GDC 2009: Flagship sifts through Hellgate ruins

Director of biz dev and general counsel Stephen Goldstein offers 10 lessons independent developers can take away from heavily hyped studio's demise.

By and large, it's typically a bad sign when a lawyer is called in to deliver the closing remarks on a game project. Indeed, that was the case with "My Lessons Learned from Flagship Studios," a 2009 Game Developers Conference session given by Flagship's director of business development and general counsel Stephen Goldstein (now of Stubbs Alderton & Markiles, LLP).

Flagship Studios was formed in 2005 by a number of notable Blizzard North alums, including Bill Roper, David Brevik, Max Schaefer, Eric Schaefer, and Tyler Thompson. Following years of prelaunch hype, the online-enabled Hellgate: London launched to a decent critical reaction. However, the game's many issues, both technical and otherwise, quickly elicited a vitriolic response from a rapidly shrinking pool of subscribers. Finally, in October 2008, the highly promising studio officially announced that Hellgate was to be shut down as of January 31, 2009.

Goldstein's session was as much about Flagship's ultimate demise as it was about offering his personal insights on what independent developers should not do. His talk began with a quick recap of the studio's nascent period, saying that by October 2007--30 days before Hellgate shipped--Flagship was riding high with 60 magazine covers, six publishers, five comarketing partners, four merchandising partners, and two online operations and publishing subsidiaries.

That had all changed by July 2008, he said. At that point, he said, Flagship was forced to lay off more than 100 employees, it had lost the rights to Hellgate, and the ensuing fallout caused substantial controversy and bad blood.

"For all intents and purposes, everyone was Flagshipped," he said, referencing the disparaging Internet meme that has become synonymous with failing in a colossal way.

So, given the talent of the team, he posited in a slide, "What happened To Flagship?"

"The mistakes Flagship made happen time and time again by entrepreneurs," Goldstein said, before saying that game developers are wonderful because they have unparalleled optimism. This disposition, though, can lead to the type of monumental disaster that befell Flagship, he said.

"The entire Flagship structure was built on swinging for the fences," Goldstein said as part of his first of 10 lessons. "Everything was solely plan A; there was no Plan B." Especially in these uncertain times, Goldstein said, it's important to not swing for the fences. "If you are in a startup right now, survival is the new success," he said, before urging independent developers to scale back whatever it is they may be working on.

Goldstein's second lesson was the importance of knowing the right economic model. Flagship, he said, was by its nature an online company that was designed to subsist on player subscriptions. Unfortunately, when the game shipped, it was sold as a boxed product at retail, and then it had a single-player option, a free multiplayer option, and a for-pay online component.

It took four steps for the company to begin seeing the type of revenue that would sustain the company, which was way too many, he said, continuing, "We should have just pissed off our community up front, and say it is going to be subs."

Goldstein's next lesson was that a developer should not try to do more than one new thing with their game. Flagship, he said, went completely overboard here, as Hellgate was the team's first 3D game, first-person shooter, subscription-based title, among other things. "The fact that we got this far is a testament to the team we built," he said. They didn't get the credit that they deserved."

Lesson four, Goldstein said, was to limit the partnerships. Taking the full blame for this misstep, Goldstein said that the back of Hellgate's box began to resemble a NASCAR car, and each of those partners wants something in return for the support.

Goldstein's fifth lesson distilled addressed the minefield of launching a game simultaneously in multiple territories, before moving on to the sixth lesson that infrastructure isn't as easy as it seems. "Do not leave your billing to the last minute," he warned. "It got left to the last minute, we ran out of resources, we ran out of time, which led to a situation where a very small percentage of users got charged twice." This was especially bad for the company's business model, because it made it all the harder to convince nonpaying customers to subscribe.

Next, he addressed the importance of not buying into hype. Noting that hype for Hellgate had been building at a feverish pace for three years, he said, "Expectations for the product were so incredibly high, no matter what we delivered, it was impossible to meet those expectations."

"If someone offers you money, take it!!!!" a slide emphatically noted as part of Goldstein's eighth lesson. In 2006, he said, venture capital firms were falling over themselves to invest in game companies. "We had a title a year from launch, with a team that had sold 17 million units," he said. "My guess is we could have raised $20-25 million to stick in a coffer." Goldstein noted that this alone wouldn't have necessarily saved the studio, but it would have given the team the additional four or five months Hellgate needed before it was shipped.

