Mountaintop Studios
Spectre Divide vanished.
After five years of development, 65 million dollars in investment, and an early wave of strong support from pro players and the press. The tactical shooter meant to disrupt the Counter-Strike space collapsed in on itself, taking its promising studio with it.
How a game that attracted roughly 400,000 players in its first week, was fronted by a famous streamer, and was once called a “breath of fresh air for tactical shooters” so quickly shuttered still haunts the studio founders, Nate Mitchell and Matt Hansen.
What contributed to the game’s failure, though, has become increasingly clear to Hansen as he settles into the reality of the more-than-100-person studio’s shutdown in March.
“In a market filled with outstanding games, especially from established franchises that have consistently delivered new player value each month, launching a live service title with a new IP is extremely challenging,” Hansen said. “Success requires getting every detail right, not just to draw in new players, but to keep them engaged and coming back daily.”
Oculus Dreams
Matt Hansen went to school for computer art at SCAD – the Savannah College of Art and Design – at a time when there weren’t programs for game design. Graduating in 2002, he flew to Los Angeles and began his career in QA. “That was kind of the entryway into the game industry,” he said.
That work granted him a more holistic view of how the industry worked. “I had a background in graphics, art, engineering, and character modeling,” he said. “It was a pretty wide array of different skills, and that lent itself to being a development producer.”
After spending time as an assistant and associate producer at EA, Hansen moved over to Telltale Games as a producer.
“I had the pleasure of working on Tales of Monkey Island,” he said. “I worked on a few other games over there, too. It was a pretty special time. The team was smaller back then, like maybe 60 total.”
Meta
After years spent working on product engineering teams at Scaleform, Autodesk, and Gaikai, Nate Mitchell helped Palmer Luckey transition the Rift from an experimental bit of virtual reality tech to something commercially viable. He went on to head up Rift at Oculus and, in his last year at Facebook, was head of product for VR.
Those conversations about gaming in Mitchell’s office would eventually turn to starting a game studio together, Hansen said. Initially, it was more of a joke, but as time passed, the joke began to take on some weight. Hansen said that after the Quest 2 shipped, he felt the time was right to move away from VR and return to game development.
Mitchell added that he took some time off after leaving Oculus to think about what he wanted to work on next.
“I decided that I wanted to optimize for happiness,” he said. “I had originally gotten into engineering to work on games.”
Looking at the state of the industry in 2020, Mitchell said he felt there was a huge opportunity to take the stuff he’d learned across the companies he worked for and create a new sort of game studio. His process was also tied to ikigai, the Japanese concept of defining a person’s sense of purpose in life.
“I was very inspired by the writings of (Nintendo’s) Shigeru Miyamoto and (Marvel’s) Stan Lee, who say that bringing joy to people is an essential part of human existence, “ he said. “And games have a pretty magical power to bring people together.”
Hansen added that a key element of the new company was having the opportunity to build a “modern game development studio that tried to get away from the toxic elements that had perpetuated over the years with things like crunch culture.”
“I wanted to focus on creating a strong culture where people could come to work and not feel like they need to go kill themselves and sacrifice every hour of their lives,” Hansen said. “They can have some balance there.”
Of course, there was also the game idea.
Mountaintop Studios
After pulling together roughly $5.5 million in seed money from their savings and a Friends and Family round, the two founded Mountaintop Studios in April 2020.
“We wanted to create games about people conquering things together by overcoming some obstacle,” Hansen said about the studio’s name. “So it’s like climbing a mountain together. That’s kind of where it came from.”
The duo spent a couple of months discussing the company’s values, recruitment strategies, and the kind of culture they wanted to foster. What they came away with was a company that relied less on hierarchy and more on creative collaboration.
“We kind of framed it as ‘nothing is someone else’s problem,’” Hansen said. “Our mission statement was ‘bringing players together through unforgettable challenge,’ and we formed the culture of the studio around that concept. We strive to make Mountaintop Studios not just one of the best places to build games but one of the best places to work in the world.”
Job titles mainly were about clarity, rather than power, and the developers they were looking for had to understand and be able to work within this general philosophy, which was interwoven into everything that Mountaintop was setting out to achieve.
