| Hi everyone. Today we’ve got the story of one game studio that escaped Embracer’s clutches, but first... This week’s top gaming news: At his 39th birthday party in September 2020, Theodore Diea declared, slightly inebriated, that he was going to start his own video-game studio before he turned 40. Diea, a producer at Ubisoft Entertainment SA, was sick of corporate politics and massive teams and ready to do something new. Half a year later, Diea took action on that tipsy promise when he saw a tweet that had gotten very little attention. A label called Amplifier Game Invest, a division of the Swedish corporation Embracer Group AB, was offering aspiring entrepreneurs the opportunity to build their own outfits. Embracer would own and fund the studios but give them operational autonomy and institutional support. “That seemed like the right path for me,” Diea told me in a recent interview. “I wasn't looking for a get-rich-quick scheme.” By the fall of 2021, Diea had started his new company, Goose Byte. Over the following year, he ordered computers and assembled a team of more than a dozen people who were making plans for their first project, The Signal, a sci-fi survival game set on an alien planet. Things seemed to be progressing well. But the economic landscape was changing, and no game company was impacted more than Embracer, which had overextended itself gobbling up studios across the world. In spring 2023, Embracer announced that a $2 billion deal (later revealed to be with Saudi Arabia’s sovereign wealth fund) had failed to materialize and that it would be embarking on a complete restructuring and cost-cutting plan which would lead to layoffs and closures. Diea started doing the math. “I looked at the studios that were within that group and just did a quick mental calculation,” he said. His company was located in Montreal, an expensive city, and would not be delivering on a new product for a long time — two red flags. “It looked like things could go sideways for us,” he recalled. (During our chat, Diea did not mention Embracer by name, citing his contract, although his studio’s deal with the corporation was public.) Very quickly, Diea said, “things got a bit more real.” He realized that he had two options. He could continue operating as if nothing had happened and risk getting shut down, or he could find another route. “Not doing something would have been irresponsible,” he said. “It looked like we were going to be one of the first ones to get hit, because we were not going to be generating revenue.” The solution was both obvious and risky: Goose Byte would have to spin out. Diea calculated how much it would cost for the studio to run independently and how long he could afford to fund it himself. Then he started talking to his bosses. It was an amicable conversation — a process that “felt fair on both sides,” he said. Embracer wanted to cut costs, while Goose Byte wanted to stay solvent, so the two parties had mutual interest in parting ways. Two weeks later, Goose Byte was an independent company, and Diea was suddenly responsible for paying the salaries of more than a dozen people — much to the dismay of his significant other. “My partner in life hates my tolerance to risk,” he said. “Let’s say everything was shielded to not involve my partner’s money.” In August 2023, they announced their game and put up a Steam page, hoping to attract interest from publishers and investors. But then they began running into the same problem as the rest of the video-game industry: everyone’s wallets were closed. Potential investors said they loved the game but that it wasn’t the right time. One venture capital fund agreed to a significant investment, then pulled out at the last minute. Parting ways with Embracer had been the right move — Diea’s former employer would go on to lay off thousands of employees and cancel dozens of games. “You can debate the speed we went to build organic growth, but the ambition was obviously to aggressively, organically grow the company,” Embracer Chief Executive Officer Lars Wingefors said on an earnings call earlier this year. “Now, we need to adjust for that.” But after the separation, Diea was faced with the same economic headwinds. He encouraged his staff to apply for new jobs as necessary and scrambled to find other financing options, like tax credits provided by the Quebec government. “I didn’t want to take over the studio to then fire people,” he said. Over the summer, what remained of his team slashed the scope of the game and switched gears. Rather than waiting for investors, they would go straight to players. They took an early build of The Signal and threw it online to a limited group of play-testers in hopes of getting feedback and cultivating a community — a process that was “scary for the team,” Diea said, but worthwhile. “We had 1,500 people sign up to the first play-test,” he said. “And half the people who signed up played it.” In August, buoyed by the early feedback, Goose Byte went to the 2024 Gamescom video-game conference with a different mindset. They still wanted funding, but now they had other options. “Our pitch was: ‘We’re going to ship this game with or without you,’” Diea said. “‘With funding, we could have more iterations, a proper marketing campaign. If not, we’re doing it anyway.’” Throughout 2023 they had been asking for a $5 million development budget. A year later, they were seeking $600,000, with options for an additional few hundred thousand for marketing and publishing. Suddenly, potential investors were much more interested — both because of the player interest and the reduced scope. Over the past few weeks, Diea and his team have received multiple offer sheets, making Goose Byte one of the rare independent studios that has found funding in 2024. They are hoping to lock in a deal by the end of the year. “It’s not riches upon riches,” Diea said. “But it’s enough for us to get a solid version of the game out and then see what happens.” For a studio that once seemed doomed to be another Embracer casualty, it’s an unexpectedly happy ending. I’ll be finishing up Loco Motion, a murder mystery set on a train a la Agatha Christie’s Murder on the Orient Express. It’s a point-and-click adventure game inspired by classics such as The Secret of Monkey Island, with some great pixel art and cartoon animations. I’ve played an hour or so and am finding it very charming so far. | 
