The Knights Of New Vegas: How Obsidian Survived Catastrophes

The Knights Of New Vegas: How Obsidian Survived Catastrophes

Feargus Urquhart was freaking out. He and his team at Obsidian Entertainment were about to take one of the biggest steps in the company’s history — launching a Kickstarter for a brand new video game — but something was wrong. The button to start up their crowdfunding page had turned grey. Nobody could click it. And the Kickstarter was supposed to launch in just 30 minutes.

Luckily for Urquhart, he had contact information for Cindy Au, Kickstarter’s community director, who he had chatted up extensively to prepare for their game-changing project. Au said it was a hiccup in the system, and sure enough, after just a few minutes it was fixed. The button re-appeared.

They clicked it. Waited a few seconds. Then hit refresh. They’d already made $US2000.

Fans have always oscillated between loving and hating Obsidian. They were warming to the game company again.

‘DragonPlay Sounded Lame’

You might think of Obsidian Entertainment as a mistreated genius, a talented group of game-makers responsible for unappreciated gems like Alpha Protocol and Neverwinter Nights 2. Or maybe you don’t have much faith in their development skills after the buggy Fallout: New Vegas and the unfinished Star Wars: Knights of the Old Republic II. Either way, their story is undeniably fascinating.

The story of Obsidian — a story of heartbreaking failures and record-shattering successes — begins with a company called Interplay, a game developer and publisher best known for games like Wasteland and Descent. Interplay’s execs were looking to expand their role-playing game division, and in 1996, they found a young game developer named Feargus Urquhart (pronounced “FUR-gus URK-heart”) to take the steering wheel.

“I was put in charge of it when I was 26,” Urquhart told me as we sat in his office in sunny Irvine, California earlier this month. Urquhart, Obsidian’s CEO and one of five co-founders, spent an afternoon chatting with me about his company’s culture and history — which began with that small division at Interplay.

“They wanted to call it DragonPlay, and I just thought DragonPlay sounded lame,” Urquhart said, laughing. “They were looking for something-Play I guess. The joke was always that the adult version of Interplay would be…”

He paused for a few seconds, waiting for me to get it. I didn’t.


Clearly that wouldn’t work. So they called it Black Isle — after a Scottish landmark of the same name — and under Urquhart’s leadership, the studio cranked out a number of isometric RPGs that people grew to love. Black Isle’s resumé included heavy-hitters like Icewind Dale, Planescape: Torment and Fallout 2. The company also helped publish the BioWare-developed Baldur’s Gate and its sequel, generally considered two of the best role-playing games ever made.


Obsidian CEO Feargus Urquhart has been running the company since it was founded in 2003.

But by 2000, their parent company Interplay was in trouble. Cash trouble.

“We did fine,” Urquhart said. “Our product made lots of money, and internally, the BioWare stuff made even more money. It was great, Black Isle. We were doing well.”

But Interplay wasn’t. “Whether it was probably some transitional stuff or some bets that just didn’t pay off,” Urquhart said, Black Isle’s parent company was in a bad place. And as a result of their financial hardships, Interplay lost the licence to Dungeons & Dragons — a licence that had been used for almost every Black Isle game so far.

This made things difficult for Urquhart’s team. They’d already sunk a great deal of time into Baldur’s Gate III: The Black Hound — the details of which are well-documented — and now they couldn’t do a thing with the D&D-packed code and ideas they’d created.

“It was unfortunate because we loved working on D&D games,” Urquhart said. “We’d been working on Baldur’s Gate III for about a year, a year and a half, and so that happened… That kinda pushed us out the door.”

(Baldur’s Gate III would be revisited again several years later, but again, it never got off the ground.)

Interplay didn’t seem like a viable option anymore, Urquhart said. So he and some of the team started to think about moving on.

“We were like you know what, we’re still in our early 30s,” he said. “If there’s a time to start a company before we get to be old and 40, then this is the time to do it.”

He recruited a bunch of fellow developers: Chris Avellone, Chris Jones, Chris Parker and Darren Monahan, all of whom became co-founders of the new company. A company called Obsidian Entertainment.

Walls of Fart Clouds

Obsidian’s studio, located on the second floor of a modern building in downtown Irvine, is sleek and swanky, full of board games, couches and high-definition television sets. Individual offices are plastered with funny pictures and game sketches. It’s impossible not to stop and stare at some of the ridiculous animation and attack drawings from South Park: The Stick of Truth, the RPG that Obsidian will release this coming spring. Not a lot of offices would let their employees hang up sketches of vibrating dildo swords and fart clouds. Here, it’s work.

