Much has been said and written about the behind-the-scenes workings of Gearbox Software in recent months, with company CEO Randy Pitchford never far from the headlines. Now the studio is back in the news after a report has revealed that Gearbox staffers expecting huge bonuses based on royalties for Borderlands 3 have been told that their payments will be significantly lower than expected.
According to the report on Kotaku, which cites several anonymous sources from within the studio, developers were told in a meeting with Pitchford that the six-figure bonuses that they had been planning for would indeed be much smaller than initially promised. The reason for this is said to be the increased cost of production for the game and its DLC, the cost of setting up a second studio in Quebec, and revised sales expectations.
The report also suggests that Gearbox staffers are on relatively low wages when compared to those working at similarly-sized studios, with the shortfall to be made up from a profit share arrangement whereby 40% of game royalties are spread out amongst employees. That was fine when the studio was riding the wave of success that followed the release of Borderlands 2, but subsequent releases Aliens: Colonial Marines and Battleborn have not enjoyed the same commercial success.
It seems as though staff were expecting things to turn around with Borderlands 3, which was actually 2K's fastest-selling game ever, but it looks like even that wasn't enough to create the kind of profitability that would have seen Gearbox developers getting the bonuses that they claim were promised by management. Apparently Pitchford informed employees that he hoped to get them more money in the future, but added that those unhappy with the payment as is were free to quit.
"The talent at Gearbox enjoys participation in the upside of our games - to our knowledge, the most generous royalty bonus system in AAA," a company spokesperson told Kotaku. "Since this program began, Gearbox talent has earned over $100M in royalty bonuses above and beyond traditional compensation.
"In the most recent pay period Gearbox talent enjoyed news that Borderlands 3, having earned revenue exceeding the largest investment ever made by the company into a single video game, had officially become a profitable video game and the talent at Gearbox that participates in the royalty bonus system has now earned their first royalty bonus on that profit. Additionally, a forecast update was given to the talent at Gearbox that participates in the royalty bonus to set expectations for the coming quarters. Gearbox is a private company that does not issue forward looking statements to the public, but we do practice transparency within our own family."
Finances are a sensitive issue at the studio after last year's public spat between Gearbox and former employee Wade Callender, after details surfaced of an alleged "secret" $12 million payment made to Pitchford. According to the new report, that legal dispute (which was resolved late last year) coupled with this latest financial setback has some predicting an exodus of talent at the studio.
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