How Mission Creep Killed a Gaming Studio

Nerval's Lobster writes: Over at Kotaku, there's an interesting story about the reported demise of Darkside Game Studios, a game-development firm that thought it finally had a shot at the big time only to collapse once its project requirements spun out of control. Darkside got a chance to show off its own stuff with a proposed remake of Phantom Dust, an action-strategy game that became something of a cult favorite. Microsoft, which offered Darkside the budget to make the game, had a very specific list of requirements for the actual gameplay. The problem, as Kotaku describes, is those requirements shifted after the project was well underway. Darkside needed more developers, artists, and other skilled tech pros to finish the game with its expanded requirements, but (anonymous sources claimed) Microsoft refused to offer up more money to actually hire the necessary people. As a result, the game's development imploded, reportedly followed by the studio. What's the lesson in all this? It's one of the oldest in the book: Escalating and unanticipated requirements, especially without added budget to meet those requirements, can have devastating effects on both a project and the larger software company.

Comments

This happens about...

[Ashenkase]

a thousand times a day across all industries.

Re:This happens about...

[Locke2005]

Agreed. I've been writing software for 32 years, and "We've completely changed your requirements, but that shouldn't affect your schedule or your budget any!" happens all the time. The point is, you have to push back. Tell them exactly what every change is going to cost (padded heavily). Unless they agree to add time and money to the project, then just deliver the originally agreed to project. Don't let people make unilateral changes in the contract after it is signed, unless you actually like working on money-losing projects!

Re:This happens about...

[Ralph Wiggam]

The point is, you have to push back.

We love to make fun of the useless "suits". But that's a situation where you need good executive management and good lawyers. They need to negotiate good contracts up front, and then make sure the contracts are abided by.

Re:This happens about...

[tnk1]

This is actually what I heard about the Federal Obamacare exchanges. Effectively the contracts person at CGI was rolling over as the government kept shifting the requirements and adding extra. And it wasn't so much that more money wasn't provided, but it was the fact that you had a deadline to work against and even if they had added extra resources, the amount of time to get those resources up to speed would have crossed the deadline.

You need people that stand there and say, "You didn't get this in the contract, it's not reasonable to add this now, and even if you give us more money, you can't get it in by the deadline." That is the job of your legal, contracts, and ultimately your executives. It can be a fine line, because you don't want to piss off your big customer too much, but you still have to lay down the terms. If not, you'll get walked all over and the project will fail.

Re:This happens about...

[gstoddart]

And it's also a situation in which you can get completely and utterly fucked by the people in suits who work in sales.

Many of us have seen what happens when that oily salesguy you'd like to to kick sells something which is complete fiction, and that it is now someone else's problem. His check clears, he gets a new car and a vacation, and everyone else is stuck building a fucking unicorn.

Sometimes, in small companies or with overly greedy salespeople they can sell the farm for a couple of magic beans.

And then no amount of effort is going to make it possible to keep up with an unrealistic client with a gold-plated sales contract which doesn't impose penalties for them failing to stick with a coherent design.

Sometimes, it is the suits who get you into this kind of trouble, and then they double down until there's nothing left.

Re:This happens about...

[sd4f]

I work as a mechanical engineer, in the building industry (HVAC) and while this is also quite normal, the word that gets thrown around is variation, obviously to the contract.

Reading the article, particularly between the lines, it appears that the problem wasn't really with the studio; they were trying to get more money out of MS, but MS just decided to kill the project rather than have a cost blowout. While mission creep did kill the game, the studio didn't plan any contingency or mitigation for a cancellation (or more likely it was just sack everyone).

Re:This happens about...

[jythie]

Which is why there is value in highlighting and dissecting cases of it happening. Maybe it would not happen so much if people were willing to learn from the mistakes of others.

Re:This happens about...

[Antique Geekmeister]

Or, that the specs meant something very different to the developers than it did to the client. And the client then had to adjust the specification to get the developers to do the work _they actually agreed to do in the first place_. I've been encountering this especially with outsourced projects lately, where "QA the system" means "QA the whole system" to most systems or management personnel, but to the 3rd party QA team it means "test just the new feature". Then when the new feature reaks or hinders another longstanding features, _which should have been reported by QA_, the developers are faced at the last minute with a mad resdesign task that affects _both_ systems and is not stable, to boot. But it passes the very limited test specified to pass that specific bug report, so it is accepted and goes into production.

It's been a difficult few weeks trying to clean up after several messes like that. It pays the bills to do this work, but it's very frustrating to have to clean up _after_ you waned developers and QA of the risks they were taking with the "test only the new feature" approach.

Re:This happens about...

[NormalVisual]

Many of us have seen what happens when that oily salesguy you'd like to to kick sells something which is complete fiction, and that it is now someone else's problem. His check clears, he gets a new car and a vacation, and everyone else is stuck building a fucking unicorn.

Scott Adams summed it up nicely.

Re:This happens about...

[turbidostato]

"Just being good at "management" is not enough."

