[zomgbbq]

Atari in 1983 went from the leader in video game production to completely imploding. In 1979, four of their best programmers left after demanding equity in the sales and were refused. Their CEO Ray Kassar famously said, "You’re no more important to those projects than the person on the assembly line who put them together. You’re a dime a dozen. You’re not unique. Anybody can do ­a ­cartridge.". They left and formed Activision which led to a sequence of failures by Atari until they finally died unable to compete with the likes of Intellivision, Colecovision, and Commodore.

[jasonwatkinspdx]

Gaming abounds with stories like this.

A friend of mine went to work for a small game studio in Oklahoma that'd gotten some acclaim for their quake mod pack. They took that momentum and started on their own novel IP as a quake licensee. They made a ahem mildly successful game named Medal of Honor.

Some time down the road, the owner of the studio didn't want to share the wealth.

As a result the top programmers, designers, etc, grouped up and negotiated a deal to become a 2nd party dev studio with a competing publisher. Nearly the entire company left with them. They couldn't take the IP with them so they rebranded their new game franchise as Call of Duty.

That studio owner literally made a billion dollar mistake by not simply being fair early on to the team. Never, ever, treat a team that has achieved rare success as replaceable cogs. If they've shipped, they can find more money people any time they want.

[TuringNYC]

>> That studio owner literally made a billion dollar mistake by not simply being fair early on to the team. Never, ever, treat a team that has achieved rare success as replaceable cogs. If they've shipped, they can find more money people any time they want.

What prevented them from offering bad deals that are common today? Some examples I've seen:

- give lots of equity, but vesting over long timelines

- give no refreshers, if people leave, they lost lots of unvested

- stay private for a long time...equity is almost unsellable and theoretical only

- give lots of equity, but lag on salary and save big

- give lots of equity, but leave people with huge unfunded tax liabilities if they want to leave company

- give "lots" of equity which is worthless if people actually saw the cap table

I dont feel any of the above are good practices, but they are common practices for equity theatre

[joyfylbanana]

> That studio owner literally made a billion dollar mistake by not simply being fair early on to the team. Never, ever, treat a team that has achieved rare success as replaceable cogs. If they've shipped, they can find more money people any time they want.

That wisdom applies to that specific industry. In gaming, the people you hire are the asset. However the same doesn't apply to all industries. Sometimes people are more and sometimes less replaceable. If you are running a fast food chain and manage to piss all your employees, yes, it is likely a problem, but if you hire new people and fix your behaviour it is likely that the business will continue to run as usual.

[rvanlaar]

What an interesting story. It made me look up how medal of honor started.

Could you clarify a few things? I don't think the story adds up.

Wikipedia has the followin information. Medal of Honor was made by DreamWorks interactive. [..] Filmmaker Steven Spielberg Spielberg founded DreamWorks Interactive in 1995. [1] And: Danger Close Games (formerly DreamWorks Interactive LLC and EA Los Angeles) was an American video game developer based in Los Angeles. [2]

This doesn't sound like 'a small game studio in Oklahoma'.

[1]https://en.wikipedia.org/wiki/Medal_of_Honor_(1999_video_gam...

[2]https://en.wikipedia.org/wiki/Danger_Close_Games

Edit: It seems you were talking about the acclaimed: Medal of Honor: Allied Assault.

Made by: 2015, inc[3] https://en.wikipedia.org/wiki/2015_Games

Edit 2: Spelling

[RuggedPineapple]

Black Isle is another great example. Interplay was going under and selling off any IP of value to get some cash out of the end of the road. The staff, seeing the writing on the wall, quit more or less en masse and started Obsidian together. The name is even a bit of a pun- Obsidian, a black volcanic glass, is what you might expect a Black Isle to be made from.

[KptMarchewa]

Funny thing is that the owners did the same thing a second time, going back to the EA, forming Respawn Environment.

[reaperducer]

If they've shipped, they can find more money people any time they want.

Quotation of the month. Devs should have this knitted into a pillow in their cubicles.

[barrysteve]

I agree with your message though there's a scarier story in there. What if those people never left to make Call of Duty?

Under the boss they would have made more Medal of Honor, and maybe the next MoH's were not billion-dollar products.

Maybe had they gotten equity, we would never have a billion dollar CoD series!

[throwawy0932832]

I suppose that explains why they felt so eerily similar and shared same engine.

[jollybean]

Yeah this story has a problem.

An entire company 'quits' and just 're-does the thing' is almost assuredly theft of know-now and IP, but more than that theft of the operating modality.

It takes in incredible amount of work, risk, investment etc. to 'get something up and going' - with all of the parts working.

Any time you walk into a company you'll see what looks like 'things working' on some level, usually that took incredible trials and travails.

It's a bit like 'decent code' - it takes iterations, after which, it's 'obvious in hindsight'.

Every coder knows it's 'figuring it out' that's hard, whereas doing it a second time is easy.

