Why Hellgate: London Failed and How Developer Flagship Got Flagshipped

By Nick Breckon, Mar 26, 2009 10:15am PDT "For all intents and purposes, everyone was flagshipped."

"I'm sure some of you are familiar with that term," said former Flagship business developer Stephen Goldstein. "For those of you who are not, the term 'flagshipped' literally has no less than five definitions in the English language."

An illustrative slide appeared on screen:

Tim: "I just bought a new table tody and one of its legs broke."

Mike: "Man you got flagshipped."

Goldstein spoke at length this morning on the demise of Hellgate: London developer Flagship Studios, highlighting specific areas that he feels lead to the ugly end of a studio with tremendous promise.

"Everything we did, the entire corporate setup, was meant to swing for the fences," said Goldstein. "Everything was solely plan A. There was no plan B."

In particular, Goldstein noted that the company should have raised more money when they had the chance, saying that it was the "company-killing moment."

"We had a title a year from launch, with a team that had sold 17 million units worldwide from their previous franchise," he explained.

"It's my guess that we could have probably raised 25 to 30 million dollars to just stick in a coffer and wait. It would have provided us the ability to delay the launch of the title. We needed another four months, possibly five, to get things polished. And we just could not take it."

Goldstein also zeroed in on the highly publicized Hellgate billing errors, which lead to some users being billed multiple times during the first days of the launch.

"[Billing] got left to the last minute. We ran out of resources, we ran out of time," he said. "Which lead to a situation where, a very small, small percentage of users got charged twice. That's very bad."

"Imagine how bad this if you're giving everything away for free, and you're trying to get people to pay you. Because then they hear that the billing is screwed up. And they say hey, I can get all this stuff for free. Why would I pay for it?"

Hellgate: London's multiple business models was also a significant problem, according to Goldstein.

"The issue that we had with Hellgate London was that it was a boxed product, it was sold at retail, it had a free singleplayer version, and then it had a subscription," he said.

"What we probably should have done is just piss off our community up front and say you know what, it's going to be a subscription. All of us were very concerned about consumer perception, rather than if money was going to be coming through the door."

As it turns out, Hellgate sold a respectable amount of copies in the US and Europe. But the game's business model depended on subscription revenue in the long term, and not enough of those sales translated into subscriptions.

"The problem wasn't that we sold 500,000 units," said Goldstein. "The problem was we weren't getting subscription [revenue] from those units."

Goldstein guessed that if the game was subscription-only, it would have sold around 250,000 copies less, but the subscription revenue would have kept Flagship afloat.

Goldstein also noted that Hellgate also represented too many "firsts" for the company, including the first 3D game, first FPS, and first subscription-based game.

"This game wouldn't be made today," he said, while turning that particular failure into a testament to the team's resiliency.

"The fact that it was in the box really is a testament to the team that we had. They didn't get the credit that I think they deserved, because with the amount of challenges that we faced, they pulled through."

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