Should We Be Worried About A Decline In First Party Development?

The start of 2016 has not been a good time for British game developers, with the news of the closure of both Lionhead Studios and Evolution Studios in the last few weeks. It’s never good to see a studio shut down and jobs lost, but it’s especially sad when it’s a storied developer with several popular games to their name. Looking to the future, there are real questions to be asked about the state of first party development for the Xbox One and PlayStation 4.

Lionhead’s closure is particularly galling, with the studio closing in on the release of Fable Legends. This was a fairly major departure from the single player focused originals, with four-player cooperative quests that were to be controlled and shaped by a fifth player as the villain. We aren’t privvy to the decision making, but Microsoft clearly felt it wouldn’t recoup the development costs.

A big part of this would have been down to making this a free-to-play game with 5-10 year cycle of support, making it an expensive undertaking. Lionhead had been working on Legends since 2012, with the first closed betas starting in late 2014 ahead of a planned 2015 launch. That 2015 launch never happened though, with the game pushed back to 2016 and the promised open beta never opening its doors to the wider public. The game’s cancellation was the death knell for Lionhead, with the prospect of letting them start work on a new project too costly for Microsoft to consider.

It’s a similar tale for Evolution Studios, albeit one that has played out in a much more public fashion. The studio had already survived one difficult game launch, with the tragedy of the 2011 Tohoku earthquake understandably affecting the unfortunately timed release of MotorStorm: Apocalypse. Driveclub’s woeful launch had no external factors to blame. First it missed the launch window, releasing almost one year later than planned, and we all know of the months-long server woes which plagued the game.

Evolution went through a major restructuring in March of last year, with Sony saying that “Evolution Studios will now focus on DriveClub as a service going forward.” They actually managed to rehabilitate their image, with a long running and very generous DLC season pass, the excellent Driveclub Bikes standalone expansion and talk of PlayStation VR support in the future. However, it would have been several years of pre-production and growing the studio once again before they could release another full game.

Perhaps both Microsoft and Sony have misjudged what it takes for a game to actually become a service, though. Driveclub’s “service” was something of a misnomer, as Evolution fulfilled the remainder of the season pass before delivering the surprise that was Bikes and moved on to create more bitesized chunks of DLC. In Lionhead’s case, a free to play game can get people through the door, but it’s another matter to engage them long enough to feel like they want or need to pay. Both likely lacked some of the levels of engagement in order to be sustainable.

The most successful “games as a service” examples have all reached that stage quite naturally and often done so from small and unassuming beginnings. That we see a crop of hero shooters like Blizzard’s Overwatch, Gearbox Software’s Battleborn and Boss Key’s LawBreakers all eschewing free-to-play in favour of a paid release is quite telling.

The closure of Evolution Studios also has to be taken in the grander context of Sony’s PlayStation business, and with PlayStation VR on the horizon, you have to be wary of the company repeating the mistakes of the past. The PlayStation Vita released in 2012 with a lot of expectations from those who bought it. It came out with a healthy selection of games in its launch window, that included an Uncharted game worthy of the series, the bitesized third person shooting of Unit 13, one of the best Wipeout games in the series’ history, ModNation Racers, Everybody’s Golf, with many more on the horizon.

That stream of first and second party content soon dried up, however, and well before it became clear that the Vita was not selling enough consoles to warrant further investment. Bigbig Studios and Zipper Interactive were both closed shortly after they shipped their respective Vita games, while Studio Liverpool’s storied history came to a close half a year later.

In each case, they were closed before development could begin in earnest on a new game, but you have to wonder if that was not a little shortsighted. Both Guerrilla Cambridge (Killzone: Mercenary) and Bend Studio (Uncharted: Golden Abyss) quickly moved on to developing for PlayStation 4 and PlayStation VR, leaving the Vita floundering with no first party exclusives and waning interest from third party developers.

With lengthening development times and necessary delays, the lack of exclusive games at the end of 2015 showed that Sony really do not have a lot of depth to their Worldwide Studios, and that could be worrying when you consider PlayStation VR as a separate platform that poses very different game design challenges to developing games purely for the PlayStation 4.

Thankfully, with companies releasing VR hardware this year, there’s a lot of optimism and interest from developers big and small. As the most likely to reach a mass market audience in the first few years of this nascent technology, PlayStation VR should be catered for by third parties very well, but truly must-have games currently seem to be few and far between.

Evolution Studios were hard at work on adapting Driveclub for VR, as we discovered at Paris Games Week last year. This project might plausibly continue as more of an exercise in adapting the game engine and existing content, with Sony perhaps retaining a small number of Evolution staff and having them work with London Studio or the recently founded and VR oriented North West Studio in Manchester. At the same time, GT Sport from Polyphony Digital might be enough to sate PlayStation VR racing game fans.

But you have to ask where the second wave of PlayStation VR games are going to come from, and even what PlayStation 4 exclusives are on the cards. I can’t see Sony diverting Naughty Dog or Guerrilla Games to develop for PS VR, let alone Sucker Punch or the in house team at Studio Santa Monica – let’s not forget that a cancelled new IP saw layoffs at Santa Monica in 2014. Much of what remains within SCE Worldwide Studios is “too big to fail”, and often as part of a wide reaching infrastructure that lends support to external studios. Santa Monica, San Diego, Japan and XDEV all have major roles in assisting smaller developers in bringing their games to PlayStation, and those are somewhat essential.

Microsoft is a very different beast, with tentpole studios at 343 Industries, The Coalition and Turn 10 putting out regular new Halo, Gears of War and Forza games, while they have a handful of strong second party studios alongside.

