An unfortunate situation has been brewing at Crytek for months, and last week it took an ugly turn that was capped off with CEO Cevat Yerli closing the company’s UK branch, downsizing the USA branch, laying off over one hundred workers, and selling off the rights to Homefront: The Revolution. These announcements came less than a week after the studio issued a press release stating that positive news was on the way.

All of this followed months of rumors that Crytek was in financial trouble and reports from both current and former Crytek employees that they were not being paid on time, not being paid in full, or not being paid at all. Employees quit the company in droves, and finally some began to speak out. After the dust settled, Yerli opened up about the situation in an interview, but his attitude was far from apologetic or responsible. In fact, I found it downright despicable.

In his interview with Eurogamer, Yerli assigned most of the blame for his company’s financial troubles on the fact that they were in a transition period. Yerli announced two years ago that his goal was to transition the company from the industry standard pricing model to an all free-to-play model within five years. While a shift in business models can be a financial strain, Yerli doesn’t seem to understand that his job as CEO is to handle transitions like these. When you’re in charge of a company, you can’t simply choose not to pay your employees in order to speed up a transition process. You must either integrate it piece by piece as it becomes financially possible (while still paying the people you are legally obliged to pay on a regular basis), or you have to downsize. To expect employees to continue working without pay for the good of the company is absurd. Yerli, however, doesn’t see it as absurd. In fact, his words seem to imply that he found his employees to be irrational in wanting to be paid.

“Some people were very impatient and got angry at the smallest delay. Also, there was a critique of us not being proactive in communication, which we don’t understand, because we had been frequently in the UK as well as every other studio, talking about potentially rough times. And we had even shared with people how they should maybe work with different banks at a personal level to prepare. Or, if not, they could make a choice to resign and look for other jobs.” — Cevat Yerli

Yerli downplays the payment delays here by referring to them as small, and calls his workers impatient for being upset about the delays. Obviously we can’t know the extent of them as outsiders to the company, but they were severe enough that an estimated 100 employees quit the company in a three month span, including the director of Homefront: The Revolution, the lead designer of CryENGINE, the producer of Ryse: Son of Rome and Crysis 3, and the head of Crytek USA, just to name a few of the more prominent ones. Would that many people with comfortable, high-ranking positions within the company really jump ship over “the smallest delays,” as Yerli claims?

Yerli responded to the second complaint, a lack of communication from upper management during the rough and uncertain transition period, with an answer that left me a mixture of dumbfounded, furious, and almost morbidly amused. Yerli says he does not understand how anyone could claim a lack of communication, because he warned them ahead of time to take out a loan at the bank. I can’t claim to know how Crytek normally runs, but at most jobs it’s not exactly reassuring when your boss tells you that you should probably go borrow some money at a high interest rate. That’s not my idea of communication, and it’s not the idea any of Yerli’s employees had in mind either. To any rational human, being told by your boss to take out a loan would be a warning sign, not a reassuring gesture of communication.

Through all of this, Yerli takes no blame. Instead, he states that everything he did was so that he could keep the team together and avoid downsizing. In fact, he’s surprised and upset that anyone would complain about not getting their paychecks.

“But our priority was to not downsize the company. Our priority was to not let anybody lose their jobs at that point. Because if a company gets into a difficult situation and you know the outcome is going to be bad, you have the choice to downsize everything. But we haven’t done that because we wanted to keep everybody tied together as a team. I was surprised and upset a little bit that the intention of us keeping together everybody upset a few of them. But I understand that situation. Some people live in very tight financial planning. That’s their own privacy. They can do whatever they want. Those guys, when they get under pressure it can become emotional. We tried to individually help out. Like if somebody gets in trouble they can talk to us directly so they don’t get under pressure. We tried whatever we could do. But you can’t make it right for everybody.” — Cevat Yerli

Oh boy. Where do I even start with this one? Yerli states that “we haven’t done that [downsize everything] because we wanted to keep everybody tied together as a team.” To be fair (hey now, everyone deserves a fair trial, right?) he didn’t downsize everything. He just downsized the entire UK branch and most of the US branch. That is apparently Yerli’s idea of keeping “everybody tied together as a team” and justification for withholding pay for months. Judging by Yerli’s other statements, I’m fairly confident that he never really intended to avoid axing the UK branch. He just needed them to finish up Homefront: The Revolution first, but once he found a buyer for the IP, that was no longer necessary.

“The primary cause 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.” — Cevat Yerli

Crytek’s number one goal was to shift to a free-to-play model as quickly as possible, and Homefront didn’t fit that description. With multiple free-to-play games in development at the company’s main branch in Germany, Crytek did not have enough money to pay everyone. The future of the company took priority, and the checks stopped showing up for the UK and USA teams.

“I don’t want to comment on cost, but given our strategy and the focus we need right now as a company this year, launching Warface, Arena of Fate and Hunt within the next 12 months, those three games need full attention for us. Homefront would have taken a lot of attention from top down of the company across Frankfurt, UK and many more. That kind of commitment would have come at the price of focus towards the other gamer services.” — Cevat Yerli

Based on reports from Crytek employees, I don’t believe Yerli is being honest about the company’s financial troubles either. It’s definitely possible that he underestimated the costs of switching his business model (hey, maybe he should have taken a loan out at the bank), but there’s more to the story than just that. According to Crytek employees who spoke openly with Kotaku, two AAA games were cancelled at the start of this year. One was a new IP (nothing else is known) and the other was a sequel to Ryse: Son of Rome. Another report from Crytek employees stated that the newest iteration of CryENGINE, a big money-maker for Crytek, was a tough sell to other companies. Yerli outright denied that a Ryse sequel was cancelled and did not comment on the other reports.

The video game industry is a competitive and risky market, and sometimes tough decisions have to be made, but that does not excuse Yerli’s actions. As the head of a company, it’s his job to prepare for hard times and transition periods. It’s not on the employees to suck it up and work without pay for the good of the company. His unapologetic attitude, anger at his employees for expecting to be paid, ludicrous assertions that they are the ones who should have prepared better, failure to communicate, and broken promises of keeping the team together by withholding pay are all inexcusable.

Afterword: For those curious about the fate of the company, here’s what it looks like going forward.. Some of the members of the Crytek UK team (at least some of the remaining staff who did not resign prior to the sale of the IP) will continue to work on Homefront: The Revolution with publisher Deep Silver, although their future after the game’s release is unclear. Some of the Crytek USA staff have formed an indie studio called Gunfire Games. The few remaining members of the Austin team will be re-focused as a support team for developers who want to buy CryENGINE. Development of Hunt: Horrors of the Gilded Age (originally handled by Crytek USA) has been moved back to the main branch in Germany, which will now handle all game development going forward. Crytek has declined from a staff of around 950 to 700 in the span of a few months. Yerli claims they are now no longer in any kind of financial trouble.

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