The Hopeful Beginning and Abrupt Shuttering of Funomena

How the indie developer behind Wattam fell apart after years of apparent mismanagement.

In a 2020 Game Developers Conference Q&A, Funomena CEO Robin Hunicke advised, “We need to be okay with being less productive and more caring to one another. If we don’t do that, we’ll never get through anything.” She signed off a few minutes later on the optimistic note that people are the heart of what makes game development work, remote or not.

Hunicke, who had long been a fixture of the annual gaming industry event and even hosted its awards show in 2018, was replying to a line of questions focusing on how to manage a studio in the brave new world of social distancing, pandemics, and protests by empowering employees and caring about the human element. Less than two years later at the first in-person GDC since 2019, Hunicke was notably missing from her scheduled appearances and the show floor where she once could consistently be found mingling. Her absence following a bombshell report from YouTube channel People Make Games, which alleged from numerous current and former employees that Hunicke had fostered a hostile work environment at Funomena, spoke volumes.

On the first day of the conference, Hunicke tweeted a non-specific apology that alluded to the accusations and promised to do better. Two days later, she and co-founder Martin Middleton announced to Funomena staff that they would likely be closing by the end of the following week. Or that they might be closing but they’re trying not to. Or that they’re still open but no one there has a job anymore. It’s not entirely clear.

“Even now, we have no idea if Funomena is shutting down or not or if they got any funding,” says one employee who wished to remain anonymous but was employed at the studio through its end. “There’s been no clear support from Robin or Martin [since the announcement].”

Funomena's Offices
Creator: Nicole Sanborn Digiorgio | Credit: Nicole Sanborn Digiorgio | Copyright: Nicole Sanborn Digiorgio

Fanbyte spoke with numerous now-former employees, who once jovially referred to themselves as “Funomenauts” and have helped us lay out a timeline for Funomena’s history and end. The studio’s downfall felt inevitable to some and was a shock to others, but it ultimately affected many talented developers in the same way. Many spoke to us under the condition of anonymity, fearing reprisal from the studio’s still-popular and well-liked management. Those who used their names believe the story of Funomena needs to be told as accurately and credibly as possible in order to prevent the same thing happening again elsewhere.

Growth

Funomena was founded by Robin Hunicke and Martin Middleton in 2013. Combined, the two boasted an extensive resume. Hunicke, who had worked on titles like Journey and Boom Blox, was especially seen as an institution of San Francisco’s indie game development scene. There wasn’t a public game jam or design workshop that didn’t have her shaking hands and evangelizing the joy of creativity somewhere nearby. She was also known to be active on Twitter, posting takes on current controversies and sharing videos of the latest panels she was on.

While it did not start out with this language, Hunicke and Middleton began openly calling Funomena a Deliberately Developmental Organization in response to financial issues within the company. This term describes a school of thought in organizational psychology that envisions a business with a singular goal: growth. It doesn’t just mean growth for the organization, Hunicke would explain to the team, but also individual growth for all employees. The idea was that no one at Funomena would stay stagnant; the studio and its people would always work together toward their next goal.

This, Funomena staff says, became the center of Hunicke’s rationale for every decision. Employees said they were told people should stay late because it’s how the studio and its employees will grow. Working on something they don’t feel passionate about helps facilitate personal and professional growth. Everything they do should in some way be looking forward to the next big thing they could be doing.

This plan started admirably. Funomena had several titles in concept and planning stages from the beginning and got a lot of attention out of the gate by hiring Keita Takahashi, creator of Bandai Namco’s Katamari Damacy series, to develop a new game at the studio. That title eventually formed into Wattam, which scored a major coup by securing a publishing and exclusivity deal with Sony. The game was first shown in December 2014 as part of the PlayStation Experience showcase, but was eventually dropped by Sony and picked up later by Annapurna Interactive.

