Why this game failed (Business Major POV)

Post » Fri Jun 03, 2011 4:16 am

I made this thread with a different intent from other threads. Right now, other threads in this forum are either a "I hate CryTek" or "I love CryTek!" type threads (basically, black-and-white, one end of the spectrum or the complete opposite)

In this thread I'll try to explain Crysis 2's failure from a business standpoint. What you think of it is up to you. I'm not trying to convince anyone to support Crysis 2, or to hate it either. Your time, your read, your thoughts.

http://investor.ea.com/releases.cfm?ReleasesType=Earnings

Crysis 2 was released in light of poor revenue streaming and a bad Retained Earnings account in EA's T-Accounts. Look at their Q4 Shareholder's Report for 2010 and Q1 Shareholders' Report for 2011. They lost over ONE HUNDRED AND FIFTY million dollars in Retained Earnings, which Sales did NOT make up for with Crysis 2. Considering the leak (build 5260) they lost an additional undisclosed amount of sales (2000 gamers and higher continue to play the Crysis 2 leak on Tunngle and other virtual LAN networks, and that's only on the unofficial, quite buggy Server Browser within Tunngle, I'm sure there's even more playing on private vLan servers, which is hard to account for).

Also, EA's Net Cash Flow from Investing Activities for Q1 2011 and Q4 2010 were drastically lower in YTD comparison with the previous year, almost by 200 million dollars of a LOSS.

In Q4 2010, after taking Sales, subtracting COGS (Cost of Goods Sold), and other operating expenses, EA was NOT making a net income. In fact, they had a net loss of over 100 million dollars. It didn't matter how many copies of whatever EA-contracted game was sold. EA was losing money anyway and their net losses were obvious to any discerning shareholder.

I'll say it again: EA was and continues to lose money, despite whatever-number-million-copies of whatever EA-game is being sold to consumers.

If that doesn't tell you something, I'll spell it out for you in English from a business standpoint. EA needed money fast, they figured this out way before Q4 of 2010, so they asked CryTek GmbH to release Crysis 2 sooner. CryTek GmbH was probably like "No way! We would need more people! Our single player is mostly complete, but our multiplayer needs more time!"

What does EA do? They started up CryTek UK. Hired a bunch of amateurs to slap together a separate multiplayer component away from the rest of Crysis 2. Remember when CryTek said the leveling up system would be "persistent across single- and multi-player"? That never happened.

GmbH would focus primarily on single player, UK would focus on multi-. Those were the new ground rules by EA.

Only, the code disparities were obvious enough to show that EA didn't have the amount of funds to hire ACTUAL professional game designers for CryTek UK. So they hired on-the-cheap, and it was pretty obvious to the customer/gamer when they finally got their hands on Crysis 2 on launch day: There was no serial key protection (literally, anyone could punch in a RANDOM serial and the game would let them play on any official multiplayer server).

If this isn't obvious enough to you, I'll dumb it down even more: Consumers got a broken game, and it's because of EA's bad financing practices, stemming from poor Net Cash Flow from Operating and Investing Activities.

Will Crysis 2 ever be fixed? Maybe, and it depends on how fast/effective the employees are. Given the results CryTek UK has shown us so far, I doubt we'll get any results any time soon. It took CryTek UK practically TWO PATCHES before they corrected the CD-key problem and banned off any pirates trying to play on official servers. It took a total of FOUR patches until CryTek UK could identify viral codes allowing cheaters to play online undetected. For weeks, gamers like you and I witnessed the community complaining about cheaters, intersparsed by incessant flaming across multiple threads by both ends of the spectrum.

While CryTek UK was struggling to fix Crysis 2, game companies like EPIC Games Inc, which almost always has a positive Net Cash Flow, has updated its game nearly on a weekly basis if you subscribe to their ListServ on UDN for beta patches. When a gamer spots a bug, and points it out on ListServ, it gets FIXED WITHIN THREE DAYS. Why? Because Epic HAS the manpower. They HAVE the money. (Are their games perfect or at the very least bug-less? That's a different story, but at least they have ACTIVE and RESPONSIVE manpower dedicated to supporting its customers needs in nearly real-time)

Point being? EA is going broke. I know it, EA shareholders know it, no one wants EA stock anymore because it's not only worthless now, it's actually HARMFUL to its owners.

