A Swedish Game Studio Decided to Leave Sony — What Happened Before and After?

This is the third piece in our series on Swedish games.

In the first two pieces, we looked at how national policy, hardware infrastructure, and hacker culture turned Sweden into fertile ground for games, and at how its strongly regional developer communities and its education system pulled in talent and kept the whole system growing.

Beyond the universities, tech parks, and developer hubs, on this trip from Stockholm to Skövde to Malmö we also interviewed the founders of three well-known studios. One makes the two-player co-op games that are rare these days, and has a maverick auteur developer who keeps turning up in the headlines. One made a runaway hit and is now moving toward "serious," large-scale games as a service. One had the nerve to break with Sony, shedding the role of second-party studio to go back to original IP — a clean "runaway" that ended in a full clear.

The three companies started in different places, made their names with different games, and went in different directions afterward. All three, with staffs of only about 50, have found solid ground in the fiercely competitive Nordic games scene and are changing the shape of the global games industry. What they have in common is plain enough — passion, hard work, and a stubborn hold on their own distinct core idea. That may be true of every startup that survives; what Sweden's games industry added was room to be creative and turn ideas into real things.

This piece is about Tarsier Studios in Malmö. Its route through the game looks fairly typical, and very "Swedish": trained by the education system, broken in at an incubator, made its name on an original idea, raised by a big company (Sony), and finally leaving home.

If this were a choice-driven RPG, the turning point would have to be the moment of "deciding whether to break away from Sony." From its founding, Tarsier spent years making LittleBigPlanet DLC and sequels for Sony — no chance to build its own ideas, but never short of money either. Then they realized that if they didn't break free of the parent at some point, they would never get to make their own thing, and they made a choice that risked closing the studio down.

Reality rewarded this team, which had original ideas and solid technical skill. Tarsier came close to shutting down, but at the last minute found a new investor, Bandai Namco, and got to build its first original IP, Little Nightmares.

As a thriller with real gameplay, it gave the genre a freshness it hadn't had in years: a distinctive look, finely built levels, unnerving sound, a world you keep thinking about. Reviews were almost uniformly good, and a loyal player community grew around it. The small figure in the yellow raincoat, Six, hops around a dark ship that looks like a giant dollhouse, dodging grotesque adults driven by appetite — and held the attention of the tens of millions of viewers watching the streamer jacksepticeye play it live, who came away remembering the studio's name.

Had Tarsier never left the parent, players would have missed the strange, rich imagination of the Little Nightmares world. And for a game studio, what finally defines it, what makes players remember it, is its own original work.

Tarsier Studios sits in central Malmö, about a ten-minute walk from DevHub. In a small screening room, CEO Andreas Johnsson and narrative designer Dave Mervik told us how Little Nightmares came to be, and how Tarsier grew up.

J = Andreas Johnsson

M = Dave Mervik

Origins, Leaving Home, and Takeoff

J: My friends and I started the company while we were still students. There was no games program back then — you could go into art or programming, and I was a programmer. We entered a game competition: build a project in a few weeks, have a panel judge it, and the teams with promise got a place in the local incubator, in a small town called Karlshamn, about a two-hour drive north of Malmö. We got the ticket and kept working on our prototype.

That was 14 years ago. In 2005 we went to E3 with a wildly naive, grand idea: City of Metronome. We rented a tiny booth at E3, tucked into a corner nobody would think to visit, and somehow everyone loved it. Even the press drifted our way for no clear reason. All week we were having back-to-back conversations in that little booth, someone always on our patch of floor, and every time we ran a demo, 30-odd people crowded in to watch. It felt good.

But at the end of the day we were still nine complete beginners with no game development experience, and graduation arrived before we knew it. When we took the idea to publishers, there were things we couldn't agree on, but they also saw that the team could grow; even as they turned us down as too risky, they opened the real door into the games industry for us. We truly had no experience.

(The promising City of Metronome never did get a publisher behind it. Tarsier's own website puts it this way: publishing is a fickle, deceitful queen, and the game is still a "great game that almost got made." But this city will meet the world one day.)