Over the course of development, Takahashi and Hunicke repeatedly clashed over design and production agendas. According to developers on staff at the time, it eventually reached the point where they physically barricaded themselves from each other, forcing employees to shepherd their messages to one another across different sides of the office. Hunicke, who functioned as both a hands-on creative producer and CEO, struggled to manage and encourage the team through the long development. When Sony pulled out of Wattam due to shifting priorities regarding indie publishing, Funomena announced layoffs.

In the ensuing week, sources say Hunicke disappeared from the office and was otherwise unreachable by staff.

Wattam launched five years after the PSX announcement to tepid reviews. Before its eventual release, Funomena put out Luna, a VR-optional puzzle game with less name cache than Wattam but more of Funomena’s personal feel. Despite a staggered series of release dates — for PC, PlayStation 4, and eventually Meta Quest — the game failed to garner much traction. These setbacks meant funding for the studio was getting tight, resulting in a common refrain from Hunicke that investors were just around the corner and deals were waiting to be signed.

The studio’s next project was to be a personal one for Hunicke, as the idea had germinated before Funomena’s founding and been tinkered with throughout the intervening years. As Wattam saw release and Luna wrapped up, Hunicke wanted to push forward on a MMO that she described as progressive, “anticolonialist, and super gay,” according to sources. This was to be Funomena’s big gambit — a game Hunicke and Middleton expected to be a defining title for the studio that also expressed the spirit of what they had been working toward so far. It is, ironically, also where a number of employees started to become frustrated with the pair, as their forward-facing ideals about the game fell apart when actually dealing with the people who would make it. Employees who came to Funomena to work under Hunicke after seeing her many talks and ambassadorship programs told Fanbyte they felt tricked that the actual person seemed to not care much about their wellbeing.

To get funding for this project, the studio needed to work on other work-for-hire projects to a larger extent than they previously had. This led Hunicke to make personal deals with and within Roblox, the massively popular children’s game that has become a profitable space for a number of smaller game developers. Rather than working on their own titles, Funomena would do hyper-specific mercenary work in the virtual universe as their main focus until more independent funding could be secured. Hunicke assured staff this was temporary and just a means to the end of creating their online game. When staff objected, largely due to an earlier People Makes Games video exposing how Roblox can be used to exploit children, Hunicke brushed off their complaints.

“We were frequently told about the ‘realities of living under capitalism’ and not to worry about ethics or influence of any given funding source,” says Jake Weidner, a former producer at Funomena right up until the studio’s closure. “Because all money is ‘ethically compromised.’”

At one point during Wattam’s development, Hunicke stepped back from day-to-day involvement with game development and instead focused on running the company. It was believed she would function better without the pressures of active game development and with some separation from the staff. The tone, at least at the time, was optimistic.

Destruction

The Roblox deal bought Funomena extra time to hopefully create a prototype for Hunicke’s pet project, but it was not as simple as anyone had hoped. Hunicke, sources say, made the deal herself without involving much of the studio or talking to the actual development team about the project’s feasibility. Had she done so, the developmental scope would not have come as a surprise to the team, who suddenly found themselves faced with a workload ill-fitted for their skillset or resources.

What followed was a period of historic turnover for the studio. The team went into overdrive to hire people familiar with what their brand partners wanted in Roblox, which often involved fairly specific knowledge of the game’s development environment. Funomena took on multiple contract workers and internships in the meantime and had those interns do associate-level work well above their pay grade or knowledge. When it came time for the interns to either move on or get full-time jobs at the studio, some sources alleged that their internship contracts were merely re-upped to keep consistently cheap labor in place.

The hiring sprint was constant as the new work was rapidly burning out existing employees. Weidner describes the level of crunch at the studio as “severe and heavily downplayed.” Producers audited projects with professional risk assessments and consistently came back with findings that the work was untenable with their current resources. These reports went to management and were eventually relayed to Hunicke and Middleton, who would reply that there was simply no other alternative: either the work gets done or the company folds.

