Chris McElligott Park
January 28, 2016
Well @#$#@%$. The TLDR is that almost all the Arcen staff are going to lose their jobs, effective Monday.
The Good
Starward Rogue is out now, and it’s getting glowing steam reviews (76, all positive, as of this writing) as well as a lot of positive youtube and twitch coverage. Mostly from smaller channels with a few exceptions at the moment, but still. People are playing it and they are really loving it! As in, more than anything else we’ve done since AI War — really?? That’s awesome news!
The Bad
Oh, but the sales suck. We’re lost in a sea of other titles. About 9,000 people on Steam have wishlisted the title, which is awesome — next time this goes on discount, hopefully they’ll pick it up (but I mean, it’s only $11.99 USD and it’s 10% off already!). By contrast, about 2,100 people have bought the game across Steam and Humble.
Deja Vu?
I’ll save you the trouble of pointing out that this has happened to us before. Back in 2010 we had a lot of trouble, and then promptly were pulled out of it by an outpouring of support. I still had to lay off about half the team that worked on Tidalis, but the company itself continued on and eventually grew larger than ever before.
We had some more woes in early 2014, right before The Last Federation came out. These were not particularly public, but we lost a bunch of staff then again. By making a lot of personal financial investments and by making the staff cuts, I managed to get us to the finish line on that game without us having to cry for help again. It wasn’t something I ever wanted to do again — particularly after in 2010, that became part of our reputation. This isn’t exactly something you want to be known for.
Anyway, TLF then became our fastest-selling title to date (though it’s total sales have not matched AI War), and we wound up with a large cash buffer. I brought back on some of the staff I had had to lay off previously, albeit more carefully in terms of how many people and how many hours. I didn’t want this to happen again.
Stars Beyond Reach
Wait, I thought we were talking about Starward Rogue? Yeah, but my chief screw-up this time happened in relation to Stars Beyond Reach. You may recall that in early October we decided to push that game back until Q2 2016, citing burn-out on the game and being creatively stagnant, etc. That was after pushing the game back repeatedly, first from May to July, and then to late September.
When we started on Stars Beyond Reach, we were relatively cash-rich. We had over $200k in the bank, solid monthly income, and I was feeling my oats. It was time for that big awesome 4X game I’d always been wanting to make. What better time, right? People had been asking us to do a true 4X for years, too, and now we were finally ready.
What happened next is complicated, and the details are somewhat up for debate. However you look at it, though, it’s my fault. Basically I overreached with the design, is the simplest way to put it. We spent a TON of time in R&D mode, and then went to beta, and found out how much the early versions kinda sucked. So we did more. And more. And more. And it got better with every iteration. The game was becoming fun, inch by inch.
However, all this time spent in extra development more than doubled the cost of making the game, and in the meantime our steady stream of income from our 2014-and-before titles started to dry up. The Steam store changed a lot, and periodic discount sales — as well as the larger store-wide sales — were no longer the huge windfalls they once had been. Our non-discount-period sales were up because of the new changes, so that was good. But the promotional income was gutted, and that was our main source of income. So we started bleeding money.
The Money Bleed
The image to the left shows a pretty good approximation of what happened month by month. You’ll notice that nowhere in there does it include paying me back for the money that I had to put into the company in order to finish The Last Federation (that was around $40k). It does include the company line of credit, which I had put to about a balance of $50k right as TLF was coming out.
In other words, yeah, we ran ourselves down to our last dime making TLF. I say we — I mean me. I mean, there again, it was my fault for being overly ambitious, and then really going through a lot of combat models trying to get things fun, etc. (I thought I had learned my lesson after the TLF project was such a close call, but clearly not.)
Anyway, yeah, first thing to do was pay off the LOC so that we were not being hit with $400 or more in interest payments each month on that. But at any rate, the company was really flying high in 2014. Our income actually has grown every year except for 2015, but in 2014 it jumped a huge amount from our previous high of about $400k gross income (in a company financial sense — not in the sense of gross sales at distributors sites — from that standpoint the $400k was our net income after distributor fees and taxes). Overall our gross income for 2014 was about $700k, which was huge for us.
That meant the gross sales prior to the distributor cuts was well over $1m. Coool! Incidentally, our total gross sales prior to distributor cuts for all our games in the last 6.5 years has now passed over $3.5 million, give or take a bit. Yay us!