Sony was the company that said publicly it wanted to sign us. They liked our idea but thought we'd be better off starting small. So we began working for Sony, and that was the start of Tarsier. We made LittleBigPlanet DLC for Sony, and Rag Doll Kung Fu on PS3 — a project Sony commissioned specifically to show off digital game distribution. After that came a lot of art work across the LittleBigPlanet series: props, level design, even whole costume sets. Sony was happy with what we did, and so was Media Molecule (Sony's first-party studio and the creators of LittleBigPlanet), so before long we were building a whole game for them rather than DLC — LittleBigPlanet for the PS Vita.

We also tried recruiting out of the player community, since some players built levels better than we did. That's the magic of that game: a lot of developers had been loyal players first, which in its way shows how the games industry has changed. These developers came from all sorts of fields — some were math teachers, some were nanoscientists — and what they had in common was a love of designing levels, which made them ideal for the work. Around then Tarsier's team started to grow, because there was more and more work, and we had to move from Karlshamn to the bigger city of Malmö, because you can't hire people into a town nobody has heard of.

M: Joining Tarsier was pure coincidence for me. I'm from Liverpool, I'd worked in Manchester, and I moved to Malmö because my wife was studying here. I found Tarsier on Wikipedia (J: we really were nobodies then) and thought, that's a terrible name, I'm not working for these people. But I clicked through anyway, and then I saw City of Metronome, and decided on the spot that I had to send them my résumé immediately. As it happened, they had an opening for exactly my job. I was lucky.

J: Little Nightmares was our first original IP. But looking back, Tarsier was built on that first original idea, City of Metronome. Everything in between was us running a long side quest for Sony, and then coming back to the source.

I think there was a moment when we all realized we'd wandered off the main storyline and forgotten why we started Tarsier, and we felt we should pick that idea up again and get back on track. So we started talking about what kind of new game to make, tried a few directions, and asked what we were good at, what we'd learned from past experience, and how to apply it to something new.

The design team went back over LittleBigPlanet: it's a platformer with some interesting mechanics — how could we bring those into a new game? Meanwhile the art team was working out how to make striking characters, and that's where the monsters in the game came from. A third team came at it from the technical side: what would make the game look best? They played with camera angles and, out of a pile of ideas, picked the "dollhouse" — exploring a whole house room by room, in one panoramic view, felt wonderful. These teams' ideas collided, and out popped an adorable protagonist, Six.

The world of Little Nightmares is mysterious, vast and warped at the same time. You can see at a glance that Six doesn't belong there. Then our camera, the dollhouse view, added the feeling of a childhood game. On top of that the mechanics, exploring and puzzle-solving alike, fit that setting, that atmosphere, that tone exactly. The ideas started out on separate tracks and happened to fit together.

M: When we were making games for other people, this was the kind of thing we dreamed of making. Games now are always telling you how to play. In today's big games, the moment a puzzle starts the scene hands you a hint; it gives you no time to learn. We didn't want that. We thought going back to what a game originally was would be fine — there's a level in front of you and you have to work out what's going on. That's what a game should feel like.

I also had my own idea about the world. I wanted it full of the ugliest things in human nature, and I wanted to let them grow wild and see how far they could go. Drop a greedy man into this nightmare and what is he after 500 years? He mutates; he becomes greed itself. This world magnifies every ugly side of people until it turns into something else, something you've never seen.

The game was first called Hunger; we changed the name so it wouldn't be confused with the film. We also realized later that the game shouldn't be only about appetite, so we reworked the story and the mechanics to make it more complex, and it felt better for it.

We also didn't want a traditional horror game full of jump scares. The goal was an atmosphere, a "suspense adventure." That was the key phrase in production. Nobody ever said the word "horror." Suspense needs tension; it needs you to feel at every moment that something is hiding nearby. It's an oppressive, uncomfortable feeling.

Looking back at that development, if we'd called it "horror" from the start, people would have expected jump scares, clowns, or the traditional strings of a horror-film score. But horror comes in many kinds, and Little Nightmares is certainly not the classic kind, so we dropped the word "horror" entirely while making it.

