Creative destruction in the games industry

Necessary Force screen shot ... the demo couldn't save Midway in the UK

Necessary Force screen shot ... the demo couldn't save Midway in the UK

At The Guardian, Keith Stuart has a full and detailed description of the death throes of the Newcastle, UK studio of games company Midway.

… it all panned out like a typical studio closure. Often there are a few days, maybe even weeks, of confusion and uncertainty. Then the CEO arrives with awkward platitudes. Then the administrators roll in. Before this, the process of moving on will already have begun for the staff. It’s a tight community in the UK; news spreads fast via closed industry forums and business contacts. Everyone knows someone at another studio. CVs fly out via email to other publishers or to the many recruitment agencies specialising in the games industry.

It’s rare that anyone has to handle this process alone. Many areas of the country have government-funded regional bodies set up to aid local studios. These can help with the inevitable diaspora of staff, alerting potential employers and arranging impromptu careers fairs. As Neate explains, Duncan took a proactive approach, “he lined up a number of companies who had agreed not to try and poach staff while we tried everything we could to save the studio. They were waiting for the green light to set up a visit as soon as our options were exhausted. The next week was pretty much full of visits from companies from all over the UK, collecting CVs and espousing the benefits of working for them. We had a mailing list for opportunities, a Facebook group even. So the studio spirit still lived on (and still does), with people looking out for and trying to find opportunities for ex-colleagues.”

This is not an isolated incident – British game development is facing some stiff challenges right now. “We know from our research that 15% of UK business have gone bust or closed down since July of last year,” says Dr. Richard Wilson CEO of UK game developer trade body, TIGA. “Over that period we have seen business such as Pivotal, Free Radical and of course Midway closing down. Anecdotal evidence seems to suggest that the vast majority of people who are made redundant remain in the games industry. Either with other UK game developers or they will look for work overseas. Increasingly UK game developers that lose their jobs here are likely to be forced to look overseas – unless the UK government stimulates the UK games industry via TIGA’s proposed Games Tax Relief…”

There’s plenty more in a long and rewarding article about the reorganisation and recapitalisation of the gaming industry:

Employing just four in-house designers as well as a hand-picked pool of freelancers, Atomhawk may well be indicative of a new era of game development. The introduction of outsourcing has gradually chipped away at the notion of the one-stop-shop model, where a single studio produces a whole game from conception to completion. In the increasingly competitive economy, that is not viable. Instead, things are beginning to resemble another area of the entertainment media.

“I believe the industry is moving toward a movie studio model,” says Ashtiani. “There, only the key individuals like the director, the producer and the actors are on staff for the duration. CG, cinematography, lighting are all provided by specialist companies brought in to do the job before moving on to the next contract. This means that productions can hire very specialist firms that contain expertise and talent that they would normally struggle to hire direct or would be a financial burden when they are not needed.”

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