Industry legend "saves" Warsaw-based Flying Wild Hog studio. "Companies collapse after hitting the 100th employee mark"
A living legend. Paul Wedgwood is one of the founders and long-time CEO of the 2001-established Splash Damage studio. He has been credited on such notable titles as Wolfenstein: Enemy Territory — a cult classic among Polish gamers during the cybercafé era — as well as Doom 3, Enemy Territory: Quake Wars, Batman: Arkham Origins or the Gears of War series.
Having sold his company for up to £150m, Wedgwood founded Supernova Capital LLP, a private equity firm. It’s debut and for the time being sole acquisition is the Warsaw-based Flying Wild Hog studio. With a handful of strong releases under its belt, the Warsaw-based developer made waves with two iterations of the superb Shadow Warrior. The company’s been going from strength to strength, but the investor’s goal is to elevate it to an even higher level.
Bolesław Breczko, WP Technologie: In June 2019, you bought Flying Wild Hog, one of the biggest Polish video game companies. Why?
Paul Wedgwood, Supernova: It was the star we were searching for.
Yes, a star. And more precisely, a star that can collapse at any moment. Do you know what a supernova is?
I do. It’s an explosion of a star that gained too much mass and collapsed under its own weight.
It’s just one of many possible scenarios, but it accurately describes the mechanism of how gaming companies fail. At a certain point, they expand too rapidly and go up in smoke. But the exploding star can also seed new planetary system, planets, and consequently — life forms.
Could you explain it without the stellar metaphors?
Let’s start with how game dev studios emerge. Usually they’re founded by a dozen or so people. The studio grows organically, the in-house relations are based on friendships, not rigid hierarchies or corporate structure. And that’s fine, but companies, regardless of the industry, can only grow to a certain point within this mode. In the video game world, the threshold is 100 staff members.
The company collapse upon reaching the 101st employee mark?
Not immediately, but this triggers a process which leads to the inevitable downfall. Having more than 100 people on board, you can’t run a company on friendship and social ties. You need structure, HR, IT, and accounting departments, an organized web of managers and directors. But studios rarely hire people with experienced in such areas.
Instead they use their internal creative staff, people involved in game development, to fill in, say, HR positions. As they lack experience, they can’t handle their duties well. This leads to frustration, which spreads across the company, problems begin to pile up, and productivity tanks.
On top of that, those companies usually have one title in development at a given time. If it gets cancelled for whatever reason, e.g. the publisher backs out, it’s a kiss of death for the company. A studio that hires ca. 100 employees spends up to $0.5m per month on salaries. If you lose liquidity, you’re done for. We’ve seen this happen hundreds of times. Just google “game studio closed” to read some case studies.
Flying Wild Hog staffers with Paul Wedgwood at GDC 2019 conference
And you, I imagine, know how to “save” Flying Wild Hog from that fate?
I already did! Within the past 12 months, we’ve bumped up employment from 100 to 200, and the company’s working on not one but three independent titles.
But what makes you so sure that you’re not just delaying the inevitable explosion by a few months or years?
Because I did the same thing with Splash Damage, which I’d founded and ran for more than two decades. In 2014, we were in the red with over £2m in debt. I’d been trying to pinpoint the underlying causes of game company failures for some time. I noticed that people from the industry are great at making games, but they know nothing about running companies. I’ve implemented a system, which by the way is available to everyone, that enabled me to steer Splash Damage away from troubled waters. Fast forward two years, and we’re turning 10 million in profits.
OK, so now tell me why did you pick Flying Wild Hog out of thousands of similar companies?
When my friends and me founded Supernova Capital, we didn’t know the first thing about this line of business. I’ve learned how to run an investment fund from YouTube tutorials. But when it comes to game dev studios, we knew exactly what we were looking for.
We tried to find a company similar to Splash Damage of 2014, i.e. having a robust and motivated team of artists and engineers able to develop AAA titles. Also, it had to have a headcount of ca. 100 employees and lack corporate structure. In the end, we’ve narrowed down our search to 70 companies.
Flying Wild Hog game release timeline
What was Hogs’ forte?
Most to our liking was the fact they were interested in self-development, and extremely loyal to their staff, just like us. However, what sets Flying Wild Hog apart from Splash Damage is their track record of only developing new IPs that weren’t part of bigger franchises.
We were also amused by their fearless attitude and candid, if not sometimes crude, sense of humour. And of course, their games — fast-paced and action-packed. They knew who they are, and what they wanted to do, they were just overwhelmed by the “boring” corporate end of business. When we made up our mind about them, I remember saying: “If we take you on, we’ll change a lot, the studio will start to generate profit and we’ll hire a ton of people.” And that’s exactly what we did.
How did the studio’s management react to this? Did the people who built the company from scratch welcome with open arms an investor who turns everything upside down?
First of all, we’re not implementing any changes on our own accord. The board has full authority and control over the studio. They’re the ones overseeing daily activities, financial matters and schedules. They even decide on the games they want to make and who will publish them.
