 or virtual reality in 2011. There’s always a Musk or Luckey working behind the corner. People just have to try.
With virtual reality and electric cars, there has been a slow but steady increase in technology and quality for these products, that has been noticable at all times.
IE, the existing electric cars in 2004, were better than the electric cars made in 2003. And the same for 2005 cars, compared to 2004 cars.
This happened, until eventually they became good enough that people started using them, but there was still noticable progress along the way.
The same is not true for unions.
The unions in 2000, were not noticably better than the unions in 1990. There is no steady and obvious progress, or linear regression that can be extrapolated into the future.
IE, for these other technologies, they were clearly getting better by X% every year, using a measureable, objective metric. Battery life, or screen resolution or whatever.
You do not see an x% increase in an obvious objective metric for unions.
By what objective metric were taxis improving by prior to the technology that enabled ridesharing? Sounds like the intersection of workers' rights and high-tech is awaiting the Kalanick of unions.
The two can go together. The gig economy, social media, crowdsourcing, open source are just some examples of social and technological innovation happening together. No one’s just bothered to apply it to unionization, yet.
The reason that Unions work for Hollywood is that the final product is dependent on a small number of specific people (mainly actors, but also writers and directors). If those people refuse to work, there is no product. Because actors are unified and honor the other less powerful unions they imbue them with power. Teamsters can strike and gain concessions from studios because actors won't cross the picket line.
Knowledge workers are largely cogs. No game project can be held hostage by one or a several critical employees. A majority of game jobs have already left California, with drop in replacements in Shanghai or Montreal or Austin.
Sounds like this article illustrates the vital importance in writers to adventure games. Telltale Games’ post Walking Dead Season 1 efforts specifically failed because the writing was not as strong and just attempted to replicate the success of the first.
You make a good point with screen writers. Admittedly I don't know much about that industry.
Do you have a good example of engineering unions? The only one I know of is the SPEEA, and I know of it because one of my friends quit a job to escape the union defined hierarchy and the associated culture.
Every union is a democratic organization that is free to define its own rules about pay, time spent on the job, etc.
There is no reason, philosophical or technical, why a software dev union would need to have rigid 9 to 5 hours or wages based on length of time on the job.
Unions lets workers assert some meaningful control over the operation of the company, instead of simply relying on management to give them conditions they like. A union of creative folks could absolutely reflect the working conditions creative folks like.
It doesn't work that way for knowledge workers and creative types.
It actually works quite well for Hollywood, and for scientists and researchers...even though these industries are heavily talent-based.
Unions negotiate based on the needs of their members. Some unions, like the Hollywood unions, negotiate job protections, benefits, and salary minimums. Members are free to negotiate better deals.
A part of the reason you hear these stories of the games industry is that it's a desirable job for many people. Games companies can get away with more than some other software companies because enough people want to work on games despite worse employment conditions than they might find with the same skill set elsewhere. There's a supply and demand issue. There's also a certain amount of self imposed crunch by people who are genuinely passionate about the game they're working on and don't have as many other demands on their time due to family or other outside interests or commitments.
To the extent that unions improve worker conditions, they do so in part by restricting entry and thus influencing the supply side. In general unions tend to benefit people already in the industry at the expense of people outside who'd like to join, among other groups. Whether that's a desirable outcome depends on large part to which group you either belong or care about the most.
I've had several anti-union libertarian coworkers in the video game industry, each one thought they are exceptional so they don't need a union and they trust their choices/negotiation skills - to be fair probably everyone in game industry has a robust opinion of themselves.
> Workers should just avoid the game industry until more tolerable and better-paying workplaces arise?
Yes. There are too many people in the industry pursuing their passion product, as opposed to doing something because it will be successful.
If you act like an artist, expect to be treated like one. And artists are treated.... poorly by society.
Not that I don't support the general idea of working on things that you like. I have a couple side project myself, that I am doing for fun. But I have absolutely zero expectation of success, and have a day job (that I like) to pay the bills. I am not going to pretend like my side projects could support me.
For me there were always red flags, they tried too hard to chase the dragon after the unexpected success of TWD, all of the sudden they were churning out 2-3 titles a year (17 individual episodes were released in 2017 alone) with an aging engine. They were constantly missing out release dates for episodes and unable to update their games for new experiences.
Also do not forget that licences for these properties are very expensive to procure making it even more difficult to break even.
They also added an Exec from Zynga as their CEO in 2017, which for me represent the very worst gaming has to offer in terms of low effort, exploitable gaming.
This was the final nail in the coffin, unsustainable business practices with high level execs who only care about the bottom line always breeds failure.
Its a shame, a lot of people knew the end was coming but management kept quiet until they literally had to close up shop and gave people a few hours to leave the building. All the workers there deserve better.