The game industry is still young at the age of 42. If it were a person it might be having a 2nd or 3rd child and be well on its way to owning its own company. But it's not a person. The game industry is made of many little cells, all working to create different things.
I've been in the industry for 15 years, and I've noticed a pattern.
Each studio (or cell) has its own agenda, culture, and development process. I've been privy to several of these processes and I've: seen first hand, heard second hand, and experienced directly, companies that have gone from little startups to massive corporate machines.
I'll start with a quick write up on the types of companies I've seen, and how they transition.
The Self Startup - A lot of companies started here. Some bright young minds got together and wanted to change the way games were made. Everyone else was doing it wrong, and they were going to show the world how to make great games. Everyone thinks they're going to show the world how to make great games. At the very least, games that they think are great.
Self Startups typically have around 3 to 10 people. They're characterized by their tireless efforts, their unity in creating something they all believe in, and their fearless ability to innovate. The issue for self startups is funding, and many people have defunded themselves to keep the dream of their game company alive. There are success stories in this area, but there are many more failures.
Many self startups gain money by creating games to other publisher's specifications, or by working on other studio's games as an outsource studio (doing art, animation, or whatever the bigger studio can't do on its own). These are seen as temporary means so that they can eventually work on "their big game." Whatever that might be.
Many Self-Startups transition to Funded Startups or Corporate Owned Companies, as they find themselves unable to complete their ambitious first game without additional money.
Studios that began as self startups: Valve, 38 Studios, and believe it or not, Blizzard Entertainment.
Funded Startups - As the industry progressed and showed promise, a new type of startup game company emerged. Those that could get funded based on the people's potential to produce hits. These startups usually have financial sector backers who want a piece of the game industry pie, and see the potential for money. These days, some of the larger corporatized game studios can also fund new startups as well.
Funded Startups typically have around 10 to 50 people. They're characterized by their belief that they can make a better game than the last one they did (no matter how successful it might have been), and a burning desire to demonstrate that they are successful on their own.
Revenue is generated by demonstrating progress on whatever game or game component they've promised the financial backers. Usually they're shown just enough to appease them so they can continue working. If the progress falls behind schedule or more money is required to continue, financial backers may continue to invest, or they may feel that the risk is too great and stop funding or sell their shares (depending on how they're investing) to someone else.
Many Funded Startups transition to Corporate Owned Companies when their financial backers run out of work for them, or decide the company is too risky.
Studios that began as funded startups: Ready at Dawn, Supervillain Studios, and Spicy Horse.
Corporate Owned Companies - In recent history, it was not uncommon for a large corporation to buy its way into the game industry by purchasing studios. In fact, many large corporations became known for games by doing exactly that. The potential for money has been proven so why not get a piece of the pie and create their own game studio? Of course, they don't know anything about games, so it's safer to purchase companies that do.
Corporate Owned Companies typically have 50 to 200 people. They're characterized by a few founding principles, a desire to continue to create good games (as most companies that are bought have already produced at least one hit), but are less willing to take risks due to several factors. Primarily, they no longer need to prove themselves, as they've already achieved some measure of success (they did get bought by a big company, likely for millions). A secondary factor is that they have to prove to the Corporation that their next game will make money similar to or more than their previous game.
So what ends up happening is probably already obvious to you...
Because the Corporation doesn't necessarilly know what a good game is, or how one is made, they want to see similarities between the previous successful game, and the new game.
In the eyes of a corporation, new games have many risks:
1. A new brand/game requires new marketing efforts.
2. A new game may alienate the previous built in audience the company already has.
3. A new unknown game may not be as good when compared to the previous game.
4. A new game that is dis-similar to the previous game requires unknown quantities of resources because the studio has never made it before.
The safest path... The most obvious path... The one that makes the most money, generates the least risk, and has the highest chance to be successful?
Some Companies that Became Corporate Owned: Blizzard Entertainment, Bungie, Popcap, Bullfrog, and Blue Byte.
Corporate Game Companies - These are the giants of the industry. Your EA, Activision, Microsoft, Ubisoft, and Sony. They achieved success based on creating solid game hits and transitioned that success into steady growth.
Corporate Game Companies are well over 200 people, and often upward of 1000+ employees scattered across multiple regions and countries. They are characterized by their constant release of sequels, a noticable lack of innovation, difficulty connecting with their consumers in a meaningful way, and their purchasing and subsequent destruction of other smaller game studios. They are at the top of the ladder in terms of resources and their ability to produce AAA games, but those AAA games are often crafted by the bright and fervent developers who just want to innovate. Innovation is risky, which I detailed in corporate owned companies, and as risk averse as corporate entities are with other game studio's work, they're doubly so with their own.
This risk aversion has a source. As these corporations grow, they hire more corporate types to run things. These people often know little about games, and I've seen two types emerge.
1. Those who immerse themselves in games such that whatever they enjoyed playing last becomes their sole focus, and everything must be similar to that last play experience (until they play something else they like).
2. Those who just don't care about games, so they will make choices based on the risk aversion principles stated previously. Meaning it needs to be almost exactly like the previous success, or like another successful game or they won't let it happen.
It's that sort of thing that makes it clear why EA was voted the worst place to work (2 years running now I believe). However, I don't think EA is a bad place to work in and of itself. Amongst us industry folk, the joke is that "EA is where we go to retire."
Developer Flight - So, what happens to those bright minded developers who wanted to show the world how to make a great game? They grow sick and tired of the Corporate entity they are beholden to, and decide to break out on their own. Off they go, and soon a new Self Funded Startup, or Funded Startup begins.
The cycle renews.
Thanks for reading, and don't worry.
Things are changing.
But that's a tale for another time.