The oppression and discomfort here is closer to existential dread than to a devil with a body. The art design did a great deal, and then there's the sound team — sometimes you can't tell what is making you uncomfortable, but they paid close attention to details like the sound of Six's small feet running over different floor materials. You walk on carpet and it's quiet, you feel safe, and the next moment you step off it and the cold creeps up. To me the sound of bare feet on a floor is especially lonely and especially fragile: you're alone, every other character has shoes on, and you have no protection.

These things go straight into your subconscious, through small details like that — the space is empty and you are small; there are creatures chasing you in the dark, and they never give up.

We tested every week, bringing people in to play and see how it felt. When everyone gathers to watch someone else play, it's easy to feel what works and what doesn't. If someone jumps, or someone can't take it and walks out, you know you did well. But if the room goes quiet, that's awkward — it means something isn't landing. It could be painful, because you really loved some of those ideas and in the game they just felt wrong. We said one thing often: "kill your darlings." You have to be ready at any moment to cut your favorite idea, because the game is always about the whole.

The world and the basic story were set from the very start, but there's more behind it, and bigger, and it comes out through DLC and later titles. Bandai Namco also helped us develop the IP — they published a standalone comic, and a companion TV series is in production. This will probably be our approach to every game we make from here: it isn't only a game, it's part of a larger world.

J: I'll say this: making your own original IP is hard. Because you have no boundaries, you have to set them yourself. How? You have to pick out the game's "pillars" — what defines your work.

M: I think what defined Little Nightmares at the start was "childhood fears," "a warped fantasy world," and "a suspense film." Because in the end you take these ideas out to raise money, and you have to know exactly what your game is. We felt it was cool — but why, exactly? You have to sit down and sort those feelings out, then boil them into a 30-odd-page design document to send to Nordic Game for funding. So "boundaries" matter. Your game concept must never be too vague or too broad.

J: That was a hard stretch, because we were changing how we ran — the money used to come from Sony, and once we went independent that source was cut off. We had no money and had to find a new investor in about three months. That said, we'd put out an early trailer for Hunger and it got a good response, so at the time we were fairly confident we'd find new money quickly...

M: You looked calm back then.

J: Right, because I wasn't looking at the numbers. Later, when we signed, finance told us we'd been about a month from running out (laughs). Raising money is always this stressful — every year you have to line up the next year's project and get ready to go find money for it. It takes careful planning. Publishers have always been our main source of money, and every time we pitch a new game we have to be sure it really holds up commercially, that publishers will really be interested. How many are interested, and do they actually want to invest, or are they just being polite? The whole thing is frightening.

Even so, we decided to cut clean from Sony. I think if Tarsier had kept working for Sony, things wouldn't have been bad — we'd have done fine, the company would still be quite good. But it wouldn't have been... how to put it, there's an itch deep down you can't scratch.

M: It was basically "we go now or we never go." City of Metronome never came together, and fine, we could live with that, but after ten years with Sony, once you know how to make a game, you have some confidence. I think Sony always sensed we'd go make our own game eventually — if you don't, it becomes the kind of thing you regret: "we were so close to making our own game, why didn't we?"

Tarsier set up its own company for exactly that reason, to make its own work rather than work for other people forever. So at some point you have to go out and try. It was exciting too, letting people see what we could really do.

It's a bit like a teenager running away from home — "we're going independent, we're leaving to make our own game" — and maybe two days later he's back at the door saying, "I got mugged, let me in." But our story ended well.

Survival Rules, and a More Exciting Future

J: Right now every publisher is hungry for content — Google, Microsoft, Amazon, Nintendo, Sony, everyone is screaming for more, and everything is growing at a mad pace. So the market Tarsier is in now is quite favorable. We have 14 years in this industry, so of course people trust us to do our best. For a brand-new indie studio, things may be rough, because the market is so crowded, and finding your own money and publishing your own game is genuinely hard, and hard to make money at. Luckily we're past that stage.

Everyone should be afraid of failing. Avoiding failure still comes down to staying competitive, always coming up with new ideas. I think we need to keep a certain edge. Look at Little Nightmares and you can tell it apart from other games at once; that edge is what makes it stand out. At the same time you can never think "we've made it" or "we know better" — you can't relax, because that's where the slide starts.

