September 12, 2009 12:00 PM | Simon Carless

[There's actually a lot of Gamasutra content we don't reprint, but here's one I felt was very GSW-able. After Titan Quest dev Iron Lore shut down, ex-employees formed Crate Entertainment. Now, the small studio has shelved a console RPG to focus a Diablo-style PC game, and founder Arthur Bruno tells our own Kris Graft why going indie-r works better.]

The founders of Crate Entertainment are nothing if not adaptive. Founded in 2008 by Arthur Bruno and Eric Campanella, Crate resulted from the collapse of Titan Quest developer Iron Lore Entertainment, where Bruno and Campanella respectively served as lead designer and art director, working on the PC-only action RPG.

The new, small studio had a big idea -- purchase the rights to Iron Lore's next project, the console-based RPG Black Legion, and find a publisher. Turns out that original plan did not come to fruition, but Crate is moving forward, thanks in large part to the latest developments in digital distribution and new trends that are changing PC gaming as we've known it.

Bruno revealed that Crate had to shelve the console-based Black Legion, and is returning to his roots with a "thematically darker" PC-based action RPG that, like Titan Quest, is in the vein of Blizzard's Diablo. The decision to shelve Black Legion was the result of two factors, Bruno said.

"The first is the state of the economy. Yeah, I went there!" joked Bruno. "Hey, it’s a great scapegoat and it would be a shame if nothing positive came out of this economic crisis. All jest aside though, the timing was just terrible."

Crate was shopping Black Legion around to publishers earlier this year, right when companies like THQ and Electronic Arts were handing out piles of pink slips. It was an environment less than ideal for a small startup to pitch a console-based action RPG that required substantial outside funding.

"We were looking for funding on a risky venture at a time when the U.S. was in financial crisis and the world economy was destabilized," said Bruno. "Some of our best prospects in terms of publishers were in the process of massive layoffs and project cancellations."

It was time again to adapt. With Black Legion's future highly in doubt, Crate turned to its roots -- the PC-based action RPG, Bruno and Crate's comfort zone. With just five core people, a few contractors, and even some volunteers, Crate licensed Iron Lore's Titan Quest engine and toolset, and began work on a new project.

"In this case, Crate Entertainment’s small size works to its advantage," Bruno explained. "We don’t need a big publishing deal to sustain us and PC, more so now than ever, presents a lot of opportunity for smaller titles. Our ability to work out a very reasonable deal for the Iron Lore Engine and toolset was another huge enabler. So we put together a project that we could begin developing without reliance on outside funding."

Success In The Niche

Cambridge, Mass.-based Crate operates very modestly. Aside from having a very small staff, most of the work is also done remotely. By having such a restricted budget, the studio, like others of its ilk, finds it necessary to be lean and mean. While it may not have been Crate's initial intention, the structure could facilitate a highly efficient way to do business: keep operations small, and focus on a specific target audience.

"I think we’ve reached a point in the PC market with digital distribution where it is possible for a small developer to be profitable catering to a relatively niche audience," said Bruno. "Titan Quest did not generate enough early sales for Iron Lore to earn royalties, but I’ve learned that [publisher] THQ recovered their investment and even made a small profit off the game. Titan Quest together with the Immortal Throne expansion have purportedly broken a million units sold."

Crate's new project will be "small-scope," and will launch at a price "significantly below normal retail," Bruno said. It may be exclusively digitally distributed, and by now you may have guessed that there will be no massive marketing campaign for the game. Crate holds no big hope that the unannounced title will have the same kind of sales as Titan Quest.

But while big sales are desirable, Crate's project doesn't need to be a huge hit by any means, Bruno said. "With no publisher and a very small development budget, if we can even capture 10 percent of [Titan Quest's total] sales, we’ll be doing OK." Crate could keep revenue flowing through "frequent expansions and optional content."

"I believe our small size, independence, and desire to avoid starvation will give us the agility and incentive to succeed in this area," Bruno surmised.

A High Barrier For Console Development

Thanks to services like Xbox Live Arcade, PlayStation Network, and WiiWare, smaller developers are getting smaller, unique games in front of more eyeballs. Even amateurs and hobbyists can get their games onto Xbox Live Indie Games, as advocates herald the "democratization of game development."

But for developers who feel their games are a better fit for retail shelves, the barrier is still as high as ever. And that's another reason why Crate abandoned Black Legion. "I think it’s difficult for any developer without prior console experience to jump into the retail console market," Bruno said. "There are additional development costs and the most effective console marketing channels are more expensive. If the developer requires publisher funding, they’ll most likely need to demonstrate proof of their technology running on console."

He continued, "Publishers don’t seem to be very interested in low-budget console titles, and a small studio that needs to staff up significantly for a larger project would be seen as a significant hiring risk. To justify larger budgets, it is also likely that publishers will want development to be multiplatform, which introduces additional technical challenges. Finally, there is the issue of certification. This can be difficult even for large, experienced companies."

Can Diablo III Rejuvenate Action RPGs And PC Gaming?

Diablo-style action RPGs aren't popular on consoles. But it isn't the most prolific genre these days even on PC, where social gaming, MMOs, simulation, online-centric, and strategy games can flourish. That could change, Bruno hopes, with the release Diablo III.

"I think the anticipated release of Diablo III may even act in our favor, so long as we don’t release close enough together that we’re totally eclipsed," he said. "I think Diablo III will help revitalize the action RPG subgenre, and PC gaming in general."

He added, "I’m sure there will be a certain segment of the hardcore audience that buys Diablo III and plays it exclusively for the next 3 years -- I may even be one of those people. However, I think a majority of players will put 2-6 months into it and, if they’ve really enjoyed it, go look for the next closest thing. If we position ourselves correctly, we should be able to attract some of these players. If we’re able to release first and do a good job, then I think we’ll have fans going off to play Diablo III and recommending our game to new players there."

While Bruno and Crate seem to be level-headed in their goals and aspirations, mitigating risk where possible, a substantial question mark still stands. How will they get the word out about the new game? Will there be enough money to launch it at the appropriate quality level? How can they best take advantage of digital distribution? Will people like game? Should they be pursuing a PC-only action RPG right now?

"This unknown path we’ve chosen to take won’t be easy, but I think if we come out the other side alive and not too badly mangled, it will be very rewarding," said an optimistic Bruno. "It’s an opportunity to fulfill a labor of love working on the type of game we’re most passionate about with an unprecedented level of creative freedom. Hopefully we won’t fuck it up."