The office is generally sectioned off by game, so it’s currently broken up into three divisions: One for South Park, one for their Kickstartered game Project: Eternity, and one for an unannounced game that’s still in the very early stages of production.


The company has an impressive collection of board games to distract them from actual work.

As we walk through the halls, Urquhart shows me some of their coolest artifacts: a soda machine that distributes beverages via scary robotic claw; a customised Obsidian arcade machine that’s currently broken; Shattered Steel lunchboxes and Baldur’s Gate flasks. We pass Josh Sawyer, a tall, heavily-tattooed game designer who led development on RPGs like Icewind Dale II and Neverwinter Nights 2.

“This is Josh Sawyer’s office,” Urquhart tells me. He points to a set of hanging dolls above the designer’s desk. “And those are his Teletubbies.”

“They’re not Teletubbies!” Sawyer yells. “They’re Pikmin!”

Urquhart laughs heartily. He’s a jovial, infectiously energetic man, and I get the impression he spends a lot of time bouncing from office to office, shmoozing and goofing around with his employees. He chuckles and jokes as we pass fellow Obsidianites in the halls. He almost seems too nice to be in charge of a video game studio.

Spreading Their Wings

The first thing Urquhart did, once Obsidian Entertainment turned from idea to registered company, was reach out to game publishers to see who might want to give some cash to the newly-formed independent studio. Before they could start making games, Obsidian needed money.

They talked to EA. “I forgot what we talked to EA about,” Urquhart said.

They talked to Ubisoft. “We almost did a Might & Magic game,” Urquhart said. It didn’t happen: Ubisoft instead contracted a company called Arkane Studios (best known for this year’s hit Dishonored) to make Dark Messiah of Might & Magic — probably, Urquhart said, because both Ubisoft and Arkane are French.

“He said, ‘Well I think that’s a cool idea, but what do you think about doing Knights of the Old Republic II?'”

“I call [Ubisoft] every year and I say ‘Hey, we’d love to make you a Might & Magic game,” Urquhart said. “And they go, ‘We know.'”

Obsidian also talked to Take-Two about a game they called Futureblight. “We were gonna look at using the Neverwinter Nights engine to do a Fallout game,” Urquhart said. “We thought that would be cool.”

That one came close to reality, but instead wound up a casualty of the console transition cycle. “In 2003, people were very worried about where the PC was going and stuff like that,” Urquhart said. “And — not that Xbox was coming to its end, but now everyone knew that there was gonna be another Xbox.” So Take-Two passed.

Then they got a call from Simon Jeffrey, who was then president of Lucasarts. He wanted to talk about making a video game.

“We actually talked to him about doing sort of an action-RPG Star Wars game, which I always thought would be cool to do — like a little party-based action-RPG, with first-person lightsabers and R2D2. It’d be fun. I still think it’d be cool to do,” Urquhart said.

“He said, ‘Well I think that’s a cool idea, but what do you think about doing Knights of the Old Republic II?'”

It seemed like the perfect fit. The first KOTOR, developed by BioWare, had done well for Lucasarts — well enough that they wanted a sequel by Christmas 2004. BioWare wanted to work on new games, and Obsidian’s developers were familiar with the KOTOR technology, so in late 2003, the deal was struck. Obsidian would have 15 months to get the game out for a 2004 holiday release.

Turned out 15 months wasn’t quite long enough.

Knights of the Unfinished Republic

This July, almost eight years after Knights of the Old Republic II was released, modders finished their quest to complete the game. Everything that had been left out, they put back in.

Although KOTOR II was released in December 2004, it was never quite finished. Deadline restrictions forced Obsidian to remove a great deal of content — planets, scenes and plot points were all left on the cutting room floor. Crafty modders would later find and restore this content, as Obsidian left it in the game’s source code, but back in 2004, it was all just scrapped.

So why was it all cut?


  • 2004: Star Wars: Knights of the Republic II
  • 2006: Neverwinter Nights 2
  • 2007: Neverwinter Nights 2: Mask of the Betrayer
  • 2008: Neverwinter Nights 2: Storm of Zehir
  • 2010: Alpha Protocol
  • 2010: Fallout: New Vegas
  • 2011: Dungeon Siege III
  • 2013? South Park: The Stick of Truth
  • 2014? Project: Eternity

“What happened was — and as a lot of these things happen, no one means anything nefarious, no one means anything badly or anything like that — what happened was we were on the track to get done for Christmas, and the game was looking really good,” Urquhart told me. “I think there was some surprise within Lucasarts that we were doing as good a job as we were. I think there were some parts of Lucasarts that were worried that ‘Oh, this new developer and they’re gonna fuck it up like all new developers fuck everything up.’

