In late June, rumors began to swirl about the collapse of Hellgate: London developer Flagship Studios. Throughout the month of July, fans' fears came to fateful fruition. Though Hellgate players would find their game servers and forums saved by a mysterious benefactor, Flagship employees were not so lucky. The vast majority of the studio laid off, Flagship became embroiled in a legal controversy regarding the fate of its intellectual properties, a fate from which it seemed nothing -- not Hellgate, not promising action-RPG Mythos, and not an explanation of any kind -- would escape.

Until now.

On July 19th, Max Schaefer, co-founder and COO of Flagship Studios, and executive producer on Mythos, bid a fond farewell to his gaming community; but included this tantalizing promise: "No matter what, we'll pick up where we left off and you'll be hearing from us shortly."

And so we did. But when did the former Flagship Seattle first start the gears turning? Will they get the opportunity to really pick up where they left off and resume work on Mythos? What really happened to Flagship Studios? We asked Schaefer and his co-founder, Mythos lead designer Travis Baldree.

GameCyte: So when did this process begin?

Travis Baldree: We started getting ourselves reformed pretty shortly after the closure of Flagship, and it took us several weeks to actually get it completed, but we started pretty much right away. All of our team knew that they wanted to stay on.

Max Schaefer: I think that was the most important thing -- that everyone on the team wanted to keep working together, and however that had to happen, we were going to do it.

TB: We all really believed in what we were doing with Mythos, and wanted to get right back to doing that again, and get -- if not Mythos itself, something along those lines -- to market.

GameCyte: And you say Flagship Studios did close?

TB: Max, are they still kind of open?

MS: It's barely open. It's just open enough to take care of the final affairs, but for all intents and purposes it's closed down.

GameCyte: We'd figured as much, but all we'd had was a press release saying "We're still open!" "We still have our IP!" It's hard to tell what's actually going on.

TB: It's a little bit of a new experience for all of us. (chuckles) We don't exactly know the 'proper' way to close down a company. First and foremost, we're just trying to take care of the debts and the employees in an orderly fashion, so Bill [Roper, CEO of Flagship Studios] and one or two other people have stuck around and are doing their best to get that done before we move on in different directions.

GameCyte: (to Max) What happened to your brother, Erich Schaefer? We noticed he's no longer with Flagship.

MS: Well, for one thing he's here in Michigan with me... and for another, he is one of the initial investors in Runic Games. He will be onboard with the company in one way or another from here on out. He is also a big fan of Travis and the Seattle guys and was more than happy to be able to contribute.

GameCyte: (to Travis) Based in Seattle at the time, what was your perspective on Flagship Studios' collapse? You were conducting interviews for Mythos in late June, right before everything unfolded...

TB: I think down to the last moment, the founders of Flagship were working pretty hard to make sure that it didn't have to come to pass; and I think we basically just ran out of time. To the last minute and actually beyond the last minute, I know that negotiations were going on to try and make sure that we could get the studio back on track. Primarily, we just all proceeded here like we were going to be releasing our open beta in October, and kept working until the last minute.

GameCyte: So you knew it was coming, and you thought you could prevent it?

TB: Well, we didn't exactly know it was going to be coming -- I don't think anyone really did...

GameCyte: I apologize, I didn't mean to put any words in your mouth. Please go ahead and tell us what happened... I don't want to tell you what happened.

(all laugh)

MS: We knew there was a possibility, but we were in very advanced negotiations with a couple of people for deals that would have kept Flagship open and would have kept everything running. And in fact, for a good while it was looking like a near-certainty that one of those would have come to fruition.

When they didn't, we were far enough along that we were kind of even going past the point where we should have closed down the company, because it looked like such a surety that something was going to be closed, but there were a lot of behind-the-scenes negotiations occurring with multiple partners around the globe, some of whom were less than... ethical or honest, and it was just a very complicated mess. In the end, it was just too entangled to get a good deal in place, and so we had to close down. It was really kind of a wrenching, horrible period actually, and we learned a lot from it. We'd do things differently next time for sure.

We all were up all night, every night, not getting any sleep, working every day trying to get it to work out for everyone, and in the end it just didn't.

GameCyte: That's such a shame. I know you've been intentionally coy about this subject so far, but as far as the Mythos intellectual property is concerned, it sounds like that's not going to happen for you...

TB: We're proceeding under the assumption that we're not going to be able to get that or proceed on it. I think that door is just about closed. Because of the nature of how the IP is being held, and the technology being held separately, it seems safer and better for us to proceed as if we're really not going to have any avenue to work with it, and it'll be the best thing for our team to get moving on something we know we can do, and that doesn't have those sorts of entanglements and history.

GameCyte: You've both spoken often about how much technology was created for and shared between Hellgate and Mythos, and we're wondering: were you able to take any of that with you? Or, will Runic have to start from scratch?

TB: We effectively have to start from scratch. Now, we have a couple of avenues where we can get a bit of a leg up, and we don't want to spend an enormous amount of time redeveloping things from scratch, so there's the possibility of licensing technology. There are other possibilities that we have, but we won't be working off of the codebase that was developed for Hellgate and Mythos--

MS: --in all likelihood. One of the things I've learned in this process is that nothing is totally predictable.

