The Telltale Sign of Healthcare Chilling Effects

Strap yourselves in, kids. This one gets political.

Towards the tail end of September Telltale Games announced its intent to shut down. The game developer was catapulted into the stratosphere with the critically beloved and commercially successful Walking Dead adventure game back in 2012, and has had a string of successful and well received titles like noir thinking man’s game Wolf Among Us and dark horse genre comedy Tales from the Borderlands.

All was not well, though, and in the immediate aftermath of Walking Dead‘s success things took a turn for the worse. In March The Verge published an ominously prophetic article detailing a toxic culture rife with overworking employees as much as 20 hours per day, terrible management and creative stagnation. This was published after Telltale laid off a quarter of its staff back in November of 2017, but that was an appetizer compared to what was next.

On Friday, September 21st with no warning at all Telltale employees were stunned at the discovery that they were all being let go due to Telltale’s failure to secure additional funding after partnerships with other media companies fell through. That was only the start of the conga line of horrible news. Telltale’s head of human resources not only revealed that there would be no severance, but their health insurance would run out at the end of the month. Nine days later.

This has been an indescribably awful situation for everyone involved. The gaming community, understandably outraged at the way this situation has been handled, has been rallying around ex-Telltale developers and trying to find them new jobs, while Former Telltale employees are venting on Twitter. Telltale itself has handed its signature Walking Dead series off to another studio to be finished, though I expect they’re more concerned with avoiding a consumer class action lawsuit than doing right by fans or providing more work for the employees they couldn’t be bothered to give severance to.

This is a situation that I’d mulled several article topics on, and if I did a deep dive on all of my thoughts this would probably be a 10,000 word article. Instead I want to zero in on the healthcare situation and how it reflects a chilling effect on the potential of people living in the United States.

The system through which people in the United States receive healthcare is a bloody mess and tied to an archaic, outdated system that I’d argue was a bad idea to begin with. Job security in the United States is dead. Once upon a time you would stay at a company for 10, 20 or even more years. Since then at-will employment has risen, jobs have moved offshore and outsourcing and external contracting have become more popular. The gig economy means that people may be working two or three part time jobs at once. Job hopping has been rising dramatically for the same reason.

Even for people who are full-time employees, their reliance on that health insurance may make them reluctant to move or pursue their dreams. Losing a job at the wrong time due to a health-related complication can be financially ruinous, not to mention stressful and terrifying.

Depending on employers for health insurance can make workers reluctant to leave jobs – even if they hate what they do, to the detriment of the company overall. It can make people reluctant to potentially do amazing things by joining an early stage startup, start a company of their own or pursue their passions. It makes unions inclined to protect jobs above all else and dig their feet in.

The situation is even stickier when it comes to the self-employed. Among freelancers and people who work solo I count myself as incredibly lucky since I make subscription-based income. Most people who work independently – including a few of my own clients – aren’t as lucky. I’ve seen a design consultant go from making $11,000 in a month to making zilch the very next month. Yes, if you’re a rockstar freelancer and make thousands every month you’re set – but one bad month can get you in trouble.

As for Telltale, the Verge article that I linked to earlier has a fascinating rundown on one particular cause of the problems at Telltale: Co-founder and one-time CEO Kevin Bruner:

Bruner worked primarily as a programmer prior to Telltale, including during his stint at LucasArts. But he wore many hats during his time at Telltale: first as the company’s CTO and later as a director and CEO. According to numerous current and former employees, Bruner’s behavior became significantly more abrasive and inflexible after the success of The Walking Dead. Thanks to his background in programming, he had been a strong force in creating game development tools for Telltale. As the studio’s popularity exploded, some employees felt he wanted to step into the role of a design auteur, which sources say made him resistant to give the spotlight to other employees at the company.

“That’s when things got really bad,” says a former employee. “I think a lot of the insecurity came from The Walking Dead.” The game’s success had significantly raised the profiles of Rodkin and Vanaman and earned them widespread praise. “I think that that really irked [Bruner] a lot,” says the source. “He felt that… he deserved that. It was his project, or it was his company. He should have gotten all that love.”

