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Crytek troubles worsen as employees walk out over paycheck issues

updated 03:25 pm EDT, Mon July 7, 2014

Financial issues cause around 100 employees to walk out, file grievances

The bad news keeps coming for Crysis developer Crytek, as around 100 employees of the company's UK studio walked out last week. Reports surfaced in the middle of June that alleged that the company was in bad shape financially, as it struggled to pay employees on time and saw several projects shuttered because of disputes.

Kotaku reported last week that it heard from four people with ties to Crytek's UK studio, which allege that the company still hasn't paid employees the full amounts they are owed. This caused around 100 employees to turn in formal grievance letters and leave in the middle of the week. No information is provided on how many permanently separated from the company, but the employees are said to no longer be reporting to work.

Crytek has been losing employees since 2011, with more than 30 departing the studio since it began working on Homefront: The Revolution. Karl Hilton, managing director and co-founder of Free Radical, the studio that predates Crytek, recently moved to a different role in the company. Information came to light about the studio's financial situation, including a number of late or partial paychecks from employees affected by the situation. While late paychecks have occurred before in the Crytek Frankfurt office, the problem may be more widespread, since the company holds offices across the globe.

What's curious is the situation around the late checks in March after news broke of the canceled Ryse 2. The company has cancelled a number of projects within the studio this year, including some original prototypes and a sequel to Xbox One's Ryse. The planned Ryse game is said to be canned over a franchise ownership dispute with Microsoft, as three employees told Kotaku. The result is that Microsoft no longer funds the development.

Things apparently came to a head on July 2, when the UK employees walked out. Kotaku claims that Homefront publisher Deep Silver and Crytek are in negotiations over the next steps to take. The development studio denies that it faces any financial trouble, including the claims that it faced bankruptcy.

Homefront: The Revolution and Arena of Fate are currently in development at the studio. Arena of Fate is a multiplayer battle arena game that shifts the company's focus to the future of free-to-play. The Homefront franchise, originally developed by THQ, was purchased by the company as part of THQ's bankruptcy auction.

A known industry insider that goes by the name of Tidux posted that Sony Entertainment is looking to bolster its development studios, while suggesting that Crytek may be in its sights. However, neither Sony nor Crytek have indicated any proof of the claim, so it should be treated as rumor.

by MacNN Staff





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