Crytek Scare? Rumors About the Makers of Star Citizen's Engine

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UPDATED - 2014-06-24: New information has prompted revisions.

(Citizen Star News) - 2014-06-23 - Rumors spread over the weekend concerned about the health of Crytek, the company that develops CryEngine graphics engine code that is used in Cloud Imperium Games' Star Citizen.

Crytek allegedly had a close call recently that could mean trouble in the long run for the company. As reported by GameStar[1], in April they were having trouble making payroll in April. This was characterized as "near bankruptcy". UPDATE - 2014-06-24: Stories continue to surface substantiating GameStar's report, and also revealing that the April payroll may not have been an isolated incident. Particularly this new report from Kotaku seems quite well researched and paints a not so pretty picture of the inner workings of Crytek.

Crytek is said to have worked out a deal for a cash infusion and maybe this is just a bump in the road for them. From the sounds of it, they need to take a good long look at the money they are spending and eliminate waste. (This may imperil the Linux port, but is needed for SteamOS support which still looks pretty important.) Perhaps some look at corporate culture and procedures would be in order given their low glassdoor.com rating.

Crytek has denied the reports[2].

Potential Impact

We don't know the details of the license agreement CIG has, but these things generally cover continued use of the engine and it's source in the eventuality of the failure or purchase of the licensing company. We do know from engineering reports and discussions with devs they do have the engine's source code and they are doing direct rewrites of sections in order to accomplish engineering goals, such as double precision maps for better representation of interplanetary space.

UPDATE - 2014-06-24: from VentureBeat 2014-06-16:

GamesBeat: This is based on Crytek’s engine, right?

Roberts: Yes, this is the CryEngine. We’ve done a lot of modifications and we’ll continue to do more.

GamesBeat: They’ve changed their licensing policies some. Does that help you at all? Or do you have a more general license?

Roberts: Yeah, we bought it out. We’re building this game for the long term. It’s an MMO. Hopefully it lasts as long as something like EVE or World of Warcraft. We need to have control over it. So we basically had to buy it out and control the source and everything. We still get updates from them. We work very closely with Crytek. But their new licensing deal doesn’t factor into what we do.

Bankruptcy doesn't necessarily mean the end. Some companies go through bankruptcy as a way to do court organized "restructuring" which gives them a chance to do bigger changes in contracts, staffing and debt than are normally possible. Acquisition is by a third party is also possible. Worst case would mean the loss of many of the services that Crytek offers and probably a death knell for the Linux version. Future development of the engine over the next decade(s?) would be more challenging, to say the least.

Some have suggested this could be an opportunity as well, if CIG hires key Crytek employees. While that would be a smart move, I am sure it would be better for all if Crytek remained solvent and independent. UPDATE - 2014-06-24: Some of opined that there would be no negative effect to SC from Crytek disappearing. While CIG does seem to have it's bases covered, and could move forward in this case, being based on a "dead"engine and no longer having the effective extra manpower of Crytek pushing the engine forward, adopting to new platforms and fixing bugs would certainly be a disadvantage.

Choice of Engines

The decision to use CryEngine for StarCitizen is frequently second guessed. Chris Roberts himself said it was down to CryEngine 4 (which became just CryEngine, currently on build 3.6) and Unreal 4, he made the choice because Cry was more mature and had better support, as well as having a visual style that was closer to what he wanted for Star Citizen[3]. Using an existing engine likely saved years of development and comparable costs. Changing engines is difficult, and expensive that often causes the death of projects and would likely delay the game for at least a year.

A number of newer engines have been floated that represent interesting new technologies, but largely untried small efforts with comparatively little support. Would have been a big risk to hitch the SC star to any of those wagons.

So pretty much committed, second guessing is likely wasted effort.

Summary

UPDATED - 2014-06-24: Although we have now seem to have real evidence that Crytek is having difficulties, we don't know how close to insolvency they are. Claims of near bankruptcy are a dangerous and potentially damaging to make. There clearly seems to be reason to be concerned. Only time will tell. Collapse of Crytek would be not good for Star Citizen development, but not a total disaster.

One of the big questions are what would happen next? Company could be bought out or engine picked up by a 3rd party. CIG is unlikely to be in position to buy them out, at least not with pledge funds. It could lead a coalition of investors with other (likely personal) funds. Unclear what the valuation of the company or the IP might be. (Again CIG doesn't need this, they could continue on their own with the code they have now.)

Inevitable naysayers aside, Chris Roberts' decision to use CryEngine is still holding up to be a wise move by all indications so far, but this could end up not being as good as hoped due to unforeseeable circumstances.

Footnotes

[1] Gamestar Article - http://www.gamestar.de/specials/reports/3057060/crytek_krise.html
English translation - https://translate.googleusercontent.com/translate_c?depth=1&hl=en&ie=UTF...

[2] CryTek Denial - http://www.golem.de/news/medienbericht-krise-bei-crytek-1406-107370.html
English Translation - https://translate.google.com/translate?sl=auto&tl=en&js=y&prev=_t&hl=en&...

[3] Chris Roberts on why he chose CryEngine: http://youtu.be/ZZWaBnpSvUk?t=31m29s from SxSW 2013
http://www.crytek.com/blog/exclusive-interview-chris-roberts-building-a-...

See Also

Kotaku - Rumors Swirl About Trouble At Crytek

Update - 2014-06-24: Kotaku - Sources: Crytek Not Paying Staff On Time, Ryse Sequel Dropped

HardCoreGamer - Crytek Is Not Going Bankrupt

RSI-Forums - German magazine Gamestar say: Crytek was nearly bankrupt in April 2014

Reddit - What would Crytek declaring bankruptcy mean for Star Citizen?