M: To me it's like musicians and bands. They put out a few songs and then repeat themselves, as if nothing matters anymore, and the hunger is gone. I think you always have to have something to say, you always have to keep growing, staying interested in the world and also trying to be interesting yourself.

J: What keeps me relaxed is that we're only making games — this isn't some very serious business, like a doctor saving lives. It's entertainment in the end. The worst that can happen is we fail, and then we start again, or change direction. That calms me down somewhat. Sweden also has plenty of safety nets; you can take a risk and still restart your career. There are incubators here and there, and government funding, to help you take the next commercial step.

We started expanding around 2010, and then there was much more to think about. Before that our heads were full of games; after, we had to deal with running a business — salaries, pensions, that sort of thing — and try to let most people keep their heads full of nothing but making games.

If you ask what the worst part is, my answer is definitely getting publishers to sign our game concept — selling the idea. If you ask Dave, he'll probably say the first stretch of development is always wonderful, when you're coming up with all kinds of fun ideas and everything is possible. But once you start building, it gets ugly; your only job left is "make it real," "finish it," and the last few months are a long, boring bug hunt, no creative work, only quality checks.

But the greatest torture of all is sending the game out for review, having it finally put in front of players, and taking their verdict.

When we released the early playable clip of Hunger, we opened a bottle of whisky and sat with a finger over the Twitter send button without pressing it. We were terrified, terrified of how people would react. But I also think that fear can be a good thing. If you're too confident, it's almost as if you've cut yourself off from everything around you.

(On what's happening in the industry now that excites you)

J: Regionally, it makes me happy how fast the games business in Malmö is growing. The DevHub building is a home for every indie developer here; it isn't just office space, it's a community, and that's a big step forward. Think about it: Malmö is such a small city, maybe 300,000 people, and several hundred of them work in games! I'm happy to be part of that community, and everything happening around me is genuinely cool.

Globally, the games industry is always exciting, because there's always something new. I came up as a programmer, a tech geek, and I really loved VR and AR — just not the games that came with them. Google's and Microsoft's cloud gaming ideas are exciting too; who wouldn't want to play AAA games on a phone? And next-generation consoles are almost here!

Also, I'm no fan of shooters, but what Fortnite has done in two years is insane. They found a special formula, and it's crossed into the mainstream, like a pop concert. That's very cool. It keeps evolving, and it isn't afraid to try new things.

M: I care a great deal about VR. I worry it won't keep going. I think if VR could reach more people more easily, economically and technically, things would be much better. For a writer like me, VR opens the doors to a lot of new worlds; I want to tell stories by different means, not only through cutscenes. What we did with Statik (a Tarsier PSVR game, 84 on Metacritic) was about breaking some of the walls between players and the game. It's a technology with a lot of potential, but it's still early — you can't make money from it yet, and everyone is waiting for someone else to run the experiments and find a better way.

J: We also keep discussing how this studio should evolve. When smartphones took off, we thought about whether to make mobile games. No — in the end we decided to stay with console games. When free-to-play took off, we thought about that too, and decided against it: the kind of games we make don't fit that business model. So for now we'll mostly keep doing what we're good at.

Of course, service games, the ones you mentioned earlier — we have been watching them since last year, wondering whether they could be part of the next project. Maybe in the end we'll find a middle point: no big multiplayer online element, keeping what we're good at, single-player, a few locations, and so on. We don't have to be The Division or Destiny; we just need to find a path that suits us and combine it with the service model.

M: At the same time you have to be careful, watch a while longer, see where the whole industry is heading. You can't rush to follow the crowd. Can we do something really cool inside this model? If not, then let's not. In the end, what we make has to be something we're passionate about.

J: If we looked at every game purely as a way to make money, we wouldn't have made the games we made — we'd probably be making Candy Crush and shooters.

We'll tell the stories of Hazelight Studios and Coffee Stain Studios in the next two pieces.

Cover image from Little Nightmares and City of Metronome.