Profile of MajorBloodnok

My point is that an independent game studio could collapse despite great sales because they were paid a fixed price plus bonuses (though I would expect in some cases there is also some a percentage 'royalty' type deal?). Subsequently they waste too much money on undeveloped project / too many ping pong table or massage chairs etc. and go bankrupt and the publisher might shrug and say that's a pity or offer them a new project to keep them open if it suits them.

Nothing there with which I disagree. It's a harsh world and the publisher holds the purse strings, particularly so in the case of Relic, who to be frank, were rescued from perdition by SEGA.

With Relic, Sega if they want can continue to inject money to have them in existence and this would be further justified if Sega were still making profits from their sales above the figure they inject and crucially believe they can do this in the future. Internal accounting may identify Relic as a loss making entity within Sega but in reality it isn't.

Also agreed. This is why I referred in an earlier post to the unknown bleed suffered by Relic to SEGA. We can both agree that SEGA would have expected Relic to pay back its initial investment of $26 million, but in addition what did SEGA expect by way of interest? And also, what is the annual 'management' charge which SEGA expects Relic to pay? i.e. the return to SEGA on its capital? Is it a fixed sum regardless of performance, or is it a percentage of sales? Or how is it calculated?

Not that i'm claiming that there are making profit for Sega over and above their operating costs - I bet they aren't atm but they may make good in future with new games and recoup the losses. It depends if Sega think they will really.

This is where we may disagree. I suspect that Relic have made a return...the question is (for me) : how greedy are SEGA?

But surely there is a bit of a difference here in that Sega own Relic so its not like they are commissioning from and paying for a game from an independent studio. Internally the finances may work like that but in this case money for sales does essentially go to the company that makes the game.

If you think back to the THQ bankruptcy, the pre-orderings for COH2 were 'captured' before THQ went down, hence Fantomasas at post #40 asking what happened to the court case. I would guess that, based on Wuff's reply, the income goes to a SEGA bank account and is distributed from there, unless Steam/Valve objected to such an arrangement after their previous experience.

And as to Fantomasas, I doubt if we will find out - think President Trump! Unless the action went through to a public trial which is unusual, the settlement probably included an NDA provision.

Photo in post #44 invised

What I understood from all SturmTigerCobra Posts around Sega and Relic is Sega could simply shut down Relic and transfer assets to Creative Assembly.

He is probably correct, but I do not think it is as straightforward as you might imagine.

I doubt if Canada has the equivalent of the European Union Business Transfers Directive.. TUPE (the UK version) can catch the unscrupulous practice whereby a company tries to set up an overseas subsidiary outside the EU in order to avoid the impact of TUPE. But TUPE does not apply in reverse, as far as I know.

Therefore, if SEGA transferred the COH assets to CA in UK, it would be free of TUPE, but what would occur with Relic?

1) SEGA would have to pay off the Relic staff
https://www.monster.ca/career-advice/article/your-legal-rights-following-your-canadian-job-loss

2) SEGA would have to pay off the Relic peripherals. e.g the NY servers

3) SEGA would have to dispose of the Va building

4) Relic would have to pay off its taxes

Could an inter-company transfer avoid all this debt paying? I doubt it, since interested creditors like the Canada tax authorities would be able to argue that Relic had a worth in any games which they transferred to CA. (This is not new, since THQ got pinned on the same kind of avoidance issue in 2012). Therefore, SEGA are unlikely to be able to write off Relic debts in North America.

Also, SEGA will be aware that if they transfer the COH IP to CA, they are placing themselves further in the UK, which is itself in the course of a highly unsettling Brexit for business. Indications are that the Japanese do not want to invest further in UK, if UK hives off from the EU, bcs the EU market is much bigger. Therefore, if SEGA invests further in CA, it is potentially jumping from one problem to another, if tariffs emerge between UK and EU.

And where do CA stand, if the COH software were transferred to it?

They probably know about the bugs in the Essence engine. Do they want the responsibility of taking on COH franchise with its attendant expenses? e.g. another 100 staff? Server outsourcing costs? Little income return from COH1/COH2, which have already been harvested, but which they cannot abandon, unless they lose the core members?