Goldstein's ninth lesson was that it is important to bring in an objective point of view. "Everyone there was in the trenches," he said. "We weren't having regular meetings with someone with an outside perspective to put us in check. No one said, 'You may need to rethink this business model.'"

As his final lesson, Goldstein said, "We're all in this together." He said that despite Flagship's problems and missteps, many others within the development community stepped in to lend a hand when they could. "Businesses are going down now for reasons beyond their control," he said. "Now, I'm not sure people are in the position to help today."

Goldstein did close on a positive note, however, saying that even though the economic environment is hostile, it presents "a massive opportunity," as people will figure out new ways to get their games made that don't necessarily require a substantial infusion of funding.

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38 comments
SonicEXE
SonicEXE

imo the economic model did play some part, if you spend a good portion of the companies funds on a game, and anticipate people will start to pay monthly after trying it out, essentially giving a taste, it could theoretically work, but in most cases someone just wasn't thinking it out right. As for the game itself it was a fine game, i played it with my girlfriend for a few months on and off along with other games, and we wanted to actually try to finish the game at some point, which clearly wont happen now. the biggest flaw though, as i saw, was it's unpolished nature. I remember logging in one day to the fact that i was missing 2 high quality guns. I contacted an authority about it hoping they could possibly fix it, and was told oh, sorry, this happens sometimes, we're working on fixing it, sorry for the inconvenience. so i mean yeah, there were some things that really made you angry, but i wouldn't necessarily say the game ITSELF was so bad, it was more from a technical point of view. keeping in mind, this is one gamers opinion, a lot of people enjoyed the game, a lot of people didn't, the fan-base wasn't as bad as some games, they just made some poor choices in the end =/

skuly
skuly

It had nothing to do with the economic model. The game looked good but it sucked so bad most people wouldn't play it even for free...... so stfu with all this crap about it being because of it's economic model. It was the same as guildwars economic model. You buy the game, you pay for free... but if you really like the game you buy the expansions guildwars just misses the single player. I bought GW when it came out and played it for way longer then i played Hellgate i played Hellgate for a few days and GW a few weeks. And i only played Hellgate for more than hours because i pushed myself. i knew after a few hours the game sucked imo. If it was sub only alot of people might not even have bought the game at all.

Leria
Leria

Fact is that the best companies don't have a Plan B. The best companies focus on doing ONE THING AND DOING IT WELL! I don't understand why Flagship was having problems. I downloaded HellGate: London from Pirate Bay..... it's a damned good game, all things considered. A little 'hacky and slashy'.... but that's good in an action game, especially one that focuses not only on guns, but swords and other weapons. Something tells me that the economic troubles just happened at the exact wrong time and Flagship was caught up in those troubles. Flagship's business model WAS SOUND! There hasn't been an online game YET that has been a spectacular failure, unless the game ITSELF was a total dud.

krasimir7
krasimir7

The game was overly ambitious for a first game by a studio - even a studio made up of Blizzard veterans. But even more importantly, when I played the game, it played very much like a SINGLE player game. It took a lot of "stuff" from Diablo and enhanced it (like item crafting/upgrading). To charge a monthly fee for a game like that is clearly suicide. You can take an AMAZING game like Fallout 3 and even then, you won't be able to turn it into a MMO with subscriptions tickling in. Finally, are they going against the entrenched opposition of WoW? Forget it. It's like creating an operating system different from Windows... you can do it, but you'll either be doing for free (F2P) or you need a niche market (LOTRO).

_DeadlyFred_
_DeadlyFred_

Guild Wars. Don't justify your monthly expenditure by trying to assert that an on-line game MUST charge a subscription fee in order to be successful; you're wrong. Goldstein called it, on all fronts and I don't see how in the world you can try and argue with it since... hey, he was THERE! That's ten reasons up there, not just one and all of them contributed. He is absolutely right though in that, for all the things that went wrong, the team deserves credit for the things that didn't; Hellgate had the potential to be a really amazing game from the ground up. It's a bit disturbing to me, reading comments here: the gaming community has become way too much like a bunch of squabbling politicians when it comes to opinions.

