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No tears for Crytek

Weekly Roundup: It's one thing for a company to go under, but another to take its unwilling employees with it

Earlier this year, GamesIndustry.biz ran an interview with Crytek MD Avni Yerli.

The article featured a head and strap that, in retrospect, are something of a perfect combination of irony and foreshadowing:

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That article ran in July. The unwitting accuracy of the headline would already have been clear to Crytek employees, some of whom this month accused the company of missing payments to employees as far back as May. According to a number of reports from purported current and former Crytek employees, those paychecks went from merely late to non-existent beginning in September.

GamesIndustry.biz sent the company multiple inquiries before running the stories based on widespread (but ultimately unverifiable) accusations. When it became clear they weren't going to respond to any of our requests or address these accusations, we ran a story on them, noting that the company had run into such problems before, missing payroll for months in 2014. Back then, the company first dismissed the claims as rumors, then confessed to having some issues with capital and wrote off the whole incident as the company going through "a transitional phase."

Our headline from July stated that Crytek's business model is built on trust. The snarky interpretation of that headline is to say its business model is built on the misplaced trust its employees have in being compensated for their work. And yes, a company abusing that trust is bad enough, but honestly, I'd be surprised if the developers still at Crytek have faith of any kind left in management.

"If these reports are accurate, the developers in question are owed about one-third of their annual salary"

It seems more likely that those remaining aren't doing so out of trust, but a lack of better options. Assuming these reports are accurate (and again, Crytek's given us no reason to doubt them), the developers in question are owed about one-third of their annual salary. If they walk away now, the only way they're seeing any of that money is likely through an expensive and prolonged legal battle against an opponent which apparently has severe cash flow problems and presumably might not survive to see the end of litigation. So those employees, already cash-strapped after months without their standard pay, would be gambling further money on trying to get blood from a potentially bankrupt stone.

By this point, those who are left behind are no doubt hoping Crytek can somehow save itself, much as it did two years ago when it licensed the CryEngine to Amazon to use as the foundation of Lumberyard. Indeed, there are rumors that Amazon would buy the company outright now rather than let such a concentration of knowledge and support for its fledgling game engine be forever lost. (We asked them, and received the time-tested "Amazon does not comment on rumors and speculation" line.)

I'd expect most of the developers with savings and/or well-established industry networks to have jumped from Crytek by now. But plenty of good, talented, hard-working developers--particularly those early in their careers--would have neither the bankroll nor the contacts to ensure a comfortable landing.

For those following the cheeky interpretation of our previous headline, this would be the "next wave" of game developers Crytek was targeting with its "pay-what-you-want" (and apparently when you want) strategy. But they would still be there not because they thought their employer would make good on its debts, or because of some heartfelt belief in the project and the team, but more likely because they felt trapped.

And if that's the case, Crytek is not a business "built on appreciation and trust." It's a business built on exploitation.

I'm not saying Crytek management and the Yerlis are doing this without reason. Of course they'd pay their employees if they had the money. They no doubt still see a path through, a way that they can salvage what they created, regain solid financial footing, pay their employees everything that's owed, and come out of it a better, stronger company.

But so did Curt Schilling. After 38 Studios collapsed, the company's founder showed the mindset that can ruin not just a company but its employees as well, saying, "I believed with every ounce of my being that everything was going to work itself out." 38 Studios missed payments too, and not just to employees. It let their healthcare lapse, which one employee discovered when his wife needed a bone marrow transplant. No amount of confidence that everything will work out can justify putting employees in these situations.

Like so much of the world, the games industry is a harsh and unforgiving environment. Management's struggle to stay afloat, saving the company and the jobs of all those it employs is a commendable task, perhaps too often a thankless one. But it's one thing for the company to go under; it's another thing for the people running it to risk taking their employees down with it in the process.

Other news on GamesIndustry.biz this week:

Where do consoles go from here?

Why outsourcing doesn't work

Analysts set expectations for Super Mario Run

Magic Leap PR chief follows CMO to the exit door

How to get your US patent approved faster

Where now for Call of Duty?

Oculus restructures into PC and mobile divisions as Iribe steps down

Turtle Rock: AAA boxed product "not a welcome home" for indies

Majesco Entertainment exits the video games business

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Latest comments (5)

Ron Dippold Software/Firmware Engineer 4 months ago
While Robinson (PSVR) and The Climb (Rift) are fun little P2P VR games, they also went to 'pay what you want' for their games model - but very few people want to pay for Warface, Hunt has been delayed since 2014, and Arena of Fate is still stuck in closed beta (also since 2014). I just don't see a lot of income.

None of which changes or disputes anything you said - not paying your employees and not saying anything about it is no way to handle that.
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Steve Ellis Managing Director / Programmer 4 months ago
Well said. I couldn't agree more. I was in a similar situation nearly a decade ago. When it was clear that we were reaching a time when we might not be able to afford staff wages, we put the company into administration while there was still enough money to do so.... and then the administrators sold the company to Crytek.
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Alex Barnfield Lead Engineer, Vitei Inc4 months ago
I'll put the issue of that particular closure to one side, but about 2 and a half years later however I had a good experience, or as good as one could hope for in the circumstances of an office closing down odd as it sounds my view on our industry improved. No issues with notice pay, full use of the offices for job hunting, not before any holidays so I was able to begin interviewing immediately, and indeed other companies were invited directly to the offices in a well organized fashion to recruit.

I wish that was the expectation rather than the exception, but such ideal circumstances seem to be rare - personally I'd settle for a company being upfront about it's situation so people can choose to see if the companies fate improves if their finances allow it. I doubt that's Crytek view however:

"But I understand that situation. Some people live in very tight financial planning. That's their own privacy. They can do whatever they want. "

If you run a company you run the risk and reap the reward; employees do neither, but reading that convinced me Cevat Yerli is more than happy to view employees as an extended overdraft facility.

Edited 1 times. Last edit by Alex Barnfield on 18th December 2016 2:15am

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Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster3 months ago
Anyone who's carried on reading the press would have noticed that the Dev studio is not only intact, but also relaunched as an independent. Glad to see that those employees will continue to keep thier jobs.
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Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster3 months ago
Anyone who's carried on reading the press would have noticed that the Dev studio is not only intact, but also relaunched as an independent. Glad to see that those employees will continue to keep thier jobs.
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