In an extensive interview with Eurogamer, Crytek co-founder and CEO Cevat Yerli has addressed Crytek's problematic year, painting a picture of a company that has struggled in transition.
It follows widespread reports of unpaid wages, high-profile departures, and downsizing at Crytek studios in Austin and the UK, accusations of mismanagement, and the sale of Crytek UK and the Homefront IP to Deep Silver, through which Yerli and the rest of Crytek's upper management have faced accusations of mismanagement and arrogance.
Responding to those accusations, Yerli shies away from openly defending his personal reputation. "I don't want to defend myself because defending myself would imply me talking good about myself," he says. "Let me say it this way: if I really was a bad person I don't think Crytek would have such a loyal base. Are some people upset? For sure they are, because they have been let go. Am I making the best choices? There's certainly room for improvement. Can we learn more? Sure. Every day we try to improve... We make mistakes. We are human. We wake up, go to our job, eat like everybody else, then go to sleep. In general we are flawed. If I did say something in the past that came across as arrogant, maybe it's because I don't speak the native language. But I don't mean to offend people. I just mean the best for people."
Yerli states that staff at Crytek were warned about the company's solvency problems, and advised to work out a deal with their banks to cover any potential issues. Explaining the decision to delay payments to staff, Yerli had this to say: "You have two choices, right? Either you delay payments - again delay... it's not that they didn't get paid, they got delayed - delay payments and salvage the company. Or, you push your cash flow directly to the studios and you file for insolvency. Both options are really bad. So you have to make the better of the two bad decisions."
He claims, too, that the vast majority of staff at Crytek remained loyal despite the payment issues, and that only "a few people" complained. "There are expectations from some staff that aren't realistic," Yerli elaborates. "There are expectations, for example, that we reveal the entire situation of any deal, any cash flows and P&Ls and things like that. You can't do that. That's internal. Even our investor doesn't have that level of access to be honest."
It was Crytek's transition ongoing transition from boxed-game developer to free-to-play service provider that caused the company's troubles, says Yerli. "The primary cause [of the issues] was the transformation. We're observing where the industry is going. We knew free-to-play or games as a service - online services in general - will become the future of gaming. We've known this for a while. But we were finishing up our retail games or still had them in development, with Homefront for example.
"But that shift required a whole different capitalisation, as well as additional talent pool and different types of spending and forecasting. All of that caused temporarily diminished capital resource, which we have now overcome. This was the main cause of the situation - the whole transformation of Crytek."
Yerli claims that a revenue deal is what saved the company, not an investment or a buyout, but refused to give details or indicate when or if that revenue deal would be announced, or whom it was with. He claims, however, that Crytek did not need to sell its UK studio and Homefront in order to survive, but chose to do so in order to focus on its upcoming free-to-play titles Hunt, Warface and Arena of Fate. "Homefront's timeline, as well as the focus as a studio we would have needed to put behind that, would have been detrimental to the transition to us. That was the comparison: are we delaying the transition further, or are we going to do it earlier than later?" he says.
"We didn't need to downsize our company. Maybe this didn't come across. We didn't need to sell Homefront... It wasn't a pure commercial deal. It was a strategic deal for focus. We didn't need to sell Homefront or the UK office."
The full interview at Eurogamer is well worth a read. It's a sobering insight into what happens when a games company hits real trouble.