At GDC 2026, Room 3005, West Hall. Talk starts at 13:50.
Co-Ops Are the Future: A Step-by-Step Guide to Founding Your Own Worker Cooperative Game Studio
Presented by Ty Underwood and Cade Underwood

This session offers a practical guide to founding and running a worker cooperative game studio, with insights for both U.S. and international developers. Presenters will walk attendees through key operational, procedural, and legal considerations including founding processes, ownership structures, compensation models, and funding strategies. The session explores the strong benefits of choosing a cooperative model and when that model makes sense. We will also explore strategic differences between funded and bootstrapped teams, and how to structure projects for long-term sustainability. Real-world examples and testimonials from real co-op studios provide concrete lessons on co-op governance, hiring and separation practices, and common pitfalls.

Notes:

• The industry is changing
  • Large capital investors have decided they dont need games to make money anymore. Games are no longer seen as 10x investments.
  • Gambling in games prepared kids for unregulated gambling
  • Simulating warcrimes in games prepared kids for taking part in the war industry
  • VCs no longer need a simulation of something far more lucrative.
  • Investment is down while revenues are up in the games industry and growth has continues for three years
• Worker coops are more resilient and still competitive.
  • Coops are more resilience compared to traditional businesses
  • Collectives have an ability to share and endure risk
    • Cooperatives have a different incentive model
    • Workers share risk and reward instead of just risk (while only shareholders reap the rewards)
  • Performance without heirachy bloat
    • Member owners can trust each other to help each other grow
  • Built-in sustainability and retention
    • Co-ops attract and retain talent
• Worker co-ops bring durable worker power to the industry
  • Co-ops require capital to start, unions do not.
• What is a worker co-op?
  • owned and democratically or equitably owned by the workers.
  • Each worker has an equitable share of the votes
  • Some states have frameworks for forming and managing coops
  • Co-op can use standard business formations, but use co-op operating procedure. Some co-ops are formed as LLCs
• A coop is not:
  • A boss with a democratic process
  • Not a stock ownership plan
  • Not a union
  • Not controlled by traditional shareholders
• gamers are not workers and are not coowners
• Indie game studios thrive as co-ops
• Making money as a co-op
  • Most co-ops try to bring in too many co-owners at once.
  • It is a lot of commitment to be an owner
  • You are trying to build an org that doesnt downsize
  • Starting with 3 is a good size
• Collective ownership
  • You need a way to make decisions on how to pick what to work on and how to make production decisions
• examples of co-ops:
  • KO_OP
    • team buyin is needed to make decisions
    • conflict needs to be embraced
    • find domain experts, decide to tiebreaks
  • soft not weak
  • Soft Chaos
• Process:
  • Iterate on and document democratic procedure
  • Major creative direction needs co-op-wide buy in
  • Project leads/"bottomliners" are elected
  • Formal flat decision processes are used for team conflict, bad actors, and co-op management
• Co-ops say that the work is worth it. the games are better, the working conditions are better.
• Ownership, pay, and hiring.
  • Common for worker co-ops to pay everyone the same per hour.
  • Since you cannot complete work without another person, since you usually only hire people you need
  • Talk and negotiate the financial stuff as a co-op up-front
  • Use probation for new owners to make sure new hires are good fits. Have a clear expiration date, you dont want permanent contractors
• Non-extractive funding
  • Seed Commons
  • Financing is set up so that personal people do not face liability if it fails
• Legal frameworks, entity choice, common pitfalls
  • In the US, there is no universal co-op statute for creative businesses.
  • You do not need a special law to be a coop, you just need a coop agreement and a coop process.
  • In the US, it is easier to start as an LLC
• Incorporation and taxation
  • Operating agreement for llc or bylaws for corporations
  • There are no federal tax benefits in the US for coops, in general
  • Co-op profit distributions means that your profit share is treated as patronage dividends which gives you tax benefits.
• Common pitfalls:
  • Overengineering democracy
    • Too many meetings
    • You dont need consensus in everything
    • Give people domains to operate in
  • Failure to formalize early
    • Waiting until you are successful leads to bitter ownership disputes
    • plan ahead
  • Confusing co-op with collective
    • A co-op has legal institutional requirements
  • Uneven contributions and burnout
    • Track hours
    • balance the load
  • No plan for dissolution
    • Have a plan for when people want to exit
• More info at howtocoop.com
• United States Federation of Worker Cooperatives

Questions:

• Is it hard to attract certain talent if there is a high pay differential for certain roles if paying everyone the same?
  • it isnt a hard and fast rule, not everyone does equal compensation
  • Stipends for higher education or higher living costs is sometimes done
• Could you explain the difference between collective and co-op?
  • A co-op is a narrower definition that solves the problems discussed in this talk, including being profitable.
• How do you start a co-op when others do not have capital or when some dont need to work nearly as much as others.
  • Do equal pay per hour. This solves the time issue.
  • Not having enough money is a common problem, co-ops will usually have some or all of them start part time and then transitioning to full time.
  • You need to start slower and more collaboratively.