Crytek CEO and founder Cevat Yerli has a lot to be proud of. In just over a decade, his company has gone from a personal hobby to a major player in the game industry. Not only have its first-person franchises like Far Cry and Crysis become synonymous with top-of-the-line graphics, but its CryEngine 3 is being licensed for major upcoming projects including MechWarrior Online and the next game from Left 4 Dead developer Turtle Rock. The company is also investing heavily in the growing free-to-play first-person shooter market with Warface.

But Crytek faces significant challenges as well. While CryEngine 3 continues to be licensed by high-profile games, architectural firms and even the United States Army, the Unreal Engine has much deeper penetration in the video game space and drew considerable attention with the recent reveal of Unreal Engine 4. And while Warface is successful abroad, it is untested in the North American market.

Yet when I talked to Yerli at E3, he came across as one of the most relaxed people at the entire show. Perhaps it was just exhaustion, but he wore a consistent smile, laughed readily, and didn't seem at all like someone facing down threats from all sides.

I spoke with Yerli about the origins of Crytek, the future of CryEngine in an “Unreal” world, and why high-end PC gamers can be a tough audience to target.

Ars Technica: You began developing CryEngine as a college student. Was that your first experience in game development?

Cevat Yerli: I was 12 years old when I made my first game, [but] Crytek was formed in '99. It was a virtual company. It was a hobby for me more than anything else, really. I had friends all over the world, on the Internet, that shared my opinions and my thoughts, and they were happy with what I said and they joined the virtual teams. This was all for a hobby only, to make the kind of games we would love to make. I was 16 when I started my first endeavors to make games [with others], and I was 19 when the more serious efforts started.

Then in 1999, when I was 21, we had three different prototypes we had developed. One was called X-Isle, one was Silent Space, it was a space shooter, and the other one was called Engalus. And in 2000 I went to E3 and showed those three prototypes around, and people were blown away by the quality because we were doing this as a hobby. And when people said, “How come your hobby project is better than our pro project that we're showing at E3?” I was like, “I have no answer for that, but I know what we do is cool.”

We [Yerli and his brothers Avni and Faruk] were three Germans coming from Germany with [our] suits [on], and nobody was wearing suits here. I was like, “Alright, get rid of the suits!” the next day. We showed some of the stuff to publishers, and Ubisoft was the one that picked up X-Isle, which then became Far Cry.

When you were pulling together your original team to work on X-Isle, how did you sell them on the idea of designing an entire engine? That’s a huge project for a bunch of guys just as a hobby.

It was kind of like a chicken/egg issue. First we're like, “Okay, we want to build this game,” and we didn't want to compromise the idea. We didn't know what it meant to make this game, because we looked at the other [game] engines and said, “This engine cannot do the game we want to do.” We found that, back then, Unreal, or its software engine, was too “closed-spaces.” We wanted to have a terrain-based, open world engine for Far Cry, and that technology didn't exist. So we said, “Let's build it.”

And people didn’t really question the statement “Let's build it.” They just said, “Alright, so who do we need to hire?” And then I started hand-picking engineers and the tools guy and whatnot. Effectively, as we were building the company, as we were learning how to make games, we also built an engine team at the same time.

The odds of failure are huge at that point, but we had no fear and we had no understanding of the risk. We just did it. We didn't have the burden of previous experiences, so we could be mad enough to do it. If I would [build a new company] with today's experience, probably I wouldn't be that crazy.

If you think [about] our risk profile, there's three guys who want to make a game, so they pick the genre of shooters, which is most difficult at that time. They decide to make their own engine and a whole different game that had never been done before. Bright colors, open spaces, nonlinear, systemic AI, things like that, and [our] first engine, so the odds of failure [were] huge.

Where does the “Cry” in Crytek come from? Crytek, CryEngine...

I'm poor at coming up with names, that's why! [laughs]

It came from somewhere.

I wanted to have recognition around the Crytek brand. The conception of the Crytek name, the real reason is a secret, but I'll tell you another reason. It's the technology that should eventually be so emotionally true that it makes you cry, right? Then there's another reason, which is the original reason, which one day I will share, but not now. The idea is that we want to be sure there's a brand recognition with our games that we build, but we are relaxing this a little bit right now.

When you look around in the video game industry, do you see advances in technology that you think are clear responses to CryEngine?

Oh, yeah. A lot of them. A lot of them. I mean, if you honestly look back at the last six years, since 2007... when we put the first Sandbox video out, the CryEngine 2 editor where you could play the game inside the editor, nobody had done that before. So we see the Unity [engine] spawn off... and the Epic [Unreal] engine tried to mimic that, and Epic is still not there 100%, but Unity actually started like that, clearly inspired by Sandbox.

If I look at DirectX 9, DX10, DX11, progress is being put out constantly, every time there was a following wave, and if you really analyze [the] technical quality of the engine since [the] X-Isle tech demo, then Far Cry, then Crysis, then Crysis 2, I don't think there was ever a moment when CryEngine did not lead the pack. And I think it's because we are relentless in that regard.

We do not think of it as, “Do we really need the future?” We rather say, “Make it.” It's better for the gamer, it's cooler for the game. We don't [worry] over a ton of investment. We just go forward and say, “That's the best thing we can do, that's going to press the boundaries, that's going to innovate, that's going to allow this,” and we want the best to achieve that.

Our culture, our philosophy in our company, [is that] we let the guys come up with the new ideas. It's not very top-down and I say to [my] engineers, “Hey guys, can you do this and this for me?” Rather, [I say], “How do you think we can push the graphics forward? What can an animation do? What can physics do?” And those guys come up with tons of ideas which they pitch, and [I] say, “Go and do it.”

I don't ask them, “Did you check with [the] game team if they need it?” [I say], “Make a case, tell the game team how they can benefit from it.” That's how you get evolution. If you ask your customer, as in gamers, sometimes they don't know what they want yet, because if they can't imagine the future, it's difficult. So the best subject matter experts are the people who do the job, and if you tell them, “Where do you see the next two years going,” they come up with hundreds of ideas.

I'm just packaging them and saying, “Let's take this, this, and this” and then we go forward, and then tell the game team to use it. And that's how the best games are done.