TB: Nothing is sure, but we're not planning on doing so.

GameCyte: Do you have any plans for games, going in? Any ideas you'd developed in your minds, or perhaps even laid out, during your time at Flagship?

MS: Well, we make a certain kind of game. We're all action-RPG experts, and that's an area we want to stay within. We really thought that Mythos was hitting on the head what the proper way to approach gaming in the future is. It was developed with an efficiency -- it didn't use all the latest graphical bells and whistles, which take time and expense to create, and which people don't really care about. People want the games to run on the computers they actually have.

There's a lot about the Mythos product and development process we're taking forward. The technology and the IP are obviously not going to be there, but a lot of the philosophy behind it will be.

TB: The style of Mythos -- an MMO that didn't take a huge time commitment, and could play before dinner; that was free to download; that was easy to pick up and play and focused more on that fast action/immediate gratification that is not really the norm in most MMOs --

GameCyte: At Flagship Seattle you spoke often about "triple-A casual" titles and the free-to-play business model; are we going to see your new games embrace those concepts?

TB: I think that would be our desire. Don't want to say anything with 100% surety because you never know what's going to happen as you complete your start-up deals, but that's definitely something we'd like to do.

MS: Particularly in the MMO space, I think that the free-to-download item transaction model is the way of the future. It's just not practical -- and I think people knew from the beginning -- that you really can't have 20 good subscription games that you play. It just doesn't make sense.

TB: We're not really looking to get out there and compete directly with Blizzard for their players as an enormous triple-A MMO; we want to make something fun that people can play while they're waiting for their raid to start in World of Warcraft--

MS: --for an hour and a half--

(Travis laughs)

TB: ...and that we can still sustain without having to fight for everyone's subscription dollars every month.

MS: But the point is, people don't really go to Best Buy to buy a PC game anymore and want to pay fifteen bucks a month once they've done that. The barrier to entry is just too high for that. Whereas if you download a game for free, try it out, and pay as you choose you want to pay, through item transactions, that's something that almost anyone can do -- and there's no risk or commitment. What we find in Asia, and even with some games in the United States now, is that you're actually getting people paying more that way, even on an average player basis, than you do with a subscription game. The barrier to entry is lower, the risk is lower, the commitment is lower, and it's just much easier for people to do. That's definitely something we believe in.

GameCyte: Your points echo many of those I've heard Alex St. John of WildTangent voice, and -- I was curious if you have any plans to talk to WildTangent and work out something there. They've got a program called the WildTangent Orb which is currently looking for software developers...

TB: Well, I've definitely kept in touch with Alex. I can say that, probably.

(all chuckle)

MS: There's certainly a possibility that we might do business with Alex St. John and WildTangent. We've got respect for them, and they've got respect for us, and there's nothing that would preclude us from doing so. However, we're looking everywhere right now.

GameCyte: Can you tell me about some of these possiblities? Are you looking at PCs, consoles, mobile devices like the iPhone, for instance?

TB: PC is our primary platform, but we definitely don't have any objection to looking at other platforms. I've always wanted to do--I think there's probably a big market for a casual MMO action-RPG on consoles, especially now that they have virtual consoles and downloadable content. A lot of them have purchasing systems in place, Microsoft Points and the like. We definitely don't have any objection to doing that, but I think we're going to launch with what we know, unless a deal comes along that pushes us in another direction.

MS: First and foremost we're game makers, and so we're kind of platform-agnostic, but our expertise is in PC games, and the types of games we make seem to be best suited for PCs; but as Travis said, the console world is exciting, and even the little simple web games have a certain appeal to us.

GameCyte: We wanted to ask about the scale of this operation: Are you considering another worldwide rollout like you planned for Hellgate and Mythos? Does that still make sense for you?

MS: I think we're going to work at a smaller scale this time, and we're not going to try to be developers and operators. With Hellgate, one of the challenges we faced halfway through development was that our U.S. and Europe publisher decided that they didn't want to get into the PC business like they'd originally said, and therefore weren't going to do the operations and back-end networking for our game.

So we had to create Ping-0 halfway through development of Hellgate: London, and it had to perform billing, provide the back-end technologies and customer support and all kinds of things that we didn't intend in the beginning to have to do. We're a development company, not an online operator or publisher. Going forward, we're going to make sure that we work with solid partners so that we can do what we do best, which is making games.

Having said that, we realize that our games are very popular in Asia, and we have very good relationships with a lot of Asian companies and definitely with Asian game players, and that's not something we want to lose. Whatever we do, we will eventually work into the Asian market as well. You know, maybe we'll be less ambitious about simultaneous worldwide launches in 17 languages...

GameCyte: (laughs)

MS: ...but we do want to make global games.

GameCyte: I'm curious what kind of cues you might be taking from Blizzard on your next titles. Bill Roper once said Mythos was the most genuine Diablo title; but as Blizzard North becomes further fragmented, will you be able to make that kind of claim again?