So how does Supernova fit into this picture?
We provide recommendations and pointers on how to manage the company and its finances. How to select projects and priorities. How to celebrate and organize events.
How should companies celebrate?
First of all, it is my contention that game dev people don’t celebrate as much as they should.
They don’t party often enough?
Exactly. Every milestone should be at least marked with a visit to the pub. There should be a company event held in celebration of every major goal reached.
Why? You don’t make any money on staff parties.
Social engagement and the bonds, which bring people closer, are more important than mindless observing of company hierarchy. If you build a team with members who are loyal to each other, they will remain creative and productive regardless of any obstacles. Mind you, this is only a means of cementing an already strong relationship. The most important caveat is to hire the right people in the first place.
Flying Wild Hog 10-year anniversary party
I can’t give you a universal list. What companies should do is to create a system of values and look for people fit into it with their personalities. Splash Damage was unique in that its employees were loyal to each other even if they had to stand up against the management, and that studio cultivated a friendly atmosphere among team members.
And Flying Wild Hog possesses all these values?
Hogs stand out among other studios with their trailblazing and audacious approach to projects, their sense of humour, and the fact that they hire the best specialists. Once you understand how this
value set differs from the one embraced by, say, CD Projekt RED, you’ll be able to hire people that fit into your vision before you even sign them.
CEOs prefer metrics that are quantifiable. Because how can you measure staff satisfaction?
If you fire all the selfish pricks who keep demolishing your work and recruit team players, you’ll immediately notice a change of heart and morale boost among your people. That’s not something you can put in a spreadsheet, but you’ll definitely hear about toxic behaviour in the form of jokes passed around in the open space, water-cooler talks or at company events. If everyone’s having a blast, it means the mood’s right, if there are people hugging walls with their faces glued to their phones, then you’ve got a lot of work to do.
So, I reckon Flying Wild Hogs must throw wild parties?
You bet. People love it. So much that they invite people from outside of the company. And I don’t mean their partners, but also friends and acquaintances working for our competition. It’s not uncommon for us to hang out with CD Projekt, People Can Fly or Techland guys. They also love our parties!
OK, so now please explain it to me – what do you need a PE firm and a Polish game dev studio for? You’ve said it yourself that Splash Damage was a friendly and profitable studio.
There’s a type of people that find satisfaction in creating things from scratch. From watching the seed bloom into a powerful, sprawling tree. I’m that kind of guy. Also, I’ve accumulated so much experience and knowledge about running video game companies that I simply had to make use of it in a completely new venture.
Do you feel just as at home in Poland as you feel in Flying Wild Hog?
I love Poland and I love Warsaw. It’s a great place to do business. OECD concluded that Poles are the world’s 6th hardest-working nation. And Poland boasts one of the fastest-growing economies in Europe. It also has the highest number of MA graduates in Europe.
But the thing I value the most when looking at Poland’s neighbours, is the fact that Polish millennials are the most progressive. They’re fully aware that homophobia, racism, and sexism will be eradicated in several years or so, and game dev people are at the forefront of those cultural changes. Despite all that, Poland still struggles with the stigma of being a narrow-minded and backward-thinking country. Such state of affairs doesn’t bother me that much because it scares away competitors and allows me to work with wonderful people.
Ok, now a few words about games and your gaming experience. You're a fan of multiplayers shooters. You'd played them, you'd made them, you're in the actuall heart of all of it. What has changed most in the genre over the last 20 years?
Latency. The very short time between the player and the server. FPS, such as "Quake" or "Counter Strike: Global Offensive", are based on muscle memory. Now they're more accessible to everyone and got tons of players. Which led to possibility of constant improvement of online shooters and adding new features, but still without eliminating the "hardcore core".
We've also stopped to precisely label every game: "This is FPS, this is TPP, this is RPG". Now most of the games, especially those made for multiplayer, are open-world oriented, where you can shoot or have a RPG-style character progress.
Are there any dark sides of mutliplayer gaming? We've all heared about how they could addict young people.
It's just my humble opinion, but online games doesn't make you check your social media accounts each 5 minutes. So speaking about addictions, let's start with Facebook and other apps. Also for many people it's the only way to maintain some relationships or make new friends. Go to any convention and you'll see dozens of online friendships turn into physical life.
Still - there is a lot of pressure to reduce time spent with video games, especially for children.
Of course there is. 100 years ago there was pressure to reduce time with books. Then with the radio, people went crazy that goverment would control society. And then there was cinema, television, games, internet. There's alwyas "something" that is considered as a source of all problems. In 2030 we would grumble about kids wandering in VR kits. Old people will always complain about young people, that's how the world works.
Feel free to contact Paul directly through his Instagram: @paulwedgwood. Game studios interested in cooperation or mentoring can reach Supernova Capital through their website. Artist and programmers interested in working at Flying Wild Hog can reach the studio here.