The video game Borderlands 3 was a big sales success when it launched last fall, according to its publisher, 2K, which described it as "a billion-dollar global brand." That's why it was shocking to employees at Gearbox, the developer of the game, when the studio's CEO, Randy Pitchford, told them yesterday that they would not receive the significant royalty bonuses they expected.
Employees at the studio will get small bonus checks, but nothing close to the tens of thousands or even hundreds of thousands that many had expected. This account is based on conversations with six people close to Gearbox, all speaking anonymously because they were not authorized to talk about what happened. Some said it was crushing news that has upended their financial plans for the future.
Pitchford also told Gearbox developers that if they weren't happy with the royalty system, they were welcome to quit, according to those who were in the meeting. He did not attribute the diminished bonuses to the coronavirus pandemic, which has led to economic uncertainty and pay cuts in many other fields. He did say that he hoped to get more money to employees as an advance from 2K on future royalties.
When asked for comment, Gearbox sent over the following statement:
Borderlands 3 represents an incredible value to gamers and an incredible achievement by the team at Gearbox Software. Our studio is talent-led and we believe strongly in everyone sharing in profitability. The talent at Gearbox enjoys participation in the upside of our games – to our knowledge, the most generous royalty bonus system in AAA. 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.
