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When I first heard about the firings and the delay to the game I thought "This doesn't sound plausible. Are they really going to ruin their investment and effectively kill the company to supposedly save a quarter of a billion. That would be unbelievably stupid". But with every subsequent nugget of information it's getting increasingly clearer that they, Krafton, actually are unbelievably stupid. They're pretty much guaranteed that if Subnautica 2 gets released (and that's assuming Subnautica 2 is in a good enough position to be released) the studio will shutter as all the talent will move on and all the money Krafton spent acquiring the studio is thrown in the wind. They're not even going to save the quarter billion because the delay means they're going to be paying at least 6 months wages for minimum effort work because I doubt anyone at that studio is willing to put in the effort after being cheated out of their bonus.
Even if it's all so obvious I still find it hard to believe the publisher is THAT stupid. But that's the world we live in, where people get to make idiotic decisions because they're greedy as fuck.
Yeah in the world where EA exist and Xbox close down a studio that just launched a successful game and also fire bunch of people and shutting down lot of project, this doesn't sound far fetch at all.
I guess the lesson the first game trying to teach is to never believe any giant corporation.
They paid for their expertise, even offering a bonus that was clearly less than whatever their projected profit would be, and then tried to squander it because they didn't listen to their expertise.
Publishers in all kinds of industries are risk adverse to the point of not trusting whoever they made deals with to follow through. This is totally on brand for publishers!
I mean, the publisher seems to be pretty stupid, because...how did they figure that $250 million?
There are two entries in the Subnautica series, Subnautica and Below Zero. Subnautica has sold "over 5 million copies" at a retail price point of $30. So that's $150 million in gross revenue. For this back of the napkin math I'll assume that the "over five million" and the number of copies sold at a discount come out in the wash. 30% of that gross revenue is going to immediatley go to Steam or whatever other platform, so the company got $100 million in net revenue before their own expenses like rent and power bills gets at it.
I cannot find sales figures for Below Zero, but it sells for the same price point and I don't think it could have possibly sold more than Subnautica did, so let's figure another $150 million gross, $100 million net.
Subnautica as a franchise netted its studio ~$200 million across the launch of two games selling ~10 million copies.
And Krafton had agreed to pay out a $250 million bonus for reaching a certain revenue target in 2025, which they were on track to do given the announced early access launch.
Just to put them in the black for that bonus, Subnautica 2 would have to sell better than both previous games put together at a higher price, and that doesn't touch the purchase of the studio, operating expenses, or the dump truck of cocaine that must have been involved in these financial decisions.
I didn't want to think they're completely incompetent so I decided to do some digging. That $250 million is actually part of their acquisition deal. Krafton technically bought Unknown Worlds for $750 million. $500 million was paid up front and the extra $250 million was due for 2026 if Unknown Worlds met the performance clause. That $250 million has nothing to do with the sales of Subnautica, it's part of the buyout.
This could mean they were always going to try and stiff Unknown Worlds. It also means it's probably less about the people working at Unknown Worlds getting stiffed and more about the leadership expecting a payout that was agreed upon.
Okay, they spent $750 million for a studio that has barely made $250 million in its history. I still don't think the math mathulates here.
So what? Things are mostly valued by what the projected performance is, not the prior performance.
Also it seems that Krafton assumed they would miss the performance criteria, so they thought they'd bought it for $500 million. That doesn't sound unreasonable for a studio that made $250 million with a single release and already had more in its pipeline.
What do you base projected performance on if not prior performance?
I don't think Unknown Worlds did have a $250 million single release; that's probably what they netted across three games, Natural Selection 2, Subnautica, Below Zero.
Stupidity is an ingredient in betting against your own teams. Because this is what happens, you put yourself in a position where you don't want your own victories.
Any way, I see it as our goal as the game playing public to figure out how to make this cost Krafton more than $250 million.
"“This doesn’t sound plausible. Are they really going to ruin their investment and effectively kill the company to supposedly save a quarter of a billion"
You should see the documentary about the making of Lego Island: https://www.youtube.com/watch?v=bG55COe_f8I
A wildly succesful game, so what did the publisher do after having released a wildly succesful game and having the team that made it under their wings? Fire them all and try to weasel out of the promised bonuses.
It was standard practice 30 years ago, and it still is...
Standard practice has been to fuck over the developers after release. They haven't released Subnautica 2 yet. They're screwing the developers over before they've cashed out the game. That's the part that made it implausible in my mind.
It's ready for prerelease it seems, and very playable. Sounds like they already have what they need. They're just taking a little headstart :p
We don't know the exact state of the game but what we know is that it's early access ready. If previous Unknown world games are of any indication it's still 2 years away from final release. They might make some money back with early access but it will be negatively reviewed under the pretense that it will not be properly finished. The release is already guaranteed to take a financial hit.
Most Korean companies are like that. Extremely shortsighted, zero capability at creating and managing new markets.
Correct me if I'm wrong, but most of those 250 million were going to the three people that were fired, not the actual workers. I stopped caring about this issue when I learned that, seems like just rich people bickering to me.
That's according to Krafton and we know they will bend the truth to create a narrative. But even if it's true I still think Krafton are the assholes here. I'm less concerned when people in positions of power don't get their position enabled bonuses, but Krafton is also taking away whatever bonus the actual workers were originally promised.