Inside Sledgehammer Games and the biggest gamble you never knew about

Sledgehammer Games has something of a tradition. When a new employee joins, they are given a “challenge coin” emblazoned with the company’s values. It’s an old tradition that is popularly attributed to World War I and romanticized around the story of an American pilot shot down and captured by Germans, but who escaped and avoided execution by showing his French allies his challenge coin bearing his squadron’s insignia that was given to him by the squadron’s lieutenant.

It’s a good story, but like all stories of its ilk, it is difficult to verify how much of the story is true and how much has been altered for dramatic flair. Regardless, the tradition has continued for decades in all aspects of society. It signifies that the person receiving the coin is part of something bigger than themselves, and many assume the coins bear at least some luck. For Sledgehammer Games, it almost became a forgotten memento of a studio that very nearly wasn’t.

At the start of 2010, the Call of Duty franchise was the undisputed king of gaming, and Infinity Ward was one of the most lauded developers in history. Its most recent game, Call of Duty: Modern Warfare 2, had just shattered all previous gaming and entertainment records, and the franchise was just beginning to hit its stride. And then it all came crashing down in spectacular fashion.

The lawsuits between Activision and Infinity Ward co-founders, Jason West and Vince Zampella, set in motion a series of events that would directly affect hundreds of people for years to come. The confrontation that began with the ousting of West and Zampella began as a ripple that expanded and soon threatened to destroy both the developer and the franchise itself.

The well documented legal battle ended in a settlement, but by then West and Zampella had already formed Respawn Entertainment and taken 38 former Infinity Ward employees with them. The Call of Duty developer was left in shambles. For any developer losing nearly half their staff would be a difficult obstacle to overcome, but for a development team locked into a cycle where it needed to have a game complete in roughly 20 months or risk breaking up a billion dollar franchise, the pressure was on.

Meanwhile, Activision’s biggest rival Electronic Arts had hit a rough patch in 2009 as well. It still had its bedrock of EA Sports games like Madden and FIFA to rely on, but original new IPs like Mirror’s Edge and The Saboteur proved to be financial disappointments. EA’s acquisition of mobile and casual game developers like Playfish was offset by layoffs that claimed nearly 17-percent of EA’s total workforce. One highlight, however, was EA’s internal development team formerly known as EA Redwood, and re-branded as Visceral Games in May of 2009.

Despite the commercial and critical disappointment of 2009’s The Godfather II, the studio was riding high following the success of the original survival horror game Dead Space, released in 2008. The game quickly spawned talk of sequels, comics, novels, and even an animated film. At the helm of it all was the game’s executive producer, Glen Schofield.

Schofield is an industry veteran with over 20 years of experience who has been involved with nearly 50 games. Originally trained as an artist, he has worked in most genres from action to children’s’ games, and has seen the industry grow and mature. After spending several years with various publishers and developers, Schofield made a home at Crystal Dynamics before later moving on the EA, where he eventually went on to be named Vice President and General Manager of Visceral Games.

Schofield has had a front row seat for the maturation and development of the gaming industry, both in the way it has expanded in size, as well as the model that has driven developers to try to produce hits or risk collapse. The industry has become hit driven, which has created a gap in the types of games on the market. There are a glut of big budget titles coming from major studios with large staffs, as well as a growing number of indie games made by smaller teams that can be more nimble, but games existing in-between have dried up.

“It feels like it started about 5 or 6 years ago. Some genres like cartoony platform and racing games started to diminish a bit. Even movie games started becoming scarce.This came about when production costs started rising. As costs increased, games that sold 1 million units or so weren’t nearly as profitable,” Schofield said. “With fewer genres making the big money, developers started gravitating more towards action and shooter games. With added competition within a smaller group of games, bigger more expensive games were the way to beat the others.”

As this change began to occur, Schofield recognized what was coming and returned to school to obtain an MBA, something that would prove useful in forming a studio of his own years later.

During his time at EA, Schofield met Michael Condrey while working 2005’s 007: From Russia with Love. Coincidentally, this would be the last Bond game EA would make before Activision won the rights to the Bond franchise. Condrey, a 15 year industry veteran, began his career with EA, and remained there until leaving to help form Sledgehammer Games.

