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Nick Baynes: From Big Bit to a big idea

Nick Baynes: From Big Bit to a big idea

Wed 30 Apr 2014 7:52am GMT / 3:52am EDT / 12:52am PDT
Development

Developer launches Ironfist, a studio with a brand new business model

Nick Baynes has seen a lot in his 22 years in the industry, and now he's sure he's come up with a solution for all of the problems he encountered in that time. The problems that dog independent studios and their investors, that limit innovation and make staff stay in jobs they don't love, in the hope of finding a job for life.

Here the Big Bit founder explains why he left that company in March, and what he's been working on since. Introducing Ironfist Games, a brand new studio with a brand new business model.

Q: You founded Big Bit three years ago, so what was behind your decision to leave?

Nick Baynes: For me personally I just felt there were certain things happening in the industry that I wanted to be a part of but maybe I didn't feel I was best placed to do at Big Bit. I've been in the industry for 22 years and don't get me wrong, I am really proud of games like The Snowman, but if I was given a completely blank page to develop a game from it wouldn't necessarily be that game. So I wanted to take advantage of the disruptive landscape that's out there now and really get back to making some games that I'm really passionate about making.

Q: So what is the new project?

Nick Baynes: The new studio is called Ironfist Games - I wanted a name that didn't feel too new media - and the way I'm describing it is it's more of a game production company than a game development studio.

Regularly over the last 20 years at management level we've had discussions about copying the way that movies and some TV productions are made, in terms of creating a more stable environment. I don't think there's really been the opportunity to do that until recently thanks to the games tax breaks and various other forms of investment that have come in.

"Each game that we produce will be a separate, standalone, special purpose company"

Q: How will Ironfist work?

Nick Baynes: Externally things will appear like any other regular multi-teamed development studio, however the way that Ironfist is structured is that Ironfist as a company is actually going to remain a very very small, lean group of people, probably never more than four or five people, myself and a few other experts. Each game that we produce will be a separate, standalone, special purpose company set up as a co-production between Ironfist and investors, or whoever else is a partner.

What it means is that the development team on each of the projects is then contracted directly to the project, to that special purpose company. So the Ironfist core team work on all the projects in the same way that a studio director would work on multiple projects in a current development studio environment but the benefit from the business side is the way it's structured.

So the big benefit for the studio is that there's less ongoing overheads and commitments, it means that the burn is much more controlled. Over the years I've worked at a number of independent developers and you always get feast and famine. There's always periods where there's almost too much work to do and then there are times where you're looking for work for the staff you're currently employing. With Ironfist if the games are there then people are contracted to the games, if people aren't there then people aren't contracted to it so the general cash flow and the overheads are very controlled.

It also allows us to focus much more on the creative side of things and innovation and new IP. One of of the reasons for that is partly because looking at different investment routes, when people are going to invest in a game they want to own the IP because that offers more value for them, so it does encourage creativity perhaps more than the work for hire model.

1

Q: What benefits are there for the investors?

Nick Baynes: For investors obviously in the last year and particularly in the last month or so there a various new investment opportunities - SEIS has been big recently, the Seed Enterprise Investment Scheme, investment loans - not to mention people that are now coming to the industry because of the games tax breaks as well.

The benefits for them with this model is definitely controlled risks, the fact is that the company they're putting the money into is focused on their project and their project alone. In fact with some of these investment schemes you really need to do it this way, you need to do a joint venture to take advantage of some of the investment opportunities. And again the benefit here is that by having a very lean core production group at the heart of Ironfist it means that we're not going to be attributing any overheads of that studio to the joint venture.

Q: And for the staff working on those titles?

Nick Baynes: Firstly I should just say that I really genuinely believe that this is a way that the industry is going to go over the next few years. I don't necessarily include micro-teams with that, and I certainly don't include the massive internal publisher teams right now, but I think for mid-size teams this is definitely an attractive structure to take.

For team members who are currently sat in full time jobs initially this might sound scary because obviously if people are contracted to a game rather than a studio then theoretically that's a shorter term contract than a job for life. But what's been clear in the last two or three years is that there's no such thing as stability or jobs for life in the games industry. The biggest, most secure studios let people go

Part of that fear that people have of being freelance in some ways actually benefits the employers because if people are scared of leaving they're going to stay in their current job forever. I do think with flexible contracts and working in this kind of set-up there's a number of benefits to staff.

Games these days are services, unless you're doing a big budget boxed product there is no real end to development cycle so I'd argue that working on a Steam game or a mobile, game, that's still feasibly a 12 or 18 month gig anyway, so it's not necessarily that short term. Also when you're working in flexible contracts and especially with a contract that is directly contracted to a game it means that freelancers could negotiate higher day rates because that cost is only being paid for while the game is active.

