Posted Tue, Nov 01, 2011 by The Mittani
The immediate cause of the layoffs is obvious enough: stagnating subscriptions in EVE and a too-aggressive burn rate for DUST 514 and World of Darkness development. During the height of the Monoclegate controversy, EVE players examined CCP’s 2010 financial report. On October 28th, 2011 the company was due to either repay or recapitalize a $12 million dollar loan which it had been using to develop World of Darkness and DUST 514. It is likely that CCP’s cash on hand dwindled past the point where they could repay the loan outright, requiring recapitalization and negotiation with their creditors.
Incarna and the NeX Store appear to be dead for now. Reports indicate that much of the staff tasked to these projects as environment or fashion designers have been axed, as have the remote (ie, non-Reykjavik) community team and an unspecified number of Atlanta-based EVE content developers. Those remaining in Reykjavik have begun a mad scramble of releasing spaceship content, including four tier 3 battlecruisers and a long-overdue fix to hybrid weaponry.
Meanwhile, Hilmar has been confronting the company’s fall from grace in the media, with pieces in Gamasutra and Eurogamer. It is easy to be unsympathetic towards a CEO immediately after layoffs, particularly when I consider some of those Hilmar fired to be friends. Yet the context of CCP in the Icelandic business community created a situation where avoiding hubris would be nearly impossible for anyone in Hilmar’s position - and hidden in that context are the answers as to why EVE began to go wrong.
It begins with the bubble. If you are one of the last three EVE players who have not yet read Michael Lewis’ seminal article ‘Wall Street on the Tundra’ I suggest you do so. It’s a crash course in Icelandic culture from an American perspective that roughly matches my experiences in Reykjavik, as well a depiction of the milieu of irrational exuberance which Hilmar and the other CCP executives were swimming in when they decided to buy a floundering company in the United States that made tabletop roleplaying games for the Goth/industrial demographic - ten years after that subculture had grown up and moved on to other things.
“That was the biggest American financial lesson the Icelanders took to heart: the importance of buying as many assets as possible with borrowed money, as asset prices only rose... They bought stakes in businesses they knew nothing about and told the people running them what to do—just like real American investment bankers! Nor were the Icelanders particularly choosy about what they bought...” -Lewis, ibid
For EVE players with no experience with Vampire, check out Troika’s excellent Vampire: Bloodlines on Steam (using the fan-patch to fix it, of course; Troika makes CCP look good at code). It captured the essence of the World of Darkness in a way no other title has. Now try to imagine CCP developing such a game.
I say this as an avid fan of the old World of Darkness; “The Mittani” was originally a Malkavian World of Darkness character. Yet the heyday of World of Darkness was when I was a clove-smoking twenty-something with shoulder-length hair and an obsession with kinky vinyl-clad Goth chicks - i.e., the late 1990s, more than a decade ago. CCP bought White Wolf in 2006, and the reaction from RPG fans was similar to that of businessmen worldwide upon being bought out by overly aggressive Icelandic bankers: ‘Huh?’
“Icelanders—or at any rate Icelandic men—had their own explanations for why, when they leapt into global finance, they broke world records: the natural superiority of Icelanders... Iceland’s president, Olafur Ragnar Grimsson, gave speeches abroad in which he explained why Icelanders were banking prodigies. “Our heritage and training, our culture and home market, have provided a valuable advantage,” he said, then went on to list nine of these advantages, ending with how unthreatening to others Icelanders are. There were many, many expressions of this same sentiment, most of them in Icelandic.” - Lewis, ibid