“Nate and I would get down into the weeds and triage bugs or whatever it would take,” Hansen said. “No one was above any task. Instead of having this kind of Ivory Tower or top-down approach, we wanted to be much more of a ‘let’s bring people in who are self-organized, self-managed, and enjoy a culture of trust and respect. Everyone felt accountable to each other.”
With that in mind, the two began to assemble a deep roster of talented developers. The first group, which Mitchell says were essentially co-founders as well, consisted of design director Mark Terrano, art director Rich Lyons, and lead game designer Brent McLeod.
Mitchell and Hansen also made a last-minute decision to make the studio remote-only.
“COVID was just really hitting, and the world was locking down,” Hansen said.
Mountaintop Studios
The combination of studio philosophy and fully remote work led to a killer’s row of developers.
“We had an insanely veteran team who had been in AAA,” he said. “They are like the leads of some of the biggest shooters out there. But they’re just kind of sick of being a cog. And, in those days, they were talking about moving back to their hometowns to work.”
Ultimately, the studio was comprised of individuals from 19 countries, and founders Mitchell and Hansen made a conscious effort to build a sense of camaraderie among the far-flung devs.
“We would hang out a lot together, use Discord for everything, and Slack for our main communication channels,” Hansen said. “We had people who would just be working together in a Discord room with their mic and camera off.”
That sense of being present in a room helped to allow for more water-cooler-like moments, he said. As the team dove into development, they also spent an inordinate amount of time playing their own game.
“Over time, I think some really strong friendship bonds were built because of this,” Hansen recalled. “Everyone on this team is still close. I feel like they’re my best friends.”
Counter-Strike: Global Offensive
Nate Mitchell is a long-time, passionate fan of Counter-Strike. He grew up playing the game with friends and thought deeply about the intricacies and design of tactical shooters.
“In my youth, I did a lot of 3v3 Counter-Strike scrims on IRC,” he said.
Hansen mentioned that the two discussed how it was the most popular game on Steam but hadn’t evolved.
Even with the 2012 release of CS:GO, Hansen said the two felt the game was pretty much the same. “The bones of the original – for better or worse – were still there.” Mitchell saw an opportunity in that, a hole in the tactical shooter space that needed to be filled.
He was also motivated by his interest in 3v3 games in general. He loved playing Halo Doubles, Gunfight in Call of Duty, and the like.
“The 2v2 to 3v3 experiences were insanely special as far as social dynamics,” he said. “It puts the onus on each team member to perform.
“So we said, ‘OK, what if we designed and tuned an entire game around small team, competitive play?’”
Armed with this idea, the two decided to chase their dreams of a game studio free from burnout and toxicity, focused, at least initially, on creating a new take on the tactical shooter. It was April 2020, just two months before Valorant, Riot Games’ take on the space hit.
“We wanted to make our version,” Hansen shared. “We didn’t want it to feel like just a copy and paste of Counter-Strike, but we were heavily inspired by that game. We knew there was an audience for that sort of game, and we thought that they would be interested in seeing a true evolution of the tactical shooter.”
Once the studio got off the ground, those initial dozen or so devs started working on the roots of the game they had in mind. The team quickly started building out the pieces of a tactical shooter in a heavily modified version of Unreal Engine 4.27 and then iterating on some of the basic elements of the genre.
Valve
Very early on, the studio divided development into two tracks: one focused on gameplay and the other on visual development.
“Because as soon as you start merging those, once they’re coupled, it’s harder to iterate,” Hansen said. “So we deliberately kept them separate with the idea of merging them in the future once we start building the game for real.”
A big focus, initially, was ensuring the gun feel of the game was fantastic because the team felt that if they didn’t have a strong foundation in gunplay, nothing else would matter.
The team also conducted extensive internal prototyping, drawing on the experiences Hansen gained while at Double Fine Productions during Amnesia Fortnight. The idea, back in 2007, was that Schafer had the studio stop work on all current projects and spend two weeks working on a variety of game prototypes that would be reviewed by the studio. The four best were made into playable prototypes.
At Mountaintop, they kicked off game jams centered on cat-and-mouse gameplay.