Also there's more chance of getting a fair share of rewards. I've been at 150 person studios in the past where things like royalties or bonuses have been paid out and there's always controversy. If you're lucky enough to have been put on project A and it makes loads of money for the company and project B doesn't, does that mean you should get a higher bonus or royalty? There's arguments either side but it's not fair in that kind of set-up. It's almost like a postcode lottery.

"If this is going to work anywhere it's going to work in Brighton"

The more the industry goes to this model, and I believe it will, the more there'll be a constant flow of flexible workers and I think it's going to benefit everyone.

Q: And development costs will presumably be reduced?

Nick Baynes: When you're a work for hire studio or when you're a big independent studio you're trying to make a margin on every game you do, you can't survive just breaking even. So in the traditional model some projects budget for the rainy days. In this model, obviously scheduling and planning needs to be done very prudently and with the worst case scenario in mind but in terms of actual costs, because the money coming in is directly going to the game and because the studio is directly benefitting from IP and the backend as well… more of the money will go into the development.

Q: And you'll be based in Brighton?

Nick Baynes: If this is going to work anywhere it's going to work in Brighton because we've got… I've lost count of how many developers are down here but I think it's something like 18.

In Brighton there's also an element of collaboration between studios, in terms of helping each other out. If you need a UI artist, for example, then you can drop an email to the other studios and we all help each other out. I think that could be taken further with this model because the whole things it's built on is the idea that games themselves are co-productions and there's no reason why a co-production couldn't be done between two developers and an investor, for example.

The winners are going to be the players, because they're going to get games that are willing to take more creative risks, and the other winners are going to be the development community. It strikes me as a much more long-term sustainable model.

20 Comments

Renaud Charpentier
Lead Designer

64 138 2.2
Popular Comment
Yes, Hollywood is structured like that, but with a factor of 10 to 20 on the key men incomes.
A studio game director in the UK won't clock much above 100k, at best, a capable american movie director will clock at 1M at least for one movie, which usually is 9-12 months of (hard) work.

So he can afford to be on a project tied contract, not to have work for 12-18 months between 2 projects and if one movie is a big hit he can raise his "salary" even more. This is the same for the other project leads: actors, script writers, composers etc...

If you offer the same instability as Hollywood (or other form of arts) you can't do it with the Freelancer model of 20-30% above the salary guy payroll, it's not sustainable: you will get the desperate ones and the best will prefer security and bigger projects.

So I think the vision is right, as other entertainment industries operate like that, on project based contracts, but are investors ready to deal with "stars" and the high costs that come with them?

Posted:2 months ago

#1

Helen Merete Simm
Senior UI Artist

43 161 3.7
Popular Comment
For more senior staff who are looking for something more secure, I think this business model will not appeal. Another downside to contract work is burnout of creatives. Working intensely on a 2 year project and then collapsing in between isnt something you can really sustain, and honestly I don't think its something people would want to sustain.
Financially I can see the appeal of this business model, but for the actual people involved, the talent and the human aspect... I'm not a fan.
And I think that they will struggle to find the contractors needed for this work at a senior level, and as a result things will get messy.


Again I understand why this model makes sense for the people at the top, but having been someone at the bottom, a contractor for hire, I wouldn't want to be in that position again. I want security, benefits and a place where I can grow as an employee, where I'm not single use disposable goods.

Edited 3 times. Last edit by Helen Merete Simm on 30th April 2014 11:04am

Posted:2 months ago

#2

Ian Monaghan
Studio Head

1 3 3.0
The team at Big Bit wishes Nick every success in his new venture, he leaves Big Bit in great shape for the future.

Posted:2 months ago

#3

Neil Young
Programmer

269 294 1.1
Popular Comment
@Renaud - isn't hollywood, very, very unionised to cope with the instability? Not going to comment on whether that would be good for games or not, but it's a key difference.

I can see the appeal of the model, but can also see it making the industry much less attractive for everyone but single people without dependants, when the thrust these days is trying to be more inclusive.

Posted:2 months ago

#4

Nick Baynes
CEO and Founder

5 5 1.0
There are a couple of reasons why I think these fears are unfounded. Firstly, if the production studio in question has a number of productions live at any one time then remaining at one place is still achievable, as in an ideal world if everyone's enjoying working with each other then I'd hope team members would want to sign another contract within the group, on a different project/SPV. It's not really any more or less secure than the current system. (the benefit being you get to renegotiate your deal after every project...)

