Valuable Lessons Learned from Studio Layoffs

Trash Goblin, a game where players uncover and sell unique items, was created amidst a challenging situation that its developers turned into an opportunity. Spilt Milk Studios initially pitched the game to 20 publishers in 2023, but by the end of the year, they had pitched to 76, with only two offering terms and one entering contract negotiations. The studio eventually launched a Kickstarter, which succeeded but wasn't a massive hit. On the path to the game's early access launch, Spilt Milk's fortunes were boosted by a UK Games Fund application and a work-for-hire project, allowing them to rehire two team members who had been let go and make a freelance artist a full-time employee. The studio has since adopted a more cautious approach, prioritizing the protection of their team and institutional knowledge. Aurora Punks, a Swedish publisher and co-dev partner, also experienced significant growth during the COVID years, expanding from four to almost 50 people in 2022, but then had to lay off nearly 30 people due to a painful pivot. The company has since taken a more sustainable approach, focusing on creating a baseline of revenue for each team and exploring multiple revenue streams, such as premium mods for games like Fortnite and Ark: Survival Ascended. This approach has allowed them to offset costs and ensure that team members have projects to work on during downtime. Both studios emphasize the importance of having a diverse portfolio of projects and revenue streams to avoid relying on a single source of income. By doing so, they can minimize the risk of layoffs and ensure the long-term sustainability of their businesses.