“We wanted people to think about what some new things were that could reinforce that part of tactical shooters, these slow, thoughtful, team-based encounters,” Hansen said.
The game jams and long days of thinking of new approaches to a shooter built around small teams yielded a few interesting ideas.
Two ideas stood out: one was a concept centered on drafting equipment or weapons before each round, an approach somewhat similar to what was later used by Frag Punk but inspired by the success of roguelikes and games like Hearthstone Arena.
The other idea was what would become Spectre Divide’s key differentiator: duality, a concept from the studio’s VP of product, Lee Horn. In Spectre Divide, players can swap between two bodies as they attempt to outthink, outmaneuver, and outshoot their enemies.
The decision to stick with duality came down, in part, to how the skill solved one of the early problems the developers faced when working on their concept: smaller teams.
“With duality,” Mitchell said, “the game plays more like a 6v6 game. It was a pretty brilliant solve.”
The initial version of it wasn’t quite fully baked, but the entire team could tell there was something magical about the concept. The team spent more time working to develop it further.
For the concept to work, the team felt it would have to be integrated throughout the game, including things like level design. While some on the team loved the idea, others thought it was too gimmicky or that it would be too difficult for players to master, given their already considerable challenges in a tactical shooter.
“Ultimately, everyone agreed that if we were going to stand out against the competition, we needed something, we needed our own hook, something that felt unique,” Hansen said.
As the team was closing in on this concept for the game, they also decided to overhaul many of the game’s core systems. So when the team existed pre-production, they ripped out the networking code and built their networking stack, built out custom rendering techniques, and integrated a scripting language into Unreal.
It was the end of 2021, and the team was ready to start full production, but clear vision didn’t mean there weren’t other challenges.
Money
While the studio launched and pre-production started in 2020, the founders knew they would need more investment to bring this free-to-play service game to life.
The duo started by approaching venture capitalists for financing. VC was, at the time, suddenly showing a significant interest in studio creation and game development. Seeking money from investors allowed the two to escape the traditional publisher-developer model, receiving all the money up front.
“You get to kind of choose your path forward from there,” Hansen said. Throughout the studio’s short life, the two raised $65 million from a mix of that initial Friends and Family round and several other investment rounds.
Partially because of the hunger for video game investment by VC funds (more than $13 billion was invested in private gaming companies in 2021 alone), they were able to pitch their concepts without a polished demo.
“The first round was largely raised on the idea of ‘Here’s the concept that we’re trying to execute and here’s the team that we’ve already assembled, which comes from a background of already building amazing games,’” Hansen said.
Mountaintop Studios
Those early investors didn’t push back on the studio’s ability to deliver a hit; it was more about whether they were pursuing the right space in gaming.
“They were interested in building something that in three to five years has the potential for some kind of large exit,” Hansen said. “Some liquidity event. It’s always a pretty big swing because you’re now saying we’re going to go toe-to-toe with Valve and Riot.”
It turned out that the investors’ interest in the game and the space it explored was heightened, not harmed, by the release of Valorant. That was primarily because it ended up growing the genre instead of taking a significant audience away from CS:GO. So for Mountaintop’s game to succeed, it didn’t need to dethrone anyone; it just needed to find its own space.
Mountaintop ended up raising $30 million in Series A funding in the summer of 2021, and then another $30 million in the fall of 2023, and brought on some angel investor influencers, including Michael “Shroud” Grzesiek.
Race to Launch
Despite the funding, the game nearly didn’t make it to launch.
For one thing, the studio struggled to capture the game’s look. Breaking apart the gameplay mechanics and the look of the game early on to help speed up the iterative process of developing a new type of tactical shooter seemed to work at first, but then it led to some issues.
“The look of the game and how we built the assets was just not converging in a way that we wanted it to,” Hansen said. “We weren’t hitting the look. We had a bunch of people trying. It took us 2 ½, almost three years, to get that right.”
The team also struggled with fine-tuning 3v3 gameplay for a genre that typically relies on larger player teams. To make matters worse, while duality initially seemed intriguing, the team began to notice that playtesters were not fully understanding the concept.