Employees who tool 100% salary to start, without higher risk equity, and then wanted to 'trade after the fact' shouldn't be miffed - they just shouldn't have taken the job if what they wanted was equity.

It could entirely be the case of cockroach management giving horrible terms to everyone including underpayment etc. but these stories are often one-sided.

I'm working with a company right now that I've discovered has a seemingly 'simple' product. It took this young girl 4 years of struggle (and failure before) that, to get this thing where it is and establish all the sales relationships. I'm sure I could duplicate it quickly with minimal resources (I wouldn't do that to her), but it has dawned on me how much effort it takes to move things forward.

Here is the story, and it doesn't really speak to some kind of greedy action by 2015, the original game devs. More subtle than that. More like the original team, which was assembled by EA, liked working together, and were lured away by another studio as a team.

[1] https://www.mcvuk.com/business-news/publishing/the-medal-of-...

FYI the founders of 'Call of Duty' were eventually fired on bad terms again.

I would reserve judgment on these situations.

Especially in entertainment and creative things, there are a lot of personality issues.

[senko]

> Their CEO Ray Kassar famously said, "You’re no more important to those projects than the person on the assembly line who put them together. You’re a dime a dozen. You’re not unique. Anybody can do ­a ­cartridge.".

Imagine any software company CEO nowadays saying that out loud, no matter what they privately thought.

[MikePlacid]

> Imagine any software company CEO nowadays saying that out loud, no matter what they privately thought.

A daughter of my friend was not very happy in her job: a Silicon Valley company hired her as a security pro, but was using as a coder, which she hates. She was going to leave, but decided to wait ten months or so until her stock options vested. She and a big group of other engineers were fired right before the vesting moment.

All this time the CEO was generating absolutely politically correct sounds: people are our best capital, diversity is our strength, etc. She would be better off if he was honest.

[kkarpkkarp]

> Imagine any software company CEO nowadays saying that out loud, no matter what they privately thought.

Comarch CEO famous quote: "any developer could be replaced with finite number of interns"

This is Polish software company (quite big, one of the biggest) and since this quote went public, they don't have best reputation among developers. You go to work there only if you are actually intern fresh after uni.

[deckard1]

today they have their scrum masters whisper it in our ears at the daily stand up

[YetAnotherNick]

To me honest and harsh conversation, even if it is wrong, is still better than firing 100s of employees in a zoom call with corporate speak.

[gfxgirl]

I agree 100% with much of the sentiment here that creators deserve respect and a cut of the spoils

At the same time, it really depends.... I'm pretty confident that there are very few engineers at FAANG that can't be replaced. I'd also expect there are very few engineers at Epic, Activision, Blizzard, Naughty Dog, Sony, Rockstar, Ubisoft, Valve, etc... that can't be replaced. Sure, if 30%-70% of the team left on any particular project it would probably die, but at least for AAA titles, there's usually no one person responsible for that title's success? Or maybe there is but it's limited to a few key people and not every person on that team.

IF you're at some indie firm with 5-15 people that's probably less true.

I mostly made this comment because in 1983 most games were made by 1 to 3 people max. By the end of the 80s there weren't many games that had more than 20 people on them and usually they took less than a year to make. It was only in the mid 90s that we started getting 30+ people teams trying to fill a CD with data and it arguably wasn't until the 2000s that we had games that it was common to teams of 30-100+ people multiple years to make.

[neffy]

If you take the truly non-performing folks, well sad to say you can probably get rid of most of them and improve performance.

Otherwise, get rid of any engineer and the minimum impact is 3-6 months code and culture familiarisation before they get up to speed with your particular application/code base/equipment. Can easily be more than a year - especially with some of the big systems.

So yes there is an impact on business performance, and a highly damaging one, far more often than is realised. Companies compete - and companies go under and get replaced, all the time.

[Mc91]

> I'm pretty confident that there are very few engineers at FAANG that can't be replaced. I'd also expect there are very few engineers at Epic, Activision, Blizzard, Naughty Dog, Sony, Rockstar, Ubisoft, Valve, etc... that can't be replaced. Sure, if 30%-70% of the team left on any particular project it would probably die

The thing is these two things are linked - one engineer leaving and 30-70% of a team leaving. The quantity of who leaves does not matter as much - a project may be able to handle 70% of consultants, interns, junior and regular programmers leaving, but might die if the 30% (or 25%, or 20%) leaving is entirely senior/staff/principal.

One of the lead programmers who has been at the company for many years leaves. He is friendly with some of the other senior programmers and says he thinks the company is slowly going downhill, and he got a new job with better money, and with a saner schedule, work environment and work-life balance. Maybe one of the other senior people leaves for the company he left for. Then other senior people start leaving.

It's like Steve Blank's essay about how a company deciding to start charging fifty cents for soda led to an exodus of its best senior programmers. One lead leaving can be a catalyst for others leaving. So they are in a sense irreplaceable.

If a company is an oligopoly like Verizon/AT&T or the like, then they are privy to revenue and profits they don't have to compete for, and for companies in that situation people are more replaceable. Not for companies that have to be competitive though.

