22nd November should have just been game designer Anthony Gallegos’ birthday. But circumstances were unusual this year. His employer, Marvel Heroes developer Gazillion Entertainment, had put him and the rest of its staff on unpaid furlough earlier that week. He didn’t know when he’d see his next paycheque. His dog Shasta had just been diagnosed with cancer, and needed a pricey chemotherapy treatment. On his Twitter feed a week earlier, Gallegos had told fans that his financial situation was rough. Things were about to get worse.
That afternoon, which also happened to be Thanksgiving eve in America, Gazillion CEO David Von Dorman would send an e-mail to Gazillion staff informing them that they’d all lost their jobs. Gallegos had suspected, that might happen, he’d later say on an interview with Kinda Funny Games. What surprised him was a bit of information buried in bullet points: Gazillion was unable to pay out paid time off or severance. Gallegos would miss out on weeks worth of pay in compensation for holiday he hadn’t taken. His benefits would be cut off in about a week.
On a Twitch stream later that day titled “Laid off on my birthday trying to save Shasta,” where Gallegos was raising money for his dog’s treatment, a viewer asked what was happening. “Laid off on Thanksgiving by a company that’s now saying they’re too bankrupt to pay our PTO [paid time off],” he explained.
Gallegos is just one of dozens of Gazillion employees who were laid off the day before Thanksgiving, weeks after being told they had to go on unpaid leave. They’d lose their health insurance. They wouldn’t see money they’d saved up from holidays they never had. They wouldn’t get severance. And the game they’d worked endless crunch hours to keep alive would simply blink out of existence. Now, two weeks after Gazillion’s abrupt shuttering, employees have told Kotaku that they’re updating their CVs, meeting old contacts for coffee and applying for unemployment. Gazillion and Dorman did not return requests for comment.
“Video games are a business. I get it. I just think this whole thing could have been handled better.”
One former employee who wished to remain anonymous said he’s been having trouble sleeping now that he doesn’t have a paycheque. With no severance and without receiving over $5,000 (£3,727) he’d accrued in paid time off, he doesn’t know whether he’ll be able to scrounge up January’s rent for his current flat. He’s considering breaking his lease and moving. He described himself as “scared” and “anxiety-ridden.” Worst of all, he told me, he fears that this will happen to him again. The same month Gazillion shuttered, Telltale Games laid off 25% of its staff. The studio behind Torchlight shut down, too. Is this just what working in games is like?
Gazillion’s future had for a long time been in question, according to four former employees interviewed for this story, all of whom asked to stay anonymous in order to protect their careers. For years, Gazillion had struggled to preserve its licensing contract with Marvel, but the problems started to ramp up earlier this year. Marvel Heroes was popular on PC, but its player base had been steadily bleeding out since its release in 2013, so for Gazillion, porting the game to PlayStation and Xbox became a major milestone. Gazillion had released only one other game and was basically reliant upon Marvel Heroes to stay solvent. This console port, which entered development in 2016 and came out in June 2017, was supposed to be the studio’s saving grace.
But it wasn’t. Employees say during one of Gazillion’s hands-on meetings in early fall, they were told that Marvel Heroes’ console release had underperformed compared to executives’ forecasts. After the studio laid off more staff in September, employees began questioning the studio’s future.
In October, employees learned that Gazillion had lost the Marvel license and may no longer be able to operate Marvel Heroes. But the studio’s executives told staff that they planned to continue negotiating with the massive comic book conglomerate, according to two people who worked there. “We were told renegotiation was an option,” a former employee told me. “I took that at face value and assumed someone was working on getting the license back.” Another employee said, “We were told we’d get regular status updates on the negotiations with Marvel.” Local employees attended Gazillion’s Halloween party. Sources I interviewed report feeling an emotional whiplash.
On 10th November, a temperate Monday in California’s Bay Area, Gazillion employees gathered in a room for an urgent all-hands meeting. Fans hadn’t heard a peep from the game’s development team for a month. Planned updates went unimplemented. Former employees say that they had been gagged because Gazillion was figuring out its next steps and still negotiating with Marvel, so they couldn’t tell players what was happening.