The work getting done at all costs meant late nights were an expected part of the job. Eventually, reports of deteriorating health and burnout made their way up to Funomena’s leadership who claimed they had no idea, but no changes to the scope or schedule were made to prevent it. This cycle of staff getting told they were being heard yet seeing no changes to prove it repeated itself several times, multiple Funomena employees say.

While Hunicke and Middleton chimed in that they were aghast by people overworking, Hunicke also told — or sometimes yelled at — the staff not to call it “crunch.” She emphasized no one was being forced to stay late, only asked as part of the team goals. Those who didn’t work well past their scheduled hours would be ostracized or belittled, often with information Hunicke gained from private conversations with employees.

One source relayed a story where they left a virtual meeting saying they would not be able to work after hours that night, prompting Hunicke to loudly joke to the rest of the attendees that the employee “probably can’t work as hard because their marriage is in trouble and they need to take care of that.” The source said they closed the meeting window on a freeze frame of Hunicke laughing at her own joke.

Spots for the MMO prototype were, according to multiple sources, coveted by many and given away to Hunicke’s inner-circle only. During evaluation meetings, managers would suggest that team members could earn their way out of Roblox content and onto the MMO. Multiple sources stated that the only people who did were Hunicke’s personal friends at Funomena, however.

Over the months working on Roblox content, people would filter in and out without the teams involved really being aware of the people leaving or being hired. In an effort to get out of this cycle, Hunicke began talking up the idea of Blockchain, Web3, and NFT concepts as a possible avenue for Funomena in the near and long-term future.

Developers say they became increasingly worried that Hunicke would pivot toward that direction, though, especially as she began giving talks at Web3 conferences and discussing it more around the virtual office. Despite protests about its detrimental environmental effects and exploitative nature, the controversial technology path had become en vogue with many gaming companies in the last year. A group of developers, including Weidner, would express their concerns to management, with many stating an intent to quit the studio if it went in that direction.

“Robin spoke highly of enforced arbitrary digital scarcity as a futurist concept,” Weidner says. “She framed it as something needed to make sure digital creators were rewarded for their work and that truly unique experiences could be provided for those willing to pay for them.”

Creator: Nicole Sanborn Digiorgio | Credit: Nicole Sanborn Digiorgio | Copyright: Nicole Sanborn Digiorgio

Hunicke reportedly dismissed staff concerns about NFTs and Roblox as “sensationalist troll enabling” and kept putting off studio-wide discussions about it for several months. When concerned employees finally got a meeting on the books with her and the rest of the company, a plan of action could not be reached before the meeting ended. Hunicke told staff she would help improve the development culture of Roblox and that Roblox leadership was listening. It was the last time she commented on the subject.

Moreover, the subject of money was becoming a sore spot for many of the staff, who were frequently asking for studio-wide pay transparency. Hunicke reportedly dismissed these claims, adding that several Funomenauts were against the idea because they believed it would cause jealousy and disharmony. Sources say there was no unanimity about pay transparency, which made it “convenient” for Hunicke to not try finding a solution at all. She would tell complaining staff to be patient — that ideally they would all become rich at Funomena one day, and that they were moving toward that goal.

Throughout all this, Hunicke was splitting more of her time between Funomena in San Francisco and 75 miles south, where she teaches as an Art and Design professor at University of California, Santa Cruz. When she would delay meetings, she told Funomena staff that she was too busy at UCSC.

“When we called Santa Cruz, they would tell us she said she was busy with Funomena,” a managerial source that preferred to remain anonymous tells Fanbyte. “We had no idea where she was.”

Fallout

The week People Make Games’ investigative report would hit YouTube, Hunicke got on a call with staff a few days before their usual scheduled meeting. “We got two gems and a turd today,” she began, according to sources present.

