Royalties to Borderlands 3 talent are reported dismal despite game's success

Cal Jeffrey

Posts: 2,326   +535
Staff member

Gearbox Software employees have the opportunity to participate in profit sharing with the company. The current royalty split is 60-40, with 60 percent going back to the company and 40 percent split among employees based on tenure with the studio. These checks come quarterly and can be quite substantial. The bonuses from the 2012 release of Borderlands 2 allowed many employees to buy houses.

The first bonuses are about to arrive on Borderlands 3, which employees were led to believe would be in the five- and six-figure range. Anonymous sources who attended a meeting with CEO Randy Pitchford yesterday told Kotaku, the royalties are going to be "significantly" lower than this mark.

"The talent at Gearbox enjoys participation in the upside of our games – to our knowledge, the most generous royalty bonus system in AAA."

Pitchford said that Borderlands 3 had been more expensive to produce than projected. Part of this expense came from the studio deciding to switch from Unreal Engine 3 to Unreal Engine 4 right in the middle of development. Additionally, as per the terms of the profit-sharing deal, 2K Games has to recoup the entire budget for the game, including all DLC, before royalties are issued. This sum amounts to about $140 million, all totaled.

Several employees were dismayed at the reveal as the expected returns were the driving force by all their long nights and hard hours working on the shooter. Many had already made financial plans for the money. Granted, it's not wise to count your chickens before they hatch, but Pitchford's alleged response to outcry was somewhat harsh.

"[Pitchford] told developers that if they weren't happy with the royalty system, they were welcome to quit," said insiders who attended the meeting. They added that they would not be surprised to see an "exodus" of employees soon.

Shortly after the game's release, 2K parent company Take-Two Interactive announced the franchise as a "billion-dollar global brand," with Borderlands 3 breaking multiple records and becoming "the fastest-selling [title] in 2K's history." Then, in a February earnings call, Take-Two CEO Strauss Zelnick said, "We expect lifetime unit sales to be a record for the series."

When asked for comment, Gearbox said in a statement that it believes its royalty system is the most generous in the AAA industry.

"Gearbox talent has earned over $100M in royalty bonuses above and beyond traditional compensation," said a spokesperson. "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."

The statement made no mention of Pitchford's meeting with employees nor what may have been said. However, if the sources' claims are valid, it is easy to see why it did not sit well with employees in the current economic climate, especially following a very public dispute in January over Pitchford taking a $12 million secret advance bonus on projected profits.

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yRaz

Posts: 3,282   +2,678
The lack of revenue might have something to do with pissing off gamers due to their business practices. The higher ups shouldn't punish the devs because their business practices reduced sales. I was considering buying borderlands 3 since it's on steam and half price, but I think I'm done with the borderlands franchise after this.

 

m4a4

Posts: 1,762   +1,454
TechSpot Elite
Well, if he said that, I hope there is a mass exodus after this virus stuff is over. It's the least he'll deserve for ****ting on the people under him like that (especially if he did get paid his "royalty" early).
 

OptimumSlinky

Posts: 203   +378
The lack of revenue might have something to do with pissing off gamers due to their business practices. The higher ups shouldn't punish the devs because their business practices reduced sales. I was considering buying borderlands 3 since it's on steam and half price, but I think I'm done with the borderlands franchise after this.
Revenue wasn't the issue as much as costs. Borderlands 3 sold insanely well, even on Epic. But the move from Unreal Engine 3 to Unreal Engine 4 delayed production and raised costs pretty significantly.
 
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Evernessince

Posts: 4,985   +5,105
"[Pitchford] told developers that if they weren't happy with the royalty system, they were welcome to quit"

Mr. Pitchford, game developers are not McDonalds employees you can just treat like trash and easily replace.

It's comments like this that cause a studio to loose exceptional, irreplaceable talent. I was going to buy BL3 on steam to play with my friends but now? No, I think gearbox is no longer a company that deserves my money.
 

yRaz

Posts: 3,282   +2,678
Revenue wasn't the issue as much as costs. Borderlands 3 sold insanely well, even on Epic. But the move from Unreal Engine 3 to Unreal Engine 4 delayed production and raised costs pretty significantly.
While it sold very well, it could have sold better had it not pissed off so many PC gamers. The amount of people who refuse to buy a game because of a publisher or developers business practices is growing. The reason we don't see a huge impact from these people is that the amount of gamers is growing with it. If 100,000 people choose not to buy a game, but 200,000 new gamers enter the market that year, you aren't going to see an impact from those sales. However, loss of 100,000 sales on a $60 game(more with DLC and macro transactions) is $6,000,000. That's not a small amount of money. I don't know how many people were on the development team, but $6 million is enough money to give 100 people $60,000.