TB: I think we're kind of moving toward making a slightly different kind of title at this point. Diablo III is coming down the tracks, and I'd rather be on the tracks alongside them rather than directly in front of them when they come rolling through. What we really started to do with Mythos was make it more of a social action-MMO, where there was a shared overworld where people spent a lot of time interacting, and I think it's important for the free-to-play microtransaction market for people to be able to spend time interacting face to face in larger groups, rather than "I only see you in the lobby and then I'm off with my party for the remainder of the time."

TB: We still want the random, fast play experience that we had, but it's important for us to differentiate ourselves from Diablo III and Sacred 2 as they come down the line by having that sort of shared community feel to the game. Auction houses, crafting, more traditional MMO trapping within the context of a game that's much faster paced and doesn't require the same sort of time commitment.

MS: Diablo III is not shaping up to be an MMO at all; Diablo III is in the vein of extending what Diablo II did. What we're doing is taking the Diablo-style action and moving it into the MMO space, and not into the casual games space. The missions are different, and we're really excited about Diablo III. We can't wait for it to come out, just so we can play it, and we have nothing but respect for the Blizzard guys. They're incredibly talented, and I know that Diablo III's going to be a top-notch game. But, fortunately for us, we're going in a slightly different direction.

GameCyte: I wanted to ask about the use of color in Diablo III. I know you've both spoken to interviewers about the art direction, and praised it for what it does, and since you've said you want to be on the tracks aside Diablo III instead of risking being... in front of it...

TB: (laughs)

GameCyte: Is there pressure to move in the same direction, and go for that bold, colorful style, or do you perhaps think that there might be an unserved market for dark action-RPG titles like the ones zealous Photoshop enthusiasts were making 'screenshots' of?

MS: I'm loving this controversy, by the way. The same thing happened when we were making Diablo and Diablo II -- there was a lot of criticism that it was just too gray and too dark, and that people wanted brighter colors. You're damned if you do and damned if you don't with these sorts of games. I think that the team that's making the game should set the tone of the game, and shouldn't try to make it something that someone else did... really, they have to create their own vision for the game, and be true to that vision.

Now, I love the really super-gritty, super-dark look of the original Diablos, but I also like what I've seen of Diablo III so far. I think both can be wonderful games. What we were doing with Mythos was even more bright and colorful than what Diablo III is shaping up to be, just because we were aiming at a little bit different market; it was going to be a global game, and in Asia they're very much into the brighter colors and lighter atmosphere. I think also, since Mythos was a social game, something that you're going to be spending a lot of time not playing, it's something that you probably want a little bit more inviting atmosphere for.

TB: It also allows us a little more latitude in item sales; if people want to be heavily customizing their characters, there's someone who always wants to walk around carrying a fish in a floppy hat.

MS: In Diablo I we had naked corpses stuck on stakes and it was really kind of gruesome... not where you'd want to meet your girlfriend and get married.

GameCyte: Do you know if Runic will be working on Arcane Academy or Legends?

TB: At present, no plans to do so, no.

MS: Probably not. Those are the brainchilds of people who are people who are either only peripherally involved in Runic or not involved in Runic, so as of this point that's not the plan. But again, there's no predicting this business, so...

GameCyte: Speaking of the peripherally involved, are there any plans to extend invitations to those who lost their jobs at Flagship Studios in San Francisco, and see if they'd be interested in Seattle-based Runic?

TB: There are some really talented people there... if we're moving towards getting MMOs released, we're definitely going to have to staff up. I know that there have been some who have expressed interest, and we'd definitely love to talk to them when we're in a position to be able to bring people on board.

GameCyte: When would that be?

MS: It would probably be in the one to six-month range, because what we'd be looking for there would be network technicians and that sort of thing, or people who would want to move to Seattle. This is a Seattle-based team, and they're very tight, and to work on a game, you really should be where the game is happening -- where the team is. Pretty much everyone that was at Flagship, other than the guys that are at Runic, were San Francisco natives, and they've got wives and kids and houses...

GameCyte: Like yourself.

MS: (laughs) Yes, and I'm staying in San Francisco! Fortunately, for the last couple of years, Travis and I have gotten very used to working over IM and phone, and I fly up to Seattle all the time. It works for us, but it wouldn't work to have too many people doing that.

GameCyte: You've said you don't have any interest in being an online provider yourself at this time. As far as partnerships, do you have any opportunity to continue working with Namco Bandai, Electronic Arts, and GNi?

MS: Probably not any of those. Namco Bandai has chosen to go the console route almost exclusively, GNi is a San Francisco-based company... EA kind of took over for Namco when Namco changed directions, and we had a really good relationship with them. They have a reputation for being the Borg, but they're really nice guys, really talented guys, and we had nothing but good experiences with them. We would definitely work with them again.

GameCyte: Regarding Namco, do you know what's going on currently with the Hellgate: London forums and servers? It seems that Namco Bandai has taken over the forums, and may be moving towards the servers as well.

MS: They are continuing to operate it, and they are still participating in the boxed sales portion of Hellgate and obviously have an interest in keeping it going. So they are taking it for now, but I really don't have much visibility into what their plans are.

GameCyte: I'd like to thank you both for the interview... This was a pleasure.

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