“The ship’s always been kind of rocky”
“The company has always struggled,” one employee, who had worked at Gazillion for over half a decade, told Kotaku. Since 2013, Gazillion had gone through at least three different layoffs, according to four people who worked there.
During this meeting, Gazillion executives told employees they’d be put on unpaid furlough. The studio would keep paying a few employees to keep Marvel Heroes alive. Three former Gazillion staff told me that managers suggested they update their CVs and apply for unemployment.
“The ship’s always been kind of rocky,” a former employee told me, “but we never got an explicit idea from management that the ship was going under until we went on furlough.”
The question of “Why?” lingered. Those who had poured blood, sweat and tears into Marvel Heroes felt they were owed an explanation. All they knew was that the contract had ended and there were issues at the bank. In between bingeing on recent AAA releases like Star Wars Battlefront II and updating their CVs, three former Gazillion employees interviewed said they were fuming.
“We were told things were okay for a long time,” one employee said. “What we were told and what reality was were completely different.”
Another employee said that going on furlough felt “frustrating as hell” and “disingenuous. I felt like we weren’t being told the truth.” Another told Kotaku that he felt “helpless. It was all executives talking to executives.”
A few days after furlough was announced, I reported that Marvel was ending its relationship with Gazillion and, until 31st December, when the servers would go black, players could download characters like Spider-Man, Squirrel Girl and Storm for free. In the meantime, employees waited for an update. None came until Thanksgiving eve, when CEO David Von Dorman sent out an email to the entire staff explaining that the unpaid furlough was transforming into a permanent blanket layoff. Marvel Heroes’ server would shut down in just a few days, not one month.
“Well, if we do get laid off, at least they’ll have to pay us PTO. Why would I take vacation?”
The e-mail, which was forwarded to Kotaku, went on to explain, “The bank has decided not to pursue any course of action that sees Gazillion meaningfully continue into the New Year and this requires that the company terminate its workforce.” Gazillion could not meet its obligation to compensate employees for paid vacation never taken. Employees’ final paychecks, which went out on 24th November, would not include that money. Benefits would end shortly thereafter.
Two employees say Gazillion owes them around $5,000 (£3,727), after taxes, in paid time off. Another employee said they’re owed several weeks in paid time off, but declined to give a specific number. One said that, since the studio was in crunch mode between late 2016 and early 2017, they were asked not to take holidays. After working somewhat regular 50 or 60-hour weeks over those months, they had accrued a lot of extra paid time off. Some employees said they suspected that Gazillion might be doomed, so they’d saved up that untaken paid time off in an effort to keep themselves afloat if the company went under.
“By September, when things were going downhill, the mindset of myself and other coworkers was, ‘Well, if we do get laid off, at least they’ll have to pay us PTO. Why would I take vacation? I can just get that paid out if I get laid off,” a former employee told me. “That ended up being not the case.”
“I think that’s pretty ridiculous,” said a former employee, who said they have been filling out job applications for weeks. “[Gazillion has] paid [Marvel] millions of dollars over ten years. The employees—who are innocent in this scenario—can’t even have their PTO paid out. They won’t even pay to have two employees run the game for a month so our players can be happy.”
“I’m super angry that it’s gone, that our customers can’t play and that they didn’t get any notice about it”
Another employee said he felt “dismal, like all the work, all the crunch we went for was being thrown away. It was all super depressing. I love our product, I love our team and knew we could make our customers happy. Sucks to not be able to deliver that. Now that it is over, I’m super angry that it’s gone, that our customers can’t play and that they didn’t get any notice about it.”
Game development is a volatile industry. Studios are dissolved, reformed and restructured with little input from game-makers on a regular basis. But Gazillion was still hit hard by the news. Employees interviewed say the staff was tight, like a family. Some employees blame Gazillion for not communicating the company’s status well enough to staff until it was too late. Others blame Marvel for cutting the contract. And yet others blame themselves for sticking around.
“I basically don’t trust anyone,” a former employee said. “We just wanted to make a good video game. Video games are a business. I get it. I just think this whole thing could have been handled better.”