|
Your continuous donations keep RPGWatch running!
RPGWatch Forums » Comments » News Comments » 10Tacle Studios Bratislava Shut Down, Elveon Moved to England

Default 10Tacle Studios Bratislava Shut Down, Elveon Moved to England

March 17th, 2008, 19:13
Today 10Tacle Studios published a PR disclosing they are in financial difficulties, and are restructuring to address the issues. Here are a couple of excerpts, taken out of context and with the key points underlined:
At present, 10TACLE STUDIOS AG has overdue claims against at least three different fund investors, totaling € 13.4 million. The company's management is proceeding on the assumption that the settlement of a large portion of these claims with its debtors will be feasible over the next 14 days. [..]
However, falling short of the forecast published for the 2007 fiscal year can no longer be excluded. In its interim report of November 19, 2007, 10TACLE STUDIOS AG had already indicated that substantial delays have been incurred in the production of ELVEON and TOTEMS.

As the development of the console games ELVEON and TOTEMS has resulted in additional costs – as will be shown in the individual financial statements of the relevant subsidiaries –, a negative impact on the Group results must be assumed. […]It should be noted that the delay in the above productions has in no way impacted on the – initially projected – intrinsic value of these products. This is confirmed by the fact that well known publishers have made offers for the global marketing of the game ELVEON in particular.
As a result of the effects described above, the 10TACLE Group experienced a strained liquidity situation. […]However, this threat has been averted thanks to the funding package agreed with the private investor Bertram Rickmers. […]
Moreover, a comprehensive restructuring of the 10TACLE Group has been agreed upon in order to optimize the company's organization, making it more transparent for market participants. At the heart of this re-alignment is the consistent positioning of 10TACLE STUDIOS AG as a development and production company. In the future, the classic tasks of marketing and sales will be performed almost exclusively by publishing partners. […]
Cost savings have already been realized or initiated in the following areas:

Overall, 25% of the Group's staff who are not directly involved in the product development (marketing, overheads, etc) will be made redundant. The company has been trying – and will continue to do so – to transfer these staff members into new positions with companies in related industries.
Furthermore, the company has decided to close its Bratislava site, which has been responsible for the ELVEON production up till now. The tasks for the finalization of production have already been assigned to other locations and the cooperation partner Climaxgroup in Southampton, England. The restructuring process will continue in full swing; the new cost and efficiency-optimized structure should be ready by no later than the summer of 2008.
More information.
Gorath is offline

Gorath

Gorath's Avatar
Prime Evil
RPGWatch Team

#1

Join Date: Aug 2006
Posts: 6,771

Default 

March 17th, 2008, 19:13
I'm surprised.

In mid-2007 they bought Stormregion (S.W.I.N.E.) and in December 2007 they bought The Games Company.

And NOW they have "financical difficulties" ?

Didn't they see this earlier ??? :confused:

“ Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.“ (E.F.Schumacher, Economist, Source)
Alrik Fassbauer is offline

Alrik Fassbauer

Alrik Fassbauer's Avatar
TL;DR

#2

Join Date: Nov 2006
Location: Old Europe
Posts: 15,868

Default 

March 17th, 2008, 20:11
I was expecting something like this — I've been following the development of Elveon a bit, and it was starting to look uncannily like S.T.A.L.K.E.R. — over-ambitious and over-risky given the resources available to the developer. It's a big project, and if it goes over-budget and over-schedule, it's enough to sink an independent studio the size of 10Tacle, no matter what acquisitions they make.

It's a tough business.
Prime Junta is offline

Prime Junta

RPGCodex' Little BRO

#3

Join Date: Oct 2006
Posts: 8,540

Default 

March 17th, 2008, 21:27
I agree - not surprising as such but Alrik is right that it points to poor management.

