Coach with Authority. Be hard on the facts, while soft on the people involved. Suggest alternatives you feel everyone can live with if you can't easily get the members themselves to jointly solve the problem. You know you are in Overt Conflict Stage when team members are focused on being right and wronging others. This is the hostile encounter and antagonistic state.
People choose sides on the issue.
A leader may emerge from the group who acts as spokesperson. Positions are polarized. Small factions evolve. You have a serious problem. Your team is caught up on an issue not focused on the long-term goal of creating a killer game.