Star Fox Developer Says Mid-Sized Studios Can Survive by Making AA Games for Established IPs and Smaller Games With Original Ideas

Velan Studios believes mid-sized game developers can improve their chances of survival by balancing AA projects based on established intellectual property with smaller games built around original ideas. Co-founder Karthik Bala outlined this strategy in an interview with Christopher Dring for The Game Business, explaining how the approach helps studios manage financial risk while continuing to experiment.

The strategy is particularly relevant as Velan works on major franchise projects, including Nintendo’s new Star Fox game for Switch 2. Rather than relying entirely on expensive productions or limiting itself to small independent releases, the studio wants to maintain a varied development slate.

WHY VELAN STUDIOS IS BETTING ON A MIDDLE GROUND

Karthik Bala described the studio’s approach as a balance between making AA games with established or licensed IP and developing smaller experimental titles with more limited budgets.

“We’re finding a natural cadence, where we can do a double-A-scope game with an established or licensed IP,”

Bala explained during the interview. He added that original projects with unusual gameplay concepts can receive smaller investments and be developed by leaner teams.

According to Bala, this model suits experienced studios that are too established to operate like small indie teams but lack the resources of companies employing hundreds of developers on major AAA productions.

He also pointed to audiences that remain underserved by the industry’s biggest publishers. These opportunities can allow mid-sized studios to develop distinctive experiences without requiring blockbuster budgets.

ESTABLISHED FRANCHISES CAN REDUCE FINANCIAL RISK

Velan’s strategy also reflects the value of working with recognizable intellectual property. Licensed projects provide access to an existing audience, while smaller original games allow developers to explore concepts that might be too risky for large productions.

The studio has previously collaborated with Nintendo on Mario Kart Live: Home Circuit and is developing the new Star Fox game. Its portfolio also includes original projects such as Knockout City and Midnight Murder Club. Velan Studios’ official website outlines its work across these different types of games.

Guha Bala argued that relying on a single project can leave independent studios vulnerable when publishers change their plans or funding disappears. Maintaining a mixture of larger licensed games and smaller experimental releases can help spread that risk.

Velan’s approach follows a difficult period for the studio, including the shutdown of Knockout City’s public servers in 2023 despite the game attracting 12 million players. Its founders have since emphasized shorter development cycles and more deliberate spending.

The studio’s strategy does not eliminate the risks of game development, but it offers an alternative to depending on one expensive project. For mid-sized developers, balancing established franchises with original ideas could help preserve creative freedom while making production costs more manageable.