Splitgate's shutdown teaches us an important live service lesson
Image: 1047 Games

Splitgate's shutdown teaches us an important live service lesson

Protocol Entertainment

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re delving into free-to-play shooter Splitgate’s decision to cease development and the perils of live service business models, as well as a renewed debate around crunch culture and a nearly decade-old interview gem about the development of SimCity.

Splitgate learns a hard, but necessary, live service lesson

Live service gaming is often heralded as the future of the industry. But it’s easy to forget that for every Fortnite or Destiny, there are countless live service gambles that fall flat or outright fail. Developer 1047 Games is trying to avoid the latter fate, and still harboring ambitions of joining the ranks of the former.

The indie studio behind the live service shooter Splitgate announced last week it would cease development on the game, in favor of putting resources toward an all-new product. For the players who invested time — and in some cases, significant money — into Splitgate, the news is a bummer. It’s also increasingly common, as more developers try to replicate the success of the games-as-a-service giants that now dominate the industry.

Splitgate was a viral sensation … until it wasn’t. 1047 Games was blunt in its assessment of the challenges it faced. In a message posted to Twitter, the team likened its struggle to “bailing water while also trying to keep everyone who bought a ticket to board our ship happy, while also trying to turn our boat into a rocket ship.”

  • Splitgate was once an indie success story: The game, which combined the teleportation features of Valve’s Portal with arena shooter gameplay inspired heavily by the Halo franchise, was developed by Stanford students and released in 2019 to modest fanfare. Two years later, it went viral when it launched on consoles as a free-to-play live service game.
  • The game grew from 1,000 players to more than 200,000 in a matter of weeks, crashing 1047’s servers and forcing the team to take the entire game offline to help scale it.
  • The organic growth attracted heavy investor attention, and 1047 raised $100 million in September of last year at a staggering $1.5 billion valuation. The funds and media spotlight allowed 1047 to hire aggressively from across the industry, too. “Our attitude is: The sky's the limit,” CEO Ian Proulx told me at the time.

But the past year hasn’t been kind to Splitgate. The game dropped from a peak concurrent Steam player count of nearly 70,000 in August 2021 to about 1,700 players last month.

  • The resilience and popularity of other shooters and battle royale games such as Apex Legends, Fortnite and Valorant has created a fiercely competitive market, and Splitgate’s novelty for many wore off quickly.
  • 1047 Games also cited technical and structural problems with “trying to rework old content and systems” it built as a tiny team and “trying to retrofit and live operate an existing product.”
  • The company plans to develop a new free-to-play game in the Splitgate universe using Unreal Engine 5. It plans to keep Splitgate operating for now, with player cosmetics and progression intact and a new battle pass launching later this month.

Splitgate’s struggles are a familiar tale for many in the industry. That includes AAA developers of major live service products, which struggled despite having many times the budget and expertise of 1047 Games.

  • Major live service flops of the past half-decade include Electronic Arts’ Anthem, Bethesda’s Fallout 76 and Ubisoft’s Hyper Scape, all of which failed for vastly different reasons and in ways that underline just how difficult it can be to create a product that stays fresh (and profitable) for years.
  • Developers of all stripes have faced live service hurdles. Although Nintendo, for example, has grossed more than $1 billion with its live service hit Fire Emblem Heroes, it said last month its other mobile free-to-play game, Dragalia Lost, would shut down for good in November.
  • Players of the game told The Verge last week how they felt guilt and remorse over the amount of money and time they sunk into it.
  • Even seasoned studios like Destiny developer Bungie — which Sony acquired explicitly for its expertise in live service development — took years to crack the code to success, and even then only after experimenting with its business model, making plenty of mistakes and splitting with its first publishing partner.

On paper, the creators of Splitgate did everything right. They copied all the industry best practices, raised a mountain of venture capital funding and hired experienced developers from big-name studios. But the tricky nature of live service gaming makes it difficult to predict when a game might succeed better as a one-off hit or when it needs to be updated constantly to keep players coming back and what it might take to pull off such a feat.

For players who spent money on Splitgate and other live service games in decline, it’s a bit like investing in a promising new venture only for the enterprise to go belly up. And once the servers shut down, as has been the case with online multiplayer titles since the early ’90s, the game and everything you’ve bought is gone for good.