The gems were that funding was, once again, right around the corner. Hunicke said they were closer than ever to receiving the venture capital investments necessary to get Funomena back on its original development track. The turd, of course, was that journalist Chris Bratt of People Make Games had contacted Hunicke and Middleton about the accusations in the video, looking for comment. Hunicke warned her staff that the information in the video was exaggerated, old, and not reflective of the current state of the studio. She then told staff she didn’t think it was worth responding, and ultimately chose not to.

This dismissal of the accusations upset many Funomenauts, some of whom were involved with bringing these charges to People Make Games. A group of former and then-current employees sent a letter to Bratt detailing specific incidents, many of which were recent, accusing Hunicke of fostering a poor work environment. One source likened Hunicke’s blasé reaction to pouring gas on fire, suggesting that the more powerful condemnations of her behavior would have likely gone unmentioned had Hunicke merely been more contrite.

The letter and subsequent video that mentioned it triggered other accusations, including from former staff at Funomena and UCSC, to come forward with further recriminations against Hunicke.

“I can now say publicly, without equivocation, that this same abuse affected me and many others at UCSC, for years,” tweeted Nathan Altice, a Computational Media professor at the same university as Hunicke. “She was emotionally manipulative, spread rumors, tried to silence those that spoke against her, and labeled me as a ‘creep’ and a ‘bully’ and a ‘misogynist.’”

Two other sources at UCSC reached out to Fanbyte after being made aware of this article, stating they had issued formal complaints about Hunicke long before the People Make Games video came out. We contacted UCSC to confirm that these formal complaints were filed, the University replied with a statement saying the allegations made in the video and shared by staff “are serious and troubling,” but would not confirm or deny that there are formal complaints that pre-date the video. They added that they are currently conducting an internal review of said allegations.

Various reports came from people both high-profile and relatively unknown across social media and beyond, charging that Hunicke would talk behind their backs and somehow find herself in a sole position of power above them. One source said Hunicke’s most useful talent was “[having a reputation] that was good enough to let her decide what your reputation would be.”

Concerns were brought to Middleton, who sources describe as professionally unengaged. Middleton felt “terminally bad” about everything brought to his desk, expressing sympathy but refusing to commit to any plan of action. He told staff he would talk to Hunicke, but no one could confirm if he actually did or what result those conversations had. Eventually, Funomena staff stopped looking to Middleton to solve problems, as one source described him akin to “a complaint box no one ever opens.”

So where did you go if you had complaints about one founder but the other founder didn’t want to help?

“In all my years at Funomena, despite asking over and over, there was no department to talk about management,” an anonymous longtime employee says. “They just kept saying it was too small or we’d talk about it later.”

At a company the size of Funomena, which generally hovered around 20 employees with a number of fluctuating contract workers, having a Human Resources department is rare, and even rarer in the video game industry. But the cyclical problems people at the studio were having with management and the lack of accountability kept posing issues. Eventually, it was clear some kind of solution was necessary.

The closest thing to Human Resources at Funomena was Jason Haber, General Manager and Head of Culture. The role of HR manager, unofficial and unsaid though it may have been, was thrust upon him in absence of any other avenues for staff relief. He found himself as the de facto liaison between the staff and the founders, and frequently had to mediate discussions and problems between the two. Haber had told Hunicke and Martin that he was not trained for this, but kept getting stuck mediating between multiple parties as he was shoehorned into new responsibilities.

Funomena employees largely agreed that Haber’s heart was in the right place, but that these were not his obligations to handle. The studio needed someone trained and experienced in these duties to permanently enact a better work environment. That person was never hired.

As the 2022 Game Developers Conference approached and work on Roblox continued, Hunicke was increasingly less present. The People Make Games video had been published, and the absence of an apology or even remorseful acknowledgment from Hunicke grew louder among Funomena’s employees. The only communication from her came in the form of a tweet from her personal Twitter account on March 21, where she ambiguously apologized and affirmed that she would do better.

