How Owlchemy Labs designed VR’s funny hit Job Simulator

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Job Simulator was one of the big surprises in virtual reality in the past year. The VR title from Owlchemy Labs generated more than $3 million in revenue as a launch title on the HTC Vive.

The game was a hilarious cartoon-style experience where you perform various routine jobs like being a short order cook or an office worker in VR. Its success enabled Owlchemy to be one of the few early examples of how to succeed in VR game development.

I talked with Alex Schwartz, CEO of Owlchemy Labs, the creator of Job Simulator for the HTC Vive and other VR platforms. We spoke at the DICE Summit, the elite game industry event in Las Vegas. Job Simulator was nominated for an award at the DICE Awards, the Oscars of gaming.

Here’s an edited transcript of our interview.

GB: What have you guys said about how well Job Simulator has done? What kind of impact has it had?

Alex Schwartz: It’s been surprising, a lot of the superlatives for Job Simulator. We announced our revenue, that we’ve surpassed $3 million in sales for Job Simulator last year. We’re seeing incredible pickup from people who have the ability to show a performance of themselves inside the game – YouTubers, Twitch streamers, Facebook Live, things like that.

People didn’t expect how much of a spectator sport VR would be. That was one of our early decisions when we were building. We thought that owners of year one VR hardware — PlayStation VR, Vive, Oculus – would not be the primary users of the hardware. It would be passing it off to friends and family. VR parties where people come over because they’re rare in the early days, in the relative scheme of things. We tried to build a game where you didn’t have to give a whole backstory about how to use it, what the controls are. You could just hand it to a friend and say, “Go nuts.” They can get the story through the world-building, the environmental storytelling. They don’t have to learn a lot to get into it.

We’ve been getting a bunch of awards. Obviously we had the DICE nomination. The Unity awards, Sundance. There’s been quite a few. It’s been awesome to see. It’s funny. It starts off when you tell people the name and the concept. There’s this expectation mismatch between that point – “Wait, why do I just want to do a job?” – and then when you play it and come out and realize it’s a ton of fun. It was a fun uphill battle in a sense. If you offer something with guns or going into space, that makes sense in the early days of VR. “I want to go to a fantastic world!” People don’t normally think it would be fun to throw a stapler or eat a donut, but it turned out that everyone seems to love it.

GB: You made some choices, knowing what would happen with VR in year one. You knew it wasn’t going to be a gigantic blockbuster.

Schwartz: I don’t think it was a size thing. It was more, “What is the use case in year one?” It’s not a 40-hour game where you’re going to continuously explore a story and pick it up over several sessions. A more mature platform would have that gameplay loop. We wanted that pass and play, instant pickup, smooth onboarding, family friendly, focus on the highest quality graphics. We wanted an art style that’s not too demanding on the GPU, so we could push it up in resolution to get nice crisp edges.

Our predictions were that, for the units that were out there, they’d get a lot of use on a per-person basis. It wouldn’t just be “my” headset. It would belong to everyone in my circles of friends and family. I’ve heard so many stories from friends and colleagues and on Twitter. “Everyone in the neighborhood is here today to try high-end VR.” I think that ended up coming true.

GB: Could you remind me of Owlchemy’s history again?

Schwartz: We’ve done mobile and PC games since 2010. It was a small four-man team building original games through that cycle. We released four games, always in Unity, so we brought them to as many platforms as possible.

In the DK1 days everything changed. We knew that was going to be our future, very early on. It was the first Vive development kit that—six months before the Vive was announced, we got this early unit. We’d seen room scale and seen hand interaction. It was like, let’s erase everything we knew about game development and game design, all our expectations, and start over. What’s fun about room scale and hands? That’s where Job Simulator emerged.

We grew to 22 full-time people through the course of developing Job Simulator, and now Rick and Morty. That’s particularly on my mind because I was just writing a GDC talk, the full post-mortem on the Job Simulator product. Some of the decisions that led to the final output, that story of—we almost couldn’t get that piece of hardware, the Vive, because of certain situations. It’s a long story. But my co-founder, his wife was pregnant, and she couldn’t leave. He was up in Canada. It was one of those things where Valve has built one of these devices, and it’s got wires hanging off it. If you drop it, game over. Job Simulator wouldn’t have existed if we accidentally dropped that headset. But we went up there to build the prototype in a weekend. That whole story shows how we went from this very small team to what’s now one of the largest companies doing only VR.

