An open letter to IO Interactive about Square Enix dropping you

Square Enix announced it was ceasing relations with its wholly owned studio, IO Interactive, best known as the creators of the Hitman series of games. I imagine at this point IO is frantically looking for a buyer who can keep the band together, which is a hard job at the best of times.

I’ve lived through this exact experience. EA closed down Pandemic Australia in 2009 and, shortly after, Pandemic LA. Like IO, Pandemic Aus was a strong studio, with a good team who was just hitting its stride. Like IO, our biggest mistake was simply making good games, and making them well. In the meantime, the market was shifting ever more towards blockbusters, and we were being left behind.

Like IO, we were offered the chance to find a buyer for the team — an opportunity Pandemic LA was never offered, sadly — and I travelled the world pitching our studio to every major publisher and platform. This was at the height of the Global Financial Crisis, the Australian dollar was at an historic high and for various reasons beyond our control and we were pitching a Wii game just as the Wii was proving to be a hard sell for third-party developers.

We failed to make a deal, the studio was closed, the end.

Except it wasn’t. That was the start of Defiant Development, a studio we’ve built into 25 people. That was the start of Strange Loop (Vessel and Eco), part of Mighty Games (Disney Crossy Road, Shooty Skies), Sleepy Z (Ski Safari), Single Cell Software (Caustic) and Infectious Ape (Kingspray VR) and more.

We’ve all built strong businesses by taking the skills we developed as part of a big company, drawing on the relationships we grew during those times and putting them to use making games, and other software, directly for our audiences.

Square Enix have decided that the sort of games you make — single player, high quality experiences — aren’t viable anymore. The truth, though, is slightly different. It’s not viable for them, as a bloated publishing organization that needs blockbusters and only blockbusters to sustain them. It’s not viable for them, with hundreds of mouths to feed up and down the chain, marketers and producers and shareholders and trailer producers and ad bookers and so on and so on.

It is viable for you, though. It’s viable for you to create the sorts of games that players love and sell directly to them.

It can often feel like you’ve failed when a studio is dropped like this. I don’t believe that, though. Square Enix has failed, because it had something incredibly valuable and it can’t find a way to realize its value.

When I travelled to try and sell the Pandemic Australia studio, Josh Resnick (one of the Pandemic founders) said to me “Pandemic and Bioware sold to EA for $800 million dollars. Pandemic Australia is a part of that value. Not the biggest part, to be fair, but a real part. All of that value is being written off by EA, but the value is still there. Find that value. Do something with it.”

The same is true of IO. There is enormous value in a team that can work together to create AAA games in today’s market. That value has found investors for more than 20 years. Nobody on the planet knows how to make a Hitman game like you do. All of that value is being left on the table for a canny investor to pick up cheaply. I hope you find one, so that you can continue to work as a team.

If you don’t, however, I encourage you to pan for gold yourselves. Build your own studios, find your own value and speak directly to your audience. The bloated behemoths cannot find a way to make games for that audience   and that is your opportunity. You can.

This feels like an ending, but like all endings it’s also a beginning. The opportunities today are extraordinary, and nobody is better qualified than you are.

And if you ever need help along the way, there’s an amazing community of creators ready to help.

Good luck.

Morgan Jaffit is the founder of Defiant Development, a Brisbane-based independent game developer and creators of Hand of Fate, and the upcoming Hand of Fate 2