The ‘Sustainable’ Studio That’s Risen From Volition’s Ashes

Rob Loftus, ex-principal producer at Volition, calls what happened to his former workplace last August a “gut punch.” In a suspiciously coincidental bit of timing, the Embracer-owned studio announced that it would be shutting down at the same time Starfield reviews went out. “We just celebrated our 30-year anniversary months prior to that,” Loftus told Aftermath. Just like that, due to the misbegotten financial whims of a shareholder-obsessed holding company, the decades-long ride that produced classics like Red Faction and Saints Row was over. Now Loftus and a small handful of his colleagues are trying to build something new from the ashes. But, out of necessity in a time when video game industry layoffs are practically a daily occurrence, it’s not going to look much like Volition.   

Shapeshifter Games is a new “co-development” studio from ex-Volition staffers including Loftus, a five-year Volition vet who serves as the studio’s director; Matt Madigan, previously director of finance at Volition until 2017 and now Shapeshifter studio head; and Brian Traficante, who between two stints spent nearly 15 years at Volition spent and is now Shapeshifter’s creative director. They’re starting small: When we talked earlier this month, the company employed just 11 people. (For comparison’s sake, Volition employed nearly 200 people before it closed.) For its first production, Shapeshifter is collaborating with inXile – the Microsoft-owned studio behind the Wasteland and Bard’s Tale revivals – on upcoming steampunk role-playing game Clockwork Revolution. The studio's long-term goal is to provide "a more sustainable environment for developers to do their best work."  

While Loftus, Madigan, Traficante, and co aren’t ruling anything out, the plan for the foreseeable future is to provide extra development muscle to more established studios rather than tackle original projects. In this day and age, it’s a matter of survival. 

"It's very difficult to hold all those people under one roof now, and complexity is only going to continue to rise. We think the co-dev model allows us the opportunity to be there ... and that provides some predictability for us,” said Loftus. “We’re narrowly focused on providing the best co-development services we can right now and building a strong and sustainable company.”

Sustainability is an operative term given the wreckage Shapeshifter’s founders just clambered out from under.

"There was a group of us that stayed on to settle the final affairs of [Volition], and that was a grim task,” said Loftus. “We had over 180 developers at Volition, and for many of them it was their first job in the industry. It closed, and they didn't know where to go. So a group of us spent time connecting different folks and trying to help. While we were doing this, we saw the industry starting to crumble. There were certainly layoffs in 2023 before Volition, but that beginning of the fourth quarter, we were the bellwether there."

Those experiences planted the seeds for Shapeshifter. Its founders wanted to give workers in the video game industry a (hopefully) more secure place to go.

"If we can get a few projects up and running, if for some reason a project gets canceled or a contract doesn't go through, we're able to shift those resources without a layoff,” said Madigan. “They're not immediately out of a job. The studio doesn't get closed. There's not a reduction in force. We're able to move their creative abilities onto another project.”

But even with that added padding, a studio like Shapeshifter is not bulletproof. Lost Boys Interactive, a co-development studio at which Madigan previously worked, recently laid off 125 people – though as with so many developers in recent times, its poor fortunes were tied to Embracer, which owns Lost Boys’ parent company, Gearbox. Nonetheless, Shapeshifter was faced with a conundrum out the gate. In the video game industry, many view even the safe option as risky.

“It was a little bit of leveling with people like 'Hey, here's an opportunity. I think with the co-dev we can eliminate some of the risk of studio closure' and getting people to buy into that,” said Madigan. “It was not the easiest message. Truthfully if I had just come from a closure like that, I would've probably run as far away from the industry as I could."

Shapeshifter’s name comes from a desire to express that the studio can roll with the punches – to let prospective employees and partners know that it’s able to contort into whatever shape the industry demands.

"[The name] Shapeshifter goes hand in hand with the mentality that we can take form into whatever our partners need,” said Traficante. “If you need an expert in X, Y, or Z, we've likely done it. We've been through it. That's the beauty of what Volition was as a studio. We really branched out and did a bunch of innovative things and experimented in many ways. There are just so many things that happened under one roof that made a lot of sense to celebrate." 

But even with that shared DNA, the team realized quickly that Shapeshifter would not – and could not – be Volition 2.0. 

"Plenty of studios have been around a while, but [Volition] was one of those places that was there early on while there weren't a lot of rules and regulations, and it wasn't quite known how to do it right and wrong,” said Traficante. “You just went out and did it. I think with so many things changing so frequently, it's nice to have those things that are still around: your favorite comic shop, your favorite restaurant. When those go away, you feel it."

Many people in and around the video game industry did feel it. Traficante was awed by the support Volition developers received following its unceremonious closure at Embracer’s hands. But even that was tinged with a bittersweet flavor. 

"The outpour afterwards of big names in the industry and fellow colleagues that were there years ago that went on to studios that we're fans of, to see that [was incredible],” said Traficante. “We were hearing so much of that. And I would say that actually started to hurt a little more: to realize all that heritage and history, that valve getting shut off."

Shapeshifter doesn’t have any access to Volition’s old properties or pre-closure works-in-progress. “It’s all locked up in a vault somewhere,” said Loftus, who spent our call sporadically sipping from a Volition mug, with a sigh.

"What the industry really loses is, there's a team that that ships games together -- that works and creates a culture and creates entertainment for other people. That moment is lost," Loftus continued. "We're not recreating Volition with Shapeshifter. We're evolving from where it was. But it's sad because that team that was there -- that created something together, that really clicked -- is gone. It's not going to be the same."

That said, in other ways Shapeshifter finds itself in a privileged position. The combined experience and connections of its team led to its contract with inXile, whose CEO, Brian Fargo, helped Volition publish games like Descent and FreeSpace when he worked at Interplay back in the ‘90s.

This fact is not lost on Madigan, who hopes Shapeshifter can start paying it forward in the near future.

"I was just thinking this morning: What about those people that are new to the industry and are looking for their first job – or they have 1-3 years of experience?” he said. “With this contraction, are we losing a great group of devs? We're doing what we can to pull in some younger talent. We want to have a good mentoring program. But it's hard because we're a small studio."

Even with the dual specters of instability and unsustainability looming over big-budget game development, the Shapeshifter team thinks the industry can still bounce back.

"The one thing that's a constant in this industry is change,” said Loftus. “I don't think it'll look the same in five years. … Will there be as many large games? Maybe not. But the proliferation of tools like Unreal and Unity and the available expertise allows more teams to get started with fewer resources and just an idea. I think that leads to more games in general, whether or not they're of the scale of triple-A. Even though it changes, there's tons of opportunity in the industry. That will remain." 

"Games like Lethal Company, you didn't get access to 10 years ago,” said Traficante, “and now it's what we're all playing.”

The current upheaval will continue to produce casualties, which – as Madigan pointed out – have sent many video game workers fleeing far from the Embracers of the world and into the comparatively safer embrace of other industries. But the Shapeshifter crew isn’t ready to move on from games yet, and they may never be. 

"When I talked to my family, folks asked me, 'Do you really want to be in games?' Because the [Volition] layoff happened, and then all the other layoffs in the industry were happening around it, and it was just such a grim holiday," said Loftus. "But for me [the answer was] 'Of course I want to do it.' This is what I love. I love to make video games. I love to just be around the process. Despite all its flaws, I love the industry. I can't really see myself doing anything else. For me, it wasn't really an option. I know games aren't going away. The business is going to constantly change, but games are here to stay. I'm here to be in this industry for as long as it'll have me."