It's fitting that the story of the studio behind a game called Outlast would be one of persistence and endurance. In a talk next Tuesday at the 2013 Montreal International Game Summit, Red Barrels co-founder Philippe Morin will give developers some hard-earned wisdom on how to go about setting up their own studios. As the developer recently told GamesIndustry International, it took a fair bit longer than he expected.
"I remember telling my wife I'll quit my job and within three or four months we'll know if it works out or not," Morin said. "And it took a year and a half."
Morin had been dreaming about starting his own company for a while, and had even made some attempts to do so, but things didn't come together until an original game he and his fellow Red Barrels co-founders had been working on at EA was cancelled a year into development. Other projects within EA at the time either had core teams already in place, or simply weren't up their alley, so the developers left the publisher in January of 2011.
"I remember telling my wife I'll quit my job and within three or four months we'll know if it works out or not. And it took a year and a half."
At the time, the plan was to spend a couple months putting together a trailer for a new project and then shop it around to publishers. The Red Barrels team had AAA pedigree and an offered distribution agreement from Valve to have their game carried on Steam, but Morin said the traditional publishers still seemed like the most natural source of funding at first.
"Some people are able to do their project without any salaries for a year or two years," Morin said. "In our cases, maybe it's because we're a bit older with families and kids, but whatever option we were going to choose had to allow us to give ourselves salaries and also give salaries to employees."
The publisher route didn't work out, leaving Morin looking for alternate funding options. One of the things Morin will discuss in his talk is when developers should turn down deals, even if they don't seem to have that much leverage. For example, he had an angel investor interested in the company, but that money was contingent on Red Barrels also receiving support from the Canada Media Fund (CMF), a government program offering investments for homegrown media projects. The team turned down the angel investor, reasoning that it could always go for the CMF money first, and then come back to the investor for help if that turned out to be insufficient.
When Red Barrels was formed, Morin wasn't even aware of the CMF, and if he had it all to do over again, this is where he'd have made the most significant changes. The CMF only accepts submissions twice a year, and Morin first heard about it too soon before the deadline to put together a proper application.
"When we got the answer on the first submission from the CMF, that was probably our lowest point."
Time is a scarce resource for indie start-ups, but Red Barrel waited out the six months until the next application window and made a request for the CMF to fund Outlast--which was turned down.
"When we got the answer on the first submission from the CMF, that was probably our lowest point," Morin said. "When they gave us the answer, it was simply, 'Nope, you don't get it.'"
After a couple weeks, Morin discovered the rejection had been made not because of anything wrong with Outlast, but because of technical issues with the submission, because the team didn't have everything on the business end of the operation nailed down. The CMF requires that its contribution not exceed 75 percent of a project's total budget, so to get $1 million from the fund, Morin and his co-founders had to scrounge up more than $300,000 from their savings and families. Combined with a Valve distribution agreement, it was enough to earn the grant money--on the next submission, six more months down the road.
When asked if he would have any hesitation about fronting that $300,000 if he had it all to do again, Morin said none at all. It would have been his first option if he knew then what he knows now, adding that he could have started up the company in just six months instead of a year and a half. Besides, the personal investment has already paid off since Outlast's September launch.
"You have to stop thinking about [going indie] in a romantic way. You have to be able to analyze all the aspects."
"We made our money back," Morin said. "Now it's more a question of how much buffer we're going to have for the next game. Currently we're working on a PS4 version and the DLC."
Despite a few missteps early on, things have turned out well for Red Barrels. Outlast is selling well and getting good exposure (including an enthusiastic endorsement on Conan O'Brien), and Morin said he has no regrets. But he knows his story isn't especially common, and there are plenty of newly independent developers who hurt themselves simply out of ignorance when it comes to the sort of legal and financial stewardship other people handled for them at big publishers.
"You have to stop thinking about it in a romantic way," Morin said of going indie. "You have to be able to analyze all the aspects. I've heard stories of some studios closing not because the game they were working on wasn't good, but because they just could not go through the process of managing the company and making sure the budget was spent wisely. And if you're unable to do it yourself, you better get somebody on the team who's able to."