“And so in early 2004 they took a look and they were like, ‘Wow!’ Their QA was playing it, and they were like, ‘This has a lot of potential: let’s move it out, let’s give it time.’ So they moved it out to the next year.”

Urquhart was perfectly fine with that decision, and he changed the project’s schedule to reflect that new 2005 release date. But he forgot the cardinal rule of dealing with executives: make sure everything’s in writing.

“On our side we didn’t make sure that we had the contract changed,” Urquhart said. “And then post-E3 I think financially something happened — I don’t know what it was. And we got the call and they said it has to be done for Christmas… Again, I don’t think this is anything nefarious, it just happened. Some of the onus is on us: we didn’t get the contract changed. So we had to make this decision: get in trouble or get it done.”

As a new developer, they wanted to make sure their publisher was happy so they could all work together again, Urquhart said. So Obsidian sucked it up. They went through the game and cut out what they could, including a ton of scenes, some quests, and even an entire area — the droid planet M4-78. They also didn’t have enough time to do proper bug testing, although Urquhart thinks people have been rather harsh on Knights of the Old Republic II over the years.

“When I talk about KOTOR II through the sands of time, some people are like, “Well, I heard that KOTOR II crashed every six seconds,” Urquhart said. “No, it didn’t crash every six seconds. It’s perfectly playable. For a vast majority of it, it’s practically bug free.

“My favourite email that I ever got from someone was like, ‘I just wanna tell you how angry I am about the ending of KOTOR II. After my third playthrough, I just feel…'”

Urquhart laughed. “I’m like… if you played through three times, it couldn’t have been that bad!”

The Snow White Spin-Off That Wasn’t

In late 2004, as they were finishing up on KOTOR II, Obsidian got a call from the folks at Atari, the company that had snatched Dungeons & Dragons licence after Interplay lost it. Atari had released Neverwinter Nights in 2002. Now they wanted to do a sequel. Urquhart was happy to oblige.

By 2005, Obsidian was stable and doing well. Despite their issues with KOTOR II, the company had grown to some 50-something employees, and Urquhart was talking with multiple publishers about making all sorts of games.

One of those publishers was Disney, who enlisted Obsidian to design a video game prequel to Snow White and the Seven Dwarves. Tentatively called Dwarves, it would be a third-person action game for Xbox 360 and PS3 that focused on Snow White’s seven companions. There would be a whole new story, and at the end, you’d banish the antagonist to Snow White‘s iconic magical mirror.

“It was a lot of fun,” Urquhart said. “We feel we turned in a really cool prototype. We worked on it for about a year. It’s one of the games here that the team just loved working on. And unfortunately — which, it happens in this industry — you have changes of focus at a publisher.”

“When somebody offers you something as an independent studio, you take it. You take it, because it’s feast or famine. That’s what we’ve found.”

Those changes of focus were caused by a CEO change, which led to a total shift of direction. Suddenly Disney was no longer interested in doing a Snow White prequel. Snow White was untouchable, they said. The game was cancelled.

It was a heartbreaking experience that Obsidian — just like many other video game developers — would grow quite familiar with over the coming years. Games are always ephemeral. Publishers are constantly changing their minds about where to throw their money, and gaming trends tend to ebb and flow on a monthly basis. So independent developers like Obsidian have to stay scrappy. They have to juggle as many balls as possible, knowing that most of them will hit the ground.

“We put a lot of challenges in front of us,” Urquhart said. “It’s this interesting thing, I think, as an independent studio. And I’ll give anybody this advice that I can. When somebody offers you something as an independent studio, you take it. You take it, because it’s feast or famine. That’s what we’ve found.”

Over the next few months, Obsidian found themselves with something of a feast. While they were wrapping up work on Neverwinter Nights 2 in late 2005, Urquhart got a call from Sega’s people, who were looking for a brand new original RPG. Problem was, Obsidian was all tied up. They had nobody available to work on a new game.