GB: The $3 million, does that mean the game is profitable? Did you break even, at least?

Schwartz: It’s hard to measure. A lot of people would say it was successful. Even at a much lower revenue target, it would have been successful, because it opened the door to being a launch title on PSVR and Oculus, being a pack-in on the Vive. The amount of notoriety and influence and all that, that was way more than—as long as we didn’t go out of business, it would have been a success.

There’s a couple of numbers out there. Survios released some numbers. We released some numbers. Those are pinning various data points to the overall VR ecosystem. Everyone’s wondering if we can make enough money. Is it big enough? Can anything succeed here? I think absolutely it’s a world where, if you set expectations properly, you can find success in a lot of places. But some people are asking that question in the grand sense of, “Can I put $100 million into development today and get a 2X return from a great game?” We’re not at the stage where this medium allows for that size of game.

We’re happy with our attach rates. Everyone’s manufacturer bound. With good attach rates and 9/10s in reviews, that means as the industry grows, our slice of “that game you have to have,” that’ll get bigger as PSVR releases five times more units over the next couple of years or whatever it is. We’ll continue to be that game, because we established ourselves. If you have a VR headset with hands and you don’t have Job Simulator, what are you doing? It’s one of those core games.

We’re doing something like nine talks at GDC, the most of any VR company. We didn’t expect that. It turned out that—we bring on a lot of people at the company that are—communication is our number one job interview requirement. A lot of people are really well-spoken about VR. Our audio guy, for example, is giving a talk about spatial 3D audio with HRTF. Our producer, who’s on Rick and Morty, she’s giving a design talk on that project. We ended up bringing together a whole group of people who can speak eloquently about VR, and that led to a lot of talks in all the disciplines where we’ve been building.

We even put together a funny talk about “how not to give a VR demo,” because we’ve seen so many terrible demos. Someone has a headset on and you just throw a bunch of controllers at them, all these failings.

GB: What’s the timing on Rick and Morty at this point?

Schwartz: We haven’t made any announcements yet on launch timing. We’ve announced that it’s coming to the Vive, and nothing further. You can expect some more announcements soon. Justin Roiland is keynoting VR LA in two months. We’re working closely with him, since he does both the voices for Rick and Morty. He’s made a lot of contributions on the audio side of the game.

GB: How did you find that project? Or did it find you?

Schwartz: That’s a funny origin story. He tweeted, “I love Job Simulator!” He’s a little crazy. He’s screaming in all caps about how he loves the game. “WHO MADE THIS? OH MY GOD IT’S SO GOOD!” I replied and said, “Hey, you make one of my favorite TV shows.” I was in LA a couple of weeks later and we messaged back and forth. I ended up at his house drinking beers and ordering takeout Indian food. We were just hanging out.

My plan was to pitch him. “Hey, we should combine the concepts of the cartoon you made and Job Simulator. What if it were Job Simulator in Rick’s garage?” But before I could pitch him, he was saying, “We should do this!” Basically parroting back my idea. A week later we found ourselves giving demos of VR to the head of Adult Swim. At that point it was done. We started development right away.

We’ve been working on it about a year now. A lot of challenges with having fully rigged 3D animated characters that have never been shown in 3D before, standing in front of you in VR. It’s like the challenge when the first Simpsons games were made, with 3D Homer and so on. No one had ever actualized him in three dimensions. We did all the work to take a 2D character and make it into 3D animation.

We’re giving a GDC talk about that, too, called “Spatial Storytelling.” We have to tell a story in 3D now. You don’t necessarily know where the player’s looking, whether they’re listening. Are they paying attention to the V/O or not? There are lots of tips about how we’ve found that you can’t just force the player to do something. You don’t want to make them feel bad if they’re not following the rules of the world right at any moment. It’s still a sandbox. You can still do what you want. But there’s a story overarching it.

GB: Compared to that, Job Simulator was what, about four people over 16 months?

