Publisher Krafton Delays ‘Subnautica 2’ Game Ahead of $250 Million Payout
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adamsapple
Or is it just one of Phil's balls in my throat?
The 250M was offered as part of the purchase agreement when Krafton acquired Unknown Worlds. The clause was for the studio to hit a certain revenue milestone by the end of 2025 (this milestone is not specified). It wasn't just for hitting revenues this year, it was from their acquisition to the end of 2025.
And the (now departed) CEO says that if Subnautica 2's early access had come out this year, they would have hit that milestone, but the studio will miss out on it now. And so Krafton has essentially yanked away the 250 million bonus from the developer that they were primed to receive by year's end.
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The 500M is the amount Krafton acquired the studio for back in 2021.
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calico
Member
"Unknown Worlds' leadership planned to share the additional money with all of the studio's employees, which number around 100. Staff who were at the company at the time of the acquisition were told they were eligible for bonuses ranging from hundreds of thousands of dollars to seven figures..."
From this it sounds like the devs were probably in line for 5-10% of that additional $250m, and that this agreement was made with (some or all of) the sellers ie. the people who would receive the additional $250m if the revenue target was hit, rather than with Krafton.
So Krafton are really (allegedly) screwing the sellers out of $250m (which seems like a no-brainer for Krafton assuming it's legal) and the devs are getting screwed indirectly as a result. It would be interesting if the devs have this bonus deal with the sellers in writing, or if it was just a case of 'trust me bro we'll totally share the money with you if you hit the revenue target'.
It seems to me that the sellers made an agreement with Krafton, and the sellers made a separate agreement with the devs, both based on a win condition which Krafton effectively holds the power to prevent from happening.
The sellers could ofc easily honour their agreement with the devs out of the $500m they already received if they really wanted to (lol).
From this it sounds like the devs were probably in line for 5-10% of that additional $250m, and that this agreement was made with (some or all of) the sellers ie. the people who would receive the additional $250m if the revenue target was hit, rather than with Krafton.
So Krafton are really (allegedly) screwing the sellers out of $250m (which seems like a no-brainer for Krafton assuming it's legal) and the devs are getting screwed indirectly as a result. It would be interesting if the devs have this bonus deal with the sellers in writing, or if it was just a case of 'trust me bro we'll totally share the money with you if you hit the revenue target'.
It seems to me that the sellers made an agreement with Krafton, and the sellers made a separate agreement with the devs, both based on a win condition which Krafton effectively holds the power to prevent from happening.
The sellers could ofc easily honour their agreement with the devs out of the $500m they already received if they really wanted to (lol).
xrnzaaas
Member
Yeah it's sad, releasing PC games in early access has become a norm. It was originally supposed to be used to work together on shaping the final game and helping out smaller studios. Now for a lot of devs & publishers (even the large ones) it's an excuse to launch an unfinished project early to start making profits and to avoid people complaining about the technical state of the final build.
I'm glad it's not that popular (yet) on the consoles and most new games launch in their final form.
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Goalus
Member
The journalist wants a payout, too.
Right but the large numbers don't make any sense. The total profit of Subnautica is probably less than $50m, based on sales data (6 million sold, average price around $20 ?)
So why pay $500m for the studio? Why offer $250m in bonuses? Just a crazy amount of money
Lukaku's First Touch
Member
It's time to go to court if I was them. This sounds like some fucked up bullshit. I'd be pissed and almost start saboteuring the whole project.
adamsapple
Or is it just one of Phil's balls in my throat?
It was something to sweeten the pot and get Unknown Worlds to agree to the acquisition, I reckon.
And, again, it wasn't an immediate payout, they had a clause to see 5 years worth of revenue to disperse that bonus.
IAmRei
Member
In these days? That could be hard. As one changes will be seen by whole system team. And also if caught, the penalty is super bad for devs : /
lh032
I cry about Xbox and hate PlayStation.
sea creature mocap
HeisenbergFX4
Member
They released a video yesterday and a lot of comments (including mine) are centered around this 250m
adamsapple
Or is it just one of Phil's balls in my throat?
I bet, wonder if this can be a potential lawsuit in the making.
The developers CEO said the early access is ready but the publisher is forcing it to be delayed citing some feedback. Wonder if the developers can take the publisher to the court here.
Gambit2483
Member
Meh, as long as they can get Hi-fi Rush on Switch 2 I don't care.
Dorfdad
Gold Member
Means we are ready to collect big money for access to the menu and loading screens. Just hang around for the real gameplay stuff. Trust me dude.
demigod
Member
adamsapple
Or is it just one of Phil's balls in my throat?
Krafton saw some value there I guess.
Maybe they felt like they overpaid it, hence this move to cut-off their bonuses so they don't have to foot another 250M bill.
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HeisenbergFX4
Member
Honestly its like the price of some of these other games and people laugh at numbers brought up, no one here can remotely guess at what these evaluations are and how they arrive at these figures
Poppinfresh
Member
Was the bonus promised for a full release or an early access release?
Everyone is trying to blame the publisher for this, but is it possible that the Devs were trying to push the game out in Early Access to get a bonus that was meant for a full release?
Beyond that, there is ZERO reason for a game in an established, popular franchise to be released in Early Access.
Audiophile
Member
Sounds like a perfect time for the devs to hold the code hostage.
Angry_Megalodon
Member
The story is extremely sus. As my dad says, "If something looks strange it's because it's strange"
So, no, I'm not believing for a second that an AA studio would have a whopping 250M bonus, this is fucking insane.