I didn’t get paid at all in 2012, and had put at least half my income back into the company in 2013 and 2014 to keep it going, but our overall library of games — and thus pool of long-term income — was growing. When I say it like that, it sounds kind of stupid, but basically it boils down to the fact that I had enough to live on for my needs, enough to pay staff, and enough to keep making games.
Most of our games have made money (well, actually about half of them have earned more than they cost), and out of those some made VASTLY more than they cost to make (AI War in particular, but TLF also did very well on that front). So it’s not completely moronic to say “we’ll worry about that back income later, and right now the important thing is to come out with another game that is awesome and which hopefully has a solid reception like the other games of ours which made money.” All it would take is one more game like TLF and all of that back history would be wiped away, PLUS we’d have a handy war chest as buffer for during future games.
What happened, instead, was our back catalog except for AI War and TLF all pretty much stopped earning any money around mid-2015 when some of the Steam store changes happened. And our ability to gain substantial income from periodic promotions disappeared, so we stopped having “on months and off months” and pretty much just shifted to “off months.”
The First Crossroads
In April of 2015, I knew we wouldn’t be able to finish Stars Beyond Reach in time for a launch in May. So at that point we could either push back the date on that and try to finish the game by July, or we could set it aside and work on some other game. I was getting really excited by the idea that turned into Starward Rogue about that time, so it was suuuper attractive to want to just jump over and work on Starward and give up on SBR for the time being. SBR really wasn’t going all that well at that time, although there were a lot of things that were headed in the right direction.
I am well aware of the sunk cost fallacy, and I considered that a lot when making my decision. I’m also very aware of the “grass is always greener” effect. A project that is in the ideation stage is always more exciting than one in the late slog period of development. After looking at finances and talking to staff and my wife and my parents and looking at various circumstances, I decided to keep going on SBR. Going for early July would actually give us loads of extra time to finish it up really well.
And Then Down From There
Obviously “we’re almost done” kept not being true, because Stars Beyond Reach just kept not being good enough. I have over 160 hours playing the game, and it is a fun and intriguing game in quite a lot of ways. But it is just missing… something. Some of the mechanics just don’t quite work. Enough things are just out of place that the whole isn’t the pleasing masterpiece that I had hoped to create. Not even close. How does it stack up to other strategy games? That’s impossible for me to state objectively. But the game was not (and still is not) at a state it needs to be for me to feel good about trying to sell it to you.
The Biggest Crossroads
October rolled around, and we were basically hitting a point where my projected income put us running out of funds just prior to the end of December. IF things went really smoothly with SBR, which seemed unlikely, then we might be able to release it into the maelstrom that is the November release schedule. That would have been suicidal, and so that would mean releasing SBR in the new year.
But that would be really putting ALL our eggs in that one basket, and if we couldn’t release anything until January anyhow… well, that might just be enough time to make the game that went on to become Starward Rogue. Going for that, and taking on some debt to accelerate the project and thus get it out faster, seemed to make more sense. Even my fiscally conservative mother agreed. Having one project in a semi-finished state and another project finished in that timeframe just made so much more sense.
And I still stand by that! That was the right call, and actually everything went according to plan from then on.
Starward Rogue As A Project
The first thing I did was get Misery from our forums on board, because he’s a whiz at the sort of enemy designs that make up the game. I also got up with my friend Zack, who is excellent as a level designer, to help work on room designs. I wound up pulling in over a dozen other people from November through January to work on a contract basis on aspects of the game. Actually it was probably the best work I’ve ever done as a project manager / producer. Man it was a hellish rush toward the end, and I was sleeping about 3-4 hours per night and then working the rest of the day for the last week or so toward release, but things all came together.
Oh, but one thing. Just a tiny thing. Because of this insane schedule, and the fact that the game was going to be coming hot off the presses right as release happened, there wasn’t going to be time for advanced marketing, PR, awareness, etc. No launch reviews. Ugh! But to combat that, we did a really big promotion with a Bionic Dues giveaway with Humble Store in exchange for a lot of promotional awareness about Starward Rogue.
We knew starting in October that the marketing/PR side of this was going to be a nightmare and likely would harm our launch. But out of a number of bad options that I had in October (based on my own mistakes from earlier in that year), that was the least-bad. And then Erik came up with the idea for the Bionic Dues giveaway, and that was a really huge coup in terms of our ability to get launch-day press and so forth. It was a gamble, sure, but we stacked things in our favor as much as possible given the corner I painted us into with SBR.