sataricon
sataricon

The thing is any game that is shipped unfinished it will fail unless it's an overly hyped game. Take warhammer online...This game had so much promise but in the end because EA pushed the team for an early release they had to cut down many IMPORTANT features from the game...And the result is what we see. I love hellgate but i wish that the game was better from release...i play it SP tell today from time to time but there is just these things that i can't do...AKA playing as a summoner...they suck and every one on the forums said that they are unplayable later in the game but the devlopers had their hands full with bugs that wasn't supposed to be there from the first place

thodgson
thodgson

New promising game, Battlefield Heroes, is completely free...maybe they should rethink this.

kemuva
kemuva

Mistakes were made, big time. But I'm hoping developers will take away a lesson or two. Lessons other than ones raised by Goldstein. 1. The World of Warcraft format of powerful monsters (npc's) and WHIMPY players is really no longer acceptable. 2. the New Model that Hellgate introduced, and will forever change how many gamers want to play the games, is: POWERFUL players from the start, and from then ON. Lots of whimpy NPC's that drop loot. A healthy scattering of powerful NPC's that don't take an ARMY of players to kill, (that can be soloed!) and that drop a HUGE amount of LOOT. The Everquest, Everquest 2, & WoW formula (weak players, powerful mobs) worked, and is only still working, because we didn't know any better. Gamers playing these games now, are either ones stuck there due to not wanting to leave their friends, or ones that are very young, and don't know any better. Hellgate has produced a few hundred thousand players that know better now. We are spreading the word. For example: I'm personally back in WoW on a once yearly free 10 day trial, spreading the word.

ottumatic
ottumatic

I will chip in my 11th lesson: "Never use your resume to advertise / hype up your game". It is sickening back then to read through all of HGL's previews without having to notice something along this lines "... developed by ex-Blizzard [insert name]". We knew you used to work at Blizzard and Blizzard is consistent in developing good games. But remember that is the past affair, are you going to deliver the exceptional performance you had in the future? You see, my feeling is that the ex-Blizzard employees in Flagship had been living in their past throughout the project. You could feel the nostalgia in HGL. However they failed in translating the game into something mind blowing for the current generation. It's like remaking 1980s Pacman without introducing any new features or graphic and selling it now.

pdwarf
pdwarf

to andrewlkt i do understand companies need to make a profit, but with no free play i would not have parted with my $100 to buy the game in the first place. so without my initial purchase, the company had no opportunity to try and up-sell me to pay to play.

emptyjuicebox
emptyjuicebox

[This message was deleted at the request of a moderator or administrator]

Erebus
Erebus

No one said, "You may need to rethink this business model." I suppose rule number 11 should have been, "Listen to your community, especially the well-spoken ones who aren't simply giving you a pat on the back." The writing was on the wall with this one. See my Gamespot blog in October of 2008...

Erebus
Erebus

No one said, "You may need to rethink this business model." I suppose rule number 11 should have been, "Listen to your community, especially the well-spoken ones who aren't simply giving you a pat on the back." The writing was on the wall with this one. See my Gamespot blog for October of 2007...

andrewlkt
andrewlkt

Pdwarf obviously didn't understand the article. The point is that companies need this thing called profits to survive. Fixing the problem you're talking about won't result in profits. Goldstein is right that the problem was a free single player option, free online multiplayer then on-line subscriptions. It made for a crappy business model. Companies need to figure out who their target market is and who their profitable customers would be. Flagship trying to please customers like pdwarf who will never be part of their profitable customers segment are doomed to failure.

Targzissian
Targzissian

Hellgate: London is still a successful single player game worth playing through once. If you haven't picked it up, and would like to try an action-RPG/shooter hybrid, go buy it.

pdwarf
pdwarf

the problem was NOT a free single player option and the on-line subscriptions. I for one will never pay to play, not while it still costs $100 to buy new games. the problem was forcing the gamers to play ALL the quests in a required order to get to next area. you could not go exploring different areas when you felt like a change of scenery, because tunnel doors would not open until you had completed the quests. sometimes you had to keep going back and talk to the SAME person to eventually get all the required quests so you can move on GAMERS like to play a game their own way, NOT be dictated to on where and when to play. also the game was 1 year too late, not needing another 4 to 5 months to get it right before putting it on the market.

