Someone help me understand the logic here. You spend 6 million on a company and then shut it down before its had any chance to recoup any of that money back for you.
Maybe Midway just likes buying stuff, probably got a fine collection of solid gold umbrella holders at the head office.
http://www.kotaku.com/gaming/midway/midway-shuts-down-austrailan-studio…
quote:Originally posted by pb
The only time you're forced to liquidate a company for the value of its assets is when the company is seen by everyone as being unable to ever deliver. This is pretty much a worst case scenario.
If you look at the stock market, you'll notice that pretty much every company trades for above its "book value" (accountant speak for what you would get if you just sold its assets).
Absolutely correct, although I'd guess that when the main asset is Intellecual Property which is maintained by the publisher even after the termination of the development studio, the value of it's assets actually liquidated may be much less than the total value of the studio.
quote:
Furthermore, if the Board believes that the project will never make a profit, they just axe it, they don't need an "excuse".
Again, absolutely correct, excluding
1) the possibility that some form of contract for the game existed between the studio and the parent where termination "for cause" wold be needed to avoid penalties; or,
2) the PR value amongst employees, potential employees and studios with which they want to do business in the future.
Don't get me wrong, I totally agree with you in general, but I've personally seen some very short-sighted economic decisions made which actually do axe projects that will make money in the future. It's soul-suckingly depressing when it happens to you, and I feel for those affected here.
quote:Originally posted by mcdrewski
Don't get me wrong, I totally agree with you in general, but I've personally seen some very short-sighted economic decisions made which actually do axe projects that will make money in the future. It's soul-suckingly depressing when it happens to you, and I feel for those affected here.
Sure, I've been sacked when a studio I worked for fell upon hard times so I know what it's like, and I've seen my share of breathtakingly stupid business decisions first hand.
My theory on this is that producing a game is very much like producing a movie - you have a design/script, you decicde how many and what type of programmers, artists, actors, whatevers you need, you bring them together for the game/movie, make it, and then that's it, time for everyone to move on - the nature of the industry is that job security isn't on offer.
Way back in the old days of Hollywood movie studios operated a bit like game studios have been - they had a staff, it would consist of x actors, y directors, z producers etc... These people were on a payroll, and with its staff the studios would make movies. Seems pretty insane when you look at the way movies are made these days, and games are going the same way.
pb
Hrm. Has anyone pondered that maybe, just maybe, the developer has some responsibilities to bear?
Going purely on the time I spent there, it was very rare for a milestone to be able to be hit. Always overpromising and under-delivering. Then there was accusation after accusation when a publisher drops a project.
Scavenger for instance is a derivative of a project started in 2000.. and has been through various incarnations. Each time getting sold to a different publisher and eventually the publisher canning it. From last count, Midway make about 4 publishers.. on the same base project.. shouldn't the bells have been ringing a long time ago?
I personally know _many_ ex-ratbag employees, there is probably one in every game company in Aus :) .. thats the sort of turnover theyve had. But again.. rather than blaming publishers.. and screaming blue murder at them.. maybe there are some core issues that were never resolved?
Management especially was always good at ignoring core critical issues, and expecting people to work rediculous hours to compensate for bad scheduling.. poor design.. and over-promising features.
For those there in the last few weeks, the above would be very familiar while trying to pack as much as possible into the 'Vertical Slice'. With everyone knowing the project would be canned if it wasnt improved.
I feel very sorry for the ppl sacked though - these are the ppl that suffer the most, and work their guts out, only to be treated this way - just before xmas is plain redic. Apparently there was a recent hired UK person too.. pretty disgusting.. but again.. Id hesitate in solely blaming Midway.. theres always alot more to it than simple blame games.
Dear All,
Firstly, we just wanted to express our sadness at the news that RatBag had been shut down. Many of us here were big fans of the Dirt Track Racing titles amongst others.
We are currently ramping up our new development studio based in the British Midlands to work on next gen driving and racing titles and would be interested in speaking with any experienced individuals who are now on the search for new positions. We currently have several positions we are looking to recruit for immediately.
As always, we are always open to discussion by interested persons. All communication will be treated as confidential.
Best Regards,
SEGA Racing Studio team.
Nice one SRS and welcome to the board. :) I'm sure SEGA Racing Studio would certainly benefit from some of the expertise at Ratbag. Perhaps too, some of the former employees may begin a new venture in Adelaide? Something could rise from the ashes here.
Adelaide needs at least one Games Studio. Good to hear too that the likes of Team Bondi have sent reps over to Adelaide to conduct interviews.
quote:Originally posted by mcdrewski
You're not thinking like an accountant, and certainly not thinking like the board of a publically listed company.
Not "meeting milestones" is often an excuse to axe a project that they don't believe will make them money in sufficient time. It could be the best game ever due out in 2007 and the publisher will see the cash burn now that they need to report to their shareholders now. This means they can axe a good game or a good team even if it is going to make money.
Why would they do that? If they want money now and their project has the potential to deliver but only in the future they would be able to find an investor who is willing to pay more than the sum of the parts of the company, which is all you get if you just liquidate it like they did with Ratbag.
The only time you're forced to liquidate a company for the value of its assets is when the company is seen by everyone as being unable to ever deliver. This is pretty much a worst case scenario.
If you look at the stock market, you'll notice that pretty much every company trades for above its "book value" (accountant speak for what you would get if you just sold its assets). The idea that a company is worth more than the some of its parts is a basic principle of all systems of economic organisation. If you want to report cash coming in right now you try to sell above the book value by promoting the idea that the company will be worth more in the future.
Furthermore, if the Board believes that the project will never make a profit, they just axe it, they don't need an "excuse", they're the Board, appointed by the shareholders, and they will do as they please, subject to having to face the shareholders next time the Board is up for re-election. Its not like a studio has the right to appeal and say "we made our milestones".
pb