Indie studios survive layoffs by embracing revenue diversification over single-product dependency
Summary
Spilt Milk Studios pitched to 76 publishers in 2023, faced complete funding withdrawal
Aurora Punks scaled from 4 to 50 people, then cut 30 positions across multiple stages
Both studios rebuilt using work-for-hire, consulting, and portfolio strategies
"Our job is not to persuade publishers. Our job is to persuade consumers" - Nicholas Lovell, Spilt Milk Studios
01
Crisis-driven wake-up calls
Spilt Milk's Trash Goblin lost publisher backing at contract signing stage after 76 publisher pitches
Company temporarily laid off 2 staff, canceled freelance artist contract during 2023 funding crisis
Aurora Punks' rapid COVID-era expansion proved unsustainable, forcing dramatic workforce reduction
Both studios recognized single-revenue-stream vulnerability as core structural problem
02
Recovery through strategic rehiring
Spilt Milk rehired both laid-off employees within 3 months, compensated for lost time and benefits
Former freelance artist converted to full-time employee position
Trash Goblin's modest success enabled team stability and potential programmer hiring
"We did hire the people who were made redundant back. We just couldn't [carry the cost], it would have killed the company" - Nicholas Lovell
03
Portfolio strategy as survival mechanism
Aurora Punks now requires each team to have baseline revenue sustainability before expansion
Work-for-hire and consulting provide steady income streams independent of project success
Premium mods for established games (Fortnite, Ark) create flexible revenue during project downtime
"You need to have enough potential revenue streams to always be balanced" - Robert Bäckström, Aurora Punks
04
Operational restructuring for resilience
Spilt Milk targets controlled growth to 3 teams of 10, utilizing trusted contractor pool
Aurora Punks maintains small profitable projects for individual team members during gaps
Both studios prioritize institutional knowledge preservation over aggressive scaling
Clear goal-setting and celebration culture essential for managing diverse project portfolios
05
Future-focused sustainable growth
Studios shifting from publisher-dependent to consumer-focused revenue models
Emphasis on cozy game specialization and proven market expertise at Spilt Milk
Proactive approach to revenue diversification before financial pressure intensifies
"If a person in a suit comes along and offers us lots of money to make a game we really want to make, we'd absolutely say yes. But we don't want to be dependent on them for our survival" - Nicholas Lovell
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