Pitchford is a scumbag. He took $12,000,000 for himself after alienating a portion of the player base, told employees they weren't going to be getting bonus's they were heavily implied they would get(which is why they worked so hard) and then told them if they don't like it, quit. I was considering picking up Borderlands 3 on steam but I'm not touching it. I hope they do quit.

And as far as only buying stuff on steam goes, I game on Linux. Steam makes it incredibly easy to install and play games on Linux that do not have official linux support. Because of this, having a game listed on steam almost exclusively decides whether or not I will pay for it.
 
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HofyPC

Posts: 53   +51
"[Pitchford] told developers that if they weren't happy with the royalty system, they were welcome to quit"

Pitchford can take a long hydraulic suck on my nuts. No Sale!
 

mirgc

Posts: 6   +6
Another angle for the smaller bonuses could be that a lot of people and developers saw it as "easy money". That it would be a hit for sure, and tried as hard as possible to get their fingers in the pie. I'm betting there were a lot more people on the project (not necessarily working) than BorderLands 1 and 2.
 

bviktor

Posts: 149   +285
Yeah, right, "exodus". After "the most generous royalty bonus system in AAA" all that happened is that now it gets in line with other companies, so no, these crybabies will not go anywhere. I'm all too familiar with this kind. They just whine and demand, but they know it's not better elsewhere either, so it's all just a big bluff.

Anyone who makes plans for their bonuses before it's even confirmed is an *****.

They knew other peeps bought houses last time, so this time they WILL buy houses. But no, that's not how bonuses work. A few years ago, we were on the brink of a buyout, everyone was going apesh*t, they were all brainstorming on what kind of house they'll be buying and stuff, and then the deal went south, and this exact outcry happened. And do you know how many devs left at the end of the day? Zero.

That's about it.
 
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Fearghast

Posts: 246   +170
TBH I am not surprised with the result.
Gearbox it actively trying to piss off gamers and many others ... so they probably, finaly, run out off any good will that was left. Not to mention Borderlands 3 is mostly the same as first and second one content and mechanic wise.
 

Ludak021

Posts: 149   +114
Well, if he said that, I hope there is a mass exodus after this virus stuff is over. It's the least he'll deserve for ****ting on the people under him like that (especially if he did get paid his "royalty" early).
yea, it's deducted from taxable money, so why give money to government when you can make it an expense? Everyone does this.
He probably took it just before filing the net earning for tax purposes.
 

Nobina

Posts: 2,421   +2,024
Well, if he said that, I hope there is a mass exodus after this virus stuff is over. It's the least he'll deserve for ****ting on the people under him like that (especially if he did get paid his "royalty" early).
What usually happens is those pieces of sh*t get away with it. People are too afraid to lose their jobs and will take whatever abuse is thrown at them. I saw this many times first hand.

CEOs of gaming companies seem to be absolute scum, I remember journalists callling Pitchford out way back hence I don't buy Borderlands games.
 

Capaill

Posts: 1,187   +722
What a **** move. Underpay your staff by promising them the best bonus system in the business. Force them to work extensive overtime with the promise of the bonus. Then, after quietly taking a massive bonus for yourself, announce that your hard-working employees get next to nothing, in the hopes that they will all quit and you won't have to pay out anything. Which will probably get him a second quiet massive bonus. Then lure in the next batch of fools with a promise of the best bonus system in the business. Rinse and repeat.
 

MasterMace

Posts: 117   +75
"[Pitchford] told developers that if they weren't happy with the royalty system, they were welcome to quit"

Mr. Pitchford, game developers are not McDonalds employees you can just treat like trash and easily replace.

It's comments like this that cause a studio to loose exceptional, irreplaceable talent. I was going to buy BL3 on steam to play with my friends but now? No, I think gearbox is no longer a company that deserves my money.
gotta keep it tight