Thirty-one staff and contractors working on Jumplight Odyssey, including members of the operations and publishing unit, were laid off.

Trent Kusters (Above), co-founder and studio director at League of Geeks, told staff of the redundancies during a Zoom meeting on November 17.

Alongside Jumplight Odyssey, the studio is also developing a remake of cult classic strategy title Solium Infernum.

Mr Kusters said Solium Infernum was also at risk, but the studio managed to secure loan financing to ensure completion of the game and prevent the studio's closure.

"We were going to give everyone redundancies if that didn't come through," Mr Kusters said.

"We've narrowly avoided the end."

The Melbourne-based studio, founded in 2011, began work on Jumplight Odyssey — or JLO as it is nicknamed — about three years ago.

The game launched into Early Access — where players can play the game before it's completed — in August. The studio was working to complete the game, for its full launch, sometime late 2024.

The struggles at League of Geeks are a reflection of a broader trend across the tech and video game industry in 2023. Unofficial estimates put tech industry layoffs beyond 240,000 across the world, while the games industry has seen around 7,000.

Studios contacted suggest that, after the boom years of the pandemic, publishers and investors have simply stopped spending big on game development and have become financially risk averse.

As a result, Australia has seen studios pause major projects, cut staff numbers dramatically or practically shutter because of increasing interest rates, a weak Australian dollar and ongoing economic uncertainty. 

League of Geeks saw great success with its first game, Armello, and has been able to attract grants, government funding and investment for more than a decade. It was named the Studio of the Year at the Australian Game Development Awards in 2020.

Earlier this year, there was a feeling its fortunes could start to change.

The 'RIP zone':

At every quarterly company-wide meeting — or "all hands" as they're known — studio leadership provides an update to the team on the studio's financial situation.

On the cash flow graph, one dotted line represents the "RIP zone". If cash in the bank dips below that marker, the studio is essentially trading insolvent and cutting into its employee redundancy benefits.

The first indication League of Geeks might be headed for the RIP zone came in Las Vegas, in early 2023, at an annual premier game developer networking conference called the DICE Summit.

"All the decision makers are in the same place and they talk about what's coming down the pipe," Mr Kusters said.

The conversations Mr Kusters had, in the shadow of the Ukraine war and creeping interest rate rises, took a tone that shook his confidence.

For the first time he could recall, there was great uncertainty about what the year ahead would look like for developers.

Tomas Rossel, a corporate financier who worked with League of Geeks, explained that essentially all the big investors in the space simultaneously pulled back on spending.

"They're just more careful," he said "They'd rather focus on the investments they already have."

When Mr Kusters returned to Melbourne after DICE, he secured financing to keep the studio's two projects alive until November, predicting the team might hit the RIP zone by the end of the year.

By October, things had changed.

The choice:

As Melbourne International Games Week (MIGW) approached, Mr Kusters and the team were in discussions about investment opportunities with two of the largest game companies in the world.

But shortly after League of Geeks' showing during video game convention PAX and at Sydney's SXSW festival, Mr Kusters said he saw "essentially every single cent of money" pulled off the table.

One of the deals had the potential to secure the studio's future beyond 2026, according to Mr Kusters.

But as it came time to sign, the publisher's investment team asked to jump on a call.

"My stomach just fell to the floor," Mr Kusters said.

"I was just like, 'This is not a good news call.'"

The investors pulled out, citing an internal change of process that effectively put a stop to all investments.

The shift put League of Geeks in a bind, with just three weeks to go before they'd hit the RIP zone.

Mr Kusters tried to secure a deal by calling other studios and investors, hoping to save all of the studio's staff and its two video games.

He couldn't pull it off.

Which meant the team would have to dip into the RIP zone — and employee benefits — or pull the plug on one video game, to save the other. 

"We had to make the incredibly devastating 'Sophie's Choice' decision," Mr Kusters said.

"And it was just a financial logic puzzle to choose Solium Infernum over Jumplight Odyssey."

Mr Kusters says the studio will now look to "tie a bow" on JLO, stressing the game is not cancelled, though it may look like that in effect.

He is hopeful the team can secure further financing in the future and resurrect it, bringing it to a full release.

"We believe in it and we want to see it go out the door," he said.

"The fact that we have to pause this game is just a brutal, brutal reality of the financial implications of everything that's happening in the industry right now."

The end (?)

Jumplight Odyssey and Solium Infernum were born from the ashes of a project that League of Geeks had been working on for years, known as "BLACKCAT".

The game was a partnership with major indie game funder Private Division.

During the pandemic, Private Division and League of Geeks decided to part ways, ending BLACKCAT's development.

This is not uncommon in video games.

There are folders full of abandoned ideas, discarded projects; art, video and assets that will never see the light of day.

But the end of BLACKCAT, in the middle of the pandemic, was a scary and uncertain time, principal game designer on JLO, Felix Strangio, said.

"The beautiful thing about it is, out of all of that uncertainty came JLO," he said.

JLO — a sci-fi strategy simulator where you captain a starship across the galaxy — was the perfect remedy for designers like Mr Strangio who experienced the heartbreak of seeing the BLACKCAT project canned.

It was a game about hope and perseverance and it resonated with the League of Geeks team.

The game was launched into Early Access on PC gaming storefront Steam to mixed reviews.

Erin Croft, executive producer on JLO, said the game wasn't quite ready.

"We probably should have held off a little longer."

After numerous patches and updates, things turned around with player reviews pushing up the game's rating. To get to a full release, with all bugs patched and features implemented, would take another nine months or so.

But Ms Croft and Mr Strangio were made redundant along with the entire JLO team. 

"The team is a broken team right now," Mr Strangio said.

While some members have been looking to move on quickly, most of the team continued to work on the game's final update.

But how final that update will be appears to be up in the air.

Though League of Geeks suggests JLO has been "indefinitely paused", Ms Croft feels it's unlikely it will be revived.

"That would be a very hard thing to do without the team," she said.

Whatever happens to the game in the future, there will be one small tribute to the people who created it left in-game: The final update will contain avatars of the development team, so they live on in Jumplight Odyssey's galaxy.

The next adventure:

Despite the unpredictable changes to the market, Mr Kusters said he and his fellow co-founders, Blake Mizzi and Ty Carey, take responsibility for the layoffs.

It's not just the economic situation that puts people out of a job.

"Ultimately, it's a failure … and that's not lost on us," Mr Kusters said.

And it's a difficult time for game developers and designers to be entering the job market.

Contraction in Australian studios, the drop off in investment and global layoffs across the industry mean there's a lot of talent and few opportunities.

Several Australian studios have had to make cuts, including EA's Firemonkeys in Melbourne and Canberra's Uppercut Games. 

But it's not doom and gloom across the whole sector, Mr Strangio said.

Some former League of Geeks staff have already been placed in new jobs in studios across Australia.

That doesn't make the end of JLO any easier.

It's a disappointing end for Ms Croft who says she loved working with the founders and studio directors at League of Geeks and they were "doing so many things right".

"This will be a game that always sticks with me, because I really enjoyed it and I enjoyed the team," she said.

It's an experience she thinks she won't find anywhere else.

"It's going to be hard to find a place as good as League of Geeks."

Original Story By | Jack Ryan