So, no, I'm not believing for a second that an AA studio would have a whopping 250M bonus, this is fucking insane.
StreetsofBeige
Member
Who the hell would buy UW for $500M. And is this $250M bonus on top of it? So if it's paid out it's really $750M? They had 1 good game under their belt with Subnautica 1 that sold 5M copies.
What a waste of money. No surprise though. Karfton bought UW in 2021. That was peak covid tech/media sales spikes and interest rates hadnt zoomed up yet (that started in 2022). So like a lot of tech companies, they amped up the mergers, acquisitions and budgets thinking the gravy train would go on forever as if covid media consumption would set a new sky high minimum floor of sales. And with interest/loan rates at practically zero in 2021, they assumed you might as well blow the budget.
Embracer did the same thing buying up shit in hopes of the Saudi buyout. Then inflation/interest rates skyrocketed and the Saudis bailed. That left Embracer with a lot of junky studios and debt which lead to the past bunch of years has them selling off stuff.
Whether interest rates are low or high, never blow your load folks.... unless it's a chick that wants it.
What a waste of money. No surprise though. Karfton bought UW in 2021. That was peak covid tech/media sales spikes and interest rates hadnt zoomed up yet (that started in 2022). So like a lot of tech companies, they amped up the mergers, acquisitions and budgets thinking the gravy train would go on forever as if covid media consumption would set a new sky high minimum floor of sales. And with interest/loan rates at practically zero in 2021, they assumed you might as well blow the budget.
Embracer did the same thing buying up shit in hopes of the Saudi buyout. Then inflation/interest rates skyrocketed and the Saudis bailed. That left Embracer with a lot of junky studios and debt which lead to the past bunch of years has them selling off stuff.
Whether interest rates are low or high, never blow your load folks.... unless it's a chick that wants it.
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Dalbajobas
Member
Yeah this looks completely wildly messed up. I don't want to jump to some preemptive conclusions, need to know full story.
Surely an easy lawsuit, if the new owners simply tried to avoid paying bonus that the dev team already claim to have achieved, by forcing to delay a ready to publish alpha version.
HeisenbergFX4
Member
That 750 number is mind boggling
That said was told by someone who would 100% know a game like Halo Infinite was north of that 750 figure even with the leak of 500+ million
And people laugh at the rumored 400 for Concord
Dalbajobas
Member
Nice, as long as coop can be totally avoided.
People are making a big deal about that $250 million, 90% of which btw was supposed to be paid to 3 guys in charge before they were fired. $250M sounds like an absurd amount of money for such a niche game, not surprised to see Krafton bail out, especially when the game was delayed by a year because of poor management (according to Krafton anyway).
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Dalbajobas
Member
The game was very unique and very highly regarded.. at least on PC space. Kraftoon probably thought the studio can up their game with second installment like some other game studios before, especially with such huge incentives promised, but apparently devs didn't put everything they have. According to Kraftoon at least. But real truth always comes very late, for now we can only choose to believe one sides story or the other not knowing real details.
any one scared for them.
en.wikipedia.org
Tango Gameworks - Wikipedia
darrylgorn
Member
Million or trillion?
adamsapple
Or is it just one of Phil's balls in my throat?
Lawsuit filed by Unknown Worlds.
Good. Fuck Krafton on this one.
Good. Fuck Krafton on this one.
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SirKicksalot
Member
They claim that one of them is focusing on a movie instead of the game.New plot twist dropped by Krafton this time
KRAFTON
KRAFTON will further expand our original IPs and build immersive, virtual worlds, where our fans play together and share fun moments. We will meet everyone in the world we are building.krafton.com
He has a film production company and, well:
Also AI movie posters for their comedy movie lmao.
Reminds me of the Bungie guy with the cars.
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Buggy Loop
Member
poppabk
Cheeks Spread for Digital Only Future
More likely it was a structured deal with $250 million upfront and the other half based on meeting certain targets. Did thr three fired guys own the studio originally?
adamsapple
Or is it just one of Phil's balls in my throat?
Haven't seen a notable developer v publisher lawsuit since Activision and Infinity Ward way back in the day.
This will be interesting to keep a track of.
Last Hearth
Member
What was the revenue milestone number they had to hit to get the $250 million bonus?
I can't imagine any development team getting a bonus like that, not even GTA6.
I can't imagine any development team getting a bonus like that, not even GTA6.
Shubh_C63
Member
The purpose of EA is already skewed in the eyes of gamers. FrostGiant released Stormgate as a true EA and internet collectively was disappointed at the V0.1
POKEYCLYDE
Member
An acquisition price of up to $750 million? I love Subnautica, but that figure is insane. Especially when studios like Insomniac were acquired for 1/3 the price.
Something isn't adding up here.
Something isn't adding up here.
adamsapple
Or is it just one of Phil's balls in my throat?
Krafton acknowledged the amount themselves in the memo they put out earlier today where they put the blame on the developers leadership. So the amount, at least, is legit.
kruis
Exposing the sinister cartel of retailers who allow companies to pay for advertising space.
Indeed. This is not a case of hundreds of regular devs getting screwed by a big corporation, but a big corporation quarreling with three former studio owners about a $250 million payout of which only $25 will go to actual devs.
POKEYCLYDE
Member
Crazy amount for what is essentially an indie developer. I'm sure we will get answers about what's really going on eventually. But doubt we will get clarity anytime soon.