Schwartz: Job Simulator started with four people and grew to 16 over the course of about 16 months. That was the whole development cycle. Between launch on the Vive at about 16 people – that was maybe 10 months ago – and now, we grew to 22 people. Meanwhile we’ve been doing Rick and Morty, experimenting with new projects, porting Job Simulator to PSVR and Oculus Touch.

GB: So it’s a bit more expensive, but it’s not out of control.

Schwartz: It wasn’t the entire team, I’d say. The budget on Rick and Morty is about 1.25 time that of Job Simulator. We learned a lot of lessons that we could apply directly. But then there’s the whole—we’ve never dealt with real 3D characters. We had floating robots. That was a nice way to save on skinning and rigging and animating.

GB: Is humor becoming your niche, maybe?

Schwartz: Let me step back. Tim Schafer is one of the key people who’s made humor in games live on. There were a lot of adventure games back in the day that had humor built in. Now very few games have a lot of humor in them. We’ve set out, as a goal, to try and not take ourselves too seriously in all the games we make. If you look back at the first four games we made before VR, and then take a look at what we did with Job Simulator and Rick and Morty, humor’s been a vein that runs through all of them. That’s important.

VR specifically pulls out the childlike nature in people. Even the most suit-and-tie businessman we get, some partner who comes by to try VR, they go into Job Simulator and within seconds the inhibitions go away. Maybe it’s because you’re in your own world a bit. You forget about all the people around you. Or you feel like you’re becoming another character. Some psychological elements lead to people reverting to a childlike state of mind.

I don’t know if it’s that you forget that people are watching, or that you remember they’re there, so you kind of embellish and laugh at yourself. There’s a lot of factors that lead into extracting silliness from people. The funny thing is, no matter how serious you make a game—you’ve played Gallery, by Cloudhead Games? That’s a very serious adventure game. But the thing is, the first time you get a key in your hand in that game, the first thing you want to do is throw it right out the window. It’s the most important thing, the thing you need to progress in the game, but because you have hands, people want to be silly.

We’ve found that you almost have to take extra effort to stop people from being silly in VR. If we build something that allows them to be creative, though, we can play into that.

GB: It seems like most companies are afraid of humor. There isn’t very much of it in games.

Schwartz: It’s hard to do right. I can’t claim that we always do it right. Humor is sometimes in the eye of the beholder. Some jokes land well and some don’t. It’s definitely a risk. If you’re doing something serious, you’re not waiting for something to work or not work. If it’s humor, you have to land the jokes. It’s like standup. You can bomb hard, just like on stage doing standup.

All the environments started with Simpsons references, Mike Judge humor. The original Office demo had the “come in on Saturday” joke from Office Space. Setting that tone helped us write the right lines. That’s something interesting. People come up to me and ask, “Who’s your writer? They’re great!” But we don’t have a writer at Owlchemy.

We built a premise around our initial gameplay prototype – “in the future, robots have taken all your jobs.” Now you’re in this re-creation where robots did bad research on how everything was supposed to be. It’s all slightly off. Every person on the team, whether they’re an artist or a designer, they have to think, “When I’m designing a keyboard for a computer in the office, designing a blender in the kitchen, how would that work in this skewed weird future where robots reinvented everything?” You have to understand the premise and have a sense of humor.

That’s another thing we hire for. We have to have people who are all on the same page with that sense of humor, so we can all play into it rather than having one single writer try to write lines. Because it’s not lines that are funny, it’s the whole environment. It’s the things on the poster, the design and shape of everything in the world, it all plays into that story.

GB: Thinking about the outlook for VR, what are the stages you see ahead? People are talking about this “trough of disillusion.”

Schwartz: We’ve always believed we should run our company understanding that there will be a longer period than analysts predict before we get to a number of consumer units out there that you could arbitrarily define as “a ton.” When we started developing Job Simulator, we thought, “Let’s look at the timelines of how things are starting to get released.” Gear VR released numbers very early saying they had the most units out. Before the Vive had been announced, the Rift was the only game in town, that and this idea of some kind of prototype from Sony. That was where we were when we were making design decisions.

We said, “The standard for all VR interaction is going to be two hands and one head. All three will be positionally tracked.” So we didn’t build any games that were just gaze-based, with no positional tracking. We shot ahead of the curve, hoping that Sony would release Move controllers, hoping that Oculus would eventually release hand controllers. But it was a huge risk. We had to start before anyone announced hand controllers would be a thing. It turned out to be the right decision.

