I anticipated that Electronic Arts’ purchase of Titanfall studio Respawn Entertainment wasn’t going to go over well with fans. And from what I’ve seen, the reaction has been mostly negative. But should we really be so quick to judge this will be the death knell for creativity at Respawn? I don’t think so. I think we need to understand the realities of running big development studios that are building blockbuster games.
I don’t have the complete inside scoop or a crystal ball on the future. But I have interviewed the leaders of EA and Respawn about this, and I want to point out the basic business matters that fans should understand before they leap to the most cynical conclusion. I don’t mean to apologize for the behavior of big companies. I just think we should grasp why they do what they do. These companies aren’t acting the way they are because they’re evil. It’s because they’re doing what’s in their business interests, and that’s the way that you run a company with the aim of producing one big creative success after another.
On Twitter, some fans made immediate use of their extended 280 characters to criticize the deal.
If you are expecting people to be happy for you, they won’t be. @EA is one of the most hated companies out there. If history has shown us anything, their leadership will drive your company into the ground and destroy the quality of your product. This is a bad move @Respawn
— Mark Hilgefort (@mrkhiggz) November 9, 2017
Another snarky fan said, “I’m pumped to open loot boxes while wallrunning.”
Fans appear to be cynical now because EA just shut down the 70-person Visceral Studios in Redwood City, California, and reassigned its work to a studio in Vancouver, Canada.
In an interview, I asked Vince Zampella, CEO of Respawn, what he expected to hear from fans.
“Ultimately, my message is we are still Respawn, and we are going to make the same games we did before, and hopefully better,” Zampella said. “Anyone who is a fan of Respawn should trust us that what we are doing what we think is best for the future of Respawn and our games. We intend to deliver to our fans everything and more than we did in the past.”
Why are fans not trusting Respawn? And why are fans automatically assuming that shutting down Visceral was the wrong decision?
Patrick Soderlund, executive vice president at EA, said that EA didn’t shut down Visceral for business reasons or because the single-player Star Wars game wasn’t going to monetize as easily as games with live operations, loot creates, and microtransactions. In an interview, Soderlund said it was a creative-driven decision, meaning that the gameplay wasn’t meeting expectations. The game sounded promising, as it was being made by Uncharted co-creator Amy Hennig, but we don’t know it was good. EA said it got feedback from those who played the prototype and decided to reboot the game with a new studio in Vancouver (where costs are much lower).
The cynicism extends from Visceral to Respawn, as some fans say that Zampella and others are cashing out and selling out. But the deal is structured in a way that will reduce that kind of behavior. Respawn gets $151 million in cash. But it also gets $164 million in restricted long-term stock in EA. That means that if EA’s stock price goes up in the future, then Respawn’s people get even more money. And the deal has a $140 million earnout, or a bonus if Respawn hits its goals through 2022.
This is not the structure of a deal where those being acquired can easily take the money and run, nor is it the structure of a deal of an acquirer that plans to shut down a studio after a short time. This is how you structure a deal if you want the people you are acquiring to stick around for a long time and if you want to get them to create something of value for the larger corporation.
“When you work inside EA at DICE, or BioWare or Vancouver, they all have creative freedom and creative integrity,” said Soderlund, who rose through the ranks at EA’s DICE studio and is a game developer himself. “There are different cultures in different locations. That’s what gets those studios to make great games. We are not interested in changing any of that. We want to keep what is great here. One of the reasons we are going into this acquisition is because of what Respawn is. It would be very unwise of us to change any of that.”
Fans are not expecting EA to do anything that makes business sense. But are they forgetting that EA actually enabled Respawn and the original Titanfall to exist? EA bankrolled Respawn’s first game as Zampella and Jason West left the Call of Duty studio at Activision? Titanfall would not have spawned as a brand new franchise were it not for EA’s decision to take a risk on the new studio.
If you look at Reddit, some gamers say that EA deliberately undermined Respawn’s Titanfall 2 game last year, launching it on October 28, just a week after EA launched Battlefield 1 and a week before Activision launched Call of Duty: Infinite Warfare. But why would EA undermine Titanfall 2 if it was the publisher, and it stood to gain money from better Titanfall 2 sales? This undermining would have weakened Respawn’s ability to stay independent. But it would have also have weakened the financial performance of EA itself. That theory is silly.
It also ignores some of the facts coming out. Kotaku reported that EA didn’t initiate the takeover. Rather, Asian gaming giant Nexon cut a deal to acquire Respawn first. EA had the first right to counter offer, and it did so. Its bid was accepted, and this deal would not have happened if Respawn had not initiated acquisition discussions with Nexon.
Others have pointed out the big number of studios EA has acquired and shut down. Some of those deals were truly nightmarish for those involved. But EA has some very big studios that it is still operating like BioWare and DICE, and it has started some new studios, like Montreal’s Motive Studios, one of the makers of Star Wars: Battlefront II.
The thing to grasp is that running an independent game studio is very hard. Sometimes you can make it for decades, like Insomniac Games. But most other times, the founders have to run for as long as they can before it becomes clear that they need someone else to bankroll the operation. I think that’s what happened here. Respawn saw the looming costs of creating Triple-A games, the rise of live operations and the need to continuously invest in a game, and they saw that it would be much better to find financial shelter in order to foster more creative freedom. I was reminded of a recent tweet by Rami Ismail, cofounder of Vlambeer — an indie maker of games like Nuclear Throne and a popular pro gamer personality — where he said that gamers should try to understand the game business.
Activision’s Sledgehammer Games and Raven Software had more than 500 people working on this year’s Call of Duty: WWII. They labored for three years. Respawn was trying to create three different games — a Titanfall game, a Star Wars title, and a virtual reality title — with a staff of 205 people. I think Respawn absolutely had to change in order to stay competitive with the rest of the industry. This deal might turn out to be a good thing for fans, if it means they will get more games sooner.
“It doesn’t change the future of Titanfall. Except maybe we get more resources and better alignment,” Zampella said. “There are only positives to come from it. We are not going to drastically change the game because of it. But we may get resources to make the game slightly better.”
It’s kind of one of those Occam’s Razor things. Maybe the most cynical conspiracy theory isn’t correct. Maybe this deal is happening because it is in the business interests of everybody to make it succeed. The simplest explanation might be right.
I think the first reaction is to relax. Wait and see what happens. We might actually get some better games out of this.