Nearly 20 years in, Pittsburgh game development company Schell Games is hiring its first chief technology officer, hinting at plans to expand its virtual reality gaming universe.
The company has always been about tech, CEO Jesse Schell said, but the new hire could help bring its virtual reality experiences to more than one player at once.
Already, Schell Games lets players slip on a headset and enter a virtual world where they can act as a secret agent, working to foil the plot for world domination. Or perhaps a world where they battle “magic-infused monstrosities,” swinging swords in the virtual world and working up a sweat in the real one.
It’s not as simple as adding a new player to each of these worlds, letting friends meet up IVR rather than IRL (in virtual reality vs. in real life). New CTO Jeff Brown said the games have to be designed to be multi-player from the beginning.
“You must account for input from several players, chat, voice and the unpredictability of the internet. The design must account for player actions and reactions,” he said. “You must combine all of this and deliver an entertaining experience for everyone.”
Schell Games’s bet on virtual reality has already been paying off.
Its latest game, “I Expect you to Die 2: The Spy and the Liar,” the second iteration of its popular VR game that puts the player in the role of a secret agent who doesn’t quite know what they’re doing, surpassed $1 million in revenue less than a week after its August launch.
In the next two to three years, “VR should really be mainstream,” Mr. Schell said. “We know that when VR gets popular enough, it will be a social activity.”
Schell Games, based in Station Square, announced the new hire earlier this month. After 19 years of operation, Mr. Schell said the company had been contemplating a CTO for a few years, looking for someone to help the team look at the big picture.
So, rather than coming up with new technology just for a certain game, they’ll think about where the tech overlaps for different products and how to build it out as a platform.
“We are touching so many kinds of technology — we’re doing virtual reality and we’re doing augmented reality and we’re looking at new types of interactions with mobile [devices],” Mr. Schell said. “We’re just constantly experimenting in new areas and zones. Our technical team has sometimes felt a little overwhelmed.
“We are now 19 years in, have 140 people in the studio and we’re seeing a lot of potential growth.”
A growth signal
Bringing in a new chief technology officer is certainly a “positive growth sign,” said Sean Sebastian, a partner at two local investment firms: Black Tech Nation Ventures and Birchmere Ventures. “It is a sign of a pretty sophisticated engineering team doing some really heavy lifting,” he said.
Before joining Schell Games, Mr. Brown served as chief technology officer at Gameforge 4D, a video game publisher and developer based in Germany, and Cheezburger Inc., a Seattle-based company that operates what it calls social humor sites where users can view and create arts, memes and other digital content.
His resume also includes roles at several other video game developers, including Valve, in Bellevue, Washington; THQ Inc. in Agoura Hills, California and Electronic Arts Inc. in Redwood City, Calif.
“Some CTOs just know how to work with tech. He has experience building those bridges between technology and art and design,” Mr. Schell said. “To be honest, that is the hardest part about making video games.”
The new hire may raise some suspicions that the company’s growth could indicate its intent to eventually go public, something that seems to be on a lot of Pittsburgh tech companies’ minds these days. Tech startups like Duolingo, Aurora and Cognition Therapeutics all started selling shares in the public markets this summer to tap into the money at play.
But in this case, this type of hire doesn’t send that signal, Mr. Sebastian said. A company that plans to go public is most likely to hire a chief financial officer, and one that has already worked at a public company.
“That requires a CFO who’s been there, done that,” he said. “You don’t make that up on the fly.”
A spokesperson for Schell Games could not be reached for comment on that issue in time for publication.
The company hasn’t really been operating without a CTO for its nearly 20-year history, Mr. Sebastian said. That role was just filled by Mr. Schell, who essentially took the lead as CEO and CTO.
Now, Schell Games is likely looking to take advantage of a market that was spurred along by the pandemic.
“In the whole COVID era, so much has gone online that used to be in the real world,” Mr. Sebastian said. “I’m guessing they’re rushing to put out new games, new products to take advantage of the new world.”
The pandemic’s impact
Mr. Schell said the pandemic did accelerate the popularity of VR in some ways, but also stunted the industry’s growth in others.
It’s hard to wrap your mind around the VR experience until you’re really inside a virtual world. It’s one thing to tell your friends you just went on a mission to save the prime minister using your ever-present power of telekinesis. It’s another to let them save the prime minister themselves.
But with a virus that spreads through air droplets, sharing a headset hasn’t really been an option.
For the company overall, the pandemic was a challenge but because it has so many different types of projects going on, COVID didn’t affect the bottom line, Mr. Schell said. Some of its theme park projects were put on hold — and some still are — but interest in health and education games picked up.
Meanwhile, disruptions to the supply chain and shipping delays forced Schell Games to push back the rollout of a new product.
The latest release of its Happy Atoms game is on hold indefinitely because of manufacturing delays in China and shipping delays with containers across the globe.
A set of 50 “atoms” costs around $115 from Walmart or $160 from Thames & Kosmos, a Rhode Island-based company that makes science kits, board games and craft kits for kids. On Amazon, a 17-atom set goes for $53.
Products that typically took four to six weeks from when they left a factory in China to landing at a U.S. distribution center can now take 12 to 16 weeks, toy consultant Marc Rosenberg told the Associated Press in October.
At the same time, prices are going up. Costs of containers on ships have increased more than six-fold from last year.
NPD Group, a market research firm based in New York, already warned that shortages will affect the holiday season and are advising retailers and customers to shop early to avoid shortages, sell-outs and price increases.
For the video game industry, the rush usually comes later in the year, around December and January, when gamers start downloading their gifts, Mr. Schell said.
What comes next?
Schell Games is also keeping an eye on what happens in China for more reasons than just the supply chain.
Earlier this year, China tightened restrictions on gaming for minors, limiting play time to just three hours a week. The move was part of an escalating crackdown on the gaming industry.
For game makers in the U.S., it’s something to keep an eye on but it was already a hard market to get into, Mr. Schell said. Most of China’s gaming market consists of Chinese games, so Schell didn’t have a big presence there to start with.
“It’s something we’re all looking at and watching but it isn’t having a huge effect on us,” he said.
The same principle applies for virtual reality, down to the headsets.
In the U.S., Facebook and its Oculus Quest dominate the market. In China, another company called Pico is taking the lead in the VR headset race. Pico is owned by ByteDance, the Beijing-based company that also owns social media platform TikTok.
“The virtual reality market is still very nascent, there are not a lot of competitors for it,” Mr. Schell said. “Will there be new competitors that emerge? And which competitor will become more international?”
Already, there are rumors of other companies looking to get involved in the market, including Apple, Microsoft and Florida-based startup Magic Leap. For many of them, the latest focus is augmented reality glasses.
Meanwhile, Schell Games is looking to get a lot more new things started, Mr. Schell said. Perhaps channeling his video game secret agent character, he couldn’t share details.
“Right now, we’re sitting on a lot of secrets. Hopefully that will change soon.”
Lauren Rosenblatt: lrosenblatt@post-gazette.com, 412-263-1565.
First Published: October 18, 2021, 2:44 p.m.