And Here We Are
Welp, Starward Rogue is out now. I couldn’t be more proud of it. It’s such a cool game! It’s possibly our best yet, and certainly better than anything other than AI War. Players seem to agree. Our beta testers had started out iffy in late November, and had really helped us shape this into something they were all hopping around excited about. Threads were popping up all over our forums about “I love this game!” and “Where did this come from?” and so on.
In the past when we have done a launch, generally we wind up on the Steam top sellers list in the top 40 at around the low side, and peak somewhere in the top 10. We’ve reached the #6 spot a couple of times, briefly, and if memory serves we might have very very briefly been #2 at one point. Usually we hang out in the teens for a few days and then drop off.
That’s where we make our money. Other things, like positive reviews from some sites or youtube channels, cause a brief spike, but that’s about it. Things taper off and we then have a low-grade income from the game for a while after that. Then the next income pops are pretty much discount promotions — although that started not being the case in 2015 for us, so now that was questionable as well.
However, unfortunately, Starward Rogue has seen financially the worst launch for us except for Tidalis and Shattered Haven. Those two did worse (much worse), but we were not as large at that point. The Tidalis flop is what precipitated the 2010 money woes that were public, though. Shattered Haven was fortunately not really more than a disappointing blip in 2013, financially speaking (there are honestly people in our fanbase for whom that is their favorite Arcen title — I know the steam reviews are “mostly negative” and I get that most people don’t like the game, but it wasn’t something that nobody could enjoy).
Anyway, Starward: we have mostly hung out in the 200s instead of in the teens, and mostly in the 250s at that, top-seller-chart-wise. We peaked, briefly, at #98. That lasted under 3 hours. Our clickthrough rate on our marketing run was over double the store-wide average, but it still ended early compared to what happened with TLF. I’m not sure why that was, but we were still getting other kinds of featuring, so there were some solid hits coming in.
What Didn’t Happen
This was supposed to be a month of high earnings to recoup recent past losses, and to provide a nest egg that would support us as we finish up Stars Beyond Reach in a manner that we feel we actually want to release (there are some very heavy revisions that we have planned on that front). Instead, it looks like the company will be taking another loss for the month — this one about $6k, give or take a little (final numbers are not in).
To put it another way: owwwww.
I look at the reviews and the player comments and so forth and I get so happy. I look at the sales numbers and… yeah. This is literally unprecedented for us. We’ve had rocky response and reasonable or poor sales. We’ve had good response and good sales. We’ve had poor response and poor sales, and mixed response and poor sales. What we’ve never had is awesome response and poor sales.
What Happens Now (Assuming Nothing Changes)
I’ll have to pull another $30k or so out of my personal money, taking a hit on stock sales since the market is down. The LOC is pretty well maxed out. I’m not going to default on any debts (good lord I would never put myself in a position to do that), but I don’t have any extra money to spend.
Based on the current income level, we will only be able to maintain a fulltime staff of two — Keith and myself — but I’ll stretch it to three in order to keep our artist Blue on as well. We need an artist on staff. Everyone else, including Pablo, our awesome composer who has been with me from the start, gets laid off. If things don’t improve, then after another month or three Blue also gets laid off.
Some of the contractors on Starward Rogue were originally fans and have now offered to donate some of their time to helping maintain the game post-launch and continue curating player content and creating some more content of their own, etc.
In the last two months we have had six people fulltime, four more with > 10 hours per week, and another seven with regularly-recurring work generally paid by the piece. That’s the team it took in order to make Starward Rogue in such a short amount of time — and it doesn’t count voice actors or some one-off contract artists, etc. Most of that team was just on for some limited contracting in the first place, but seven of those have had a work relationship with us for at least a year (if not three or six years).
To some of them it’s just a disappointment. To others it’s the loss of a dream job. For two of them, this disruption comes at a time when they have new babies on the way. For Pablo, he’s a new dad as of less than two months ago (his paternity leave is why there isn’t more music in the Starward Rogue track list, but he is adding more since returning to work). On the flip side, and what I have to remind myself: nobody is dying, and most of them have spouses that either can or do work; and/or they have other job prospects beyond just Arcen.
But still. These people are my friends, my colleagues, and people whose livelihoods are my responsibility. I have made all the choices I have in good faith, and usually in lengthy consultation with the rest of them. But there’s been a lot of trust that they put in me that I knew what the hell I was doing.
