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[Bullet Club]

Game Publisher Cancels Contract With Developer, Then Tries to Poach Its Entire Team

Three months after losing a deal with Take-Two, Star Theory Games was out of business.

www.bloomberg.com

Late last year, Take-Two agreed to extend Star Theory’s development deadline by six months to add new content to the game. That kicked off a new round of contract negotiations. All seemed well, said the people who worked on the game, until Dec. 6, when the project was pulled and the LinkedIn messages went out. At the hastily called staff meeting a few days later, the founders said in addition to sale talks, they had been trying to clarify royalty terms, which were unclear in their contract, they told employees.

Three of Star Theory’s leaders—Jeremy Ables, the studio chief; Nate Simpson, the creative director; and Nate Robinson, the lead producer—departed for Take-Two’s new studio immediately. Other staff mulled whether to go, torn between leaving and abandoning their colleagues or staying and risking their livelihoods, they said. One employee, who asked not to be identified, said they felt a mix of confusion and fury, adding that they’d never been put in this type of position.

Then came the pandemic. The conference was canceled, leaving Star Theory with nowhere to take its pitches. Publishers, sensing an economic downturn, tightened their spending. On March 4, Star Theory shut down. Each worker received a month’s pay and two months of health insurance, said three former employees. A few joined their former colleagues at Take-Two’s Intercept Games.

 

[NeoGiffer]

 

[The Bloody-Nine]

Yeah, that is just WILD. No other word for it.

 

[wvnative]

American video game publisher being evil? Gasp...


Seriously though, the trifecta of EA, Take-Two, and Activision... all make me ashamed of this industry. Sadly the story doesn't surprise me at all.

 

[Bullet Club]

Take-Two Games is a ruthless company.

In another story that highlights the risk involved in associating with "AAA" publishers, 2K Games' parent company has wiped out a studio it was in an otherwise reasonable relationship with.

Star Theory was working on Kerbal Space Program 2 when it suddenly found the project pulled out from under its feet. At the exact same time it canceled the developer's contract, Take-Two was trying to take Star Theory's entire team for itself.

It's one of the most outwardly aggressive stunts a "AAA" publisher has pulled on a smaller studio, but it's not uncharacteristic in an industry where the big fish don't just eat the little fish - they downright eviscerate them.

 

[SaucyJack]

This is fucking disgusting, possibly illegal. I hope the Star Theory owners are suing their arse off!

 

[DonF]

Big company has little to no ethics?! I for one I'm shocked

 

[Rick Dangerous]

Disgusting. No other words.

 

[Thabass]

Damn Take Two's really starting to get shitty. They've been pretty shitty before, but this Activision levels of shitty.

 

[NickFire]

I see some comments upset with Take Two. Can someone point to the part of the article that explains what Take Two allegedly did that was a breach of contract or somehow illegal? All I see is they hired a company to do work for them. They were willing to extend the deal. The company felt their future royalty terms were not clear and satisfactory. Negotiations then began over royalties the company wanted. Take Two then said forget it and cancelled the deal. Take Two then offered people jobs. And the company went out of business when the pandemic hit and they couldn't find someone to replace the money Take Two was paying them the prior year.

Walking away from negotiations is perfectly fine if you don't like the pitch. Was there a contract not to offer employment to the employees that Take Two breached? I'm not following as to what Take Two did that warrants outrage. Maybe they did violate a law or contract. No idea. Better reporting would be appreciated .

 

[Aretak]

I see some comments upset with Take Two. Can someone point to the part of the article that explains what Take Two allegedly did that was a breach of contract or somehow illegal? All I see is they hired a company to do work for them. They were willing to extend the deal. The company felt their future royalty terms were not clear and satisfactory. Negotiations then began over royalties the company wanted. Take Two then said forget it and cancelled the deal. Take Two then offered people jobs. And the company went out of business when the pandemic hit and they couldn't find someone to replace the money Take Two was paying them the prior year.

Walking away from negotiations is perfectly fine if you don't like the pitch. Was there a contract not to offer employment to the employees that Take Two breached? I'm not following as to what Take Two did that warrants outrage. Maybe they did violate a law or contract. No idea. Better reporting would be appreciated .

Illegal and immoral are not the same thing. You know this of course.

 

[NickFire]

Illegal and immoral are not the same thing. You know this of course.

