How would you best summarise 2021?
2021 was a busy, and at times, challenging year for many as disruption continued due to the pandemic across all working conditions (home working, hybrid and office working) and industry events, most of which were cancelled in-person for the second year running. However, the safety and wellness of the entire Team17 extended family remains of paramount importance. We pride ourselves on being people first and whilst it has been difficult with two years of Covid restrictions for many, we look forward to a “new normal” over the coming months as many of our teams return to hybrid working which will benefit all. Our remote working procedures are now fully embedded into our business, and we have an established approach to facilitate hybrid working through investment in technology infrastructure and are constantly reviewing the best approach for each of our teams.
We have seen many gaming companies struggle with lockdown to deliver new titles on time. Have you been affected by this with title delays? Has it impacted your results and how are you managing the longer-term impact of working remotely, and has it impacted working hours?
There is no question lockdown has presented numerous challenges to businesses across the globe and the games industry certainly hasn’t been immune to those. It has always been incredibly challenging to develop and publish games and this has become even harder over the last two years. We have a hugely experienced Studio management team and robust project management processes – this meant we were able to minimise delays and proactively decide to move content out of the year where this would deliver a better final product. That said, our business model is more flexible than many and we have worked incredibly hard to deliver another year of new title launches and updates to existing titles and our portfolio approach has allowed us to maintain focus on delivery and improved financial results.
With the systems we had in place pre-pandemic, we saw an average working week of 37.5 hours. Whilst we appreciate that working from home can disrupt standard working practices and make it more difficult to manage hours, we believe we have a firm handle on this and are doing all we can to support colleagues with increased investment in outsourcing and records of billable overtime. As a people-first company where many employees have families, it’s vital that we get the balance right and we will be monitoring this area even more carefully to ensure our zero-crunch approach is maintained.
2021 is reported as the year of the great resignation. How has Team17 been affected and what are you doing to engage with your team and help retain and reward them in such a competitive market?(“M&A”)?
Retaining great people is a challenge for all businesses, and the gaming sector is more competitive than ever, and we are certainly not immune to the pressures this brings. As a business with a reputation for high quality, internally developed products, we have seen an increase year on year of our teams being approached by other companies. This spiked in Q4 2021 (in line with industry trends) but has since subsided, with Q1 2022 comparable to the lower levels of early 2021.
Our employee engagement survey in 2021 told us many great things including that our teams feel incredibly proud of the business and to be part of the Team17 family. The survey also pointed to some areas that we can improve on, and we are actively working on these.
The results of our reward and benefits survey last year have already been implemented for 2022, which includes improved benefits alongside salary benchmarking against other games companies naturally taking the current inflationary pressures into account. I’m pleased to say that we have paid out annual performance bonuses consistently since we established the Games Label in 2014/15. We’ve added a number of working groups led by our people, an initiative designed to help strengthen Team17’s robust and positive sense of community following the expansion of the business.
We are very focused on working with talented creators who want to build sustainable franchises across multiple genres and platforms.
How do you continue to attract great talent in a highly competitive market?
The games industry, like others, has skill shortages specifically in engineering and there’s no question the employment market within the gaming sector is incredibly competitive. However, our content portfolio offers a wide variety of interest and challenge to anyone looking to join a development team or publisher within the gaming sector and we believe our remuneration package is highly competitive as is our zero-crunch approach. We remain a great place to work and our Talent Acquisition team continue to attract and introduce brilliant new talent into our teams across the Group. Shifting to hybrid and remote working models also allows us to recruit from a global pool of talent, with remote employees still benefiting from the leadership and development that our studio teams can provide.
Recent months have seen negative stories about working practices and culture in the games industry – how do you respond from both a Team17 and an industry point of view?
The games industry is still maturing in many areas and continues to change at a rapid rate. Even though it has come a long way in the last four decades, it clearly still has a way to go. Whilst there has been some uncomfortable reading, I’m glad that people have felt able to speak out about reported incidents and that the industry as a whole can respond and learn from these. As Group CEO of Team17 I’m ultimately responsible and accountable for absolutely everything within the Group and I take that responsibility very seriously. Any reported issues at Team17 have been fully investigated, we have a zero-tolerance approach to discrimination of any kind, we have internal communication channels (including women only forums) and an external online anonymous whistleblowing portal to ensure that our teams are always comfortable raising issues should the need arise.
To protect our people, we run a zero-crunch approach and utilise outsourcing in QA and development to help manage the workflow. Throughout 2021 our QA teams worked a weekly average of 36 hours with one month where the weekly average peaked at 37.5 hours.
The games industry is full of very passionate people and with the shift to work from home, the start and end of the working day are less well defined. We are looking at how we can better monitor home/hybrid working to make sure we protect these people and ensure they maintain a healthy work-life balance.
We have grown incredibly quickly over the past few years and safeguarding both the physical and mental wellbeing of our people is incredibly important to me. The day any of us say we have done enough is the day we fail! We strive to build a Group we can all be very proud of and whilst doing many great things there is always more we can do and are doing.
Team17 has clearly entered a more ambitious period of M&A growth – how is this linked to the Group’s overall strategy?
Since listing Team17 in 2018, we have been clear on our ambition to deliver organic growth for our established business supplemented with targeted acquisitions that allow us to produce great games for all age ranges on all platform channels. Over the last year we have demonstrated this with solid organic growth and also our ability to identify, negotiate and acquire great businesses with StoryToys joining the Group during 2021 followed by astragon and The Label in early 2022. This is in addition to us acquiring some fantastic IP franchises such as Golf With Your Friends in 2021 and Hell Let Loose in 2022.
These additions meet our goals of being able to expand our audience base and provide a foundation for the next stage of growth. It allows the Group companies to take advantage of our established portfolios and capabilities to enhance their growth potential. Comparing the business today with Team17 pre-IPO really does highlight the significant progress we’ve made on any measure and I’m very proud of what we are building, headquartered here in the UK.
Given all the recent M&A activity, is there any risk to the core Team17 business?
I’ve always seen our M&A strategy as being highly complementary to our core business, which at its heart is simply about making great games. We take great care through the due diligence stage to identify companies with great financial performance but importantly a strong cultural fit led by amazing management teams. StoryToys, The Label and astragon all posses a common passion for creating great content to share with dedicated gaming communities, which is what Team17 is all about. We also brought in a very strong new CEO in Michael Pattison to lead the Team17 Games Label, meaning that there is a significant senior operational leadership team now in place to run each business autonomously, ensuring we can continue to grow and meet our ambitious strategic plans.
You now have a very strong senior team operating across the business – is this a sign that you are becoming more hands-off? What are your longer-term plans?
I’m thrilled to have a strong senior team by my side in Michael, Mark, Tim, Julia, Emmet and Parisa, all of whom have a shared vision to build something very special for the future of Team17 Group and are extremely motivated to drive the business forward.
For Team17 to deliver the growth targets that we have set ourselves, we need to unlock the power and opportunities afforded by the overarching Group structure – I will be increasing the focus that I place on building commercial relationships across the Group so that we can identify synergies and be as efficient a business as possible – sharing best practice, learnings and resources appropriately. I will also be supporting the operational CEOs on their journeys as they grow the businesses they lead, sharing the lessons I’ve learnt along the way. I think they would laugh at the idea of me being hands off!
The Group position will also allow me to spend more time thinking about the journey ahead – I pride myself on being able to read the industry well and identify trends, but reacting to that takes time and capacity, which this structure will allow.
I care passionately about Team17 and the games industry. It’s been my home for approaching four decades now, and I want both to see continued growth and success for many more to come.