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Report: Crytek on the Verge of Bankruptcy, Company Denies Claims – (Update)

June 24, 2014 Written by Alex Co

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Update:

Kotaku has also published a report relaying the same thing: that Crytek is having a hard time paying salaries, that it has been “bleeding staff since March,” and the sequel to the Xbox One-exclusive Ryse has been canned.

Check out the detailed report from multiple anonymous Crytek employees here.

Original Story:

Crytek, the company behind such games as the Crysis franchise and Ryse, are in financial turmoil according to a report by German gaming magazine GameStar, who titled the piece as “The Vultures are Circling Over Crytek.”

The report was translated over on NeoGAF and we’ve listed the info below.

  • *Information is from a half dozen independent sources, according to Yerli “dramatized rumors” from disgruntled ex-employers 

  • *Salaries are paid late and leading employees are sending applications to other studios at home and abroad 

  • *Warface doesn’t work outside of Russia, other attempts at F2P were unsuccessful 

  • *G-face was a flop

  • *The development of Ryse was catastrophic: mere months before release, the title was severely behind, only with additional manpower they were able to finish it

  • *Disagreements with MS over the ownership of Ryse’s IP could be a red flag for other publishers

  • *Adoption of CryEngine not going as planned, word-of-mouth at GDC was negative

  • *Too many employees, burn-rate too high (3-5 M euro).

  • *”The vultures are already circling,” says a leading representative for a major publisher.

  • *Big publishers are not interested in buying outright,would rather wait for bankruptcy, sign the talent and shop the IPs. 

  • *Belarusian Free2Play giant Wargaming is listed as a possible buyer of Crytek

  • * Avni Yerli says a cash injection for the company is finally imminent. The contract has not been signed yet, but is as good as in the bag. “It’s not all great. Our transition to Free2Play studio was not painless. But that is now behind us, “he concludes.

Now, given how the report seems to be a tad too specific to just be a random rumor, there’s a good chance that something is indeed happening at the company. However, a Crytek spokesperson has denied the allegations and has supplied Eurogamer with the following statement:

Regardless of what some media are reporting, mostly based on a recent article published by GameStar, the information in those reports and in the GameStar article itself are rumors which Crytek deny.

We continue to focus on the development and publishing of our upcoming titles Homefront: The Revolution, Hunt: Horrors of the Gilded Age, Arena of Fate, and Warface, as well as providing ongoing support for our CryEngine and its licensees.

We have received a lot of positive feedback during and after E3 from both gaming press and gamers, and would like to thank our loyal employees, fans and business partners for their continuous support.

While that should have doused the rumor flames, here’s where it gets interesting. According to Eurogamer, before E3, a source told the site that staff at Crytek’s Sofia office in Bulgaria have not received their salaries for the past two months.

In addition to that, the site said that it has gotten “worrying reports” coming out of Crytek UK, which is rumored to have failed to pay employees on time. and “Management have been accused by some staff of a lack of transparency over these issues, and many are disgruntled.”

Lastly, while the GameStar report cites World of Tanks maker Wargaming as potential buyers for Crytek, Eurogamer said that it has heard that a Chinese firm is interested, that I assume to be Tencent given its vast war chest and focus on gaming.

Regardless of what you believe in, it looks like there is some smoke regardless of Crytek’s denials.

We’ll keep you posted for any developments if and when they happen.

[Source: GameStar, Eurogamer, NeoGAF]