Ultimate point? This one is up to you. Do you want to support Crysis 2? I think the game has (had?) a lot of potential, but bad financing screwed it up. Will it ever get better? Maybe, but by the time it gets better, many players will have left.

Or maybe you'll choose to leave Crysis 2, in favor of supporting other game companies.


My personal opinion? I think EA should shut down CryTek UK, screen its laid-off staff for competency, and move any (if at all) qualified staff over and merge them with GmbH in Germany. Reduce employee salaries, but promise a higher end-year bonus in an attempt to increase productivity rates among CryTek's unified staff force.

Long run? EA should evaluate its companies and terminate any contracts with less successful titles. GAAP guidelines dictate EA's "goodwill" value, and their goodwill has fallen from 2010 to 2011. This in turn means shareholders are not inclined to invest in EA, which means less money for any of EA's contracted companies like CryTek. So, EA needs to build trust again in the financial market, somehow, or EA's companies will not see any investing streams. Remember, investing comes before sales. Poor investing = poor game = poor sales = poor net income. I've already shown you that this model proved to be the demise for EA in Q1 2011/ Q4 2010, hence the failure of Crysis 2.
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Quick draw II
 
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Post » Fri Jun 03, 2011 6:53 am

3 votes, 30 views, no replies? With the amount of flaming on this forum, I'd have expected a heated reply by now (hopefully with financing opinions). Would love to hear what the community thinks of EA's/CryTek's financial future.
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Rob Smith
 
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Post » Thu Jun 02, 2011 11:41 pm

Great post sir. Great post!
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Far'ed K.G.h.m
 
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Post » Fri Jun 03, 2011 12:56 am

tl,dr....wont mind crytek shutting down....Not interested in their games anymore
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Josh Trembly
 
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Post » Fri Jun 03, 2011 3:50 am

I think Crytek should break away from EA until EA get their sh*t sorted out.
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Zosia Cetnar
 
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Post » Thu Jun 02, 2011 5:18 pm

Interesting post, Sir!
But as far as I know the EA Premium Partners (or however they are called, Crytek, Dice, id,...) have the right to decide the release date, but can't easily postpone it. And I can't recall any announcements for Crysis 2 release date other than "early 2011", you?
So in my eyes, EA is not the actual reason for Crysis 2 being unfinished. EA is just the "bank", that gave Crytek the resources they asked for and published the game. Then, Crytek just ran out of time/resources.

You might have heard that the Engine with Editor will be available in Summer. Would be interesting to see, if EA is involved there too, and if the release will be postboned or not... Maybe you are right indeed. So, thx for the POV, I will consider this in future rants :D
Peace
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P PoLlo
 
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Post » Thu Jun 02, 2011 7:52 pm

I think Crytek should break away from EA until EA get their sh*t sorted out.

That would involve terminating contracts, which I imagine would be very costly for CryTek (penalty fees, lack of investment support, etc). Then again, CryTek got poor investing to begin with.. Give CryTek 1 more year, and they probably would've released a good Crysis 2 without CryTek UK even existing. Would've saved EA's finances too in the long run.


Interesting post, Sir!
But as far as I know the EA Premium Partners (or however they are called, Crytek, Dice, id,...) have the right to decide the release date, but can't easily postpone it. And I can't recall any announcements for Crysis 2 release date other than "early 2011", you?
So in my eyes, EA is not the actual reason for Crysis 2 being unfinished. EA is just the "bank", that gave Crytek the resources they asked for and published the game. Then, Crytek just ran out of time/resources.