It just so happens that I may not know what the hell I am doing. Either I never understood the market as well as I thought I did, or the market changed while we had our heads in the sand developing SBR, or both. Whatever the case, it’s something I deeply regret. The fact that they are all being so nice and understanding with me makes it all the worse, honestly.
Why Am I Telling You?
I don’t know. I kinda thought that Starward Rogue was good enough that this would be a new chance to live life properly and not run around with my hair on fire all the time. Instead we have this gut punch.
I mean, obviously, I’m hoping that you’ll tell all your friends and family and shout to the high heavens how much the game if you do. Nobody writes a post like this without hoping for some help, and it would be disingenuous for me to suggest otherwise. This post is definitely a request for help, if you feel that you want to give it.
It’s very embarrassing for me to come back and do this a second time; that pretty much cements that as part of my identity in your mind, doesn’t it? I’m now the guy who can’t manage the finances of his company right. Well… so be it. There are many worse things to be. Someone who doesn’t take a last-ditch opportunity to try and salvage his staff is one of them.
How Can You Help?
This is why I said “I don’t know” in answer to the above question. Our problem seems to be one of exposure for Starward Rogue. Unless I am very much missing something, there doesn’t seem to be any reason why it shouldn’t be happily finding a smiling audience about now. If you have a way of helping get the word out about the game along with whatever your opinion of it is (if you think it sucks and want to tell people that, I guess that’s certainly better than them not knowing at all).
Some of your wind up being inclined to start giving us monetary tips through paypal. And while that is certainly very much appreciated, that’s kind of a “sprinkling water on a heavy blaze” sort of situation. In order for me to salvage staff at anything close to the levels we had in 2015, let alone what we’ve had recently, we need sustained sales from a wider audience — an audience that I feel like the game would appeal to, if only they knew about it properly and actually bought it instead of wishlisting it.
“Give a man a fish,” and all that. Not that we don’t appreciate the fish, but if you give us money and then see us still have a massive layoff I imagine that’s going to feel like a gut punch to you. So I mean… I’m really not wanting charity here.
If the game doesn’t deserve to sell, then it doesn’t deserve to sell, and that’s the way it goes. In that case, then the appropriate thing that usually happens in a company is a layoff. Yay capitalism.
The only thing that I’m wanting is for the game to have a chance to actually find its audience, and for them to either support us or not by deciding to purchase the thing we have on offer for them. That’s why we made this in the first place! (Aside from the fact we wanted to play it, I mean.) If that’s simply not meant to be, as was the case with Shattered Haven or Tidalis, then so be it. But that’s not at all the vibe I’m getting so far.
What About Stars Beyond Reach?
I’ve brought this up several times in this post, so I need to go ahead and address this game’s status. Yes, we are still planning on releasing this in Q2 of this year. It will be undergoing a major overhaul of a lot of the low-level mechanics (but not the high-level spirit) under the direction of Keith, while I pretty much step back from the project (we can’t have two head chefs and he’s the one with a really good plan for the game that I’m really excited about).
I and the former-contractors now-volunteers will be maintaining Starward Rogue. I’ll be doing playtesting and giving feedback on Stars Beyond Reach along with the other 250ish testers we have for that game. And I’ll be working on another project on my own. I’m not needed on SBR in a fulltime capacity right now, and so far SR isn’t showing signs that it can support me doing fulltime post-release content for it like I had hoped, so it’s time for me to split my time with something new that will hopefully do a better job of sustaining our new tiny staff if that’s what we shrink to.
In short, if the sole reason you care about the fate of our company is because you want to see Stars Beyond Reach become a reality, then please don’t support us extra at the moment. That’s a lot of pressure on SBR — what if you don’t like it? What if, god forbid, we just can’t get it right and scrap it? None of that will be affected by what goes on with our staff-at-large anyhow at this point. SBR is in no way a hostage to our current circumstances.
Time To Wrap This Up
I don’t have any rallying cry to close this, or anything like that. I’m exhausted, the whole team is, and right now we’re feeling this really strange mixture of being very happy and proud and also being… a bit crushed. You might say “that’s life,” and you’d be right. You might point out that game companies big and small get shuttered every week, and you’d also be right. And we’re not being shuttered.
But a lot of people I care about did a lot of hard work to bring to life something that I think you’ll enjoy, and they’re going to be losing their jobs in about half a week because of me. I figured I ought to at least give you a heads up.
Official forum post on this topic.
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Memorandum