[siscia]

I see stories like this a few times.

But oftentimes management ask if the project will be completed at all. And yes, the project will be completed.

But the real question to ask is often:

Will it be completed on time? On budget? With the same quality level?

And this is a complete different story.

[eloisant]

Most developers working on products, not just at FAANG, can be replaced but it's very costly.

You need to find a developer in the specific niche he was competent. Not easy because there is a shortage of developers. Then he needs to get up to speed with the stack and the processes used in the company.

So in theory yes, engineers can be replaced. In practice it's costly, with no guarantee of getting the same productivity, and the process to find someone will leave you with one person less for many months. When you have competent engineers that you want to keep, the last thing to do is to play the "I don't need you anyway" card.

[ryathal]

Blizzard lost their entire RTS staff to Frost Giant and will likely never release another RTS again. Sure they can probably survive on lootboxes for Hearthstone and Overwatch, but it's not the company it was. Even WoW is basically dead and is just rehashing with classic. Diablo got turned into mobile lootbox garbage as well, and it's too early to tell if Diablo 4 is going to follow the same path, but I wouldn't hold out hope on it being a critical success.

Large game companies have now essentially become casinos.

[orange_joe]

what's incredible about this is that Activision remains an industry leader whereas I'm not entirely sure if Atari even still exists.

[denkmoon]

Ironically however modern day Activision has the exact same attitude of Atari that caused their founding.

[walrus01]

atari very much does not exist, the trademark/name has passed through like 3 or 4 different hands now. whatever corporate entity is now calling itself atari has absolutely no relationship to the original.

[coolandsmartrr]

Looks like they were facing extinction in 1991 until now-CEO Bobby Kotick took over.

https://en.wikipedia.org/wiki/Activision#Purchase_by_Bobby_K...

[simonebrunozzi]

Atari still exists today.

In 2018 I met Frédéric Chesnais in NY, and learned about the latest things related the company. Here's an interview I found from 2019. [0].

It seems that the current CEO is now Wade Rosen. [1]

Company is still up and running.

[0]: https://frenchamerican.org/interview-frederic-chesnais/

[1]: https://venturebeat.com/games/atari-ceo-wade-rosen-interview...

[gabereiser]

And let’s not forget that the great Woz and Jobs were once Atari employees who left to start a new company called Apple.

[dnissley]

Interestingly, this is kind of an anti-example of what was asked for in the OP. Here, few people quit, not many.

[zomgbbq]

This was the beginning of an avalanche that led to most of the remaining engineers at Atari to leave and try to start their own third-party game companies to follow in the success of Activision.

[mdcds]

OP here. I assumed that many people needed to quit for a company to implode.

turns out I was wrong!

[justin66]

Atari collapsed under its own weight because of some pretty profound mismanagement, which led to massive layoffs. (you mentioned in another comment that engineers “left in an avalanche.” The word is “layoff”) There were plenty of extremely capable designers and engineers (and researchers) who were let go in a very short period of time, people who had not gone off to do their own thing. Atari was big.

If anything, other companies making good games for their platform aided them, and they were famously bad at seeing that. Engineers leaving to develop Atari software didn’t move the needle in terms of their collapse. Not giving individual credit on games is a tiny footnote in the book of things Atari management did wrong.

[readme]

the irony is that the CEO probably does less work than the assembly line worker

[RajT88]

A lot of CEO's at places I have worked didn't really make decisions. They schmooze the biggest customers. Constantly, 12-14 hours a day.

[stavros]

I don't know if it's less work, but certainly the assembly worker definitely delivers more value.

Only one of the two killed the company.

[muzani]

The effects of a CEO is often lagging. If an assembly line worker stops working, you see the results immediately. If a CEO stops working or does something very negative, you might see the effects years later.

You'd think that losing key staff would kill the company overnight, but even in this situation, it took 4 years between being doomed and actually dying.

[a-dub]

i thought there was an industrywide videogame crash in the early 80s that was blamed on the atari consoles being too open. (everyone was making cartridges, even companies like ralston-purina, quality fell under the flooded market and consumers gave up).

my understanding is that this gave rise to nintendo's tight control over developer licensees while atari was sold off and pivoted to home computers (specifically the st line) under jack tramiel.

[ido]

The story is more complex than that, Atari split in 2 (the games company and the consumer electronics company) and neither really exist anymore (and haven't for a long time now). But basically yes - they never replicated the success of the VCS and arcades stopped being a major part of the industry in the 90s. All of Atari's biggest hits were in the 70s and (early) 80s.

[coffeemug]

Is there a book on this you can recommend?

[vitaflo]

This is all laid out in the Nov 28, 1983 edition of InfoWorld Magazine.

[pinewurst]

I’d read that Kassar actually compared the programmers with towel designers, having come from Burlington Industries (a textile company) himself.

[scarface74]

Or it could have been caused by the whole video game crash of 1983 and not four employees leaving…