The serious business of making games

So Star Citizen is really a singularity. In theory, we could just start pouring the budget from every game into Star Citizen, and be promised all of those games in return built into the world of Star Citizen, but much like a physical singularity, none of those titles would ever actually escape the dev black hole.

I am so here for all roads in the serious biznass thread leading to dunking on Star Citizen.

We need a ‘The Serious business of not making games’ thread

The consolidation going on in the industry right now is crazy.

You’re onto something here.
I’m sending this idea to Roberts. He’s the only one who can make it happen.
It would certainly stop our backlogs from growing further.

You guys don’t get it. We’re actually living inside the singularity. Our reality is actually just a Star Citizen simulation. The game shipped, we’re just SIMS and we’ve still got a few hundred years of simulation to grind out before we will reach the deep-space-faring era Star Citizen promises.

I don’t believe you.

Too much?

Yes. They (being Embracer nee THQ Nordic nee Nordic Games) announced three separate acquisitions within like 40 minutes, Gearbox was just one. Arguably not even the biggest one, they apparently also bought a casual puzzle games company for $700M up front.

(Good grief, when did Nordic become as valuable as Ubisoft?)

If I’m reading this correctly, the earnout targets are beyond ludicrous. Gearbox made a profit of about $40M in 2019 when they released Borderlands 3. For the earnout, Gearbox as a business unit needs to make between $200M (to get anything) to $370M (the maximum) in profit in 2026.

This is the kind of earnout you put into a contract when the seller thinks their business is way more valuable than the buyer does, but both really want to make a deal. This lets Randy brag about having made a billion dollar exit, and for Nordic to pay a realistic price.

Yes, that’s the interesting part. But also, that earn-out is stretched out over six years.

The deal is initially worth $363 million in cash and stock, a number that could grow by up to roughly $1 billion if Gearbox meets some ambitious earnings goals over the next six years.

See the ambitious earnings goals part? That’s an understatement. Gearbox would literally have to pull several rabbits out each year in order to earn the $637m or so at a rate of about $106m per year. Basically, the bulk of buy is back-loaded - which is never a good sign. Basically Embracer figured that the company was only worth about $393m now. And if you calculate the EBITDA, you will see why the bulk of the value is in a 6 yr earn out. How are they going to generate $637m in rev over 6 yrs when they’re barely pulling $40m per yr? So for all intent and purposes, they basically sold the company for $363m and left it at that.

I thought this tweet by @SorenJohnson was interesting. My guess is he is right, I know my one attempt and game design/development failed miserable because the 3 of 5 the main people were remote, including myself.

Well, that’s sorta evident, I’d say.

These two conditions probably make it a bit more likely that starting a project with an entirely distributed team goes somewhat smoothly: the team has already previously collaborated on a project in a similar constellation and it’s an iteration of a previous project. There’s a shared understanding of who everyone in the team is, what everyone can do and how everyone rolls. And there’s a shared understanding of what you’re trying to achieve.

If that’s not the case, etablishing all this becomes a lot more challenging when everyone is working remotely due to the lack of the kind ad-hoc communication an office can provide as well as and a higher dependency on written communication (e.g., fewer non-verbal cues and more ambiguity among other things). I’d also argue that physical proximity makes it easier to build trust in a new team.

Gee, I hope @SorenJohnson is wrong, because our new studio has started two projects in the last year and we’ve been all remote from the outset (slightly pre-pandemic). So far, so good!

Ah, that’s an important caveat. That includes us.

Don’t worry, Soren is wrong.

As if I didn’t already know you were married, that’s the kind of response my wife would give.

I really think it depends on the team, producer, leadership, and communication. With the contractors, we are currently over 30 people, that is not small. We’ll be prototyping our next game before we release Old World, and that will be a chance for Soren to examine closely whether his theory is applicable. While I do not agree or fully disagree, I think the industry is learning new ways to work together and improve. I can make a case for increasing productivity under the pandemic.

It’s similar in IT. We’re all adapting to the new normal, and as you say, some productivity is higher while other things fall off. There are tradeoffs that happen with people working from home, but I’ve largely noticed an increase in my own productivity being away from the office.

I miss talking to coworkers I don’t regularly interact with as part of my job, and I know a couple specific instances where not being in the room together led to confusion and mistakes. With that said, a lot of other things have gone way more smoothly without extra cooks in the broth.

I think it varies dramatically by person as well. Not just personality-wise, but what’s your home situation like? I’ve definitely lost some time to kiddo drama (or just kids being kids – they’re 4 and 7, for goodness’ sake) because I don’t have an actual home office to work from.

It’s always about the specifics of the team, isn’t it? My hunch is that closing a project remotely is DOABLE, but in not certain terms easy.

I do think the middle of production is the period of development when remote working impacts less. Closing, bringing everyting to full polish, QA/UX testing and fixing… That requires a lot of communication that is not going to go as smooth remotely. Specially if there are multiple stakeholders in the project with different viewpoint as to acceptable polish/stability at launch.

It IS doable, but requires a lot of managing.

Of course doing early access as Soren is doing mitigates a lot of issues, since you are doing support and polish at the same time, so you get a lot of feedback you don’t get in a more closed-off development (where fast feedback loops between team members can really speed up polishing rounds).