By its very nature, live service gaming is and always will be a gamble, for developers and players alike. For 1047 Games, the struggle now will be convincing us its next product is a worthwhile investment.

— Nick Statt

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“Anyone who knows me knows how passionate I am about the people I work with. Earlier I tweeted how proud I was of the effort and hours the team was putting in. That was wrong. We value passion and creativity, not long hours. I'm sorry to the team for coming across like this.” — Dead Space co-creator Glen Schofield apologized over the weekend for a now-deleted tweet promoting crunch culture. Schofield’s Striking Distance Studios is producing a survival horror game called The Callisto Protocol.

“How we make games is evolving. The idea of a single team under one roof really doesn’t happen that often anymore … The days are gone when you can sort of go, ‘Everybody, round up the team in the cafeteria, I want to tell everybody to work harder this Wednesday.’ That’s long gone. It’s gotten a lot more complicated than that.” — Microsoft Studios chief Matt Booty told a crowd at PAX West over the weekend that single-studio development is being phased out in favor of distributing work across multiple developers.

In other news

Microsoft goes on a media offensive for Call of Duty. Microsoft last week published a blog post defending its Activision Blizzard deal and confirmed to The Verge that it also signed a written agreement pledging to keep Call of Duty on PlayStation as regulatory scrutiny heats up.

The Meta Connect conference gets a date. Meta's annual fall conference, formerly Oculus Connect and now dedicated to all things AR, VR and the metaverse, will take place on October 11. "Don't sleep on it," wrote Chief Technology Officer Andrew Bosworth on Twitter.

Tencent invests further in Ubisoft. The Chinese gaming giant is buying just short of 50% of the Ubisoft shares held by the founding Guillemot family, a purchase that will raise its stake in the French publisher from 4.5% to more than 11% at a price of almost $300 million. Tencent is also authorized to purchase an addition 5.5% of the company if it chooses.

LG pushes NFTs on its smart TVs. The display maker said last week it will start selling NFTs of digital art to use as a sort of screensaver for your TV when you’re not actively watching something. Samsung made a similar announcement back in May.

Amazon’s “Rings of Power” posts impressive numbers. The new prequel series clocked more than 25 million viewers within 24 hours of premiering last week. It’s the best Prime Video debut ever, in part because Amazon says the show launched in over 240 markets worldwide.

Microsoft starts testing a “Friends & Family” version of Game Pass. The company’s game subscription service is experimenting with a model that allows for up to five people across multiple households to share a membership. In Ireland, the plan costs 21.99 pounds (a nearly equal value in U.S. dollars) per month.

Riot’s Arcane makes Emmys history. The animated hit, based on the game League of Legends and distributed by Netflix, became the first streaming series to win the Outstanding Animated Program award at the Creative Arts Emmys last weekend.

Pico bets on mixed reality for its next VR headset. The device from ByteDance’s VR unit will have color video pass-through, just like Meta’s upcoming Project Cambria headset.

Netflix’s ad-supported plan may launch as early as Nov. 1. The streaming service is reportedly looking to fast-track the launch of an ad-supported tier; Netflix reportedly told advertisers that it wants a $65 CPM rate, which would be a significant premium.

Meta buys a haptics startup. The acquisition of Berlin-based Lofelt could help the company build new input devices for AR and VR.

That time when SimCity’s designers discovered a dark secret of car culture

If simulation games accurately reflected the real world, what sorts of horrors might we have to contend with inside our virtual entertainment playgrounds? The answer, according to a developer on SimCity, is way too many gigantic parking lots.

In an old interview gem from 2013 that went viral over the weekend, SimCity creative director Stone Librande told The Atlantic that one of the shocking discoveries his team made while developing the series reboot that released that same year was the sheer volume of modern urban parking lots. Librande said he used Google Earth and Street View to do research into urban planning, only to find out that if they replicated real-life parking lot design, SimCity would be “really boring.”

“I was blown away by how much more space was parking lot rather than actual store,” Librande said. “So what we do in the game is that we just imagine they are underground. We do have parking lots in the game, and we do try to scale them … but they're nowhere near what a real grocery store or pro stadium would have.” More cars necessitates more parking, and as Librande points out, parking lots kind of suck.

— Nick Statt

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Thoughts, questions, tips? Send them to entertainment@protocol.com. Enjoy your day, see you Thursday.

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