Thursday, November 11, 2010

Gamebryo / Emergent IP and Assets at Auction

Gamebryo is dead*! Long live Gamebryo!
* - Well gamebryo may not be dead. The development team is disbanded, and it's highly uncertain if another company will try to reanimate the corpus of code.
Emergent's assets and IP are being auctioned, closing Dec 10th. The announcement contains some interesting content, which is nice to be able to share publicly.

The financial profile of the company since 2005 is contained, here it is in handy chart format: 
Note that revenue was significantly less when I joined in 2004. We saw big growth in 2005, and that continued solidly through 2007. The peak of 12.2 Million in 2009 notes a significant success for a product that started with a small core Gamebryo team of ~15 engineers that I joined in 2004. The excellent growth financially reflects the engineering investment of the previous year or two, plus the more recent sales efforts. 2004 to 2009 were very good years.

There are also updated numbers for the number of titles that used gamebryo:
...selected by studios around the globe to bring over 350 titles across more than 15 game genres to market. At any given time, Emergent is supporting over 100 projects in development and has sold over 490 licenses in the past five years.
And the top titles list has some fresh new items, including Epic Mickey:
Titles using Emergent’s technology  include Game of the Year award-winning titles like Fallout 3, The Elder Scrolls IV: Oblivion,as well as critically acclaimed titles like Warhammer Online: Age of Reckoning, Civilization Revolution, QQ Speed, Divinity II – Ego Draconis, Dance on Broadway, LEGO Universe, Epic Mickey, Bully and more.
The amount of investment into Emergent was also listed, "To date, Emergent has secured over $40 million in equity financing and raised over $4 million in venture debt financing". (I don't believe that includes the history of NDL, which was founded in 82 and started development of Gamebryo in the late 90s.)

The diversity of Gamebryo is also mentioned. 14% of revenue came from non video game sources, and no one client represented over 10%. Some of the notable customers were:

  • Video games: Electronic Arts, Activision, THQ, Ubisoft, Sony, Bethesda, 2K, Atari, Disney
  • Online games: Tencent, Shanda, TheNine, NineYou, NC Soft, Kingsisle, EA Mythic, Trion
  • Military simulation: USC ITC, Total Immersion, IP Keys, Lockheed
  • Education: USC, University of Pennsylvania, UNC, Nanyang Polytechnic
  • Other: Rio Tinto, Tacx, WMS, GTech
Among the assets, a data base of over 6,200 profiled developers and 14,775 contacts is listed.

It also incorrectly lists that "The Company holds on patent for Floodgate." I was one of the inventors that filed the provisional patent, which was left to expire and not filed for full patent status.

And so it is, the labor of many passionate engineers, sales staff, and support staff is up on the auction block. I have mixed feelings. One one hand, it was a great run, Gamebryo has had a significant impact on the industry, and that's success locked into history. It's also nice to have a change of pace, and the downturn for Gamebryo has seen us move on to interesting new challenges. But it's also sad, because I feel that Gamebryo could have had a different future, one that continued the success we saw from 2004-2009. It's difficult to speculate on how things could have been done differently, and we'll never have an answer about how else it could have played out. We were aggressive and shot for big growth and new products, not just settling for "getting by" or sitting on our mild success. Investors were interested in big returns. And, if world events and industry winds had blown in another direction, we may have been greatly successful. 

One thing is clear to me, however. When the investors/board decided to cut half of the engineering staff in 2009 they either 1) made an explicit decision to kill the future growth possibilities and attempt to liquidate the investment they had made, or 2) had no comprehension of what a software product such as a game engine is and how much value code without engineers to support it is.

20 comments:

  1. your conclusions are very eloquents.

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  2. I love this part:

    "WTI and Gerbsman Partners, and their respective staff, agents, and attorneys, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith..."

    What is the point of writing a document that you disavow completely?