In this case clearly yes. It doesn't take any technical knowledge to know that in order to deliver anything you need to stop feature creeping somewhere. The only thing that needed to be in plain English was "I have a new requirement..."; everything from that point on could perfectly be in Klingon from all management would care.

Management, specifically product management in this case, is all about setting in stone what the minimally viable product will be and then make it happen and it specifically is not bending to a partner's gut feeling about adding another bolt to it.

Re:This happens about...

[turbidostato]

"Contract problem was my first thought when I read the summary."

No, I don't think so. It may look like a contract problem but it usually isn't.

At first it looks like "hey, let's see if I can squeeze out a bit more from my dollars" (which is why it looks like a contract problem) but in the end it results on a broken provider and a customer without a product and quite less notes in their wallet.

You may end with "contract problems" if both parties have conflicting interests, but you don't have "contract problems" on situations were both parties need necessarily to agree in the general output: the problem must be somewhere else.

Re:This happens about...

[John_Sauter]

Agreed. I've been writing software for 32 years, and "We've completely changed your requirements, but that shouldn't affect your schedule or your budget any!" happens all the time. The point is, you have to push back. Tell them exactly what every change is going to cost (padded heavily). Unless they agree to add time and money to the project, then just deliver the originally agreed to project. Don't let people make unilateral changes in the contract after it is signed, unless you actually like working on money-losing projects!

When I was a commercial software developer I did this religiously. Once my supervisor told me “I cannot believe that adding a one-day item to the project causes the delivery date to slip by a day.”

Re:This happens about...

[Hognoxious]

Dilbert cartoons are spot-on about a third of the time.

The rest are understatements.

Re:This happens about...

[houghi]

Luckily IT people NEVER screw up anything. I have seen them promise on their kids that they would solve issue X by then. The sales people asked this several times. There was no "We think" or "We hope". It was "By 02:15 the lines will be up again."

They were not and now the sales people who gave the promises had to do a lot of things to keep customers.

Or when they said there was no change, so it could not be their problem, but they DID change something and it WAS due to that. Stoopid salespeople had to do a lot of extra work to keep the customers.

So it happens on all sides. In all departments.

Re:This happens about...

[gstoddart]

Well, if we have an article about how a company went under because IT failed to deliver, you can trot this out again.

But, in the context of a company which failed because of ever-changing customer requirements which apparently do not allow for demanding more money ... I'm going to stick with assuming the people who signed the contract were idiots who sold the farm and signed a one-sided contract which sank the company.

So, yes, bad thing happen all the time. But they're not all relevant to this particular scenario.

Natural disasters also exist. They, too, have nothing to do with this.

Contracts

[Anonymous Coward]

So the real story is that bad contracts killed a gaming studio?

What idiots signed a contract allowing Microsoft to unilaterally change requirements mid-project with no increase in budget?

Re:Contracts

[flarb936]

There's just not a lot of funding sources for games--this is likely the only deal they could get of this size.

Unfortunately, it's common for publishers to demand radical changes in game projecgts without any schedule or budget modification. This has sunk many studios--it's one of the reasons why there aren't many mid-sized game studios left. Large publishers always prioritize their internal projects--external developers get the shaft.

Re:Contracts

[Anonymous Coward]

When they protested, the Microsoft representative was quoted as having said, " I am altering the deal. Pray I don't alter it any further. "

Re:Contracts

[quantaman]

So the real story is that bad contracts killed a gaming studio?

What idiots signed a contract allowing Microsoft to unilaterally change requirements mid-project with no increase in budget?

Three theories:

1) The execs were idiots for signing the contract.

2) If the execs didn't sign the contract Microsoft would just go to another studio and they'd just have died a slower death.

3) The contract didn't really matter, Microsoft always had the option to walk away and if that happened the studio would die.

I'm guessing some combination of 2 and 3.

Re:Contracts

[dcollins]

Well, as an ex-game-developer (and my s/o worked for game company funded by MS), I'm going to take a stab at reading between the lines and guess that they had a series of tiered project milestones that MS got to approve/disapprove for pretty much any reason they liked. So the developer is under the gun to make them happy however they can, or else the money tap gets shut off at the next milestone. A lot of companies are sufficiently near the edge (it's a very boom-or-bust industry) that they take a "hail mary" shot, betting everything on the score with the big company. It's basically the dark side of Pascal's Wager.

But the subtext does read to me like some pretty poor management on the part of the developer company. I've seen that a lot at game companies (weak or really inexperienced "management"). The good managers I've seen that made some money immediately parachuted out of the industry to something more predictable.

Re:Contracts

[Barlo_Mung_42]

You can't follow the water fall method with games and gather all the requirements up front. This is because the number one requirement for a game is that it's fun to play and there's really no way to know how fun it will be early on. You need to get a large part of it working just to know what works well and what doesn't.
If it's no fun to play 1/2 way in something (requirements) needs to change. Maybe LOTS of things. True, they should have asked MS to support changes up front but if it starts costing so much that it's never going to break even it's probably best for everyone involved to just pull the plug.

