From the outside, Iron Lore Entertainment appeared to do everything right. The studio had the talent, the ideas and the ability to execute; qualities that culminated in the 2006 release of the PC role-playing game Titan Quest, a piece that earned Iron Lore a Game Developers Choice Award for best new studio.

But by February 19, 2008, Iron Lore was finished. The studio made a vague statement on its website saying that it was "unable to secure funding for its next project" and would disband.

Days after the closure, Iron Lore's lead designer Arthur Bruno and art director Eric Campanella quietly (virtually silently) formed Cambridge, Mass.-based Crate Entertainment and bought the rights to that "next project," dubbed Black Legion.

We spoke with Bruno about the events that led up to the demise of Iron Lore and the future of Crate and Black Legion, a game that has yet to find a publisher.

Can you fill in some of the gaps between the closure of Iron Lore to the eventual founding of Crate Entertainment? Did you know soon after the closure that you wanted to start your own company?
 
We formed Crate in February of 2008 soon after [Iron Lore Entertainment] closed.  The owners of Iron Lore were very upfront about the situation for months in advance. They were also professional and thoughtful enough to set an end-date that allowed employees to collect an additional two weeks of pay while doors remained open and people could come into the office and get help finding new jobs. 

The closing of Iron Lore was a very sad event in my life but it also presented some unique opportunities. For the last seven years I’ve been a key member of the Iron Lore team, helping to grow the company from the time we were eight guys in a windowless basement prior to signing Titan Quest, to the point where we had shipped three titles with a team of nearly 40. I didn’t think I would feel satisfied just filling a position at a large, already established company. So, instead of dwelling on what had been lost with Iron Lore’s closing, a couple of colleagues and I decided we would dare to seize the opportunities before us and set our sights on the future.

What actually happened at Iron Lore that led to the closure? It's been reported that money ran out during the development of a console version of Black Legion, but what other factors were at hand?

The most direct factor was just the economics of running an independent game studio, which is a risky endeavor by nature. The biggest struggle for independent studios is surviving the gap between projects. 

When a game is completed, advances on royalties that developers take to fund development end but it can be several months, if ever, before the developer collects any royalties. Most games don’t hit store shelves for a few months after development ends, then, depending on how the development deal was structured, the publisher may have to earn back the cost of development and marketing before the developer receives any royalty payments. With the average full-scale console or PC title now costing around $14 million to develop plus additional marketing expenses, a game may sell a million copies without the developer earning any royalties.  With typical team sizes for an independent studio now being 30-90-plus people, you’re talking about hundreds of thousands of dollars per month to keep the team paid and the studio open.  At that rate just a couple months can force a smaller studio out of business. The obvious solution is to try and line up a second project that the team can transition to as the first project ends.



Now here is the kicker – in order to land that second project, you may need to invest a significant amount of money and man-power in creating pitch materials. Trying to put together a proposal for a second project on a tight budget while your team is stretched to the limit working on the current project is like trying to squeeze blood from a rock. You have to come up with something impressive though because you’re competing against larger, well-established independent studios and also large internal publisher studios. Now imagine that you’re also a PC developer that is trying to break into the console market because many publishers just aren’t that interested in PC-only development anymore.

You can see where this is going.

Iron Lore was not able to get THQ to agree to Titan Quest II after completing Immortal Throne, the expansion for Titan Quest.  Fortunately, THQ did give us Dawn of War: Soul Storm and that kept the company alive for another year. 

So, one major problem was that the team was stretched to the limit trying to meet the tight deadline for Dawn of War: Soul Storm. With very little extra capital or manpower available to invest in working up a pitch for our next project, it was slow going; too slow as it turned out.  With a very small group of people working long hours we managed to put together a fantastic combat demo running on Xbox 360 and some strong supporting materials but by the time it was completed we would only have a few months to shop it around to publishers and try to land a deal. The Dawn of War project ended and, with a 30-plus person team, the company was rapidly burning through its remaining capital. Iron Lore was unable to pick up another contract project and tragically was forced to shut down when it seemed only months away from closing a deal on Black Legion.

Unfortunately, signing a deal on a big-budget, original property is not a fast process.