Last Tuesday, founder and creative director of Avalanche Studios Christofer Sundberg had to announce that he’d served notice to around 20 employees. Coming only seven months after Avalanche laid off 77 of its 160 staff, the news shows the severe pressures under which such large, independent developers are currently operating.
With Sundberg about to depart for E3 to show off Just Cause 2, we spoke to him about the situation his company is facing, how its fortunes have been shaped by the pressures publishers are under and how important this year’s E3 will be in defining his future. But though the situation might sound bleak, Sundberg is positive that Avalanche will prevail – if he can affect some significant changes to the ways his company makes games.
So, what happened?
Last year was really tough. We lost two publishing deals, with the value of over US$35 million. The first was in spring, but we were able to move staff from that project to one that was understaffed, so it in fact helped it. But when we lost that other project in October, that team had grown to 65. There was no other way we could solve the situation without letting those people go. That was painful, but we got out of it.
Our focus since has been on Just Cause 2 of course, but we’ve also been starting up some new projects. Right now the industry is really tough and these big projects are very risky for everyone, so it’s hard to get them started. At the same time, we have people with us now we’ve had for three or four years, which means that they require three months’ notice in the case that we have to let them go in the fall because we won’t have work for them. So we hope that during these three months in summer we can finalise the discussions that we’re having. It’s just simple risk management.
So it’s not yet confirmed that the staff members to whom you’ve served notice will be leaving?
Yes. It takes such a long time to negotiate contracts, plus we have E3 coming and then we’ll be following up on it, and then we’ll all be taking holiday in July, so we don’t expect much to happen during the summer.
Do you expect good news to come out of E3?
I’m expecting some good news to come out of it – we’ve been having some discussions with publishers and we have many options, so I’m very positive.
AionGuard as it appeared when we featured it on the cover of E198 in January
And what is currently happening with the AionGuard project?
It’s taken a new direction – we are continuing to work on the project but it’s not Aionguard now.
Compared to last year, have publisher attitudes changed regarding large and risky projects?
Yeah. But, we noticed that there was lot of insecurity last year, actually, in terms of where things were going. I think everybody on the publishing side knew what was going to happen, but not many publishers reacted fast enough to the situation. But there’s been a shift this year. The industry is hit driven and a publisher is only as good as the last game it shipped. If it ships a bad game it affects the next project, so one developer can drag a publisher down because it has invested so much in its project – and that will affect the next project, even if it’s by a good developer.
On top of that, it doesn’t seem like any publisher has a really clear vision of where it’s going or how it’s going to break this negative trend. Not every publisher is going bad, but no publisher is going well either. The ones that are in a grey area right now are just trying to hang on at the moment. That’s the impression we get. It’s scary for us to work with a publisher like that which can’t express a clear vision of where it wants to take the company, because it could go on and on along the same track. Too many publishers are doing that right now, desperately seeking help from old licences and reawakening old properties. In some cases that works, but in others I think it’s a waste of money because it won’t help the industry forward in the same way innovation does.
Do you see this trend being harmful to the industry over the course of the next few years?
In some cases I think it could be. Someone at a publisher needs to make a clear decision as to where they want to take the company, because you can’t just hope for a hit and explore on the side with some XBLA titles – I think that spreads things too thin. Experimenting doesn’t really help right now.
Have you been affected by the huge changes that publishers like Atari and Eidos have been undergoing?
Yeah, we’ve been living with changes in publishers for years now. Changes in publishers can affect developers in so many strange ways. We were working with one publisher and they just switched managers in one area and their business direction changed overnight. Sometimes it’s not really clear why decisions are being made and though everyone wants to make money and lower risk, sometimes it feels like innovation has become too risky. My experience is that so many publishers are trying to fill the year to make the end of the year look good, but are not looking three or four years into the future.
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