“[Sega was] like, ‘Why don’t you come up with a concept and we’ll negotiate a contract and when you’re available it’ll all be done?'” Urquhart said. “And we were like, ‘Ummm we’re fine doing that… you don’t feel it’s a waste of time?’ And they’re like, ‘Yeah.'”

So they came up with a concept: spy RPG. They came up with a name: Alpha Protocol. And they came up with a main character, Michael Thorton, a superspy as suave as James Bond, as savvy as Jason Bourne, and as badass as Jack Bauer.

“[Sega] loved it,” Urquhart said. “They said, ‘Hey, this is different. It’s not dragons, it’s not phasers.’ You don’t see a lot of spy RPGs. Sometimes we go: maybe there’s a reason for that!”

And indeed, Urquhart admits that Alpha Protocol had some serious issues. The game’s four-year development process was long and arduous, and the team sometimes felt like they didn’t have a clear direction: was it a shooter? An RPG? A stealth game? All three?


“We meandered — I think that’s the best way to say it,” Urquhart said. “We meandered for quite a while on that project. It took us a long time to get to the point where we were where we needed to be.”

They didn’t have any sort of game specification document, Urquhart said, which is now something they require for all of their games: a listed, documented set of guidelines for exactly how a game will be designed and developed. They also didn’t determine exactly who they were making the game for — action players? RPG fans? shooter addicts? — which Urquhart said was a serious detriment.

“We started getting into these arguments which were completely not helpful,” he said. “Is it 70% RPG or 30% action, or is it 46% action and 50%… These things were not helpful. What we needed to say is: in a mission, Michael can do these things, you know, and this is the toolkit. He can unlock things, he can hack things, he can throw bombs, he can interact this way, he can interact that way.”

Part of the problem was Sega’s indecision, Urquhart said. “A great example is there was a whole segment of the game, which was really cool, and it probably cost $US500,000 to make. It was a long sequence, lots of mocap and all this kind of stuff. And at the time Sega felt it just didn’t fit the game… and so $US500,000 cut. And you know, I understand: they pay us to make the game. It’s totally their right to do that. It can just derail.”

When it came out in June 2010 (after several well-publicised delays), Alpha Protocol was slammed by critics. Reviewers thought it was buggy, messy and directionless. The game didn’t meet Sega’s sales expectations, and plans for a sequel were shelved.

But against all odds, Alpha Protocol has somehow turned into an underground hit. For every negative review out there you’ll find a hundred fans who love the game, who replay it over and over just to see how their choices impact every scene and ending.


You might be wondering what happened to the Wheel of Time game that Obsidian announced several years ago. It’s still in the works: they’re just waiting for licence holder Red Eagle Games to find funding. “We have a treatment, we have a presentation for it,” Urquhart told me. “My hope is that they’ll go and raise the funds.”

“It’s so weird to have this game where I can read a review and the poor game is whimpering in the corner and the press guy is just beating it,” Urquhart said. “And I — we get emails. Just the other day, someone wrote a nice, very long email about how they’re playing through Alpha Protocol for the third or fourth time and they just love it… That is weird, to have a game in your career where it got reviewed poorly, but then it gets on all these lists. It’s on these ‘Best games you’ve never played’ lists or ‘Poorly-rated games you really should play’ lists. And I always wonder: should I feel good about that?”

Sega has no interest in making a sequel right now — development was costly and challenging, Urquhart points out — but anything could change, particularly as word of mouth for Alpha Protocol continues to spread. “It sold OK,” Urquhart said. “We don’t know if they made money or lost money, but we do know — and that’s the interesting thing — it keeps selling.”

“Now, knowing everything we know now, we would love to do Alpha Protocol 2, and everybody here would love to work on it,” he said. “[Because] we now know what it is and how to do it… I’m hoping maybe in even a couple of years, [Sega] will get to kind of a point where everybody has kind of moved on and the baggage is swept away. People are still positive about the brand. We get asked [about a sequel] all the time, still. It’s become a cult classic.”

Alien Encounters

In 2006, as Neverwinter Nights 2 was finished and Alpha Protocol was just getting started, Obsidian was approached by three publishers at around the same time. One wanted to work with them on an “original fantasy RPG,” Urquhart said. The other was EA, whose executives likely wanted a piece of the open-world RPG pie that had been recently popularised by The Elder Scrolls IV: Oblivion. They asked Obsidian to make what Urquhart today describes as “a big Skyrim-type Ultima game.”

