Crytek may go bankrupt

They weren't running 800 employees for ten years. They expanded rapidly, clearly beyond their means and without the output to actually pay for that expansion. They are, it seems, reliant on investors rather than generating revenue themselves. I wouldn't call them idiots, but their business savvy seems to be pretty lacking in some areas.

 

Hell, for years they had less than 100 people...

 

Heh, Kodak is one of those.

Didn't know what the fsck to do when the digital revolution happened, tried to carry on mostly business as usual and releasing some cheap, more or less terrible digital cameras on the side, until smartphones came and completely ate their lunch...

 

Kinda sounds like the direction Nintendo is going...

 

As said above, they didn't have 800 employees for 10 years. They hired ~700 employees during the last couple of years to bet on the crapfest that is the F2P gold rush, which the world+dog knew wouldn't be sustainable on the short, medium or long run.
And now these bosses are keeping said employees working for them without a paycheck for several months while driving their ferraris to work, just to make stupid decisions one after another.

So yes, to me the Yerli brothers sound like real big idiots and should be prevented from opening businesses ever again.

 

This is more of a fuzzy recollection of a speech given by an exec/author from Silicon Valley, but at least in that realm being an executive of a firm that burned out is a bonus in the eyes of venture capital firms.
Apparently, when your job is to burn through other people's money, they may as well hire someone with experience--possibly because that business expects a high failure rate and a history of failure at least means a they theoretically won't make the same mistakes as someone who hasn't learned any lessons at all.

However, I'm not sure if it fully applies to games, and this was some number of years ago.
That there are new companies listing founders with a serial history of business failures that keep getting investment money must mean the calculus involved isn't the same as a gamer's intuition.

 

When you take investor money, you give up some ownership, so it's not usually done lightly, the idea is you have to increase the value by taking the money more than you gave up to get it.

Growth is hard to manage, and there is an expectation of growth when you take outside money, to get it you have to have some sort of business plan that demonstrates how it will result in growth in oval value.

Investors are not idiots, they take calculated risks, they must have seen some promise of upside when making the investment, who knows what the original plan was.

 

It's not just a matter of whether something will result in growth, however. At least in the anecdotal account I heard, the magnitude of the upside can matter more, even if it is higher-risk.
The big funders desire bigger numbers because at the money levels we're talking about all the reasonable options are funded to the hilt already. As such, they have money chasing after the big numbers and steep upward slope, even if big growth is not guaranteed or not sustainable in the long run.
In that regard, Crytek's actions are speaking their language.

The initial investors for a company may not be idiots, but at least in Silicon Valley where their endgame is frequently a big IPO or lucrative buyout, they may be betting against the competence of the next set of buyers.

 

That actually made me think of something that does tie into Sony's business. While CryEngine may not be all that interesting with regards to their console business, it does potentially bring some interesting qualities to their mostly PC-centric MMO business.

CryEngine right now is relatively popular among the Korean and Chinese MMO developers (ArchAge is is pretty impressive showcase that got popular enough that it has been ported to Russian and soon English markets among others).

I could see a scenario where Sony look to use it for their in house MMOs (although I like the Voxel based engine they are using for EQ Next) as well as licensing it to other MMO/game developers. One benefit from using CryEngine is that porting to console should be relatively easy. At least compared to how they traditionally do their MMOs. Develope on PC, then if successful, port to console with very little consideration for the console side of things when developement starts on the MMO, and more importantly on the engine for the MMO.

Still, it seems a bit of a stretch, IMO.

What an ignorant and uninformed point of view. There are plenty of extremely high quality F2P games out there. Mech Warrior Online, World of Tanks, Smite, Warframe, DOTA 2, League of Legends, the aforementioned ArchAge, and on and on.

Yes there are some crappy F2P games as well, but that is mirrored by your standard buy once market which is also flooded with a lot of crappy games.

Regards,
SB

 

Other good F2P games: Champions Online, Star Trek Online.

Just thought I'd mention those as well.

 

Not sure what I could be ignorant and uninformed about when I wasn't talking about F2P being void of high quality gaming. Hell, I didn't even have "F2P" in my reply. Yes of course there exists a lot of high quality fun F2P games... I should know, I actively play a few of them.

I was replying to DSoup about that cesspool they call mobile freemium gaming on the apple/android stores where everyone and their brother thought they could shit out whatever and endless clones of that whatever to make loads of money. Yes, that gold rush is indeed over.

 

ST:O is still around? Wow. As an oldtime trekker, and even though I've never played the game, I have to say that's awesome.

 

Do MS need to buy crytek?

I really think this would be a good move on microsoft's part for a number of reasons. First crytek have done a lot of r and d in the field of graphics and if crytek were working exclusively on one hardware they could build an engine which makes full use of the xbox one's strengths i.e. esram. Also crytek have survived a long time in a volatile industry which means they have been doing a lot more right than wrong. Also cryengine version x would be a significant weapon in microsoft's armoury as it continues to get battered by the ps4 in sales and would deprive 3rd parties who are multipatform of a choice of middleware engines.

 

Great idea!

Also; a Crysis reboot could surely draw some attention to the platform.

 

Before MS thinks about buying Crytek… what has become of their other purchased studios (Rare, Lionhead, etc..) promises of “triple A” games? Better yet, is there anything from those studios that have approached Sony/Nintendo “triple A” status in software?

If MS needs to spend more money, how about pumping into those studios it has already, and delivering something beyond what Sony/Nintendo can offer internally. My opinion anyhow…

Plus, the PC side of me says "keep your stinking hands of Crytek, you dirty stinking console apes".

 

The OP reads like your typical "I think it would be a great idea if my preferred Console Brand X's maker bought Developer Y, because I really like Console Brand X, and it would be great for Console Brand X if Developer Y's games became exclusive" forum post.

There's no legitimate reason mentioned in the post that MS in particular would be a better fit as a new owner for crytek than basically anyone else.

 

I think an on rails Crysis where you can wave your hands around and say "full armour", "activate camouflage", etcetera, would be pretty sweet.

They already know the Xbox One hardware quite well: see Ryse. Crysis is a great franchise, especially for a struggling console that needs exclusives to keep people from defecting to another console it would be a good choice.

So: developer talent, engine, IP. all really good reasons, IMO.

 

Well yeah, but I think MS are more in need of a jolt in sales and some acquisitions could do the trick.

 

Nope. An acquisition would result in games down the line, a year or two off, unless there's something at CryTek just about ready to be released (which we really should have heard about if it's that close). I expect there'd also be contractual obligations to support existing engine users on their projects regardless of platform. A platform exclusive engine would also only be good for exclusive titles as cross-platform would make it a no-no, meaning instant significant devaluing of the acquisition

 

Well, there are rumours that Ryse 2 was well underway in development before getting canned.