IGN feature on Krome Studios' demise

Company: 
News: 

IGN have a feature up covering the fall of Australia's largest game development studio, Krome Studios. With the contribution of several anonymous ex-Krome employees, the article paints a picture of a company that had so much talent and potential, but squandered its chances on tightly budgeted licensed titles hurried out to meet short development schedules. It meant little time for the polish needed for their games which unfortunately reflected in their metacritic scores, the standard of which many publishers abide by.

The focus of work-for-hire for Krome Studios ensured that it was vulnerable to the global financial crisis and effects of the Aussie dollar reaching parity. And after three major projects were cancelled or put on hold, and with numerous delays on publisher sign offs on further projects, Krome was forced to gradually reduce its staff from a four hundred strong workforce last year to just roughly 40 or so contract employees.

However, for Krome Studios co-founder and CEO, Robert Walsh, they held onto staff as long as they could, much to their detriment. Responding to IGN for the feature...

(Robert Walsh) One of the things that Krome's done over the years is that we've tried to keep staff on as long as possible, when we didn't necessarily have paying work. To be really honest, that's pretty much led to our current position. We probably kept 100, 120 people on, waiting for work to come in...

...we were just carrying too many people for too long, waiting for publishers to make up their minds.

When put forward the common question on whether Krome had concentrated too much on licensed titles and not on original I.P, Robert Walsh argues that it did not suit a large game company like Krome Studios with the hundreds of employees they had...

(Robert Walsh) tell me, what original IP has been successful in the last 12 months? The original IP that's been most successful is Shainiel [Deo] at Halfbrick with his mobile games [like Fruit Ninja], and Rob at Firemint with Flight Control. But you don't need a hundred people to make fruit or flight.

So what now for Krome? Despite what numerous ex-Krome Studios employees have said, Robert denies the Krome is going through any closure. However, the CEO admits that "our business model doesn't work" and that the future for Krome is towards digital and social games, and away from boxed retail product. This means a smaller, tighter number of developers working on smaller games. There is hope to bring in more employees once further contracts are green lighted.

The article ends with a sombre warning by an ex-Krome employee for other local developers to take heed from Krome's mistakes...

"Hopefully other developers can learn [from Krome] how critical it is to always find time to invest in original IP. Chasing the quick buck is a short-sighted goal, regardless of the fluctuation of the Australian dollar. It was foolish to rely on cheap, licensed titles to build the local industry." — Ex-Krome Employee

Comments

Anonymous's picture

"(Robert Walsh) tell me, what original IP has been successful in the last 12 months? The original IP that's been most successful is Shainiel [Deo] at Halfbrick with his mobile games [like Fruit Ninja], and Rob at Firemint with Flight Control. But you don't need a hundred people to make fruit or flight."

True, you don't need a hundred people to be working on a SINGLE original IP. However, if Krome kept such a large staff in the past, logic would dictate that they could have been working on MULTIPLE original IPs by splitting the hundreds of people from their pool of staff into several smaller teams giving them plenty of opportunity to focus and develop multiple original IPs. By doing this, it may have allowed a number of potential and ORIGINAL IPs to succeed.

Anonymous's picture

Small dev teams working on small games for platforms like xbla/iphone were talked about when Melbourne House was bought in 2006. Never really happened. Lots of talk but it never went anywhere and I was never sure why.

Anonymous's picture

De Blob was a fantastic piece of original IP.

Anonymous's picture

Except for the fact that it wasn't an original IP.
Go do some research.

Anonymous's picture

they were- and he'd it short. He ran the place into the ground so he can bugger off. Maybe his timetable was brought forward slightly but he had planned for this.

Anonymous's picture

correction- should read "He'd cut it short"
apologies for rage spelling!

Anonymous's picture

Nobody plans to run their business into the ground. No offense dude, but that's just delusional thinking. You may be upset that you lost your job, but this kind of thinking is waaaay of base!

Anonymous's picture

Granted people don't often intentionally run their companies into the ground.
However, some people have may be aware of impending doom well in advance, and set up a gentle landing for themselves, whilst telling employees everything will be fine.... Syphon off funds, contracts, tech, IP etc over a period of time and leave the taxpayer to pick up the bill for the mess they abandon.
I don't know what has happened in the case of Krome, but it does happen. It's human nature to protect yourself first....

Anonymous's picture

who's delusional?
He doesn't have 40 people working for him.

half a dozen finishing in a week or so on Game Room
some more till january on the little MS thing
a few office staff working for free.
what, five or so on Serious games stuff that technically and legally is supposed to have nothing to do with Robert Walsh, director of two companies in liquidation.