People told us, in the early days, “You’re building for a far-out future. That’s not going to be the case. Rift will have an Xbox controller. You should build for that.” We decided to take the risk and go for hand interaction, because that’s the compelling future. 10 years from now, we’ll still have direct hand manipulation. You’ll still be able to reach out and pick up a soda or whatever. When we got our numbers back from PlayStation, we were number one for all of 2016. It was Job Simulator in the lead, and then Batman. The commonality between those is that they’re the only games that used standing and motion controls. Everyone else used Dual Shock as the primary input.

We had been campaigning to Sony and Oculus and Valve – “Hands! Hands! Hands!” It was questionable. People were arguing that the audience would just want to sit down on the couch and play. But we finally got the numbers that proved it out. People want to be in the content, directly manipulating things.

That meant we were targeting a subset of the market. You don’t have a 100 percent attach on Moves with PlayStation or Touch with Oculus. Vive ships with controllers. But that’s the marketplace.

GB: Are you hoping that Nintendo will have some kind of VR entry?

Schwartz: From an art style standpoint, we definitely adopt—Mario has an amazing visual style that’s never gone out of date. We take that concept to heart. So absolutely.

I get this question a lot – “Who will win the VR war?” I think that’s the wrong way to look at it. I don’t think there will be some clash and then one platform will emerge. It will be fragmented, in a good sense, like the Android market. You’ll have a lot of different players. For developers, as long as you’re multiplatform, you have a big win there, because you don’t have to put all your eggs in one basket. We didn’t do an exclusive because we knew the long term for us was making great relationships with Sony, Oculus, and Valve. And then opening the door to however many other platforms.

If Nintendo does something, if Apple does something, who knows? We’ll be ready on an engine that allows us to go to those platforms, with games that we think hit the baseline of quality interaction. Head, hands, positional tracking.

GB: Were you sensitive to the sort of hyper-awareness of users who don’t want exclusives? In the console days exclusives weren’t viewed as a bad thing. They were expected. But in a more PC-like world, it almost seems like there’s a negative reaction to anybody who would think of doing anything exclusive. Even that exclusive level in Arizona Sunshine drew criticism.

Schwartz: That one was a particularly strange case, because of how—people perceived it as, well, it’s still a PC, but it’s an i5 versus an i7, which seems like such a small difference. There were some complaints like, “I have a PC that could run it, so why don’t you let me?” But when people talk about exclusives–I’ve never felt like, “Oh, I dislike this developer for doing a platform exclusive.” In the earliest of days exclusives are the way you can get high quality content paid for up front in a market that couldn’t yet sustain the sales that would otherwise support a quality game like that. Halo couldn’t have gotten made unless Microsoft jumped in to get something for day one on the Xbox. I never felt anything negative about that concept. You need great software to sell hardware. That’s how it’s always been.

But for us, we decided—not because we were against the concept, but because we thought it would be a good long play to have all partners on board, we started thinking of ourselves as this Switzerland of VR. Kind of like Unity is. Unity works with every piece of hardware. We wanted Owlchemy’s brand to be associated with the best VR content.

Let’s say it’s even across all three platforms, 33 percent each for Oculus, PSVR, and Vive. If you go exclusive, that means you’re getting a smaller fraction. To fit our goal of having the most people boot up their VR headset and see an Owlchemy logo, it was clear for us that going multiplatform was a better way to do it. It was just at a cost of asking, “Well, can we do that without going out of business?” In those earliest days, in 2014 and 2015, we didn’t even know the price points of the headsets. We didn’t know when they’d be launching. Any financial advisor would have told us, “What you’re doing is dumb.” But we took that bet and said, “No, this is going to be a successful market. We want to be there.”

GB: Did you cook up any advice for people who would ask you how to survive the next year or two in VR?

Schwartz: In a talk I gave back in 2012, which was called “Not Going Out of Business as an Indie,” we talked about how our oldest strategy from the beginning of Owlchemy was that—we used to spend six months of the year on contract work to bootstrap the company. We tried to make it so those six months would give us 12 months of runway. Then we’d have a very defined, “Okay, we have six months to do original IP,” trying to ship smaller, shorter games in that period. Then we’d try to do that cycle again, with the hopes that we could eventually make enough money on our own work to not have to do those contracts.