The third was Sega, who wanted to work on another game with Urquhart and his team: a role-playing game based on Aliens. That’s the one they went with, although you wouldn’t know it from store shelves: the Aliens RPG was cancelled in 2009. (Some very cool concept art from the game is still floating around on the Internet, though.)

So what happened? Urquhart said they had a fantastic prototype — “The best vertical slice [Sega] had ever received” — but they couldn’t quite turn it into a good enough game. One Friday night in February of 2009, they sent a build of the game to Sega’s producers. On Monday morning, they got a call saying that the Aliens RPG was cancelled. Sega didn’t even look at the prototype they’d sent.

“The saddest thing was, as we were turning over everything to them, our producer [at Sega] called Darren [Monahan], one of the other owners here, and he said, ‘My god you guys did a lot of work,'” Urquhart said.

“And we were like, well yeah.”

Viva New Vegas

Just as Aliens was cancelled — and right after they’d finished both expansion packs to Neverwinter Nights 2 — Urquhart got a call from Todd Vaughn, vice president of development at Bethesda. The folks there had just released Fallout 3, and their internal team was moving on to Skyrim. They had something else in mind for Obsidian.

“We’ve talked to the Bethesda guys more than once about doing games,” Urquhart said. “They called me once about Star Trek, and I was probably being a little bit too much, too arrogant of a developer… This would’ve been like 2007 — way before the movies — and it was like, Star Trek wasn’t in a good place. I don’t know what I said, but I now know it probably sounded arrogant.”


When Obsidian and Square Enix partnered up for Dungeon Siege III, Feargus Urquhart sat down to meet with Square president Yoichi Wada. Urquhart said the experience was fantastic. “It’s interesting talking to the guy who runs all of Square. Me and him were talking about the same challenges we have. You know, about offices and people and open floor plans and all this other kinda stuff. So I think he’s a great guy.”

This time, Bethesda wanted Obsidian to work on a franchise that Urquhart, Chris Taylor and the rest of their team knew quite well: Fallout.

“They came to us and said, ‘We think it’d be cool if you did something on the West Coast,'” Urquhart said. “We were like, ‘Sure!'”

So Urquhart sat down one night with the other four owners and started to brainstorm. They decided that the game a heavy focus on factions, as per fan request. They immediately decided to set the game in Las Vegas. They even plotted out a rudimentary intro: “What could be more Vegas than starting off the game with you getting shot in the head and buried in the desert?”

Bethesda loved the treatment and immediately greenlit New Vegas, which Obsidian released in October 2010. It was well-received — and according to many critics and fans, better than Fallout 3 — but it was also full of bugs. For some people the game was near-unplayable thanks to constant glitches and crashes. Many of the game’s issues have since been patched, but for fans paying $US60, New Vegas was unforgivable.

“The timeline was compressed,” Urquhart said. “It was a timeline we agreed to — I think we bit off a little more than we could chew, and then it was a little hard to recover… We learned some lessons about trying to make too big a game. We also learned some lessons about managing QA.”

They tried to apply those lessons to their next game, Dungeon Siege III, which had its own issues, but by most accounts was relatively bug-free. And after New Vegas, Urquhart decided it was time to shed their reputation.


“We as a company got into a big room and we said, ‘We are not gonna make buggy games anymore,'” Urquhart said.

So they designed an entirely new bug-tracking system — a computerized program that automatically sends crash reports to their engineers. Their last bug-recording system, Urquhart said, involved pens and paper.

“I think that’s what people are gonna see from us from now on — they’re not gonna see buggy products,” he said. “I dunno what the exact count is, but we’re a ways away from being done on South Park and we’ve already fixed 10,000 bugs.”

“So would you want to make a (bug-free) sequel to New Vegas?” I asked.

“We would love to work on Fallout again,” Urquhart said. “Hell, we would love to work in the Elder Scrolls universe. Nothing is going on at this point in time, but we talk about it all the time… I’d love to do a Fallout: New Vegas 2. I think a Fallout: New Vegas 2 would kick arse.

“I believe New Vegas is a great, like — you have Fallout, and then you have New Vegas. They feel like separate products. Same engine, same everything, but they feel totally different. ‘Sister product’ is the best way to put it.”

Matt and Trey

In October of 2009, Urquhart got an interesting call. It was Greg Kampanis, a vice president of content at South Park Digital Studios, the interactive branch of South Park. He said that Matt Stone and Trey Parker — South Park‘s co-creators, writers, directors and voice actors — wanted to make a video game, and they wanted to meet with Obsidian to talk about it.

