Dumpshock

QuoteOK, as you may well have been able to surmise from release schedules, Catalyst Game Labs is in a bit of a financial pickle, and it is somewhat unlikely that they will retain the license to make Shadowrun products. This is not because Shadowrun hasn't been selling enough to cover expenses, but merely because a significant quantity of money is missing outright. Reliable sources put this figure at roughly $850,000. Which sounds like a lot, and it is. It is roughly 40% of Catalyst's entire sales for last year, missing over a three year period. There will of course be lawsuits, and there are already people drawing up legal documents accusing Loren Coleman of having hired people to construct an extension on his house through the company as "freelance writers" and somehow reporting an estimated $100,000 of convention sales as $6,000. Whether that is actually true or not is - of course - a matter for the courts to decide. And decide they presumably will.

But what that means for Catalyst as a company is pretty bad. It costs several dollars to print a book even when the pdfs are finished and ready for publication. A print run of say, 50,000 books (like the print run of Runner Havens) would cost somewhere between $150,000 and $250,000 to print and ship to distributors. And while it eventually sold to distributors at ~$15 a book (a total take home of $750,000), it did so over a period of three years, during which time they were paying interest on loans and paying for storage, and advertisement and so on and so forth. A book like that isn't actually taking home half a million in profits. Which is a bad thing, because it means that even if there was a complete book printed and ready to sell, even a total and rapid sell through would not pull the company out of the financial hole it is in - and the shortfall means that it does not have the cash on hand to start the ball rolling with a new major printing.

The tiny amount of drachmas that are left in the coffers are being used to print up tiny print runs of books that have sold through - another 3,000 books of Runner's Companion for example (~$15,000 to start up, maybe $30-40k towards paying creditors if it sells out). There simply is not the startup cash to bring upcoming books like the SR4 sixth world almanac or corporate guide forward. The writing is there, but the printing costs are not. Beyond that, the freelancers have not been paid, and some of them are withholding copyright until they are - meaning that even a tiny print run of these new materials is simply not possible.

Many SR writers are quitting, have already quit, or have handed in notices contingent on demands which - word on the street - will not be met. And CGL does not even own Shadowrun, it leases the intellectual property from Topps. It seems unlikely that they will be able to make their licensing payment when the contract comes up for renewal - in a couple of months. At that time, CGL will cease being able to print Shadowrun or Battletech materials (they would presumably keep the license to Cthulhutech and Eclipse Phase for at least a little while longer, because those are separate contracts).

So what does this mean for the future of Shadowrun? It probably means that someone else will create a company and start making Shadowrun again. After all, freelancers work for very little, and a well selling book can bring in tens of thousands of dollars in profits. $850,000 of embezzlement is seemingly enough to sink the company (whoever ended up with the credsticks), but I must point out that there was indeed eight hundred and fifty thousand dollars to steal, so Shadowrun is not - as a concept - insoluble. And I also point out that something similar happened to Shadowrun before. Indeed, twice before, as both FanPro and FASA before it collapsed under the weight of people not paying debts and having bags with dollar bill signs vanish mysteriously in the middle of the night. It's somewhat... poetic considering the subject matter of the game itself.

It is entirely probable indeed that when a new company comes to take the licence, many familiar faces will appear in the new company as if they had never left. Certainly back when FanPro collapsed back when I was working for the company, I simply started working for the new company as if nothing had changed. This happened back when FASA collapsed as well - those members of the team that were not extracted by Microsoft simply started turning in writing assignments to the new boss.

And yeah, I regularly go on shadowruns against Catalyst to find out what new releases are in store. Don't you?

-Frank

This is... horrible.
*sigh*

Let's hope the saying "There's life in the old dog yet" proves true.

Damn, and i just recently bought a pdf-version of AToW... hoping to see the hardcopy version coming out soon...

:-(

Well, obviously it's time to sell discount grab bags, have the president draw a limited edition art print, run open houses, and outright beg for money.

It worked for the other guy right?

Actually I think the should.  All they have to lose is their dignity.

Well, is 4e any good?

Now might be the time to grab that special edition that's been lurking the shelves at one of the local bookshops.