You might have heard that the Engine with Editor will be available in Summer. Would be interesting to see, if EA is involved there too, and if the release will be postboned or not... Maybe you are right indeed. So, thx for the POV, I will consider this in future rants :D
Peace

Your'e right, Premium Partners can decide release dates, but nothing in their contracts says "Hey, you can postpone your game as LONNNNNGGG AS YOU WANT, because we at EA are always going to have investing money for you!" So in that respect, maybe you're right, maybe EA got fed up with investing in EA and just gave up and said, "Just ship what you have already, CryTek, we can't wait anymore. Our company's in shambles and we need money now."

But I would disagree with you on EA just "being the bank". EA invests in companies, expecting a return, like standard business practices go. EA invested in CryTek but gave them lousy assets to work with (CryTek UK, again, I know I keep hammering them, but they really are a low-quality games division of CryTek)

EDIT: On second thought, there might be a possibility the Editor will be delayed. At the same time, wasn't the Editor finished the last time we saw it in promo trailers? Wouldn't the Editor have to be complete already for the game to have existed int he first place?

Good post!

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Juan Suarez
 
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Post » Thu Jun 02, 2011 8:28 pm

Pow, right in the kisser.
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Damned_Queen
 
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Post » Fri Jun 03, 2011 4:58 am

But I would disagree with you on EA just "being the bank". EA invests in companies, expecting a return, like standard business practices go. EA invested in CryTek but gave them lousy assets to work with (CryTek UK, again, I know I keep hammering them, but they really are a low-quality games division of CryTek)


Yeah, "Investor" is better than "Bank", definitely. I just compared it to typical small companies - when they need money they ask a bank. Bigger scale you go with specific investors, I guess. :)

About Crytek UK: I think they did a great job. All they had to use is the engine of GmbH. And there are enough bugs in multiplayer that are engine related. It just looks like both, UK & GmbH ran out of time. Also the bugs might be so engine specific, that Crytek UK can't actually work on a patch now, and it's all up to GmbH, which is at the same time trying to get DX11 support finished. If you are talking low-quality multiplayer in terms of "it's not like CrysisWars" or "it's too much like CoD" I'll respect that opinion, but in terms of software quality I don't really know what you mean...?
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Jake Easom
 
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Post » Fri Jun 03, 2011 6:17 am

EDIT: On second thought, there might be a possibility the Editor will be delayed. At the same time, wasn't the Editor finished the last time we saw it in promo trailers? Wouldn't the Editor have to be complete already for the game to have existed int he first place?

Good post!

My main speculation for the inclusion of the editor is the Direct X11 optimization work going on for CryEngine 3. Though, we haven't heard any news lately about this, so there's not much I can say. Overall, it sounds like the game had quite a troubled development, and is also why there has been little news lately from them. It would be a shame to see CryTek go under because of financial mishaps from the publisher.
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Mr. Ray
 
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Post » Thu Jun 02, 2011 5:37 pm

But I would disagree with you on EA just "being the bank". EA invests in companies, expecting a return, like standard business practices go. EA invested in CryTek but gave them lousy assets to work with (CryTek UK, again, I know I keep hammering them, but they really are a low-quality games division of CryTek)


Yeah, "Investor" is better than "Bank", definitely. I just compared it to typical small companies - when they need money they ask a bank. Bigger scale you go with specific investors, I guess. :)

About Crytek UK: I think they did a great job. All they had to use is the engine of GmbH. And there are enough bugs in multiplayer that are engine related. It just looks like both, UK & GmbH ran out of time. Also the bugs might be so engine specific, that Crytek UK can't actually work on a patch now, and it's all up to GmbH, which is at the same time trying to get DX11 support finished. If you are talking low-quality multiplayer in terms of "it's not like CrysisWars" or "it's too much like CoD" I'll respect that opinion, but in terms of software quality I don't really know what you mean...?

For instance, Crysis 2 shipped out with a multiplayer component that allowed ANY serial key to play, even invalid ones like CRYT-EKSU-CKSD-ICK-1234. It took days and almost two weeks for TWO PATCHES to come out before Crysis 2 even HAD a mediocre form of CD key protection.

Warez groups like RELOADED and SKidROW were laughing as they released fake serials that allowed pirates to play online in official servers.

