How the Iowa Company that made Guitar Hero crashed so quickly

By Benjamin Moore

First in a series: This project was produced by Iowa Center for Public Affairs Journalism-IowaWatch.org, a non-profit, online news Website dedicated to collaborating with Iowa news organizations to produce explanatory and investigative work. Read the rest of the series at www.iowawatch.org.

Everything happened so quickly. After 10 years of creating fun, the dreams of an entire office were shuttered by a “closure team” – a group of people assembled to shut down electronic game production studios in a coldly efficient manner. Even a security team was brought in, just in case someone decided to revolt with a plastic guitar.

The studio being closed this time around was Budcat Creations, where a group of high-tech workers could create whole videogames within a three-month period for some of the biggest names in the industry, like NintendoActivision BlizzardElectronic Arts andDouble Fine Productions.

This wasn’t your typical Silicon Valley studio. Budcat was on Washington Street in downtown Iowa City, a place known for writers and football, but certainly not videogames. Local media treated Budcat like rockstars, hoping the “hip” company would help keep bright students in the state.

The rockstar status was earned. For a while, everything seemed on the rise. In 2007, Budcat helped Activision create the highest-selling entry in the mega-popular Guitar HeroseriesGuitar Hero III: Legends of Rock. The game made more than $100 million in its first week according to Activision Blizzard, the game’s Santa Monica-based publisher. Market research data show that the best selling version of Guitar Hero III was for the PlayStation 2 videogame console, the version that Budcat specifically developed.

Guitar Hero Metallica was released in 2009 for PlayStation 2, Playstation 3, Wii and Xbox 360. (Photo by Tom Heinecke/Guitar Hero, Band Hero and Activision are registered trademarks of Activision Publishing, Inc., and Metallica is a registered trademark of Metallica)

Wanting to keep the gravy train going, Activision Blizzard acquired Budcat in 2008 and had the studio produce five Guitar Hero games within two years.

Such a high volume of games in such a short period of time is fairly uncommon for a studio, especially for a series as valuable as Guitar Hero. In comparison, Infinity Ward and Trearch, the two California studios responsible for Call of Duty, the biggest name in videogames, swap development duties every year on the blockbuster series.

The pace was intense. It seemed like Activision Blizzard was running Budcat and other studios responsible for different versions of Guitar Herointo the ground. Sales eventually reflected this. The last game in the series, Guitar Hero: Warriors of Rock, sold 86,000 units in five days compared to Guitar Hero III’s 1.4 million first-week sales.

Budcat was not involved with the development of Warriors of Rock. The game was the first that did not release on the PlayStation 2, a nearly decade-old console that Budcat specialized in for Activision. With declining sales for the series and a move away from the PlayStation 2, Activision decided to do some internal restructuring.

On Nov. 16, 2010, Activision closed Budcat’s doors.

Everyone working there was given 60 days severance time but sent home immediately. During those 60 days, paychecks were issued and insurance still was valid. It was an impersonal end for incredibly personal company.

Budcat got its name from Bud, an employee’s family cat. Elroy, an Elvis-like character inGuitar Hero, was named after a Budcat employee. Managers brought in food when it was crunch time – a period when everyone desperately tried to meet a specific deadline for a game.

“You wanted to help the company in any way. They included employees in everything,” Tom Heinecke, a former 3D artist at Budcat, said.

“Working at Budcat was the best experience in my life.”

For a company with such a big rise and fall, its formation happened fairly incidentally. In March 2000, Jason Andersen wanted a break from games.

He had co-founded Tiburon in 1994 and worked mostly with Electronic Arts, the third-largest video game company in the world, to produce football games. During crunch time, Andersen easily worked 100-hour weeks at Tiburon.

“I was really tired of working on football,” Andersen said. He left Tiburon in 1998.

Ironically, Andersen would return to the virtual pigskin sooner than intended. In 2000, connections from his Tiburon days working at Electronic Arts contacted Andersen to help fix programming errors on NCAA football 2001for the PlayStation.

Earlier that year, Andersen had co-founded Budcat Creations with Isaac Burns, another former Tiberon employee. The company was based in Las Vegas, Andersen’s home, but Burns lived 1,450 miles away in Madison, Wisc. Budcat was meant to be a name for Andersen to work under whenever he decided his break was over.

Andersen hoped a few changes and having a partner on board meant he was done with 100-hour work weeks. He couldn’t have been more wrong.

Pleased with the work Budcat did on NCAA 2001, Electronic Arts tasked the studio with many more projects – several of them football games. More projects meant more people and Budcat grew from six employees to almost 60 in three years. From 2001 to 2004, Budcat released games exclusively with Electronic Arts.

In 2005, the studio had a tremendous opportunity to spread its wings. Jonah Stich, a partner at Budcat, was good friends with Caroline Esmurdoc, the chief operating officer and an executive producer at Double Fine Productions. Double Fine, located in San Francisco, was founded by Tim Schaefer, an industry legend. Schaefer worked on several critically acclaimed games, including The Secret of Monkey Island, Maniac Mansion: Day of the Tentacle, and Grim Fandango.

Psychonauts, a 3D platformer where players invade the minds of various characters, was Double Fine’s current project. Originally, Microsoft intended to publish Psychonauts, which meant the company wanted the game exclusively on its console, the Xbox. The deal fell through and Majesco, a smaller publisher, picked up the game.

Majesco didn’t have ties to any specific console, so it was looking for external developers to bring Psychonauts to other platforms. Through the Esmurdoc and Stich connection, Budcat received code for Psychonauts and had a chance to show the studio’s skills by building a PlayStation 2 version of the game.

“I remember Budcat wasn’t the only developer Majesco was considering, but we were ultimately able to impress the folks at Double Fine. They convinced Majesco to come visit our studio in Las Vegas,” Andersen said.

Andersen describes Psychonauts as one of his proudest moments with the company.

“The PlayStation 2 was very underpowered in comparison (to the Xbox), but we were able to make a good-looking version in a short amount of time when many in the industry thought it impossible,” Andersen said.

In 2008, three years after Psychonauts, Activision Blizzard acquired Budcat. Initially the move seemed promising, offering more stability and a steady stream of projects for the independent developer.

“We are thrilled to partner with Activision and believe that this acquisition is a perfect fit for both companies,” Budcat said in press release at the time.

Little did Budcat’s leaders know that the studio was to be discarded only two years later.

“I worked at Budcat for a little over 10 years. In that time, I’m positive I put 18 years worth of work into the place,” Andersen said. “For years, I’ve defined myself by my work and the pride I take in it. My personal reaction to the closure wasn’t very good.

“I’m doing my best to move on from it.”

 “Gone in a Flash” is a four-part series by IowaWatch staff reporter Benjamin Moore, a 2012 graduate of the University of Iowa School of Journalism and Mass Communication with a keen interest in electronic gaming. His narrative is based on interviews, telephone conversations, emails and research in fall 2012 and winter 2013 with Jason Andersen, Tom Heinecke, Rob Keiser, George C. Ford, Maryanne Lataif, Brian Provinciano, The Des Moines RegisterThe Gazette (Cedar Rapids, IA)Edge,  Destructoid (link to another Destructoid source article), Gamespy Westwood Studios’ profileLouis Castle interview with Vegas Seven,IGNGamesRadarComputer and Video GamesPC GamerMicrosoft earnings news releaseSony press release and Joystiq.