That’s how it worked out. The first two years we did that cycle twice. Then after that we did all original stuff, because we’d gotten over the threshold. We were bringing in some drip income across six, seven, eight platforms. We put games out everywhere and we hoped. That worked out in the sense that if we didn’t have a multiplatform strategy and do some contract work, wheeling and dealing for up-front money from various platforms—all of that contributed to having four people able to get by.

If you bring together five people in a room today and say, “Let’s start a VR company tomorrow,” and then you think about normal industry salaries and the time it takes to build your first game—there’s no way, unless you’re independently wealthy. You’d have to raise money via an angel round, or have an amazing pedigree to be able to go to some VCs and say, “Hey, this is going to be a big win because we’re the team that built X.” A lot of people on the younger side, where VR is maybe the first big platform they want to build for–starting a company like we did, bootstrapping was a great way to get by in the early days.

The other thing is, a lot of founders out of college make a lot of mistakes with their companies. They don’t know what works and what doesn’t in the ecosystem. I recommend that people work at a studio for a year or two to get the concepts of what does and doesn’t work in various production environments. I feel like I learned a ton in the first two years, working in triple-A. I then promptly quit and started my own company, but that experience was invaluable. I feel like I would have failed if I’d just gone from school to startup. There are so many things I learned how to do and how not to do. The triple-A company wasn’t very successful. I learned a lot about what not to do. [laughs] But that’s a big tip I tell people, to get that experience.

GB: One of the big arguments Jason Rubin was making in his talk here was that the platform companies will make a lot of developers succeed because they’re seeding the ecosystem. Facebook’s going to put $250 million more in, Intel’s putting money in—if there isn’t enough VC money and other revenue to support people, the platform money will help everyone.

Schwartz: If you look from a high level at our 2014-2017 revenues, it started out with a lot of money that was not from direct consumer sales, someone buying a $30 copy of Job Simulator and that transaction going through a payment processor to us. It was either up-front guarantees, advances, or money from our previous games on Steam that were not VR. And then we raised the $5 million from Qualcomm Ventures and HTC. There was money made to make VR games, and then there was actual consumer revenue. We’ve seen that slice grow as we had hoped. We could stay successful, but never sell a unit. That wouldn’t be a success in my mind.

GB: Like the developers in Canada that get government money.

Schwartz: Exactly. When they set up those programs, their goal was, economically, if you kickstart them on year one they won’t need an infusion by year two. They’re all on consumer sales. We’re trying to get to a point where we got a nice push from all the previous things we did, all the partnerships we had, and now we’re hoping the lion’s share comes from sales to consumers. We’re getting to a point where there are enough units out there to pull in a good amount.

GB: It looks like you have a viable path to follow now.

Schwartz: Absolutely. Like I mentioned, it’s definitely viable. Your expectations need to be in line with the year we’re at. Can we put $100 million into a game now? Very low chance of that. But if you’re setting your development time and budgets in accordance with where growth will be at the time of launch—I think this is exceeding our expectations. When you look at tech over the past 30 years, the first VCR—like, what was the sales curve for something that was ultimately so successful? The first units were thousands of dollars. In the first year they sold a couple thousand of them.

Comparing VR numbers with iPhone numbers, they’re very close as far as takeup. That’s a crazy comparison, because there were six or seven years of pre-iPhone devices to seed the market for that type of device. The iPhone was a big polished effort in that field. We haven’t had even the unpolished efforts in VR yet. This is the first thing, if you don’t count academic experiments in the ‘90s. You’d expect it to match something brand new and revolutionary like the VCR, and we’re blowing those away.

It’s not an incremental next step. It’s the start of a new thing. That’s where expectations get mismatched. I think it’s going fantastically when you think about where we are in a 40-year curve. This is still just year one-and-a-half. All my friends who are not in tech have still heard of VR. Their kids want it for their birthdays. It’s definitely exceeded where I thought we would be in year one.

Source: How Owlchemy Labs designed VR’s funny hit Job Simulator