Small Business Lessons: How Hothead Games is getting through a tough time in the industry

COO Tim Bennison says diversification has helped the video game developer avoid layoffs

Tim Bennison has seen a lot over his more than 20 years in B.C.’s video game industry. He knows that it ebbs and flows, that it’s a cyclical business. And, of course, he’s been on both ends of layoffs since starting in the sector in the mid-’90s with Vancouver stalwart Radical Entertainment. So he’s not exactly surprised by what’s taken place in the industry over the last several months, as two of B.C.’s biggest game studios—Electronic Arts and Relic Entertainment—along with a handful of smaller players, have been laying off swaths of people.

“I would say to anyone who has been laid off: hang in there, it happens to all of us, and often great things happen on the other side—you look back and you think, Wow, that was such a good thing for me,” says Bennison, who has been chief operating officer at Vancouver-based Hothead Games since late 2020.

In fact, Bennison thinks some of those great things might be waiting for people at Hothead. The mobile game company, which has around 65 employees, has avoided the recent spate of layoffs—something Bennison chalks up to the way the company diversified its business model early last year.

Hothead was founded in 2006 as a self-developing, self-publishing studio that produces free-to-play mobile games. For most of its history, the company made its cash through in-app purchases and advertising revenue. “Swing for the fences… if you get a big hit, amazing,” says Bennison. “If you don’t, all that sunk cost is basically lost unless you repurpose it somehow.”

Last year, however, the company made the switch to a hybrid model in which it takes on work for hire from other studios. Hothead still does some self-publishing work, but the company has put a large focus on helping others develop their own games.

“There are a lot of companies in that work-for-hire space, so it’s about how you distinguish yourself,” says Bennison. “The way we’re doing it is pitching the fact that we have 16 years of building and marketing games from scratch with our own IP. So you can trust us with your IP. Clients get that and appreciate that angle; they want someone to take care of their IP.”

While Bennison notes that he can’t talk about companies that Hothead has been working with because development cycles last longer than a year, he is quick to list some IP driven titles that he and his staff have worked on in the past, including games for Marvel, Disney, Fox and Universal Studios.

As for the current slide that a large portion of B.C.’s gaming industry is going through, Bennison is confident that it will be short-lived. “I’m optimistic,” he says. “The industry has always been like this. We pick ourselves up and keep going. There’s a lot of innovation in the industry, too. That leads to new opportunities we can’t even think of right now.”