The rest are supposedly working for Sydney-based Company X anyway- nothing to do with Mr Walsh.

Monday: "hey lets do this small zombie game"
Tuesday: "Hey lets stop it because although we could finish it ourselves and self publish, I won't because no one else wants it. I'll pay people to sit around and do nothing until I'm out of the country so I can get someone else to lay them off.
Wednesday: "Hi guys, lets do this shooter, this week. You have a week to do this and do it in a week."
Thursday: "I've changed my mind, we're doing casual games because my fiancee won't shut up about that space"
Friday: "I'm shutting down the casual division and firing everyone in it including my fiancee. I'm also not going to be in the country while it happens, again. Feel a bit crook"

That last bit is karma, Walshy.

Anonymous's picture

"Thursday: "I've changed my mind, we're doing casual games because my fiancee won't shut up about that space"

LOL

Anonymous's picture

that he gives. How many people are still working there, and how many "might" be employed soon. What he doesn't mention is that the current contracts are up in the next two months which will take the number of paying games at Krome to zero. At best it'll be 80 people on, 40 people off. And those projects will yet again be short term contract work for hire games. The same sort Walshy says was foolish to try and build the industry with. :-S

Anonymous's picture

Aren't Krome bankrupt? aren't Krome closed? how are they still operating during liquidation? Where is that money coming from? How did Krome manage to not pay redundancy packages/annual leave/bonus leave/long service leave but manage to keep paying staff? How is Walshy flying first class to the US during bankruptcy?

Nothing is adding up correctly. sounds like a really slimy practice.

Anonymous's picture

1. Set up a bunch of companies.
2. If one isn't going so well, siphon off all its assets to other companies. Also, transfer the debt of other companies (including employee related debt - redundancy, etc) to your failing one.
3. Liquidate the company and fire the staff. You're not personally liable for any of that debt, so it has to come from the liquidated company assets. But then, since this company doesn't have any assets because you cleverly transferred them, theres nothing to liquidate, you don't lose anything, and all your debt is gone!
4. Keep operating! Infinite money!
5. Problem, ethics?

Anonymous's picture

It's not a ticket to just rack up a bunch of debts and get away with it. Continuing to trade while insolvent or transferring assets out of a company before it goes into liquidation would come under scrutiny.

There is also a limit on how many times you can be the director of a failed company.

According to ASIC:
If a director has been involved with two or more companies that have gone into liquidation within the
last 7 years and paid their creditors less than 50 cents in the dollar, ASIC may disqualify them from
managing corporations for up to 5 years. This effectively bans a person from acting as a director.

Anonymous's picture

I'm sure a man as resourceful as our Robbie would find a way around that particular loophole (the most obvious one being simply going overseas).

Anonymous's picture

Ye ol' "Bubble Hearth" trick!

Anonymous's picture

Sounds like Auran's tactics :/

Anonymous's picture

"we were just carrying too many people for too long, waiting for publishers to make up their minds."

Really? That's a bit of a weak and arrogant claim of responsibility Robert Walsh. I agree, that a lot of people were kept on during times with no immediate work available but I think the bigger point was that you kept the WRONG employees on for too long. Even when you hired really experienced, passionate and logical people from overseas, who's word was highly respected, you ignored the red flags and advice they were HIRED TO OFFER YOU! And of course hiring someone to do your job for you must have hurt when you were strongly advised to do things differently or brace for demise...they eventually resigned and no one blamed them.

Your un-professionalism during year of meetings was absolutely shocking, you were meant to be setting an example to the company and putting everyone at ease. Instead you made snide comments about people, the industry and used more foul language than I could have imagined. Most people came out feeling like a burden, undervalued and resentful of you.
You may run a games company, but sadly (and obviously in this case) that does not mean you know games. If you want to make creative decisions, you shouldn't be an exec, full stop.
End of rant.

NathanRunge's picture

I'm sorry... words cannot express how much of an arse he sounds in that article. He seems to have lost all touch with the realities of the situation, and his responsibility for the company.

Anonymous's picture

bingo! He lost track of "the reality of the situation" a while ago. For the last year or so, he only listened to the advice of one person and her advice was terrible. he ignored everyone else. It's annoying to read stories about upper management without naming him. It's him. He ran the place, overruled everyone now matter how good the idea.

Anonymous's picture

He clearly just cared too much guys!!!
That is why he bullied his employees, he just didn't know how to tell them he loved them.

