Interzone Games (Perth studio) close to liquidation

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We've had to pull down our news item on Interzone Games last Saturday as our tip off was just too early to report. The information provided then was premature for when it was posted, and Interzone staff members were right to respond that it didn't reflect the current situation at the Perth studio. The tip off was true, but things were set to happen only a short time later.

The news we had at hand was that Interzone Games, the Perth game development studio, will be closing down sometime around the 15th of February, and a Chicago executive from the parent company was due to arrive this week to bring the assets and servers from the Perth studio back to the U.S. The locally developed BigWorld tech based MMO social soccer game, Interzone Futebol, and all its assets and code is set to be handed over to a new studio in Ireland called Big Collision Games where they're expected to continue development with new funding received based on the latest builds from the local studio.

Tim Colwill, former World Designer for Interzone Games in Perth, has provided Kotaku AU with an extraordinary run down of how the Perth based game studio reached its current dire state, where highly dedicated staff members were promised a lot, continued to work unpaid, but were consequently exploited and owed a substantial amount in wages and superannuation. The amount estimated owing is $500,000 to staff, and $1 million to the ATO.

The damning report makes some serious allegations towards the Chicago-based parent of breaking a variety of Australian laws, from not paying superannuation to trading without a resident director.

To finish it off, Tim describes the ultimate cost of what this whole mess means for the Perth games industry....

As an unfortunate side effect of this, it is almost certain that the games industry in Perth will be irreparably damaged. The Western Australian government sunk $500,000 into Interzone to get it started, and with the studio now being liquidated, it is a huge disincentive for them to provide any further support to any other companies that might wish to base their operations here.

Read the entire story over at Kotaku AU.

*** Update, staff have been locked out of the studio. More details here.

Comments

Anonymous's picture

If the ATO is owed that much money can't they prevent the parent company taking its assets out of the country?

Anonymous's picture

You would think so, but they have known about the situation for well over a year and were asked to step in by a number of people in the last 2 days.

We have been chasing superannuation payments for over a year (during my 2 year employment, not a single cent of superannuation has been paid to me) and my latest generic letter from the ATO stands at "Employer debt established".

NathanRunge's picture

That's downright despicable. I'm hoping those responsible can be indicted, but the 'trading without a resident director' charge seems to indicate said people may not be accessed.

Anonymous's picture

Best of luck to everyone! I suffered a similar story from a games company.

I also stayed at a games company in similar situation and I still have 3 months owed and will never receive a penny. I believed in the game, the company and the hope of everything working out like the CEO said it would. We thought we were different. Respect to staying, but it's the wrong thing to do full stop. It's just a game, it's not your life.

When a company runs out of money and starts spending yours, it's morally bankrupt. Simple. They are _gambling_ with your money.

I will never empower a company to gamble with my money again. A bad gambler doesn't know when to quit. A bad gambler thinks that they need to keep gambling to get out of more debt, when in reality they just keep digging a deeper hole. Just stop.

Have a cry, wipe your tears, have a laugh about the good times. But remember never let an employer gamble with your income.

If they can't pay, leave.

Anonymous's picture

If you don't get paid what you should in a timely manner, then something has gone wrong, day 1 you should assume the worst.

This is clearly one of the simplest breaches of employment contract known. Make it clear that you won't be turning up for work nor doing work from home.
Make it also clear that this is on their time and you expect to get paid both what you're owed up-to-date and up to the point you are either made redundant (and additionally paid your redundancy entitlements) or the issue is resolved. Make it clear you wont be accepting any penalties against your awards holiday/sick/time in lieu. Though it may cost money talk to a Lawyer/seek legal advice straight away.

Some may think this kind of response is a little simplistic and that it may be coming from disaffected Troll, nothing could be further from the truth. I've been in the local industry for close to 10 years now and I'm happily employed within it and happy to continue. Though this industry is small and getting a new position has a lot to do with personal reputation, you will only be doing yourself a disservice continuing on without payment.

Anonymous's picture

It's all very well to say this, but at the time, when it's YOU in the position, it's a lot less black and white. For a start, there aren't many other jobs in games in Australia, certainly none in Perth, without setting something up yourself.

Secondly, some of the guys, such as myself, were on 457 visas and therefore TIED to the job. If we left the job, we'd have to leave the country.

I could go on and on giving reasons why it can make sense to stay at a company that is not paying you in a timely manner, but to be honest I'm rather sick of telling the story. Suffice it to say that the situation was presented as short term and would be resolved in a matter of weeks. We're just need to get to Beta in 2 weeks, we're close to having investors sign but they want a playtest, we're trying to sign a publisher, etc. In my opinion, had the management been honest and competent, there were a number of occasions at which point we could have turned the company around. Signing a publisher was the major milestone for me, and when the contract we were assured would net the studio over $700k in funding instantly was shown to only offer a % of the profits once the game was shipped, that was the last straw.