“I said, ‘Sure, I guess,'” Urquhart said, laughing. He agreed to set up a meeting, not sure exactly what to think.

“What was interesting was, [Kampanis] said, ‘Put something together about your company, but know that it isn’t really for them, particularly for Trey, because he already knows all the stuff that you do.'”

So that’s what they did: Urquhart put together a presentation of ideas, and when they all got together, he explained to Trey and Matt how Obsidian makes RPGs.

“I went through that very quickly, and [Trey’s] like, ‘I got it. I love this stuff. I don’t like that and this, that and the other thing,'” Urquhart said.

Towards the end of the meeting, Urquhart turned to the two South Park creators and said, “Look: let’s pretend we can do all the RPG stuff. We can handle that. If it doesn’t look like the show, all of this is pointless.”

Trey and Matt agreed.

“That’s our job,” Urquhart told them. “We need to go and make something that looks like the show.”

So Urquhart got a team together and spent a week putting together a rudimentary prototype. They got the original South Park construction paper from the folks at South Park Digital Studios, and worked to turn it into a polygon-filled interactive experience.

“We showed it to [South Park Digital Studios],” Urquhart said. “They said, ‘That’s totally on the right track, once you do a little bit more.'”

“Trey just grabs the controller and he’s like, ‘This feels awesome!’ And Matt runs up to the screen and he goes ‘That’s the construction paper!’ And they were like, ‘Let’s do this.'”

Obsidian wasn’t getting paid at this point, but the prospect of a South Park RPG was hard to resist, so Urquhart agreed to keep plugging away at it. They built a prototype set in a house from the show. You played as a generic kid, and you could change your race or clothes by hitting the trigger buttons. If you walked into the living room, you could find Randy Marsh in his underwear, playing Guitar Hero. If you went to the kitchen, you could pick up a spatula, which would then transform into an axe that you could use to smash things.

It wasn’t much, but it was the start of a game.

“We took it in to Matt and Trey,” Urquhart said. “And Trey just grabs the controller and he’s like, ‘This feels awesome!’ And Matt runs up to the screen and he goes ‘That’s the construction paper!’ And they were like, ‘Let’s do this.” And that was that.”

So they put together a contract and started working on the RPG. For a while, Obsidian worked directly for the South Park team with funding from their parent company, Viacom. But in late 2011, they decided to get a more experienced game publisher involved. A few companies showed interest. They ultimately went with THQ.

Not long afterwards, news came out that THQ was in dire straits. This was particularly tough for Obsidian, as they were reeling from the recent cancellation of a game they’d codenamed North Carolina, which forced the company to lay off 30 people earlier this year. For a while, all they could do was wait.

“Whenever you have to put people on the street it sucks,” Urquhart said. “And so it’s a big wait of like, what’s gonna happen? Are they gonna pay, are they not gonna pay? So yeah, I was worried.”

But the game is shaping up to be great. Diverging from the style of RPGs they’d developed in the past, Obsidian decided to go with turn-based combat for South Park — now called South Park: The Stick of Truth — and they spent a great deal of time working on creative attacks, spells and summons that would fit the theme of the show. Trey and Matt wrote the entire script, which from what I’ve seen so far feels genuine and hilarious. And initial buzz for the game has been fantastic. Even if THQ tanks in the next few months, it’s easy to imagine a publisher bidding war over who gets the rights to Stick of Truth.

The contrast between Obsidian at the end of 2012 and Obsidian at the beginning of 2012 is like night and day.

Next-Gen Cancellations

When I asked Urquhart about North Carolina — the cancelled project that led to significant layoffs at Obsidian earlier this year — he said he couldn’t talk much about it. It was an original IP — a big, third-person, open-world game designed and created by Obsidian. They pitched it to several publishers in 2011, complete with a fancy book full of ideas and concept art. But Urquhart couldn’t say much more than that.

“We went down the road with a few publishers,” he said. “We did get it signed up with a publisher, and unfortunately as happens sometimes, projects just don’t go. Particularly when it’s been not that long, it’s hard to go into a lot of detail about it. It’s too bad — we thought it was really cool.”

So the game was axed, and at the beginning of this year, Obsidian had to lay off a large team of people. (Earlier this year I reported that North Carolina was a first-party game for the next Xbox — codenamed Durango — and it was published by Microsoft. Urquhart wouldn’t comment on whether that was true.)