FASA IPs seem to be cursed with shit luck.

There's an official press release on their main site about the situation.

Summary: someone fucked up and spent money they claim they honestly thought was theirs but actually belonged to the company. They have 'fessed up after the hole came to light and are going to try and put it right. Some CGL employees are (understandably) extremely upset/pissed off by the situation and left.

So, not quite a "crisis of treachery", and hopefully not fatal. Still distressing though.

Is it just me, or does it seem like there are a disproportionate number of unethical shitbags in the RPG publishing business? How many embezzlement stories is this now? 4? 5?

Quote from: Werekoala;367780Is it just me, or does it seem like there are a disproportionate number of unethical shitbags in the RPG publishing business? How many embezzlement stories is this now? 4? 5?

There might be.  But it seems to be a common story in small poorly run businesses.  Though I don't have any real data and criminal misdoings make the news more than business whose customers stop coming by.

Poorly run companies, and crooked owners are not the sole domain of the RPG industry.

It's because the RPG industry, being quite small, is home to a lot of small companies rather than big ones. Even a comparatively large firm like, for example, Palladium isn't exactly a corporate giant.

The upshot of this is that the accounts aren't handled by professional accountants, often the legal side of things isn't handled by an actual lawyer, and so on. Everyone sort of muddles along doing jobs they are not necessarily qualified to do. There isn't much oversight because, hey, we're all friends here, right? We don't need that kind of thing, right? We can trust each other, right?

Which is fine. So long as you can actually trust each other. But all it takes is one shitbag to cause a heck of a lot of damage.

My point isn't that every other industry is clean as the driven snow, my point is that the RPG industry is VERY small, and by percentage of companies going under from embezzlement, it seems like it is not a trend but a disease.

Yes, the companies are small, yes, they don't always do things "by the book", yes, there are a lot of handshakes and nepotism, but that doesn't mean the guys running it are doomed by Fate to have additions built on to their homes or use the company bank accounts as a personal slush fund. People go their whole lives without doing that in other lines of work - so why is it so prevalent in the RPG world?

Maybe it comes from growing up killing things and taking their stuff? Only now they don't have to kill things?

Quote from: Werekoala;367793My point isn't that every other industry is clean as the driven snow, my point is that the RPG industry is VERY small, and by percentage of companies going under from embezzlement, it seems like it is not a trend but a disease.

How many other industries are you keeping track of to the extent to which you are following the RPG industry? Could it be that you hear about a lot of cases like this with RPG companies because as a regular follower of and poster to RPG forums you're more in touch with the RPG industry than you are with, say, the clay pot industry?

Quote from: Warthur;367794How many other industries are you keeping track of to the extent to which you are following the RPG industry? Could it be that you hear about a lot of cases like this with RPG companies because as a regular follower of and poster to RPG forums you're more in touch with the RPG industry than you are with, say, the clay pot industry?

Dude, just look at the restaurant industry.  

It has a far, far bigger history of embezzlement and financial shenanigans.  It's also crammed full of people who started up a business without knowing what they are doing and many of them aren't even half as good at what they do as they think they are.  Basically, take all of the bad things about the RPG industry and crank it up to 11.

Quote from: jgants;367795Dude, just look at the restaurant industry.
 

That's a good analogy.  Many game companies are started by gamers who underestimate the business side of things.  Many would be restaurant owners think that they can cook but don't realize how hard it is to run a resaurant.  A quarter of restaurants die the first year and 3/5s within 3 years.  Most game companies have staffs smaller than that of a restaurant.

So it's finally in the open...

So the argument isn't "Hey, its just a few bad apples", it is "Hey, all small businesses suffer from this, why should we be any different". Nice.

Maybe I just expect more out of RPGers, but I guess there are as many thieves and assholes in our "community" as any other.

The difference in my mind between this and, say, skimming a register at a restaurant is: EVERYONE has to eat. In the RPG industry, it is (ostensibly) "our" guys stealing from each other. That not only makes it wrong, it makes it personal. Think of it as the difference between someone with money invested with Bernie Madoff and just some guy on the sidelines. One says "That sucks" - the other is personally involved.