“There is already so much to think about when playing a tactical shooter, so adding the ability to control two bodies was a big cognitive load for newer players to the genre,” Hansen shared. “We had a lot of dead ends with gameplay. We participated in numerous internal tournaments, and that’s when it feels different and things start falling apart. Players who didn’t utilize the duality mechanic effectively were struggling to complete.”
However, the studio continued to refine the game, hosting playtests with new players and smoothing out the rough edges until the game began to take shape. Eventually, players were telling the team that it felt good to shoot the gun, to run around the map, and, most importantly, they were getting duality and how it changed the gameplay.
By late 2023, the studio was on the path to launching the game, but they also knew the path couldn’t be very long.
Mountaintop Studios
“The game still wasn’t hitting the visual mark, but it was starting to come together, it felt good, and we were getting a lot of positive feedback,” Hansen said. “We had a lot of professional players coming in at that point as well.”
Among them was Michael “Shroud” Grzesiek, a former CS:GO player. Mitchell said they brought Shroud in specifically to lock in his involvement as the lead gameplay advisor.
“He would come play the game every two weeks or so and gave amazing feedback,” Mitchell said. “He could feel what we were going for, build to build, and had great suggestions, especially as a pro player. He had just great ideas all around.”
The studio was making significant progress and knew they were within striking distance of launch, but decided to defer the launch of the console version of the game to focus on the PC version and get the game shipped.
“There’s a financial reality of having to launch the game at some point in order to get enough revenue to keep the company going. And, we knew we needed to ship before the beginning of the holiday marketing campaigns, for bigger titles made it hard to gain attention.”
The game launched on September 3, 2024.
In the lead-up to the release, the studio held an open beta that generated considerable excitement and positive feedback from players on Steam. The team spent its time collecting feedback. They knew there were some things to work on, but felt they were ready to launch. “When we launched the game, it had quite a few stumbles,” Hansen said.
Technical issues in the first few hours of the launch, caused by server scalability issues, meant people struggled to get into the game. Hansen believes that the initial group of people never returned once things stabilized.
“That fucking killed us,” Hansen recalled. “It killed our early momentum, which is critical for any new game.”
Additionally, players were dissatisfied with the cost of certain cosmetics in the free-to-play games. While there were items available for as little as $5, one bundle was priced at $90, kicking off a wave of player unrest on Steam.
“Because of that, everybody was focused more on the technical issues and pricing rather than whether the game was fun, so we had mixed reviews immediately,” Hansen said.
While the server issues were resolved in about four hours, and the pricing was lowered to appease angry players, the unhappiness surrounding the game seemed to persist.
“By our second or third update, where we felt we had addressed everything people had cared about and we had a lot of features added, except for Battle Pass,” Hansen said, “and it didn’t move the needle, I started thinking, ‘I don’t know if the PC version is going to be viable for us.”
Trying to Stay Afloat
The team then put all their energy into working on the console version of the game and finalizing the Battle Pass. Despite what would be another six months or so of hard work, the team knew things weren’t looking good. In December, speaking with The Verge, Mitchell called the game’s console launch and new season a “Hail Mary play.”
Hansen said the team had tried everything, including increasing communication with players, working on the PC build and Battle Pass, and completing the console build. But nothing seemed to help. Eventually, the duo made the difficult decision to lay off 20 percent of the company’s staff.
Despite the increasing certainty of Spectre Divide and the studio getting shut down, a majority of the developers were “all in” on trying to make it work, or going down with the ship.
“Some players were saying it was a dead game within one day of release,” Hansen said. “But we always felt like we were one update away from turning things around.”
Mountaintop Studios
Six months after the game launched on PC, and weeks after, it arrived on console, Mitchell took to Steam to announce the game’s demise and the studio’s closure. In a letter to “Spectre Fans” on March 12, Mitchell wrote that while the studio was incredibly grateful for the positivity and support shown by fans, the studio would have to shut the game down within the next 30 days.
“Unfortunately, the Season 1 launch hasn’t achieved the level of success we needed to sustain the game and keep Mountaintop afloat,” he wrote. “As time has gone on, we haven’t seen enough active players and incoming revenue to cover the day-to-day costs of Spectre and the studio.”
Spectre Divide shut down days after the note went out. The studio soon followed.