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  3. Just out of curiosity, how can a company's EBIT be a negative number and yet the company runs a profitable business?

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  4. I don't think there are claims of company profitability. But, Gamebryo alone was quite profitable for several years. The significant investment into products that did not succeed (Metrics, Automation, Platform, MMO Server) pull the company's profitability down. However, a startup is an investment specifically because of the trade off between loss today for potential of future success.

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  5. Vince,

    Thanks a bunch for this summary. I hear you on the mixed feelings, and thank you so much for being such a big part of making Emergent a great thing of which to be a part -- if only for a little while.

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  6. Sigh... egt was not in good health for the last 2 years really... Glad it's either going to be put out of its misery or given new ownership. Most likely it will be the former... but even so, better that then hanging on like some cute Labrador zombie puppy.

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  7. Indeed. Code unmaintained does not just sit still - it rots. Money people never understand that.

    I wish that we could have done it differently and made better headway.

    I miss everyone that I worked with in North Carolina and in California, and I know we'll cross paths again.

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  8. The people were definitely the best asset Emergent had. Luckily the friendships that we made will long outlast the codebase.

    I will definitely be interested in seeing where the code ends up.

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  9. Is that true? Why there's no announcement on EGT's official website?

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  10. So if nobody buys the engine, and the company goes belly up.. what happens to the rights? Would it be possible to release it to the public domain or something? Just curious..

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  11. Jesus, $44m investment and around another $30m of revenue all burned through and the engine is terrible. I'd always assumed Gamebryo was a smallish company building organically. I can't believe they've wasted all of this money.

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  12. >I don't think there are claims of company profitability.

    I guess decreasing their losses counts as profitability for them:

    "Emergent Game Technologies Inc. reported earnings results for the full year of 2009. For the year, the company reported a 35% increase in revenues year over year and a 58% increase in profitability for the year ending 2009."

    http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=563482

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  13. Haven looked at the engine, I'm quite shocked it took some part of 40m to make that.
    Holy... shit...

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  14. Vincent, how many employees were there at those various year points? The data is definitely interesting. Sorry to hear about the current situation of the company. It is never fun to go through that after a long history.

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  15. Vince, sorry to hear that but glad you moved on when you sensed the winds are changing.

    I hope you don't mind but I'm going to leave an open invitation here for anyone who worked on Gamebryo who are interested in a different kind of engine + tools work at www.animoto.com. We have not sent out job posts yet so write to me directly at rex [at] animoto dot com.

    .rex
    VP, Engine and Tools

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  16. Keep in mind that the costs didn't all go into making Gamebryo. Several other products were in development.

    Also, I think developers have a woefully poor estimate of what it takes to build an engine that is usable externally by over 100 teams concurrently, supported, and carefully moved forward migrating all types of games. How much does your team spend a year to build and support a 4 platform engine with code at a high enough quality all 100 other teams can edit it, a tool-chain on multiple versions of Max Maya and XSI, and tested thoroughly? Ok, now multiply by 100.

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  17. There are two fundamental reasons why Emergent failed. Neither are product related.

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  18. Well, while I can't say that I was shocked by this final outcome, it does make me sad. The year and a half that I spent at Emergent was one of the best of my career. I had tremendous respect for the abilities of the engineering team in Chapel Hill and I really enjoyed almost everyone that I worked with. Being that close to the technical side of game development was hugely educational for me and I am so glad to have had the opportunity to learn as much as I did.

    I think that there were many things that prevented Emergent from succeeding, but one of the most significant was simply trying to maintain a small company in two offices 3000 miles away from each other. During my time (and I would imagine after it, as well) we really struggled with the us/them issues that this geographic divide created.

    Anyway, I will always look back on the people that I worked with fondly. Thanks for a good run.

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  19. katie finin mcgovernNovember 13, 2010 at 7:24 AM

    Miss you guys. That is all.

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  20. Quite sad, indeed, and so utterly preventable. :-(

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