For the people "at the bottom" as you put it this is actually a great model for increasing salary to reflect experience in a way that is hard in existing studio structures. If you're a grad, or inexperienced, then currently the one of the only ways to get a significant rise to reflect your growing experience is hard negotiating at your annual review or moving companies. If you're signing a new contract after every project then suddenly the negotiating power is much more weighed in your favour.

I do expect that a lot of people will be sceptical about this model, and assuming it's embraced by the industry it may be a lengthy transition. I understand that initially it will probably only work in hubs where there are multiple studios in close proximity that enable more opportunities for the flexible worker. We're already seeing elements of this in the Brighton community.

As I said in the interview, I totally understand that people in major studios right now might see this as an unnecessary model and I accept that (in the short term). I don't think there's anything particularly secure about any job at any studio though (there's definitely no such thing as a job for life in our industry!), so if we can find a way of making a more sustainable industry that encourages innovation and avoids studios shutting down every few years then surely that's a good thing for everyone?

You mention the human aspect but I actually think that the honesty and transparency of a set up like this is better for the people involved in the long term. We all hate the cycle of boom and bust in the industry and the redundancies that follow. This is an approach that will hopefully minimise that and be much fairer for everyone. Of course until it's tried/established, we can't know for sure, but I believe this is a viable solution.

(by the way I don't think working intensely on a two year project and then collapsing afterwards is appealing with any business model really, but that's a different conversation!)

Posted:2 months ago

#5

Nick Baynes
CEO and Founder

5 5 1.0
Thanks Ian. I did say in the interview that there was some really great stuff going on at Big Bit that I couldn't wait to play when released but that bit didn't make the final transcript!

Posted:2 months ago

#6

Helen Merete Simm
Senior UI Artist

43 161 3.7
You're right, there isn't much more stability in the industry anywhere at the moment, so I suppose in a way the clarity of your proposal is better than telling an employee they are permanent staff, and then making them redundant shortly later...
But, renegotiating your terms of employment every 2 years (with the risk of redundancy) is stressful and likely to occupy the minds of your employees, ie instead of focusing on work, they will be spending some of their time every day looking for a job online "just in case"... and checking out what else is out there.

Loyalty will be harder to come by, and with the turnover you will frequently lose the efficiency gained by people used to working with each other. (Although that can also work in reverse).

Again, I agree that this situation is currently ongoing throughout the industry, so what you are proposing isn't very different at all, but I am not sure its a good development. Perhaps if there was a union for the games industry the risks could be made less scary.

Posted:2 months ago

#7

Nick Baynes
CEO and Founder

5 5 1.0
I agree that what you've raised there are potential pitfalls. My take on it is that if you're honest with your teams and let them know what's coming up, make sure that you create an enjoyable place to work that they want to continue working at, and treat everyone in a fair and transparent manner, then the idea of worrying about looking for work after each project would be minimised.

I agree with you that some form of union, or at least industry charter of some sort, is missing, and I think that's something that should be addressed regardless of business model.

Posted:2 months ago

#8

Helen Merete Simm
Senior UI Artist

43 161 3.7
Whatever happens I'm sure its going to be exciting and I really look forward to seeing what games you release!
Best of luck!

Posted:2 months ago

#9

Anthony Gowland
Lead Designer

169 495 2.9
Interested to see how this works out for you, good luck.

It seems to me like you're not building any value in to the company itself - IP will be owned by the offshoot companies, and IronFist have no staff. So wouldn't it be harder to attract investment? When you approach an investor you'll be saying "here's what we want to make, but we will need to pull together a team first", which seems like a fairly large gamble.

Posted:2 months ago

#10

Nick Baynes
CEO and Founder

5 5 1.0
Thanks!

In this model the studio jointly owns the IP/shares revenue with other partners so there's value attached to IronFist there.

With regards to attracting investment - I agree there are challenges in certain areas initially but longer term the company's track record and ability to self fund prototypes/pre-production mitigate those risks. Not an easy model for everyone at the startup stage though I agree. Hopefully, with success, IronFist can help prove the model for others to follow!

Posted:2 months ago

#11

Antony Bowler
Managing Director

4 2 0.5
This is how I envisage the future of the games industry too....

It makes a lot of sense from a business perspective for a whole number of reasons (cash flow, staff overheads, teams cherry picked per project, etc.). Obviously it's controversial as not everyone wants to go freelance, potentially losing the benefit of regular income and job security (does this exist?). However, all these problems can be worked around and planned for and as a freelancer you have a lot more control over it.

The reality is that because games are an artistic medium, the needs fluctuate and have different requirements per-project and as such require a flexible business plan to deal with that. I don't see the current model of most companies going away completely, but I do envisage more and more specialist contractors being brought in. Perhaps even, a cycle will occur, where companies essentially permanently employ contractors once they are proven in their field.