Lessons Learned
Looking back with fresher eyes this summer, there are some clear lessons that Hansen and Mitchell agree were key takeaways from the heartbreaking experience.
There’s always a tension between a studio wanting to launch with an air of confidence, assuring players that the game is both worthy and ready to play, but that can, Hansen said, create a level of expectation that your game will be as fully featured as the other games in the space, like Valorant which had launched 5 years earlier.
In the case of Spectre Divide, the game launched with a strong core set of features, but was missing some of the core features players have grown to expect from games like Valorant. It was something the developers didn’t think would be a problem because they knew those needed bells and whistles were well on their way. But fans were expecting a polished, finished title.
Mountaintop Studios
Unfortunately, it became a problem. While Valorant launched with a nearly identical set of features, from the perspective of players, Spectre Divide wasn’t competing against what Valorant shipped with; it was competing against what Valorant had grown towards over the course of five years.
On top of that, Shroud’s involvement in the game, while helping with development, sowed some confusion among potential players.
“The expectations from players, given Shroud’s involvement, didn’t match our capabilities as an indie dev,” Mitchell said. “That was our fault: we miscommunicated what players should expect at launch.”
Other players also seemed to think that any money the game made was going directly to Shroud, rather than supporting the development team that worked on the title.
Ultimately, in a world of early access and service games, it’s up to developers and publishers to set reasonable expectations.
“This was also our first launch; we were a new studio and self-published,” Hansen said. “There’s always going to be a challenge of threading that needle of we believe this is a true 1.0 for our game, and this is the start of our game, and we have tons of awesome things to come.
If he were to do it over again, Hansen said, perhaps the studio would have launched the game much earlier, so it would have been even less polished, and it would have been clear what players were getting and where the title was in development. The studio would have been more transparent, earlier about what was in the game at launch, and when other things were arriving.
Another hard-learned lesson from the release was the need for more media coverage. With a small window between the game’s beta and launch, most gaming sites decided not to cover the launch. It was, Hansen believes, too close to their beta coverage.
When it comes to that much-needed exposure from journalists, sometimes you only get one chance.
The coverage of the beta was glowing, Hansen points out. And he’s right: sites were calling it a breath of fresh air, a fascinating Valorant-like shooter, a testament to how creative a shooter can be. In comparison, coverage of the game’s actual release was relatively muted.
“What we showed during the closed beta and what we showed for the launch wasn’t different enough to have a new article written about it,” he said. “You need to have some space between those two times and something materially different from what they have already played, so there is something new to write about.
“Our closed beta was our big media beat, and we didn’t know that was going to be the case. We thought when we launched, we would get all of these new articles.”
Finally, the two still struggle with what he thinks was one of the most significant early issues: the timing of the game’s release.
In 2024, the studio faced a difficult decision: either ship the game a bit earlier than they would have liked or hold it until 2025. They knew that releasing Spectre Divide into the holiday crush of the video game release calendar was a non-starter. It had to be before or after.
Before meant spending post-release time finishing up some of the features they knew players would want. Releasing after would mean figuring out a way to stay afloat for another four or five months with no money coming in.
“It’s really tough,” Hansen said. “We’re supporting a studio of 100 people at this point because you have to be ready for success, so we were structured for success.
“But we wouldn’t have been able to support that size team until 2025.”
Mitchell agreed: “We didn’t have a good choice.”
But there’s one other thing he’s thought about quite a bit since the game’s early demise.
“Our game needed to stand on its own, you know?” he explained. “It had to be differentiated enough. It had to be fun enough that players would give it time to grow naturally. And it didn’t have that for some reason.
“In a parallel universe where we didn’t have the server issues, where the community wasn’t frustrated with our early pricing that rankled people, where maybe we had a bit more money for marketing, we could have gotten the critical mass going.”
Looking introspectively, Mitchell harshly judges what came of the game and studio, saying he thinks they just weren’t able to get the game to where it was good enough, different enough, or fun enough.
“Our retention was good, but top of funnel, the number of players coming in each day just wasn’t as much as it should have been,” he said. “It’s my job to make sure we were building the right thing, and we were just off the mark a little bit.”
