Formatting may be lacking as a result. If this article is un-readable please report it so that we may fix it.

Posted on March 31, 2014, Phil Hornshaw No-Win Situation: The Troubled History of Firefall, Part 1

Read Part Two of this story here, and Part Three here.

About 15 employees were brought into a room one afternoon in September at Red 5 Studios, where they were informed they no longer had jobs.

The layoff was meant to be a “restructuring” of the studio ahead of the official release of Firefall, the studio’s massively multiplayer online shooter and only game. At the time, reports said the layoff constituted 10 percent of Red 5’s staff.

But these 15 or so people weren’t the only employees to leave Red 5. Throughout 2013, some people were fired, while others left the studio of their own accord — and many of these employees had been hired only months earlier.

The layoffs were something different, though. They signaled a major change in the studio, as it transitioned away from what had been Firefall’s mandate since the game was announced in 2010: to be a competitor in eSports.

That change came just days before the layoffs, when Chief Executive Officer and Red 5 Co-Founder Mark Kern announced that Firefall’s competitive player-versus-player mode was being suspended from its open beta. Kern made the announcement of PvP’s suspension in the Firefall forums.

“As you know, Firefall started with PvP,” Kern wrote in the statement. “We have gone through several iterations, and for some time, pursued the controversial e-Sports route. As many of you know, it’s not working very well. Our last big attempt was a pure PvP eSports mode, Jetball. While very fun, it’s a high-skill game and doesn’t attract many of our players (less than 3 percent PvP in Firefall).”

It was no small alteration. Red 5 had hired people whose jobs centered around PvP and eSports, such as Morgan Romine, the former captain of professional gaming team Frag Dolls, who served as Red 5’s “eSports Maven.” The company had pledged some $1 million in prize money for various Firefall tournaments in late 2012. And in the previous year, the studio had commissioned the creation of a “Mobile Gaming Unit,” a custom bus that housed 20 game stations where players could take part in Firefall tournaments, and which also included a server capable of supporting 1,000 Firefall players.

“…So he looks at the numbers and decides PvP is going away for awhile. He announces this on the forums. When he made that announcement, that announcement is when we found out.”

The suspension of PvP — called temporary at the time, although the mode still has not been returned to Firefall’s ongoing open beta — seemed to undermine all the time, resources and money that had been spent on it. The removal of the mode also came as a surprise not only to Firefall’s players, but also to its developers.

“What happened was Mark did not like the direction PvP was going in,” one source who had worked on the Firefall design team told GameFront. “Players were complaining, it wasn’t shaping up the way we wanted, the competitive aspect … so he looks at the numbers and decides PvP is going away for awhile. He announces this on the forums. When he made that announcement, that announcement is when we found out.”

September was tumultuous for other areas of Red 5 as well. A statement attributed to Kern about the layoffs mentioned that most of the staff departing were part of Stage 5 TV, a video production department that was pitched as a marketing arm for Firefall, and which also created content for YouTube.

Stage 5 had been a considerable investment as well, sources told GameFront. Its costs included expensive, top-of-the-line equipment, the purchase of a soundstage, money spent on talent and employees, and the financing of a series of short films by indie filmmakers across the country. With the layoffs, at least some of that staff departed the studio, and a number of its bigger, more expensive video projects were suspended.

All of it demonstrated a fairly drastic shift at Red 5. PvP was suspended, employees were fired or laid off, departments such as Stage 5 were reduced, projects such as the MGU bus were more or less rendered obsolete.

The official release of Firefall on Valve’s Steam platform was supposed to come in the fall after the September layoffs. It never materialized. Then it was slated for January 2014, but that time has come and gone as well.

Finally, Mark Kern was removed from the role of CEO by Red 5’s board of directors, which includes the CEO of the studio’s parent company, Chinese publisher The9. It was another major change for the studio — Kern was the last of three founders who had left Blizzard Entertainment to form Red 5 following the launch of World of Warcraft. He had been CEO since 2010, and prior to that, served as CEO from the studio’s founding in 2006 to 2008.

Days after he left the post of chief executive officer of Red 5 Studios, Kern likened his last year at the company to a no-win situation.

“For the past 12 months, I was presented with a Kobayashi Maru test,” Kern wrote in a cryptic, movie reference-laden statement that appeared on MMORPG.com. The Kobayashi Maru is the impossible test of “Star Trek” fame, which is designed to present Starfleet cadets with a situation in which they can’t escape defeat.

Kern has been vocal about Firefall and Red 5 on Twitter and Reddit, though he has refused to answer any direct questions about his time at the studio. It’s still not clear what he meant when he likened his last year at Red 5 to the Kobayashi Maru. But former employees who spoke to GameFront, all of whom did so on the condition of anonymity, often described their own no-win situation while working at the studio.

According to sources, Red 5 was a place that could feel like a tight-knit community of like-minded gamers who were excited to create something new. But it also was an often-toxic work environment that included continual shifts in direction, a lack of objectives and coordination among employees, and the constant fear that upsetting the CEO or other long-time employees would result in near-instant firing.

The names of sources that appear in this story have been changed to protect their identities.