Maybe if he had better understanding of the industry it wouldn't have been such a shock to him, the fact that he acknowledges that he had no funding model or plan in place is the big issue here.

For years teams were asking to be able to work on smaller DLC titles and web ideas between large console projects and were constantly told "no that is not what we do at Krome".
Nothing was ever committed to as far as studio direction.

Sadly by the time Krome started anything it was too late, everything was reactionary and I think that was the biggest downfall, that may have worked back in the day with licensed projects when Krome sold itself as the cheapest and fastest to get an average job done but it did nothing to further the studio.

Anonymous's picture

The person who mentioned the wrong people were retained while talented people were ignored is absolutely correct. Climbing the ladder at Krome was as often to do with being chummy with the right people rather than having anything worthwhile to contribute. I realise this happens EVERYWHERE, but it was particularly bad at krome.

One of the first lead designers they put in place was the most useless person with no talent whatsoever. He retained his position and was put in charge of many projects despite multiple complaints about his incompetence. I won't name names but he was fat, wore glasses and was obsessed with retro games (yet was incapable of actually drawing on what those games did right), I'm sure you can figure out who that is.

Another example, one of the original art guys that had been there for years had his younger brother working as a coder. This guy was literally learning impaired, borderline retarded, and certainly not capable of actually doing any work. He was kept on for years, the kind of work he had to be relegated to may as well have been handed off to one of the petrol sniffers wandering around the valley. I mean, talk about carrying dead weight, just because he was related to someone (who themselves was extremely useless also). What a waste of money, and how frustrating for other employees.

I could go on all day, there were so many useless people there.

If they'd cut the fat and promoted genuinely talented people, the company would have made great games AND would still be around.

Yours Truly,
(removed) (yellow bamboo initiate)

Anonymous's picture

" but he was fat, wore glasses and was obsessed with retro games"

OMG that could be ANYONE! :P :P

souri's picture

Just a reminder - because anyone can sign off pretending to be someone else, and as it happened recently with an anonymous commenter pretending to be Erik S., no one should take you as the person you're signing off as unless you're posting under a registered account confirming your identity and not as an anonymous.

So for that reason, can those responding please refrain from flaming the original poster (and argue the message instead) until he feels the need to confirm himself. I don't really want another case similar to Erik who had nothing to do with an anonymous comment that was signed off as him and got a lot of flack as a result. Thanks.

Anonymous's picture

Seriously, while I might not always see eye to eye with Kyall, he is speaking the truth here, it was a major problem.

Why was it always design positions that were given to incompetent people? Design was always an afterthought at krome yet it was what really kept them from succeeding.

Just before the demise this guy was promoted to a design position on game room who's only qualifications was having worked in a call centre! I don't see how running a team of people cold calling the public and advertising holidays makes you qualified to be a designer. Oh and he was also a REALLY bad "professional" photographer, maybe that counted for something!?!? So why did he have the job? Because he was best mates with another guy who had slept with the HR girl. I mean seriously...

Anonymous's picture

The 'yellow bamboo initiate' sign-off is a pretty obvious flag that this isn't actually Kyall. That was a company in-joke.

That said, the original poster has a point, though pointing individual people out at this stage is nothing more than fruitless venting. Especially in these two examples. I mean, the designer in question was moved several months before the end into a non-design role he was actually extremely well-suited for. And the coder mentioned was gone well before all the redundancies began. Those are some rather old axes to grind.

All I can say about this whole affair is that I hope everyone has learnt some good lessons, and won't repeat the same mistakes again. Not just the higher ups - I hope those of us on the lower rungs have the personal discipline to avoid these pitfalls when we reach the top, too.

Anonymous's picture

Wasn't that designer also responsible for Guardians of Ga'Hoole?

Isn't that pretty much Krome's only "well received" game to date, besides Star Wars: The Force Unleashed and the obvious Ty franchise?

And by well received I mean, liked, but not necessarily reflected in sales :P

If you want to pick on designers, pick on anything that came out of that big back room on Constance St.

Anonymous's picture

He was also in charge of Spyro: A New Beginning, which was quite well received.

Anonymous's picture

He also designed Game Room.

Anonymous's picture

... because anyone that actually worked at krome shares the opinion that he was incompetent. If any project he was working on turned out "decent" it was because of the efforts of everyone else who picked up the slack. The projects could have been way better if they put a real designer in there who actually did something.

Seriously, I'm not saying anything that EVERY krome employee, barring the designer in question and his sugar daddy, doesn't agree with.