Why Piranha Bytes Dumped JoWooD @Eurogamer
 

Internet drama time! Eurogamer interviewed Gothic 3 developer Piranha Bytes not only about their upcoming Risen 2 (see newsbit from 12 hours ago) but also about their acrimonious divorce from former publisher JoWooD back in 2007. Other topics are the Gothic rights and, briefly, ArcaniA.
Here's a quote:
Thanks, zohaib!
More information.

Great news! :party:

It's funny, but which news?

I have a theory as to why would stock investors want behavior that is bad business like this. It has to do with the fact that 401k (an IRS incentive) retirement monies in the stock market grossly exaggerate market up and down swings. Instead of a market based on a truer valuation based on earnings/losses, it's become much more of a 'perceived value' which can have a greater effect on stock price than actual earnings. This is because there are more buyers than sellers with so much retirement money in the system. This is just one example of how the modern stock market is corporatism at work. It's not capitalism, as many presume.

Here's a video saying more generally what I said above.

Edit: and yes, the housing bubble does this too, caused by the Federal Reserve's artificially low interest rates. (the fed is not capitalist by any means)

Considering Foresaken Gods and Arcania, the above quote is very believeable.

Is anybody surprised when you fork over millions of dollars and give a deadline and the developers need more time and money what would you do. Its a business people delays on games cost more and do not always improve the game or give the returns necessary to please your stock holders. It's one of those damn if you do situations for both sides.
I know what I would choose and it goes like this give me my money back you failed to deliver on the deal.

It's more than that when it comes to Jowood. After the way G3 was released it was a bit over the top that Jowood released Foresaken Gods in worse shape. Then you have Arcania which didn't have a bug infestation but was a completely stripped shadow of the feature set of prior games in the series.

Jowood made terrible choices and that is why they are BK today… the market at work.

I always said Jowood had a good portfolio of games, but ALL of their games were buggy as hell, no matter who the developer was. So this isn't a surprise at all. It was clear as the day to me that Jowoods stockmarket ideology was it's undoing. I have zero sympathy for such a self made desaster. It's some damn bean counters and suits that ruins games because of quick buck greed, and to hell with quality and longevity. They damn ruined a REALLY cool IP.

I hope in afterlife they have to spent eternity in all the bad games they ruined.

YES as I said its a business the model is not going to change any time soon. Every publisher only cares about profits they dont care about the development studio.

You may say whatever you want, but it's a bad business. While you say it's a situation for both sides, I don't think so. In long term only one side here failed.
Today TPB is still shining and JoWood is drowning. Next time JW will think before making a move. If there will be that next time.

This is because everyone is so much shareholder-oriented.

I read not too long ago that this is a relatively new movement.

Decades ago, companies (and their bosses) just weren't so much shareholder-oriented.

The thought-model / the philosophy to be FORCED to give the shareholders their revenues AS FAST AS POSSIBLE is relatively new.

Decades ago, I read, the philosophy was rather to build up a healthy company, and not to look at shareholders like a rabbit looks at a serpent.
So to say.

I think simple incompetence is a better explanation. After all, a well-run publisher that cares about profits will do what is necessary to obtain them. Why would a publisher pursuing profit deliberately choose to take actions that lead them to bankruptcy instead?

Part of being a good publisher is being able to accurately judge project time and resource requirements before making a deal so you don't get stuck with the choice between sinking more time and money into a product than you would have originally been willing to provide and releasing a buggy, unfinished mess. If that's your choice you already screwed up. The fact that JoWood's portfolio was apparently full of buggy games suggests that they had a systemic problem with estimating the resource requirements for creating polished products. That would have sunk them eventually regardless of their motivation.

This is a good identification, although I'm not sure it's restricted to shareholder revenue per se. Companies (and individual people, I might add) seem increasingly unable to think, plan and act on a long-range basis. Whether it's companies that can't see past the next quarterly report, politicians who can't see past the next election, or software engineers who can't see past the next bugfix, there's a tendency to do whatever seems to work 'right now' and to hell with the long-term consequences.

This short-term, concrete-bound mentality is very destructive no matter where it is found.

The only other company that has a similar bad image in the minds of German gamers was Ascaron.
They released buggy games as well.
Sometimes I believe there might be some kind of curse running around.

It's a business model but one of many. The publisher can stick with the game and invest more money. They will want to do that if the game looks like it will sell well but they might also do that to keep their reputation up. They can pull the JoWood thing and kick it out of the nest as is and pull as many sales in as they can before the customers figure out that it's busted. They can demand just the code and intellectual property then hand that over to some other studio. They can even write the whole thing off and cancel.

"Demand your money back" is not a likely option. Development studios don't have that much in the way of assets.

Edit: If your publishing company itself is about to run out of money, the JoWood option may be the only one. Investing more money to do the game right is only an option if you have money to invest.

You only have to go back to the late 80's, early 90's to see a change, IMO. Its a product of instantaneous 24/7 news coverage every single person with $100 to invest thinking they are Warren Buffet. The volatility in the markets has gone up exponentially since the advent of CNBC and internet trading.

There's actually an interesting strategy I read about a few years back ( I want to say it was '05 or '06, it was in Barrons). There are some companies that refuse to give any type of earnings guidance at all. They release when they are going to release, and that is it. Additionally, there are some companies that also only report earnings annually, rather than quarterly. As a whole, the group outperformed the DJIA and the S&P500 something like 12 out of the previous 15 years.

The author of the article came to the conclusion that they outperformed because those strategies allowed the management to be more concerned with running the company and less with the fickleness of the market.

Yes, good humor (I'm glad their in good spirits) and the part I like best (the good news) is the part that's unspoken. PB is finally getting to speak directly about what they had to keep silent about for so long. It must have been an eternity for them, I never lost hope, ;)

Indeed. What people don't get is that there is good and bad capitalism. The good old fashioned one was based on production, innovation and creativity. Today more and more it is about speculation, money making money and the products are just by-products of profit. Such a thing can in the long run only be doomed. Just my 5 cents.

The past had such intelligent enterpeneurs like Henry Ford, who saw that there was need for a balance between the income of his workers and the price of his cars, so they could afford the cars they produced. These days, such complex insights are forgotten and shareholders want money no matter the long term cost.

Another good point. "Release it when it's done" only works if you have enough money to wait that long before you need revenue from the new product.

I wouldn't consider what we have today to be a form of capitalism at all. Contrary to public perception, the United States is an advanced mixed economy subjected to significant government intervention in almost every field. This makes production, innovation and creativity increasingly difficult and less rewarding than politically-connected rent-seeking. So we see less of the former and more of the latter. Mix in the aforementioned short-term perspective and it's a recipe for disaster.

I give it another ten years at the outside before the whole thing collapses under the accumulated weight of its own inconsistencies.