-= RPGWatch =-
Dhruin is offline

Dhruin

Dhruin's Avatar
Watcher
Super Moderator
RPGWatch Team

#4

Join Date: Aug 2006
Location: Sydney, Australia
Posts: 11,964

Default 

March 18th, 2008, 00:10
Originally Posted by Dhruin View Post
I agree - not surprising as such but Alrik is right that it points to poor management.
Yep, but the ability to see this stuff coming can either be easily missed by those who don't want to know or easily hidden by those who don't want others to know …

— Mike
txa1265 is online now

txa1265

txa1265's Avatar
SasqWatch

#5

Join Date: Oct 2006
Location: Corning, NY USA
Posts: 11,329

Default 

March 18th, 2008, 12:22
The tempo they bought several game studios was really asthonishing. I read the news quite regulary and 10tacle was mentioned very often. I was wondering how they could afford this, because they still are a small publisher and never had a big hit in the most important genres (action, RPG, strategy)

I hope their belgium team can survive all this. It's the old Elsewhere Entertainment team, founded by the Outcast veterans. Saw their presentation of Totems on GC 2007 and thought it could be an interesting title.

A-Van-Te-Nor: A big car full of black hot beverage
Avantenor is offline

Avantenor

Avantenor's Avatar
Sentinel

#6

Join Date: Oct 2006
Posts: 585

Default 

March 18th, 2008, 17:17
Originally Posted by Alrik Fassbauer View Post
I'm surprised.

In mid-2007 they bought Stormregion (S.W.I.N.E.) and in December 2007 they bought The Games Company.

And NOW they have "financical difficulties" ?

Didn't they see this earlier ??? :confused:
The TGC deal was only "on paper". The TGC shareholders got 10Tacle shares.

Something I´ve cut from the PR is that 10Tacle is seeking a new CFO.
Gorath is offline

Gorath

Gorath's Avatar
Prime Evil
RPGWatch Team

#7

Join Date: Aug 2006
Posts: 6,771

Default 

March 18th, 2008, 18:42
Debt financing confuses me, but the right time to have hired a new CFO was prior to all this. Hiring one now is like hiring an architect after completing designs. A treasurer is more like it, but even that's setting the bar too high.

Obviously, 10Tacle has no business being a public company. I suppose this bit of gymnastics is to keep it from being delisted. If it were private, 10Tacle would be better off filing for bankruptcy protection (here in the US, anyway).

The other thing I don't get is the stuff about ELVEON production being assigned to other locations. Is ELVEON a game under development? They're going to switch that over to another team (or teams)?? That's like some kind of a joke.

Turn out the lights — the party's over for this one. Investors should get out now.

Oh, I wish I had a river I could skate away on. But it don't snow here. It stays pretty green. I'm going to make a lot of money, then I'm going to quit this crazy scene. — [Joni Mitchell]
Squeek is offline

Squeek

Squeek's Avatar
connoisseur of tidbits

#8

Join Date: Nov 2006
Location: Orange County, California
Posts: 1,807

Default 

March 18th, 2008, 18:50
Are you sure you understand 10Tacle´s business model?

Elveon has been moved to another team in England. It´s one of their long time partners, but still an external studio. Which means it´s contract work and 10Tacle has better cost control than over the things their internal studio has done.
Gorath is offline

Gorath

Gorath's Avatar
Prime Evil
RPGWatch Team

#9

Join Date: Aug 2006
Posts: 6,771

Default 

March 18th, 2008, 19:04
All I know about 10Tacle is what I read in that press release.

By long time partner, do you mean the other team in England has already been working on Elveon? If not, it strikes me as very odd to just hand over product development to someone else mid-stream.

Oh, I wish I had a river I could skate away on. But it don't snow here. It stays pretty green. I'm going to make a lot of money, then I'm going to quit this crazy scene. — [Joni Mitchell]
Squeek is offline

Squeek

Squeek's Avatar
connoisseur of tidbits

#10

Join Date: Nov 2006
Location: Orange County, California
Posts: 1,807

Default 

March 18th, 2008, 19:25
Originally Posted by Squeek View Post
All I know about 10Tacle is what I read in that press release.
That´s not enough to understand how they operate. There is no other publisher with a similar business model. (That doesn´t mean I think their model is good. I don´t even say I understand it completely.)