However, it’s always important to remember that emotion plays little role in these business decisions. Regardless of how popular games like Fable II or MotorStorm were, both Lionhead and Evolution found themselves having to rely on former glories for too long. Lionhead didn’t even get the opportunity to release Fable: Legends and recoup some of the expenditure.

There’s a cautionary tale to take from this in relation to the health of other first party studios. After five years of games for the unloved Kinect and a decade in which any critical acclaim has met with indifference at the tills, it would seem that there is an awful lot riding on Rare’s Sea of Thieves.



  1. Obviously it’s next to non-existent on Vita, so that’s not worth talking about.

    It’s a bit of a shame what’s happening with Sony at the moment. Feels like the same thing that happened to MS last gen where studios like Bungie and Bizarre passed onto other publishers and the console began to thrive on third-party software. That never really held much weight with me, as I like the exclusives.

    I still think Sony have got enough studios in tow, but quite why Evolution, Studio Liverpool and Zipper Interactive are closed when there’s tons of money being invested in PS VR and other studios like Polyphony can do what they want, is beyond me. Likewise the same could be asked for some of MS’s decisions.

    I really don’t think PS VR will get that much attention from the major first-party studios, and rightly so. It’s a gimmick for the time being, and it’d be a shame for devs to invest in it like Vita and get shelved for the privilege.

    • In Polyphony’s case, it’s easy. Their games make so much money that they’re more than self sufficient. GT5 Prologue sold more than enough to cover the development costs of GT5 as a whole, which then shifted over 11 million copies. Even GT6 managed to sell around 5 million, and that released after the PlayStation 4 came out.

      With those kinds of sales, they have the budget to take as long as they want. Their arch rivals at Forza might release games more often, but they don’t have comparable sales figures.

      • I guess what really annoys me is that Evolution got on with it and really dealt out the content, yet it didn’t help them out. That’s the thing that distinctly miffs me about Polyphony. They could release GT Sport (quite possibly half a game) the other side of next year and still get an insane amount of sales. Albeit they probably wouldn’t screw up the launch of their game.

  2. Maybe Sony has ‘won’ this gen so much, that they don’t need to afford the luxury anymore of developing for a single platform.
    And for most consumers, it doesn’t really matter whether a game is from a 1st party developer, or whether it comes out on 10 different platforms, as long as it’s also on theirs. On the contrary, I’d rather know a good developer is going strong financially, because it’s titles are out on several platforms.

    Of course, it’s a shame for Evolution, as I love Driveclub, but in my view, the game has also been incredibly cheap when I bought it, I got tons of content for a few bucks.

  3. I think exclusives are now pointless, they don’t make as much money as a multi plat, if you look at how much the PS3/4 sold & you look at how much their exclusives sells just goes to show that not everyone is interested in specific games & will never give it a chance.

    I think how exclusives should work is for example release uncharted multi plat then DLC content etc stay exclusive to the console for free or like the last of us left behind becomes an exclusive for the console but the game stays multi plat

  4. I think it’s a massive shame when the well loved devs like Studio Liverpool and Evolution are shut down, I’d prefer them to be supported based on their reputations alone, at least until they make a game that results in a loss for Sony. Maybe Wipeout 2048 and Driveclub were their respective nails in coffins? In the case of Wipeout and the Vita you could say it’s Sony’s fault for the platform doing so poorly, but then years ago Studio Liverpool made the decision (when they were Psygnosis) to accept Sony’s money and with that comes good and bad consequences. Maybe we’re all too attached to these beloved brands to see the business sense in these studio closures, so I suppose the answer is to be a multiplatform indie dev, but then that carries different risks. We probably shouldn’t be worried, these first party guys often make excellent games and get good support for their creativity while they’re still about.

  5. The problem is these huge corporations value profit over everything else. Nostalgia, cult favourites and high metacritic ratings count for nothing to the bean counters when they’re looking to cut costs somewhere.

    The Sony ones are more understandable as they’d finished their projects, the Lionhead one is more baffling as they’d already funded development for several years and Legends was almost done.

  6. At the moment, no. I can’t see neither Sony or MS giving up on First Party Development. It’s cheaper, no licensing deals to make, all in house etc.. Naughty Dog is a very valuable partner and asset to Sony. They know that anything they produce is going to make a ton of cash so they will always keep ND open. Driveclub’s developer, Evolution got shut down, yes but the lacklustre sales and utter launch may have been the final straw. As far as we know, there was little to no conflict between the two but it could be that they weren’t getting along or their projects were constantly falling behind etc..

    First Party games will always push the console to it’s limit and is more or less an excuse to show off. Look at Naughty Dog and what they did with the PS3. Before launch, they showed off the tech. After, UC2 happened. Then UC3 closed it off.

    However, Sony does have a history of being quick to abandon something if something seems to be doomed to fail. Look at the Vita. In theory, a more powerful PSP should have done just as well as the PSP. But they couldn’t be arsed to give it proper support and was lacking games at launch. If they used first party games correctly, we could be speaking about UC:GA 2, a new portable FF game etc..Sadly, they did not and the Vita either failed or just managed to break even for them.

    There will always be first party and Sony pretty much had no choice with the PS3 but to pump out exclusives due to how much of a pain the Cell was to develop for. ND, QD managed to get the most out of it and in doing so, may have convinced a few publishers to give it a shot. If they used the Vita approach, it would have failed. First party games are the first line of appeal for consoles.

    I don’t include PCs in this as well, it’s kinda hard to speak about first party games on the PC. None come to mind due to the sheer amount of publishers, developers and well, the nature of a PC.

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