I don't know any other game company that has shipped out a game on release day that still allowed fake serials to play online. This is so basic in game design, it's appalling that a multi-million dollar company would flake on it on release day. Especially with all the marketing hype that the game was going to be so great.
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Jennifer Rose
 
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Post » Fri Jun 03, 2011 1:54 am

I have seen first hand similiar financial situations in companies where bad decisions are made out of desperation. If they found it necessary all I can say is that it's sad it had to be the Crysis franchise to take such a hard blow. I still have hope for Crysis 2 but I despise many of EA's practices so at this point I won't be buying one of their games again unless they fix/save Crysis 2. I'll never be pre-ordering again that's for damn sure...HA! I still have hope for this title though.

Great post, I enjoyed the read.
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Rhi Edwards
 
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Post » Fri Jun 03, 2011 7:40 am

I have seen first hand similiar financial situations in companies where bad decisions are made out of desperation. If they found it necessary all I can say is that it's sad it had to be the Crysis franchise to take such a hard blow. I still have hope for Crysis 2 but I despise many of EA's practices so at this point I won't be buying one of their games again unless they fix/save Crysis 2. I'll never be pre-ordering again that's for damn sure...HA! I still have hope for this title though.

Great post, I enjoyed the read.

Me too! I've seen restaurants open up, and the owners don't market enough, or over-market, and end up incurring too high in operating and investing expenses despite otherwise would-be great revenues. I think it's about 70 or 80% of restaurants fail in their first year of startup.

For EA to be a long time company and failing, it's either a bad sign of the economy, or EA just doesn't know how to commit to the right financial decisions. Crysis 2 was screwed hard regardless.
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Donald Richards
 
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Post » Thu Jun 02, 2011 7:49 pm

The game failed because there was no passion put into making the game. The general lack of innovation and mundane "barely good enough" effort put into the title makes not only the game look bad, but crytek as well.

After Crysis 1, they took the safe road, and that failure to take a proper risk and make something nobody has made before has lost them a lot of respect with a lot of gamers.

But good riddance I say. I can only hope other companies take note of this and try not to repeat these mistakes. (They won't.)
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casey macmillan
 
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Post » Thu Jun 02, 2011 4:56 pm

Your are half-right, but this game is far from failed...
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Laura Shipley
 
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Post » Fri Jun 03, 2011 12:33 am

Where's the button for "I have better things to do that read a crap load of text about companies economic situations and I will buy games based on how good they are not who makes them"?
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KiiSsez jdgaf Benzler
 
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Post » Thu Jun 02, 2011 7:15 pm

I would blame both EA and console monkeys
-BC2 also released in march. Crysis 2 was delayed to not confront Black OPs.
-EA releases "unproven" franchises in March. May was looking crowded with Duke and DX3 releasing, both of which were cancelled.
-EA has a habit of dumbing down and heavily altering the gameplay of games. ME3 is designed for mass market appeal, with "Shooter meets rpg" elements.
- They can call this crap whatever they want, but please dont call it crysis.
-Crysis 1 as almost a religious following, and with Crysis 2, Crytek could have, atleast theoretically, eaten BF3's market share
-Crytek placed huge emphasis on copying to make bucks, rather than innovating to make big bucks
-Crytek is a tech company first, and crysis 2 is proof of concept of CE3. They did not want to scare away game devs, who have become extremly stupid these days. Their tiny minds can think beyond on the rails shooter.
-Console fanboys prove that humans are devolving. They cant imagine an fps without corridoors, killstreaks,cheap advantages, random kills and progression system.
-Crytek UK are a bunch of amateurs that have little experience in PC game development
-Crysis franchise has now joined the likes for FEAR, another strong pc franchise, watered down because of console stupid monkeys
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Sweets Sweets
 
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Post » Thu Jun 02, 2011 7:15 pm

Agreed. Good observation on the March thing.
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Elina
 
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Post » Thu Jun 02, 2011 5:48 pm

EA is Bad for gamers, Good for CEOS and high salaray employees, and ive pretty much realized this since 2001.
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Rach B
 
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Post » Thu Jun 02, 2011 4:26 pm

I had a wonderful time reading this post, probably just because it's something intellectual in this forum. Although, even if this is the case it won't stop me from buying some games. Let's take BF3 for an example, it's going to be good. If they can make BC2 do well, they won't be screwing up the main stay of the series. That's DICE though, not Crytek. =P
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Robert Bindley
 
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Post » Fri Jun 03, 2011 1:04 am

Finally something meaty to read. EA sound like a clusterf*ck of managers and CEOs. It just didn't make sense that Crysis 2 was release like this and this explains a lot.