By long time partner, do you mean the other team in England has already been working on Elveon? If not, it strikes me as very odd to just hand over product development to someone else mid-stream.
Climax is one of the world´s biggest developers. They are "longtime partner" of every significant puiblisher.
It means Climax did stuff for 10Tacle before. Moving the game is odd, but it becomes more logical if you dig a little deeper into 10Tacle´s business.
Gorath is offline

Gorath

Gorath's Avatar
Prime Evil
RPGWatch Team

#11

Join Date: Aug 2006
Posts: 6,771

Default 

March 19th, 2008, 01:31
10tacle financed their games not by own money. They offer so called game stocks to shareholders. That means, the shareholder pay money to 10tacle and in return they get a percentage of the game sales. So the shareholders pay for development and take the risk of losing money because of bad sales figures. To spread the risk this game stocks contain not only one game, but several titles. Elveon was one of the more important and the only promising title in the main genres. But there haven't been any news within months, although the game should have been released in fall 2007 and got delayed to 2008.

So 10tacle bought one company after another. They had 8 Studios, before they closed the Slovakian studio, one more aquisition pending (afaik Climax). The Games Company was a publisher itself before they merged with 10tacle some months ago. But there haven't been any significant game releases that could justify that enormous expansion and Elveon seeming to get cancelled.

A-Van-Te-Nor: A big car full of black hot beverage
Avantenor is offline

Avantenor

Avantenor's Avatar
Sentinel

#12

Join Date: Oct 2006
Posts: 585

Default 

March 19th, 2008, 21:00
OK, I get it. I thought their stock was traded on a public market. Looks like I was wr*$#… wr@+%… hmmmmmm, there's something going on with my fingers all of a sudden. Well, you see what I mean, right?

Oh, I wish I had a river I could skate away on. But it don't snow here. It stays pretty green. I'm going to make a lot of money, then I'm going to quit this crazy scene. — [Joni Mitchell]
Squeek is offline

Squeek

Squeek's Avatar
connoisseur of tidbits

#13

Join Date: Nov 2006
Location: Orange County, California
Posts: 1,807

Default 

March 19th, 2008, 21:18
Their stock is traded on a pubic market. And I suspect TGC is not happy they were being paid in shares, because their value is melting like snow in the sun.

The problem is just that their business model is strange. When I read their official yearly report I was quite surprised that the actual publishing business is not their primary income stream. They (help) initiate investment funds and make sure the investment funds contract them to develop games. 10Tacle brings in development and market know-how and certain licenses (Ferrari, MTV). Then somebody else markets the games.
The only reason a fund whose only reason for existence is pumping money into games can have to withhold payments is that a game missed one or more milestone(s). Then the fund manager would have to act in the best interest of the shareholders and demand correct work before money flows. In this context it makes perfect sense to close their internal studio and contract an experienced and reliable (read: average ) external studio. The costs are gone and the contractor only gets paid for milestones.
Gorath is offline

Gorath

Gorath's Avatar
Prime Evil
RPGWatch Team

#14

Join Date: Aug 2006
Posts: 6,771

Default 

March 20th, 2008, 00:44
Originally Posted by Gorath View Post
Their stock is traded on a pubic market. And I suspect TGC is not happy they were being paid in shares, because their value is melting like snow in the sun.
In addition: I guess, 10tacle's own shareholders had fear that there would arise problems concerning this game stocks and finances for the next titles. So they tried to avoid loosing money and sold their shares. And then the rest followed. The stocks are quite nervous these days.

I hope for Elveon that they managed to keep at least parts of the creative crew behind that game. What arises from new teams assigned to a game already in production could be seen best on Ultima IX.

A-Van-Te-Nor: A big car full of black hot beverage
Avantenor is offline

Avantenor

Avantenor's Avatar
Sentinel

#15

Join Date: Oct 2006
Posts: 585
RPGWatch Forums » Comments » News Comments » 10Tacle Studios Bratislava Shut Down, Elveon Moved to England
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

All times are GMT +2. The time now is 10:23.
Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
Copyright by RPGWatch