Redwood City, CA-based Cryptic Studios, the developer that created MMOs including City of Heroes, City of Villains and Champions Online, is expanding its reach into Washington State as it continues work on the upcoming online game Neverwinter. Cryptic and its parent Perfect World Entertainment told Gamasutra about the founding of Seattle’s Cryptic North, which is currently supporting the Redwood City mothership by polishing Champions Online. The new Cryptic North studio is made up of most of the staff of Flying Lab Software, creators of the online game Pirates of the Burning Sea. A rep for Perfect World confirmed that Flying Lab Software no longer exists. Neverwinter is currently in open beta, and slated to launch on June 20 this year. Leading the new Cryptic division will be director Russell Williams, co-founder of Flying Lab. Williams and Cryptic Studios CEO Jack Emmert took some time to answer a few questions about the new division and today’s MMO market in an email Q&A.

How long has the new studio been operating? How many people are currently there?

Jack Emmert: We began talks to bring Rusty and his team in and establish Cryptic North before December of 2012. Russell Williams: Yeah, we went full speed ahead in January of 2013, but we've also been collaborating with each other for years, back when most of Cryptic North was still Flying Lab. We have 12 people in the Seattle Studio, but we have transplants from Cryptic come up here just as we have our Northerners go down there, so the studio size varies pretty dramatically from week-to-week.

Why did Perfect World feel the need to add another Cryptic Studio?

JE: Whenever you have the opportunity to add experienced veterans to a team, you should jump on it. [Perfect World] is always making investments in the West. Runic, Unknown Worlds, Cryptic... Western growth and independently operating development houses like us are very important to PW's future. It makes business sense. RW: Studio location is also very important. Silicon Valley is a great area, but tremendously competitive. Having a Seattle-based studio allows us to recruit Seattle-based talent. JE: There're also other benefits to having Cryptic North in Seattle. We just launched the Legacy of Romulus expansion to Star Trek Online and our Neverwinter Open Beta. Huge efforts for us. It's easy, as a studio, to get focused on a task to the exclusion of all else. Russell and his team give us perspective and allow us to better diversify. That's important for any developer.

What's Cryptic North going to be working on, exactly?

RW: Right now we are working hand-in-hand with the Cryptic Studios team on Champions Online, though we contribute to Star Trek Online and Neverwinter.

Will Cryptic North be working projects independent from Redwood's?

RW: A definite possibility. Right now we are focusing on polishing and improving Champs. Longer term, who knows? JE: Absolutely we want to grow the studio to be more than it is. Realistically, all growth is contingent upon success. Right now our games are incredibly successful, so we're growing and that means expansion North and South.

The MMO market is really risky. How do you plan on mitigating that risk?

JE: Short version: Make better games. Make cost effective games. Treat our players better. Take care of our talent. Focus on working business models. A tried and true way to mitigate risk is diversification. And we also have a crazy diverse portfolio of games at [Perfect World Entertainment]. The MMO market is changing. We've seen the rise of free-to-play and we've seen that model rapidly displace traditional subscription games. We've seen less emphasis on boxed PC titles and more emphasis on delivering unique MMOs that are not conventional tab-targeting experiences. We feel pretty good about where we are currently positioned with F2P and we believe that's the immediate future of the genre: triple-A F2P from the ground-up. That being said, of course we closely monitor our section of gaming and keep our finger on the pulse of the industry to see what's next. Platform convergence and 24/7 gaming, for example -- playing an MMO like Neverwinter on a different platform, but with the same playerbase, and taking a portion of that Neverwinter experience elsewhere, as is the case with Gateway.

Any thoughts on the upcoming consoles? Has Perfect World considered bringing its games to those?

JE: We always keep our options open and consoles are definitely in the cards. PlayStation 4 and Xbox One are very interesting to us and we're actively looking at the business behind free-to-play on consoles, the logistics behind it (how we manage accounts, patching, etc.) and the feasibility of porting our engines to those platforms. We can't definitively say yes or no and this game or that one right now, but that's a space we want to be in.