Now obviously concepts like terrible management, horrible crunch periods and expanding too quickly can’t be boiled down to a single person, but let’s unpack this for a moment. If this is true – which I believe it is – then a major reason for why 250 people had their health insurance ripped out from under them is that a CEO was insecure about the size of his penis.

This, more than anything, should be a wake up call for the United States itself. A system where you can potentially lose your health insurance overnight because your boss wants to be loved as a design auteur is not sustainable. Creative and ambitious professionals are not going to be entrepreneurial trailblazers that American culture wants them to be if they have the Sword of Damocles hanging over them in the form of huge insurance deductibles.

It’s not as if any of these employees could have seen the warning signs; how could they? According to the Kotaku article things were humming along, business as usual. In the globalized world we live in systems where health insurance is tied directly to employment is a really, really bad idea.

Whenever I discuss Telltale and how it relates to how we need a much more publicly robust health insurance system, I’ve had a few random people say the equivalent of “OH MAH GOD COMMUNISM!” Sooner or later we’re going to need to discuss the viability of publicly-funded healthcare without the conspiracy fearmongering of “government takeovers” of healthcare. In a world where a quarter of the United States federal budget goes to Social Security and another huge chunk goes to Medicare this kind of argument accomplishes nothing.

If you can, disconnect your politics and ideology from a discussion about the well being of others for just a moment. Even if you’ve got the word “free markets” tattooed on your inner thigh you have to realize that the current privatized system can’t fly. A system that allows 250 people to lose their health insurance because a CEO wanted hugs and kisses for his role in product development is a broken system. That’s really the key word here; the current system allows for this to happen. It’s not an anomaly and it happens all the time. Let’s also not pretend that there are remedies under the current system; Telltale is currently facing a lawsuit from employees but it will be years before – and if – employees see any restitution.

I don’t even have to look for examples outside of the game industry. Remember 38 Studios? The maker of Kingdoms of Amalur and would-be maker of Project Copernicus suffered many of the same horrible management problems. Curt Schilling jealously guarded his equity in 38 Studios and ended up running it into the ground, putting several hundred people out of work and cutting off their health insurance. A pregnant woman had to find out from her doctor that she’d lost her healthcare benefits. There was also this on Facebook:

Schilling’s harshest critic in the online exchange was Bill Mrochek, the vice president of online services, whose wife required a bone marrow transplant at the time their healthcare disappeared. “Are you going to admit that your stupid hubris, pride, and arrogance would not allow you to accept that we failed — and help shut it down with dignity?” he asked Schilling.

Just as an aside: Bone marrow transplants can cost up to $800,000. Not something you’d want to be stuck with a bill when the founder of your company is guarding equity like a dragon perched atop his treasure horde.

I’d also be remiss if I didn’t point out that even if you’re lucky enough to continue collecting health insurance after you’re laid off, you pay the entire deductible. A $10,000 deductible isn’t going to be any more feasible on unemployment in a medical emergency than a $3,000 one.

A friend and client who lives in France told me about how health insurance is tied to income, not employment – which means low-income people get covered for less. Wealthier people buy private, supplemental insurance. That makes sense, doesn’t it? It provides for more flexibility and more freedom and isn’t as much of a cost burden on people, not to mention it facilitates exactly the kind of flexibility people need when moving between careers or launching a business venture.

Public funding in various aspects of society is good business. It’s good for entrepreneurship and innovation, and it has decades of precedent in countries around the world that aren’t the new fascist regimes. Sooner or later so-called free market ideologists are going to have to realize that systems like unionization or a social safety net don’t exactly make you Joseph Stalin.

What should be clear to anyone interested in the long term future of tech and entrepreneurship is that situations like that of Telltale can’t keep happening. When people opt to not leave jobs they don’t like, or when they give up dreams of opening up a small business or creating a startup, we all lose. Weigh whether that’s worth adhering to a system that isn’t really compatible with today’s world anymore.