During the production, with Schofield acting as the Executive Producer and Condrey the director, the two developed a strong rapport that would serve them well on Dead Space and beyond.

“I think our skillsets naturally complimented each other’s strengths and weaknesses, and I was happy to have found a creative partner with an uncompromised commitment to excellence,” Condrey recalled. “Those who know us well know that those passions can manifest like thunder and lightning, but they also know that we are beyond dedicated to our teams, games, and fans.”

Shortly after the success of Dead Space, Schofield and Condrey began to look towards the future and what their next step should be. Their relationship with EA had been amicable and mutually beneficial, but with the interest Dead Space had generated within the industry the opportunity to move on and start a new studio would never be better. The obvious partner for Schofield and Condrey was Activision, who was hungry for new talent.

For Activision, 2009 had also been an interesting – interesting in the same way that urban legends claim “may you live in interesting times” to be an ancient Chinese curse – year. The Guitar Hero franchise that produced the first game to ever reach $1 billion in sales was floundering, and the highly anticipated Wolfenstein reboot ended with co-developer Raven Software facing severe layoffs following poor sales. It was time for a change, and that included bringing in new developers.

“It was just the next logical step in our careers,” Schofield said of the decision to form a new studio. “We’ve run teams and studios before. Now we wanted to build one from scratch and hire only the best developers. It was a chance to build our dream studio and fill it with elite, professional developers.”

Forming Sledgehammer Games, Schofield and Condrey approached Activision with a proposal. After working on what proved to be one of the most successful third person shooters in the last few years, the duo decided to try their hand at the Call of Duty franchise, but with a third-person slant. While the idea was attractive to Activision who expressed interest in offering a contract to the fledgling studio, the deal stalled for weeks. As time dragged on, it seemed more and more like the studio would be a failure before it even began until a brief encounter with Activision Blizzard CEO Bobby Kotick. One phone call later and Sledgehammer Games was a reality.

“The decision to leave the Dead Space franchise, and Visceral Games, was one of the hardest decisions of my career,” Condrey recalled. “Partnering with Glen to found Sledgehammer Games and join the Call of Duty franchise was also the best decision of my career.”

Activision wanted the studio to pursue the third person Call of Duty title as a possible spin-off for the series that showed no signs of slowing. The duo came in with a set of values and the lofty goals of creating a quality team comprised of, and made for, gaming professionals. Part of those values included creating a family type atmosphere.

“We just wanted to make quality games with developers we liked to work with,” Schofield said. “Sledgehammer is like a big family of great developers who just want to create really fun, quality entertainment.”

Of course saying that you want to create a family-like environment is different from actually doing it. To that end, the duo began to recruit a very specific type of talent at both the professional and college level. The goal was to create a culture built around personalities. Candidates undergo a fairly rigorous application process with multiple interviews that can last for several weeks, and talent is only part of it. Those that are hired receive the aforementioned challenge coin and are welcomed into the team.

“We look for intelligence, experience, personality, and the ability to work and collaborate with others,” Schofield said. “We’ll turn down great people if people don’t feel they’re a good fit.”

The goal was simple – build the best team possible, and then give them time to mesh together while allowing them to develop games that they can then polish. The independent model allowed Schofield and Condrey the luxuury to form the group they wanted to work with, composed of developer they trusted to make excellent products, and they did so under the security of one of the largest third party publishers in the world.

With the team assembled, Sledgehammer Games began work on a new Call of Duty entry with a third-person view and an action game slant.

“Having delivered a compelling 3rd person experience with Dead Space, we were excited to bring that to Call of Duty,” Condrey said. “I often describe it, with the most genuine appreciation for Naughty Dog, as imagining a scenario wherein Call of Duty meets Uncharted. I’d play that game.”

Things were going very well for the new studio and the proverbial sky was the limit. Then West and Zampella were fired and everything changed.

With the near collapse of Infinity Ward, Activision had a choice: delay the game IW was working on, Call of Duty: Modern Warfare 3, or bring in help. At the time, the franchise was on top of gaming. Modern Warfare 2 had smashed records, and the excitement around the series was palpable. Although still mostly unknown to the public at the time, Treyarch’s entry, Call of Duty: Black Ops, was also generating a great deal of excitement within Activision. The series had momentum. If Activision could build on it, Call of Duty had the potential to earn billions of dollars over the next several years. If it stopped, if no game came out for at least a year or more, it ran the risk of seeing the franchise be swallowed – or at least stunted – by competitors.