Other option is to just ship a shitty game and hope to make some of the money back but that sucks too.

Re:Contracts

[SomeoneFromBelgium]

To me this seems like a classic case of a big player playing a game of extorsion with a small supplier.
It's as old as the street. Typical example: big retail player (think Wall Mart) says to small supplier: OK this is your big break. You can start delivering your product (say canned beans) to us. The initial order will be around 100 tons/month at 5c per kilo. The small supplier can't believe his luck and starts investing in its production facilities massively to be able to cope with the enourmous volumes.
As they are nearing the delivering time big player says: wait. We need actually 500 tons but only at 3,5c per kilo.
The supplier has 2 choices: comply but the price will never cover the extra investments for the even higher volumes. Or not comply and that means immediate bankrupcy.
Of cource in this case the big player has made a mistake. The idea is to make demands that are feasable.

So in my opinion it's Microsoft being ruthless and stupid all over again like in good old times...

What's the lesson in all this?

[SeaFox]

Sounds like it truly is one of "the oldest ones in the book": Working with Microsoft is a bad idea.
Haven't we heard of multiple companies being screwed in partnerships with them over the years (long before Nokia)?

Re:What's the lesson in all this?

[Dutch Gun]

I was working for a videogame company that essentially went under because Microsoft canceled our next anticipated contract. This was one of two businesses to drop out from under me during my career. I've had a couple of cancelled projects as well, which are also somewhat disheartening. One was, oddly enough, also at Microsoft while working as a contractor. They put together an entire team before someone crunched the numbers and realized that the licensing for the game we were working on was so expensive, the project would likely not make any money. Seriously, no one did this before they actually hired an entire dev team? I spent about a week doing nothing while waiting for a computer to show up, and then worked for about a week. Then the project was cancelled. The project manager felt pretty bad about that, so kept me on for another few weeks as a makeshift "severance", as well as buying me and the other contract programmer an Xbox and a few games to go with it, which was pretty nice of him.

This sort of thing happens all the time in this industry. I suppose you just sort of have to roll with the punches with that sort of thing. Fortunately, after you've got a few years under your belt, it's not too difficult to find another job, especially if you're willing to relocate. I'm fairly lucky that way, being in an area with plenty of great companies to choose from.

I wish all the displaced devs at that company the best of luck. I've definitely been there, and know it's not a lot of fun to suddenly find yourself searching for a new job. Fortunately, studios are always anxious to grab experienced development talent, so hopefully they'll all land on their feet.

Check your contracts

[viperidaenz]

Probably good to have something like "if you change requirements after XYZ and don't provide additional fund, we can take the money and not deliver anything"
Or run on time + materials, so you get paid for time, not deliverables.

Devastating effects

[manu0601]

Escalating and unanticipated requirements, especially without added budget to meet those requirements, can have devastating effects on both a project and the larger software company.

Not to mention the company's workers, who are likely to be burnt in the process before getting lay off

Management

[American AC in Paris]

This is why having good management matters.

Good management keeps this from happening.

B.S.-marketing from Microsoft

[ItsJustAPseudonym]

I notice in the article that Microsoft repeatedly released information about the game that was completely divorced from reality. Complete bullshit. Repeatedly. That should have been a gi-frigging-gantic red flag, right there.

What did the game studio think? That stuff would magically work itself out? It sounds like they waited too long to review the actual features versus the Marketing hype with Microsoft.

This is how big companies work

[EmagGeek]

"Escalating and unanticipated requirements, especially without added budget to meet those requirements, can have devastating effects on both a project and the larger software company."

No, this is not it at all. What this should say is:

"The customer (Microsoft) will always demand more than is agreed to, while simultaneously refusing to pay for it, and expect the vendor (Dark Side) to foot all of the expenses to meet the additional demands."

Big companies will dangle a huge carrot (or suitcase full of money) in front of a bunch of 20-somethings and their startup company to get them salivating, and almost every time those 20-somethings will chomp at it without questioning motives, analyzing risk, or even having a lawyer look at the proposed contract.

It wasn't mission creep. Mission creep is when the mission changes unexpectedly. Microsoft knew damn well what they were doing, and intended to exploit Dark Side for free work product. Maybe MS didn't anticipate them imploding like they did, but it likely didn't matter to them since they no doubt retained ownership of all of the work product anyway, which they could hand off to another firm to finish, or implode trying.

Honestly I don't see why anyone would do business with Microsoft, or any other huge, publicly-traded bureaucracy for that matter.

Not Microsoft's fault

[viperidaenz]

I actually RTFA.
Microsoft changed the requirements just a week after signing the deal. Not a nice thing to do, but Darkside hadn't spent all the money then, and could have simply said no. They agreed to the change with the hope they could convince Microsoft to give them more money later.

Microsoft decided they didn't want to throw more money than what they wanted to at it and did the smart thing and cancelled the contract. They had already spent $2M, the studio wanted up to $3M more than they budgeted for to complete the project. Cancelling the project saved them $1M and all of the risk involved.