Anonymous's picture

I am speaking from personal experience, I should have been more clear on the point.

My comments were not meant to offend you in any way, and I sincerely wish you guys the best of luck with whatever course you choose to take.

Anonymous's picture

It's pretty depressing to see Aussie developers closing down left, right and center--especially to someone who's still trying to break into the industry.

Good luck to all those affected.

Anonymous's picture

Yea good luck with that. I do feel for the younger guys just coming out of the games courses, etc, but they have no hope of picking up work in this country and expecting it to be a long lasting career. Unless you have a duel citizenship visa (your parents are foreign) your choices are immediately cut to a very low percentage of success. Go overseas, get that experience and knowledge you wont get in Australia and then bring it back. Its not impossible, but you have to be prepared to pay the price to get there.

Anonymous's picture

I agree. The educational system is currently geared to churn far too many students out into the cold, but its not impossible for juniors. Just incredibly difficult.

My advice to juniors today will be to just do whatever it takes to build your skills, showreel and folio and keep trying for as long as it takes. Get a part time job at McDonalds to support you.

Those who aren't prepared to suffer for thier craft won't make it. This will be the largest percentage of students. Its not an isnult to them, it's jsut that they aren;t as passionate about entering the industry as the need to be, for whatever reason.

But there are junior positions opening every year. And that means its possible for someone to make it.

Anonymous's picture

It's unfortunate. I heard about this debacle at GCAP last year, though it had been going on much longer than that. However, it highlights the fact that a) running a business is hard, and b) running a games business is even harder, especially within the traditional developer-publisher business model.

The recent cull of local companies was inevitable, but also necessary to encourage industry growth. A small proportion of those affected will have the courage to form their own studios. Some will flourish, some will fail, but there will always be a place for you in a studio if you're good enough. Spend you're time practicing your craft, get to know people in the industry and you'll get there.

Anonymous's picture

The culling is far from over. 2010 will claim many scalps.

Anonymous's picture

"This is clearly one of the simplest breaches of employment contract known. Make it clear that you won't be turning up for work nor doing work from home."

Does that mean people at Big Ant should only show up once a fortnight..?

Anonymous's picture

Know your rights.

Anonymous's picture

Firstly, everyone at Big Ant is paid up to date, secondly, unfortunately, they have kept some staff on for far too long that are just not up to it - cruel to be kind - get rid of the rubbish and the whingers and the industry might get somewhere.

Anonymous's picture

Actually that's wrong. No-one at Big Ant has been paid for 2 MONTHS.

Anonymous's picture

I've heard this. It doesnt sound good for them ATM.

Anonymous's picture

I have heard that Marty at Interzone did exactly the same thing with his previous studio, called Flyover Entertainment. He did not pay staff at the end. He did sell the game to Vivendi Universal Games (VUG) for many millions and then the staff were transferred to VUG. Robert J Spencer is not to be forgottern either. He was fired as the Perth based CEO of Interzone for incompetence and largely living the high life using Interzone money. He is as much to blame as anyone as he burned through a lot of money which could have been used to finish the game.

Insider

Anonymous's picture

It's true. There was something about Interzone, the people who succeeded the most were always the snakes in the grass. Rj feigning innocence over in the WA Business News stung almost as much as the unpaid wages.

Robert Spencer defrauds everything he is involved in. Unfortunately for him, the piranha got eaten by the shark.

Anonymous's picture

Trickstar, the successor to Transmission games is already pulling these tricks, only a month or 2 after having started up. I've heard they are aleady missing pay because codemasters havent paid them on time but the lemmings still turn up every day for work.

Transmission also skipped paying super for months btw but Trickstar isn't liable for that. Nice move.

Anonymous's picture

Mix things up guys, because even if the security of a job is left wanting, there's no value in going through the same mistakes with the same people.

Anonymous's picture

This smells like what we went through at fuzzyeyes doesnt it guys ? come on I know theres fuzzyeyes lurkers on here.

Anonymous's picture

Almost identical story to Fuzzyeyes: missed payments, no super for over a year, then finally the collapse in September and the CEO flees to Taiwan with the IP where he hopes to keep working on it.

He owes employees in Australia (and outsource studios) over 200k and over 2 mil to Southpeak (the previous publisher). Meanwhile there is literally ZERO protection from the gov with the ombudsman at a loss for words whenever we ask for advice.

Good thing is most everyone has moved on and is surviving and hopefully not many careers have been destroyed, also CEO now rides a bike cause he's too incompetent to even own a car (karma is a bitch yo!).

Anonymous's picture

the people at ettamogah entertainment, melbourne have similar problem with this.

http://www.facebook.com/#!/group.php?gid=299441511962&ref=ts