Found in Obsidian CEO Feargus Urquhart’s office: Baldur’s Gate ale and Fallout gecko-in-a-can.

Games are cancelled. It happens. But for an independent developer like Obsidian, this has become a trend over the past decade: everyone spends a great deal of time and money on a video game that never actually makes it to reality.

Even today, as Obsidian seems to be in a comfortable position, they still have to stay scrappy to survive.

“As soon as we get back from the holidays, I’m on the road looking for the next thing,” Urquhart said. “We’re generally always pitching. Products that are working right now for our publishers might not work, and probably people don’t know a lot about this aspect, but in general, all agreements that any developer signs with a publisher have this line called ‘cancel for convenience.’ We could get a call tomorrow saying, ‘Yeah, we don’t want to move forward with product X.'”

When that sort of thing happens, Obsidian will usually get a kill fee of some sort, but that’s never enough to pay everyone for nine months — the amount of time that it usually takes to put together a new deal, Urquhart said.

“It’s hard,” he said. “That can be done with a 75-person team. Suddenly I have 75 people tomorrow that don’t have work. What do we do and how do we handle it?”

In early 2012, things were rough for Obsidian and independent developers like them. But over the course of this year, something changed. Kickstarter might not be a revolution, but it’s changed the game for companies like Obsidian. And Urquhart’s team has been one of the year’s most exciting success stories.


How To Make $US4 Million In 30 Days

It’s September 14, 2012. 10am Pacific. Obsidian is going crazy.

They’ve just launched the Kickstarter for Project: Eternity — an original, isometric RPG that they hope to develop over the next year and a half — and nobody at the office can focus on anything else. Fans are coming out in droves to support the project, donating money to help Obsidian develop a spiritual successor to the games they made back in the late ’90s. They’re making thousands of dollars an hour — the sort of success that nobody at the company had anticipated.

“I’m going around the offices, people are like holy shit,” Urquhart told me. “It was so crazy. I’d go in to have a conversation, and while I’m talking to somebody, every five minute conversation I had we’d earn $US5000.”

At around 5pm, he realised that nobody was going to get much work done, so they all went out for drinks across the street. As they sat and checked their phones, they watched the Kickstarter continue to rake in money: something like $US25,000 every half hour.

By the end of the day, they’d earned $US700,000.

“The next morning I went to breakfast with my daughter,” Urquhart said. “She’s nine. She wanted to know, cause my wife was all excited, she was like, ‘What’s going on, Mommy?” She said, ‘Oh, Daddy did this thing,’ and she plays the video. And my daughter’s like, ‘Can we give him money?'”

They hit a million while Urquhart was at breakfast. They met their goal of $US1.2 million on day two. And after 30 days — days full of updates, interviews and late nights spent in Kickstarter comments sections — Obsidian earned close to $US4 million.

It almost feels like a fairy tale ending: after years of rushed projects, sudden cancellations and brutal layoffs, Obsidian is suddenly in control of its own destiny.

It almost feels like a fairy tale ending: after years of rushed projects, sudden cancellations and brutal layoffs, Obsidian is suddenly in control of its own destiny. They’ve got two promising games on the way, and even just a few months ago, major publishers were knocking on their door: Urquhart told me he’s been talking to Bethesda, Ubisoft, Warner Bros and Lucasarts.

But not everybody is a fan of Obsidian Entertainment. Some RPG fans disliked their treatment of series like Neverwinter Nights and Fallout, and some have grown disillusioned with the company after what they see as a trend of rushed, buggy software. In many ways Project: Eternity‘s success is now an albatross. Between the South Park RPG and the Kickstartered phenomenon, expectations are at an all-time high for the group of developers from California.

Urquhart isn’t worried about the pressure. He’s optimistic about the next couple of years. “I really feel that 2013 and 2014 are gonna be great years for Obsidian,” he said. “For gaming in general.”

He’s even got a dream project: Knights of the Old Republic III. On next-gen consoles.

“I think doing something like that on Orbis and Durango and things like that might be — I would be disappointed as a gamer if that never got made,” Urquhart said. “I think a lot of gamers would be disappointed as well.”

But Obsidian has a lot of dream projects, and the 90-person studio can’t get to all of them. For now, they’ve got a lot of work to do. South Park has to meet expectations; Project: Eternity has to meet even higher expectations; and the company has to convince the world that they can release bug-free, polished video games.

So the story of Obsidian Entertainment isn’t over yet. Maybe it’s just begun.