“Leadership is a journey, and often a difficult one,” Hunicke tweeted. “It saddens me to know people are hurting from mistakes I’ve made. I am truly sorry. Right now I’m taking time to talk to people, focus on the feedback everyone is sharing, and figure out the next steps.”

Some Funomena staff described it as merely “a legally safe non-apology,” but “at least it was something.” Hunicke had finally acknowledged the report and, although vaguely, said she was listening to feedback. It was not clear what leadership planned to do about it or if Hunicke herself was going to talk to the staff at all, but some Funomenauts said they finally felt a little better about the situation.

A day later, an invitation for an all-hands meeting for the following day at 10:00 a.m. PST appeared in the inboxes of all Funomena staff. They were not told what it was about ahead of time.

Finality

At the March 23 meeting, Hunicke was blunt: all contractors were being let go immediately and did not qualify for unemployment. Funomena had just over a week before its doors would close for good, barring a funding miracle. Without skipping a beat, she argued that the People Make Games video caused investors to pull out and, without the expected financial gains, Funomena couldn’t afford to stay in business. According to several sources, she not only blamed People Make Games, but also implied that it was the fault of those who spoke with Bratt in the first place.

Hunicke turned the meeting over to Middleton, who told employees they would only have access to their files for another four days and were not receiving severance. He then fielded questions, but was unwilling to answer many of the questions the shocked staff peppered him with. That was the last time most Funomena staff heard from either Hunicke or Middleton, who concluded the meeting by telling their employees they were happy to help in any way they could.

In one-on-one meetings with their producers, Funomena staff were told not to publicly announce the studio’s closure. Hunicke had told the producers that she was still working on a hail-mary funding deal and that announcing a closure could ruin it. Employees who felt that announcing on social media was their best chance at a new job protested, but bit their tongue for the time being in hopes that Hunicke could accomplish this within a few days.

After a week had passed without any word from Hunicke or Middleton, People Makes Games’ Bratt tweeted about the closure, which was still just a few days away. It was clear at that point that no funding miracle was going to happen to save the company, and that staff were being held back from advertising themselves to look for work elsewhere. After Bratt’s tweet, the Funomena Twitter account disputed the news, suggesting that the studio was still looking for funding and stating that it would be forced to close if the funding never materialized. Sources say this wording came from Hunicke, though she sought some staff input before it was posted.

Fanbyte attempted to speak with the subjects of this piece for comment or confirmation, but Hunicke and Middleton did not return our emails or phone calls by the time of publication. Some Funomena management reached out through other sources to tell Fanbyte that the studio is still trying to secure funding even now, but would not comment further or answer specific questions.

Luna developed by Funomena

Though many sources we spoke to blame Hunicke and Middleton for their mismanagement, the larger wound comes from how quickly the two abandoned staff. Whether it was out of guilt, embarrassment, or even just a packed schedule, the two co-founders of a company that largely emphasized closeness among staff were not there to watch the ship go down with everyone else. Prudent or not, it left a bitter impression.

In the ensuing days and weeks, Funomena staff came together to recoup and aid one another. More than just a group of colleagues who all got blindsided, Funomenauts were largely people who truly believed in the studio’s mission statement: that great developers can make great games that leave a positive impact on the world. That the result was not a manifestation of that mantra feels like a betrayal to many.

But despite the way Funomena’s leaders chose to end things, the staff is taking a lot of that hurt and anger and turning it into constructive aid. Former employees sit and talk with each other online daily, some developing spreadsheets of names and roles to hand to other prospective employers. Funomena’s public history will unfortunately focus on Hunicke as the company’s most prominent figure and public face, but it is ultimately a story about the talented and resilient people who worked their hardest to passionately create games in the face of uncaring management.

Ironically, Hunicke was correct in her 2020 remark: it is more important to care about one another than to worry about production. Many of the talented developers who worked at her studio are today wondering if she ever truly believed that.

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