Pfft. I saw one lay off happen just before Christmas. Hearts and minds, people.
Well, they are making a somewhat consistent $30-35M a year (check the funding chart), and a $2.5M monthly burn rate is indeed sustainable at $30M (how the hell they keep raising that is a different question altogether) and a $3M burn rate is just barely below that they have made these last three years (closer to $35M).
At $2.5M and 450 employees that amounts to $5.5k per employee per month, which, around here, is indeed quite in the ballpark of developer cost (including overhead) and even somewhat high (it would assume experienced although not top level devs, juniors would be cheaper). Their operation being distributed around different places makes it harder to justify (I would think the expected US cost per employee is higher), but we also don’t know how many of those are (low or unpaid) intern positions.
I mean, other than the annual funding being so mysteriously high, the numbers could make some sense (there’s much data we don’t know to give more that a guess).
Very much so. $5.5k/mo isn’t going to buy very much in Austin, and probably nothing at all in Santa Monica.
I’ve always been of a mind that it’s better to lay off before Christmas than after. At least laying off prior to Christmas means the employee has an opportunity to reevaluate the gifts they’ve bought/etc.
$5.5k/mo isn’t in the ballpark for engineering salaries in Santa Monica even if there wasn’t overhead, but there is. $3k/mo (which I think is still lowballing the overhead/rent/etc) isn’t enough to hire people who aren’t taking the job for non-monetary reasons.
edited to add: or if they’re giving the employees equity as part of the compensation and that’s perceived to have value, which again kind of limits it to the True Believers™.
Word is that they have been operating on loans, as well as M2M funding since late 2016. Which explains the fervor with which they started the JPEG sales, crazy things like LAND SALES! etc. Heck, they still haven’t paid off the loans in the UK and which secured ALL the assets of ALL the companies over there. Word is that they have similar loans here in the US.
It’s not hard to continue operating M2M until it’s no longer sustainable. For evidence, look what happened to Trion Worlds which got bought out by gamigo and was made public yesterday. According the gamigo public filing it looks like they were close to bankruptcy because it was an “Assignment for the Benefit of the Creditors” purchase commonly used as an alternative to bankruptcy. Sure Trion Worlds could have downsized again (they did that earlier this year and last year as well) and kept going. But obviously they couldn’t because the company was no longer a “going concern” and this was their only “out” without filing for bankruptcy in the months to come.
I’m voting for this explanation. Roberts is keeping this project alive dreading the day he’ll have to tell some Fisk type that is over.
Cheers thanks! That makes a lot of sense. I would also add that given they are in EU locations then layoffs cant be done as easily as they are in the USA. So they simply must plan any staff reductions and announce (“consult”) months ahead of time.
$5.5k over 12 months is $66k. That’s not salary though, that’s salary + taxes + overhead, which is probably closer to $50k of that being actual salary. I’d be shocked if any of these studios are having an average employee salary of anything that low. That’s also discounting non-payroll related costs, which is pretty significant (hosting, servers, etc…)
I knew I should have majored in computer science…
Are you telling me that the developer of DERPSPACE doesn’t have a CS degree? I shall have to reevaluate my plans to buy your entire ship catalog!
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Do they come in mauve?
I am an autodidact, just like Carmack.
Yeah, just like Carmack.
Once you make a name for yourself you can license the DERPSPACE engine for the real money.
Game dev yearly gross salary in the UK is maybe £23-30k (about $30-40k) for a junior. Much higher than that for experienced senior staff, but it’s difficult to estimate the average seniority there: I gather they’ve had trouble holding onto people.
Thanks very much for the comprehensive answer @dsmart. Much appreciated.
For an excellent book that has information on how ABCs are conducted in various states, see Geoffrey Berman’s General Assignments for the Benefit of Creditors: The ABCs of ABCs, published by the American Bankruptcy Institute.
That’s probably one of the saddest books ever written.
Machine to machine?
Macron to Merkel.
Same difference. ;)
Marketing to Morons.