Best of luck Nick. I look forward to hearing about the results of your new company.

Posted:2 months ago

#12

Renaud Charpentier
Lead Designer

64 138 2.2
@Nick: as I said, I think you are right on the long term. But Hollywood studios (and Japanese and French ones for the part of movie history I know) ran with actors and directors contracted as employees for a long time (60+ years) before it changed.

That you regroup international teams of expert to work very hard for a limited time on a challenging creation, yes, that has to happen, it has many many pros, but how much these guys make during that limited time is a determining factor. It's the part of the equation I don't get so far, but I really wish you manage to solve it! Best wishes!

Posted:2 months ago

#13
i don't think Hollywood would work the same way if it wasn't heavily unionized. just putting that out there.

Posted:2 months ago

#14
Great interview. This is pretty much the exact same business model I'm doing with my new company, thumbfood, here in Manchester.
After 15 years in the games industry and getting made redundant as projects finish anyway I think this model is an excellent way to move forward. Nowadays the the games industry is very unusual to be stuck in the antiquated "full time company job model". Film/TV industry aside the digital media industry (younger than the games industry) successfully uses this model. No-one has hundreds of people sat together making a website, they hire in contractors as and when needed and this is a known business model.

We have a lot of developers and media companies here in Manchester who are gagging to collaborate with each other and I've already started putting people together on different projects. We'll be working with one company doing programming and another supplying art, etc etc, on a project by project basis. One way of looking at it is a natural progression from the outsourcing model that successful devs have been following for the last ten years.

Posted:2 months ago

#15

Greg Knight
Freelance Developer

54 48 0.9
One of the big enablers of this model are things like Unity and Unreal where programmers and designers (artists have always had a standard tool set) can come in and start being productive on day one without having to get to grips with unfamiliar code bases and arcane studio tools. Good luck, it certainly is the future for our industry.

Posted:2 months ago

#16

Ruben Monteiro
Engineer

64 131 2.0
Popular Comment
Wow, so staff will get the insecurity of freelancing with the low paycheck of a full time employee? What a winning combination... for the investors.

I don't see any new model here. This is just good old Binge and Purge: get folks for cheap (with no commitments or strings attached) and tell them to take an (unpaid) walk in the park until something new comes up, IF it comes up and IF no one else is willing to do their jobs for less money. Nice.

Posted:2 months ago

#17

Peter Dwyer
Games Designer/Developer

481 290 0.6
It also allows us to focus much more on the creative side of things and innovation and new IP. One of of the reasons for that is partly because looking at different investment routes, when people are going to invest in a game they want to own the IP because that offers more value for them, so it does encourage creativity perhaps more than the work for hire model.
I'm not even sure how the above statement is supposed to work. This immediately, given how he describes this as a production studio model, becomes nonsense. Unless you have one and exactly one investor for that project. Otherwise who the heck would own this so called new IP? Multiple investors would have zero incentive to do a new IP as they would need to bicker over just who owns what part of it. Instead they'll likely just fund a clone of whatever is trending at the time.

With all due respect to Nick Baynes new business model. He's just described the common scenario of a bunch of clueless managers, sitting in their office, persuading others to invest in their big idea and then contracting out the development work to some low cost Indian dev team. You neither get what you expected or what you wanted at the end but, hey "Other peoples money" as the saying goes.

Posted:2 months ago

#18
@Ruben Monteiro
Who says people are going to get paid less money as freelancers? All the freelancers I know get paid loads, work a few months on / a few months off, then go off on holiday for a few months.

Edited 1 times. Last edit by Simon Smith on 7th May 2014 2:11pm

Posted:2 months ago

#19

Helen Merete Simm
Senior UI Artist

43 161 3.7
@Simon thats a little naive... Those freelancers get paid "loads" to compensate for the fact that they don't get paid holidays, they don't have any financial stability and they don't get sick days either.
They also don't take holidays for a few months by choice. Thats called being unemployed. And while it might seem like a holiday to young men in their early 20s, to people with families its a nightmare.


@Nick Baynes - Have you read this article? It clearly lists the disadvantages of the model you are celebrating.
http://kotaku.com/why-game-developers-keep-getting-laid-off-1583192249
"This cycle of over-hiring staff just to fire them later isn't just toxic for them and their families. Imagine you're a game developer, and you're crunching—working 14 to 16-hour days—for a video game studio that you know could axe you as soon as the game is done. How much incentive do you really have to give it all your best effort? Will you really care if that game turns out to be any good? Are you really going to be able to make great art with the cloud of layoffs hanging over your head?"

Posted:A month ago

#20

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