After making a couple of successful PC and console games, in 2011 Hothead Games pivoted into mobile and never looked back.
The Vancouver, Canada-based firm “has seen and done it all” in the 12 years since, CEO Ian Wilkinson tells us: hits, misses, premium, free-to-play, licensed games, original IP, development, publishing and work-for-hire.
Today, after a couple of cancelled projects and a slight pivot, Hothead is expanding its work-for-hire business. “Over time, we found it more challenging to launch new games with the metrics necessary to guarantee their success,” explains Wilkinson. “We started and cancelled a number of titles, some of which didn’t hit our retention bar and others that didn’t achieve our CPI targets.”
“We are in an era where consolidation is taking place. Games have become significantly more expensive to make and market, and with that comes a much higher risk profile.”
Below, Wilkinson shares some wisdom, anecdotes and what he’s learned so far from the many ups and downs at the storied studio.
The 2011 pivot to mobile
“Because we believe in focus and ‘no surrender and no retreat’ we burned our console and PC development bridges. Initially, we created 99c premium mobile games. After a year, we abandoned the premium model for the free-to-play model.”
Troubled launches, big wins
“Our first taste of success on mobile came with Big Win Soccer, but the path to victory was anything but smooth. When we launched the game, our servers were instantly overwhelmed, crashing repeatedly.”
“Apple requested that we pull the game from the store until we could ensure its stability. In a move that some may have seen as stubborn – but we saw as committed – we refused. For months, our team worked tirelessly to stabilise the game, and when we finally did, it was like opening floodgates: Big Win Football, Basketball, Baseball, Hockey, Racing, and the licensed MLB and NHL versions swiftly followed.”
“Our next significant success came with KillShot, a title that unfortunately landed us in legal hot water. Glu Mobile felt that our game bore an uncomfortable resemblance to one of their own titles and took legal action against us. We settled the dispute out of court swiftly, aiming to minimise the impact on our team and our project. We immediately started to develop KillShot Bravo. It became the most successful game we’ve produced.”
“Next, we inked a licensing deal with a Chinese publisher, although they never released the game. They were going public and wanted to talk about all the successful North American games they had the right to distribute in China for their IPO narrative, rather than launch the games. Eventually we decided to sell KillShot Bravo and Hero Hunters to Decca Games, a part of the Embracer Group.”
Deal or no deal
“A few years back we decided to explore acquisition options. After careful evaluation, we settled on the highest bidder. However, this bidder we chose had never undertaken an acquisition before, and the process quickly got bogged down in minutiae. The process stretched out and because ‘time kills deals’, eventually, they got cold feet.”
“I learned an invaluable lesson. Firstly, the highest bidder isn’t necessarily the best bidder; the best bidder is the bidder with the highest probability of closing on the deal. Secondly, it’s imperative to set a rigid timeline and adhere strictly to it.”
Even work-for-hire isn’t risk-free
“Once a project is signed, work-for-hire is inherently less risky than creating games on spec; it’s profitable from day one. These projects provide us with a financial runway to continue to take measured risks with our self funded Hothead IP based projects which often take a year or more to generate revenue.”
“Recently we hit a bump in the road with our first work-for-hire deal. Early on we spent all kinds of time and energy into closing a deal on a fantastic property. At the 11th hour, the client hired a new senior exec who reported to our contact. The deal fell apart at the last moment when the new exec hired his previous employer to do the work. This experience was a brutal wake-up call: “never count your deals until they’re signed.”
Surviving in a turbulent market
“A little bit of luck, lots of focus, and even more hard work are underrated. We learned that with enough willpower and persistence, we can outperform our competitors. Skill alone isn’t enough, effort is often the linchpin to our success. Great execution can make up for less-than-optimal strategy.”
“Creating urgency is critical. We’ve learned to embrace the concept of ‘manufacturing a crisis’, cultivating a sense of urgency that keeps us sharp and prepared for when a real crisis hits.”
“Our journey is testament to resilience. From financial tightropes to technical roadblocks, from painful decisions affecting our people and their families or our beloved IPs to the validation of organic success, we’ve been through it all. And through these tumultuous times, we continue to become stronger, wiser, and more focused than ever.”