BloodMist
BloodMist

I could always tell this company was way in over their heads when it came to this game.Number one, it never looked like a very good game anyway, certainly no Diablo killer, and number two, and it was a very good point made here, you can't give people a free single and multiplayer and ever suspect the alternate subscriber only option could ever work with a game.I mean there's just no freakin way to ever get anyone to subscribe, especially if what you get for subscribing isn't all that impressive, much like the situation was with this game.I do applaud them for trying something sorta new however.

NavIGOtoR25
NavIGOtoR25

Good story, good lessons, but not good game!

bka4u2c_basic
bka4u2c_basic

Yea, but EA is still in business and still makes a boat load of money. So as much as people hate them somebody's buying their games. SIMS, anyone.

aura_enchanted
aura_enchanted

its EA's fault everything EA touches dies: red alert, Command and conquer, battlefield, need for speed, and hellgate. i imagine if they stopped been such dictators they would release games and not have this happen. for those still doubting: when was EA's last VERY GOOD games, really.

smashhero
smashhero

The way I see it. Their biggest problem was being too ambitious. For a team of developers that have never done an 3D game to try and make a DX 10 next gen graphic MMOFPSARPG? For a time, people were comparing Hellgate's graphic to Crysis. Even Nvidia's 8800 graphic card have Hellgate on the box. That is what I call aiming too high.

DukeEdwardI
DukeEdwardI

i was expecting a lot from hellgate, but it ended up meh feeling. i wish i gave it a chance because i hate seeing game studios go under, and i do wish the best of luck to all the ex-Flagship devs. but i place blame on EA for this title ending up as it did. Knowing EA, they most likely gave them the release date of 10/31/07 and Flagship by that point had crammed too much stuff into game but not enough time to polish all of it. i'm pretty sure it got a lot better over the following months, but it was too late, the damage had been done. i still wait to see what the devs plan to make next, i'm pretty sure they have learned their lesson from Hellgate: London.

elozl
elozl

yep, i still have some hope on them if they try harder and better next time... Fame doesn't guarantee quality...

Gooshnads
Gooshnads

It's a shame because there was a problem that screwed me over... there was a train part in the game and basically if you died you were a spirit but as a spirit you needed to talk to the quest giver to go back into that area... and i couldnt since i was a spirit massive break in gameplay there.. so it's just a shame they didn't polish it... i love diablo 2 and i expected more of ex-bliz north devs but it's all good... to me, its one broken game but they are capable of so much more.... if they create anything else ever again... i really hope it will be much more polished... my hopes are still with the devs

N0tYrBeezin
N0tYrBeezin

I thought Hellgate wasn't as bad as some folks were trying to make it out to be. Their bitterness and hatred over their own disappointment often times over the top and turned into nitpicking on every little things. True that Hellgate wasn't any where near perfect but the fate that it suffered was kind of harsh. I guess that the higher you climb, the further you fall. RIP Flagship!

gzader
gzader

I only played it single player and it rarely crashed on me. I liked the game. It could have, and should have been more than it was but it deserved a better end. I hope the lessons paid for here will be learned by other devs.

bigpirateben
bigpirateben

Great article, great business advice. I've been with a start-up the past 4 years, and have been around for a lot of the mistakes he mentions. The best point: survival is definitely success in this economic climate. And as he said, you NEED people with a big picture view in your company. You will probably hate them, but they're usually right. Being in the trenches is very deceiving position.

joesh89
joesh89

i forgot all about that game. and i don't like seeing studios collapse.

mrhuntin
mrhuntin

hellgate london was a awesome game.

WoKeN-Snake
WoKeN-Snake

LoL I made 70k off hellgate london. Thanks Flagship

PodXCOM
PodXCOM

Goldstein, You're a good man. I wish you the best of luck. If only you were the one working on Diablo III.

krazilec
krazilec

I'm feeling sorry for Bill Roper. He's one of the greatest game designers ever.

ClayMeow
ClayMeow

HGL was an excellent game that suffered from horrible mismanagement. The way FSS handled everything cause a lot of bad press that just compounded and compounded. The game was definitely worth the $50 pricetag, but they severely underestimated the subscription model and what it had to provide to make it work.

nurse_tsunami
nurse_tsunami

The end product Hellgate was so much of a disappointment when you consider all the potential and hype it had. Like Goldstein said, they tried to cram way too many things into it and it ended up a mess. On a more positive note, I can't wait for Diablo 3 to hit stores :)