    • I don’t care what anybody says, KOTOR II is still and forever will be my favourite RPG. I wish they did manage to complete it without cutting content, because having played the restoration project (the mod that restores cut content) you can really see how much they had to cut, and how much better it is with the original content (although even cut it’s still the best imo).

  • Good read. Thanks, Jason. Sorry to hear their arcade machine is broken.

    I still can’t get over how Alpha Protocol was a flop, and Mass Effect 2 was game of the year in 2010. I put about 100 hours into both of them at launch, and found AP to be superior in almost every aspect. I hit four times as many game-breaking bugs in ME2 than AP (literally – 4 in ME2, 1 in AP), the morality system in AP was far more nuanced, and the story was more “adult” in that it was mature and compelling, as opposed to Bioware’s 12 year-old boy version of “adult”: more guns, more swears, and less-dressed, skankier women.

    The only way I’ve been able to make sense of it is consider that reviews can be – if not bought, exactly, certainly influenced – by money and promotion, and that most game reviewers are not actual “journalists”, and so aren’t as schooled in identifying (and compensating for) when such influence might compromise their integrity.

    • I dunno about AP’s bugs. I mean, the sneaking didn’t work at all because the AI could see through walls. It was an adequate shooter, with a decent story.

    • “The only way I’ve been able to make sense of it is consider that reviews can be – if not bought, exactly, certainly influenced – by money and promotion”

      Exactly, just take a look at SWTOR’s perfect 10s. A fan can give a perfect 10 for that game and I wouldn’t care because fans are inherently biased. But professional game reviewers should not be giving a game with such obvious flaws (that most of them noted in their own reviews) perfect 10s. 9s I can let by since there will be times when a reviewer acknowledges a flaw in the game, but also mentions that it’s a part of the game that they don’t personally care all that much about. But 10s should be reserved for something that absolutely perfect

  • Good article, it hit’s on points which relate to their early games and their future expectations. This is the type of article I enjoy reading on kotaku!

  • A real good article. It gave me a different perspective on gaming companies and how they run. And as @spaghett said – “OBSIDIAN, WE LOVE YOU <3”

    Big fan of the games Obsidian has pushed out and am eagerly anticipating the next 2 these guys are releasing.

  • I read every word of this and I’m not even an Obsidian fan (not a hater either mind you). But after reading all this, I think I’m firmly in their camp.

    Best of luck to these guys in the coming years!

  • Good Article. KOTOR II was one of my favourites but I had always wondered what the hell was wrong with it. Towards the end of it things just stopped making sense… Now I know why. It’s a shame because the gameplay mechanics they added were great.
    Looking forward to the stick of truth.

  • My brother has been bugging me to play Alpha Protocol for ages, and now, given the dearth of RPGs I might just do so.

    Echoing other sentiments here: I am a big fan of Obsidian and wish them nothing but success, also super sad that their open world 3rd person game was cancelled. We need more open world RPGs imo.

      • 😐 I really enjoyed skyrim, to the point that I spent approx. 300 hours or so in it. Admittedly they need to get better at making an engaging story line, and the combat could be more visceral (in my fantasy world they would bring the guys who did Chivalry on as consultants). But otherwise I loved, as much for its mod support as for the game itself actually.

        A different setting (different as in, really different, not just slightly different cookie-cutter fantasy world) with a similar design philosophy would be more than welcome.

  • I used to hate them after KOTOR II, and NWN 2 was buggy as hell too. After that I had decided to skip all their games but went back to them with Fallout NV (after a while given that the game at release was reported full of tons of bugs) – with this game they regained my trust since it was an awesome and bug free experience by the time I bought it. For the first time it felt like they were caring and were going to support their games. I’m impatiently waiting for Project Eternity now!

  • Obisidian could’ve made a Star Trek game? Those fools. Even before the Abrams reboot there was plenty of awesome things they could’ve done. :'(

  • I was sceptical about Alpha Protocol, but eventually gave it a go with a cheap 360 copy. Utterly brilliant game, I was addicted… I only encountered a couple of bugs, nothing to ruin it for me though. Absolutely recommend it to anyone who likes RPGs/spy stuff/sneaky things.

  • I loved New Vegas (but waited for the GOTY edition, as I did with FO3), and Dungeon Siege 3 wasn’t a bad title either. NWN2 back in the day was fun, and there was always heaps of mods for it. Im really looking forward to South Park, and I dont even like the show.

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