14 DAY TRIAL // Crytek has highlighted some of the reasons that have caused its recent financial problems, noting that the shift towards free-to-play experiences required additional investment that caught the studio off-guard and led to unforeseen results.
Crytek has been active in the games industry for quite a while and has managed to remain profitable thanks to popular games, like the Crysis ones, not to mention licensing deals for its CryEngine technology.
A few years ago, the studio proudly advertised its shift towards free-to-play experiences, promising that it would release fewer and fewer full-price games.
That shift, while going rather smoothly, required quite a big financial effort, and unfortunately Crytek wasn't able to handle the stress. As a result, it wasn't able to pay wages and recently entered a restructuring process.
Crytek CEO Cevat Yerli has explained the current situation to Eurogamer, noting that Crytek is now in a position to better support its free-to-play transformation.
"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."
Yerli explains that a free-to-play shift can't be done overnight. Instead, the studio started using the full-fledged releases to create a loyal fanbase and will continue to do so in the near future. However, at the same time, it's still going to focus a lot on free-to-play games.
"We're still committed to retail this year and some of it will be next year. You'll hear of that soon. But the majority of our game launches this year are already games as a service, and will be more and more so in the coming years."
"This transition, even though it was done as soft as we wanted it to be, we underestimated some of the additional investment required for that."
Crytek currently has quite a few projects in development, such as Warface, Arena of Fate, or Hunt, and wants to get back to making a profit as fast as possible.