Crytek get it in the neck and now are trying to repair the damage done. EA, get your sh*t in order!
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David Chambers
 
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Post » Fri Jun 03, 2011 4:35 am

Hmmm... Well, seeing as how I'll have my Bachelor's degree in Business Administration (accounting emphasis) in December, I understand everything you're saying. However, there's also a lot of opinion and pure speculation in the post as well. Nevertheless, it was a good read.
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Angelina Mayo
 
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Post » Thu Jun 02, 2011 8:14 pm

I would blame both EA and console monkeys
-BC2 also released in march. Crysis 2 was delayed to not confront Black OPs.
-EA releases "unproven" franchises in March. May was looking crowded with Duke and DX3 releasing, both of which were cancelled.
-EA has a habit of dumbing down and heavily altering the gameplay of games. ME3 is designed for mass market appeal, with "Shooter meets rpg" elements.
- They can call this crap whatever they want, but please dont call it crysis.
-Crysis 1 as almost a religious following, and with Crysis 2, Crytek could have, atleast theoretically, eaten BF3's market share
-Crytek placed huge emphasis on copying to make bucks, rather than innovating to make big bucks
-Crytek is a tech company first, and crysis 2 is proof of concept of CE3. They did not want to scare away game devs, who have become extremly stupid these days. Their tiny minds can think beyond on the rails shooter.
-Console fanboys prove that humans are devolving. They cant imagine an fps without corridoors, killstreaks,cheap advantages, random kills and progression system.
-Crytek UK are a bunch of amateurs that have little experience in PC game development
-Crysis franchise has now joined the likes for FEAR, another strong pc franchise, watered down because of console stupid monkeys

Why must console players be "monkeys?" I think idiotic, ignorant people like you are the "monkeys." The platform has nothing to do with how developers make the game. - "Console fanboys prove that humans are devolving. They cant imagine an fps without corridoors, killstreaks,cheap advantages, random kills and progression system." Yes, because all of those things are the direct result of consoles.... You're retarded..

You seem to have a flawed understanding of how things work as in "stupid people buy consoles and smart people buy PCs." Just because you pay more and have better graphics doesn't mean that you're smarter than anybody. I play on my PS3 pretty regularly and I'd bet anything that you're definitely no smarter than I am.
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ashleigh bryden
 
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Post » Thu Jun 02, 2011 6:13 pm

Hmmm... Well, seeing as how I'll have my Bachelor's degree in Business Administration (accounting emphasis) in December, I understand everything you're saying. However, there's also a lot of opinion and pure speculation in the post as well. Nevertheless, it was a good read.

True, it's a shareholder's opinion :)

No way in hell am I ever touching EA's stock until they get their sh*t together. The video game industry is so bipolar when it comes to their public shares.
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Oscar Vazquez
 
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Post » Fri Jun 03, 2011 8:27 am

Okay, I thought crysis 2 was okay. Except for all the bugs, **** multiplayer (CoD w/nanosuits) and last but not least they left almost every good aspect of crysis out. Hell, they cannot even make the special edition extras page work. I honestly will be done with crysis 2 after I finish campaign mainly because there is no LAN support and I primarily play over hamachi with a friend in crysis wars (less lag) and we cannot play crysis 2 over hamachi and so I get cut by my "heavy firewall" connection that tags me as ultra high ping. If I cannot even host my own game at all then it is pointless to try to play on line with friends even if I did not have such a **** connection.
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Alan Whiston
 
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