Avalanche Studios finds the line between AAA and independence

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Avalanche Studios won the E3 in their own way. While there were bigger games and more eye-catching demos, the Swedish developer emerged from the show with three promising games: the fourth game in the Just Cause franchise, the co-development of Rage 2 with id Software, and a brand new IP intended to bring Generation Zero to the Self-published.

In a way, this was expected. When we met CEO Pim Holfve at the Nordic Game Conference last month, it was clear that Avalanche has big plans – even bigger than Rage 2, which was announced in the days leading up to our meeting. Exactly what the news would be was unclear, but few could have guessed that it would be three things at once: a new Just Cause, a new IP, and, most surprisingly, a new owner at Nordisk Film.

“My biggest concern is that there are so few independent AAA studios,” Holfve said when we met at NGC. “We are one of the few big ones.”

As a wholly owned subsidiary of a large media company, Avalanche can no longer be viewed as truly independent. However, because of the nature of Nordisk Film’s gaming investment strategy, it will be possible to pursue the exact same goals without the risk of achieving the same goal as all of the other AAA independent studios that no longer exist.

“The companies in which we invest, we want to be there for decades”

Martin Walfisz

Nordisk Film is one of the oldest film companies in the world, says Martin Walfisz, founded in Copenhagen in 1906. It has been part of the Danish media group Egmont since 1992, but the entry into the games industry only came relatively recently.

“They’ve been around for so long: books, films, television, newspapers, etc. It was so obvious that games were missing,” says Walfisz, who founded Massive Entertainment and joined Nordisk Film Games 18 as a senior partner a few months ago. “The challenge was to enter an industry that is developing so quickly, with a different dynamic than you are used to – some similar, but also different dynamics.”

How Nordisk Film has gained a foothold as an investor can be seen on the pages of this website: A little over a year ago there was an investment of 10 million US dollars in Avalanche; a $ 5 million minority interest in Reto Moto, founded by a founder of IO Interactive; 15 million euros for Star Stable Entertainment, an online gaming platform aimed directly at a female audience.

Martin Wolfisz, Nordisk Film Games

“As long as the Egmont Board of Directors thinks the proposal makes sense, we can invest,” says Walfisz, adding that all investments are made from Egmont’s balance sheet and not from a fixed fund. “I don’t know how much cash or cash equivalents Egmont has, but there is a lot of money.”

Walfisz claims that Nordisk does not have an “investment thesis” as such and that the list of requirements is relatively short. It is essential that the company is based in the Nordic countries; moreover, the most attractive targets tend to be seasoned or experienced teams who are either self-publishing or moving towards it quickly, with an emphasis on developing games as a service. It doesn’t care about the casual market embodied by Candy Crush and his ilk.

“It is not in our DNA as a Nordisk film, and it is not in our competence to select the winners in this area,” says Walfisz. “Time will tell, but we believe that we are better with deeper experiences. Not necessarily narrative driven, but experiences where there is deeper engagement over a longer period of time.

“In this sense, we are not a typical investor … We are not just a startup investor. We have to see that there is a certain dynamic so that we can bring in money, but also our knowledge and our network. And see if we can accelerate this dynamic. “

“Even though the company is celebrating 15 years this year, we have the feeling of a large garage studio”

Pim Holfve

Nordisk has a much longer perspective than VC investors, who have made big bucks with casual Nordic companies like King and Supercell. She seeks experiences that inspire deep engagement over long periods of time and sees her own role in a similar way.

“We want to support the companies in which we invest for decades,” says Walfisz. “We believe we can have the same agenda as the studio’s founders. Instead of investing and then having to exit three years later and pushing them in that direction, as long as they make great games – and of course we want that.” To see profit – then we’ll just be supportive. “

In this context, Nordisk’s decision to buy all of Avalanche makes more sense. The Swedish developer had made clear his intention to self-publish long before the initial investment of $ 10 million and had a long and respected track record. What it took was gaining momentum, says Pim Holfve, a fact that soon became clear after becoming Avalanche’s first CEO three years ago.

“What Nordisk Film has achieved is that it has allowed us to mature much faster,” says Holfve. “Even though the company is celebrating 15 years this year, we have the feeling of a large garage studio. We like that, we appreciate it, but at the same time we needed more structure to grow the business. Games are still at the core – we’ll stick to that – but business is a supportive function. “

Generation Zero is one of six projects under development at Avalanche

Generation Zero is one of six projects under development at Avalanche

Nordisk’s “boardroom help” was invaluable, and the cash in the bank from the investment provided the stability needed to think long-term and take clearer steps toward the self-publishing model that theHunter: Call had of the wild used. Part of that process is growth, with a new office in Malmö (the third Avalanche studio after Stockholm and New York City) to increase the company’s workforce from 330 to over 400.

Just Cause 4 and Rage 2 are part of the reason for this growth, but its self-released games will be even more important to Avalanche’s future – and without that piece, it seems unlikely that Nordisk would have decided to take over the business directly. Before, according to Holfve, the company couldn’t have managed the number of games it is developing now, but its investments in leadership over the past few years have opened up new opportunities.

“We currently have six projects of different sizes. That would not have been possible four or five years ago. ”

Pim Holfve

“In the past, we’ve been really bad at running multiple projects. It made it easier to have two locations [Stockholm and New York], but we’ve been working very, very hard on it – a couple of people have tried to do the projects at the same time. Now we’re shifting the lead to Executive Producers and Senior Producers who run the projects as their own company – we’re giving them a bigger mandate. It works really well for us.

“We have six projects [running concurrently] now in different sizes. That would not have been possible four or five years ago. We have a strong focus on leadership development. “

When the Malmo office was announced, Avalanche said they would be working on “relatively small, flexible products”. However, in a game like Just Cause 4, which is also under development, the word “small” is very open to interpretation. Holfve laughs at the idea.

“This is a huge project,” he chuckles. “So smaller than that.”

In fact, theHunter: Call of the Wild is exactly the order of magnitude that Avalanche is aiming for with its self-published games. “You could say 30 percent of an AAA product,” adds Holfve. “We also aim for all of our self-published games to be run as a service. They’ll grow with free and paid DLC, so it’s up to the player what experience they have over time. “

This includes Generation Zero, a post-apocalyptic online shooter that debuted at E3 this year and was enthusiastically received. And, like all Avalanche games, Generation Zero is built using the APEX engine, the strength of which is fundamental not only to the company’s self-publishing endeavors, but also to its entire philosophy as a studio.

“This technology is in our DNA,” says Holfve. “It’s built solely to create big, beautiful worlds. We’ve been developing this since day one. It fits so well with our company motto: ‘When you see it, you can go there, if you poke it, it reacts. ”

“It has to be part of all of our games.”

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