And since SEGA will not want to pay Relic's debts for no return, there will have to be at least a nominal capital payment by CA for the Relic assets it receives from SEGA: so what price will SEGA place on that? The cost of discharging the Relic debts (if any), or a much bigger sum? And if that larger sum was sought by SEGA, would CA want it?

Or would it be easier to sell off Relic lock, stock and barrel to an eager competitor? The alternative bidders do exist. The 2012 auction taught us that.

Are we sure the CoH IP is under SEGA and not part of Relic? Really the more interesting thing is why is Relic working with Microsoft for AOE instead of using one of their own IPs? What does Sega think about the whole thing and why would they split off some of the cash flow for a AAA title?

Iirc, it was the IPs which were up for auction at the end of 2012 and some of which SEGA acquired. I cannot be certain, but I would think that SEGA own the COH IP, and if they do not, they certainly control it.

I am happy to be corrected, but I thought SEGA set up the deal with Microsoft, albeit it is for Relic to implement the terms of it.

Their management issues we've known for years and this is yet another confirmation that Relic management is garbo, no surprise here. The employee is referencing DOW3 a fair bit so it wouldn't surprise me that he was part of the team which we should look at as a separate issue from CoH as it could have been an entirely different Dev team (as we know they had 2 while working on the British Army Expansion).

The Dow 3 flop is a big issue for Relic and one that might have been solved by better market research TBH. The issue with Dow 3’s role simply tried to bridge a gap between RTS and Moba market however failed to satisfy both parties as both MOBA players and RTS players found the game to be rather shallow. The game itself did a lot right with good models, sounds, maps, and even animations (as limited as they were) but even with all that good came a rather fragile foundation that their elements simply created an environment that wasn’t fun or deep enough to make it reward.

Not disagreeing, but I don't play DoW, so cannot comnent on that aspect, other than it seems to have been a wretched failure. .

With that. Its rather odd that Relic is working on AOE4 but I am afraid that AOE might not scratch the already profitable and established CoH franchise fan base which is rather large according to steamspy, 3 million units total sold by 2015 is a rather large amount of dosh that may or may not come over with the AOE IP. Even still we have yet to see anything outside of a teaser, until we know more about the game it’s hard to gauge how well the game might be received or what base they are trying to capture but my guess is that Microsoft might have better market data than Sega.

Steam spy gives the COH2 membership as 2,388,268. Accordingly, if we said the average payment was $50.00, it means that Relic should have paid back SEGA its investment of $26 million and covered the ongoing staff and establishment costs of the past 5 years. At least in theory, and very crudely. This is because I have no idea how much SEGA bleeds from Relic annually.

Having said that, the unhappy Relic staff member, asserts Relic is unprofitable. And the General Manager does not deny that assertion. So I am a little at a loss at this point. Are Relic profitable or not?

If you really want to go down the rabbit hole, what if SEGA favors CA over Relic?

Please see my response above to Esxile.

CA has 500 employees going for it, against Relic's 205. But, the EU has employment regulations which deter some outsiders from NA, and the UK is about to Brexit the EU (or not, depending on your point of view).

*Edit: I felt like I needed to keep going as I felt like I didn't address the "coh2 wasn't profitable" idea by saying that if steamspy is correct that the total untis sold in 2015 was in fact 3.8 million doesn't include the price that it was paid for but it also doesn't account for the DLC that was sold.

Although I do not follow Relic finances closely, I was always under the impression that it was holding its own with COH2, regardless of whether COH2 could have been handled more deftly.

That is indeed an interesting thought and one that I wouldn't see impossible either. But considering the situation of Relic when CoH2 launched in its rather lackluster state and the community's full knowledge of this situation in relation to the lackluster state of launch, wouldn't such an act (the premature selling of Relic) still mean the deathbed for Relic since the community will not buy into another fiasco.

It would certainly mean the death knell for the Relic Studio, but I guess CA (or an outside Buyer) might say: 'Relic's loss is another studio's gain', or something similar. The community has shown remarkable resilience: the core members at the time of COH2 launch are not the same core now, bcs Relic squandered so much on the COH2 launch (albeit many COH1 posters are returning from time to time).

e.g. look at this first picture in the blog and ask yourself: how many remained active within 6/12 months of COH2 launch?