So even while the figurative paint was still drying on the doors of Sledgehammer Games’s new studio in Foster City, CA, Activision came to them and asked if they wanted to help make the new Call of Duty game.

On one hand it would mean abandoning the third-person game that would combine practical gameplay development with one of the most lucrative and financially stable brands in gaming. It would also mean that the new developer would suddenly be under intense pressure and scrutiny, as the game’s deadline was looming and very little work on it had even begun. It would also mean that if Modern Warfare 3 failed, a huge amount of the blame would land on Sledgehammer Games. If the sequel to the most financially successful game in history bombed, most gamers might be inclined to give Infinity Ward a pass – seeing that it had been decimated in the recent exodus – and instead shift the blame to the unproven developer whose name now adorned the cover. There was also the risk that even if the game succeeded, Infinity Ward would be the one to receive the credit as it was the more recognized name.

There were many, many reasons to decline and play it safe. But there was also one very good reason to accept. It was Call of Duty, one of the most popular games in history.

“We thought about that,” Schofield said of the risks, “but the chance to work on MW3 and learn from the best FPS team in the world was just too great of an opportunity. You have to take risks and just go for it. Being safe all the time in this industry is not a sure path to success.”

Both Schofield and Condrey agreed that the risks were worth taking, but the pair decided to leave it to a vote. The entire Sledgehammer Games staff unanimously voted yes.

“As the first title from Sledgehammer Games, committing to deliver Call of Duty: Modern Warfare 3 was like taking on Mt. Everest,” Condrey recalled. “We knew Call of Duty fans, and Activision, were placing a massive bet on the scrappy upstart team from San Francisco. The pressure was intense, but it provided the energy and aspirational goals that the team rallied behind. I couldn’t be prouder of how the team responded to challenge.”

When Sledgehammer Games joined the development process, the game was barely past the development stages. Only the barest of a foundation had been laid. It was an open slate, but also a massive amount of work.

“It was interesting. Both studios were going through significant changes, and many in the industry were watching intently to see what was in store for Call of Duty,” Condrey. “They say the hardest steel is forged in the hottest fire. I’d say that both studios are better, and certainly stronger, because of the partnership.”

A typical game development cycle is two years or more. Some big budget games developed by large studios can take upwards of 3-5 years. Together Sledgehammer Games and Infinity Ward, with help from Raven Software, did it in less than 20 months and produced a game that went on to gross $1 billion in 16 days with an average Metacritic score of 88.

There were, of course, criticisms. Some disliked the similar multiplayer feeling, others disliked the story. These complaints are common though, and the game was a legitimate success.

It was a massive risk for Schofield and Condrey’s new studio, and one that most outside of the industry never considered. The Infinity Ward name was the marquis on the Modern Warfare franchise, but failure to deliver on Activision’s golden egg would have resulted in a wave that crippled those in its path. Looking back at the success of that game and franchise as a whole, it is easy to overlook the chance Sledgehammer took.

Thanks to the release of that game, Sledgehammer Games has established itself as a preeminent AAA game developer, and its next project will be another Call of Duty first person title – although when and what exactly it is remains to be see. And although the third person Call of Duty game is currently dormant, don’t count it out in the future.

For now though, Sledgehammer Games continues to grow and thrive. Since its formation, its ranks have swollen to over 120, and shockingly, its turnover is under 1-percent.

“We set very high hiring standard and maintain a commitment to providing a workplace where developers will want to stay for many years, Condrey said. “Consequently, in a high tech industry where turnover averages around 20%, we are very proud that our unwanted attrition remains at a fraction of 1% of our staff annually.”

With only one game under its belt, Sledgehammer Games still has a long way to go to completely establish itself. But with the industry continuing to change and push for bigger games, as well as new and more powerful systems on the way, the young developer is going to need to print more challenge coins as it continues to push itself.

“Every game is challenging in some way, that’s why I love it,” Schofield said. “Who doesn’t want to be challenged and pushed? That’s when you do your best work.”

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