I've yet to see anything immoral. I'm open to hearing explanations. Take 2 is not immoral if it stops doing business with a company when negotiations go sour. Take 2 is not immoral for offering people jobs either. Again, I'm open to explanations. But I haven't seen anything immoral yet IMO.

 

[Clear]

I see some comments upset with Take Two. Can someone point to the part of the article that explains what Take Two allegedly did that was a breach of contract or somehow illegal? All I see is they hired a company to do work for them. They were willing to extend the deal. The company felt their future royalty terms were not clear and satisfactory. Negotiations then began over royalties the company wanted. Take Two then said forget it and cancelled the deal. Take Two then offered people jobs. And the company went out of business when the pandemic hit and they couldn't find someone to replace the money Take Two was paying them the prior year.

Walking away from negotiations is perfectly fine if you don't like the pitch. Was there a contract not to offer employment to the employees that Take Two breached? I'm not following as to what Take Two did that warrants outrage. Maybe they did violate a law or contract. No idea. Better reporting would be appreciated .

Yeah, there's definitely not enough there (detail-wise) to call it one way or the other, anyone leaping to call winners and sinners on the basis of that is showing their bias/ignorance big time.

If a project gets cancelled, nobody comes out ahead.

 

[Aretak]

I've yet to see anything immoral. I'm open to hearing explanations. Take 2 is not immoral if it stops doing business with a company when negotiations go sour. Take 2 is not immoral for offering people jobs either. Again, I'm open to explanations. But I haven't seen anything immoral yet IMO.

I don't recall asking for your personal views on morality. You seem to be the only person here that has a deep interest in other people's feelings about this. But hey, you've gone from accusing people of accusing Take Two of doing something illegal to accusing them of just having the wrong opinion in the space of two posts, so that's... progress?

 

[NickFire]

I don't recall asking for your personal views on morality. You seem to be the only person here that has a deep interest in other people's feelings about this. But hey, you've gone from accusing people of accusing Take Two of doing something illegal to accusing them of just having the wrong opinion in the space of two posts, so that's... progress?

Hey I recall you chimed in to tell me there is a difference between immoral and illegal and that I know this. Why would you make a dismissive post like that and then get upset by being asked to explain it?

 

[Bryank75]

Sony should have bought R* before TTwo but they are so bad at the acquisition game, it's not even funny.

The whole thing reminds me of a JR quote...
"Once you get rid of integrity, the rest is a piece of cake."

 

[zeorhymer]

Something something big corps bad something something.

 

[McCheese]

Hey op, you can archive the page which gets past the paywall and gives former kotaku asshat less traffic:

archive.org link

 

[Oddvintagechap]

Hey op, you can archive the page which gets past the paywall and gives former kotaku asshat less traffic:

archive.org link

Then why read the story.

I kinda want tp understand these private labels epic and 2k have started. Where they take all the financial risk, share half the profits, and dont keep the ip.

 

[waltyftmus Prime]

 

[YCoCg]

Scummy Take-Two being scum? Nothing new there, I guess they ran out of GTA modders to spy on this month.

 

[FloatingIslands]

I don't see anything wrong.

TakeTwo had a contract with Star Theory to make the sequel to Kerbal Space Program (which Take Two has it's rights).
Star Theory didn't like the contract.
Take Two cancelled the contract but liked how the staff worked.
Take Two creates a new studio to keep working with the game and offers job to Star Theory's staff (possibly with a better wage or benefits).
The majority of the staff from Star Theory accept their new jobs at Take Two.
Then, Star Theory closes because they weren't able to pitch their new game at gdc, and covid.

Why is Take Two seen as the bad dude, when it was the employees of Star Theory that accepted the new jobs and left the company?
And why should the staff be seen as the bad dudes either?
People all the time leave their current job to get something better or more stable.

 

[The Bloody-Nine]

I don't see anything wrong.

TakeTwo had a contract with Star Theory to make the sequel to Kerbal Space Program (which Take Two has it's rights).
Star Theory didn't like the contract.
Take Two cancelled the contract but liked how the staff worked.
Take Two creates a new studio to keep working with the game and offers job to Star Theory's staff (possibly with a better wage or benefits).
The majority of the staff from Star Theory accept their new jobs at Take Two.
Then, Star Theory closes because they weren't able to pitch their new game at gdc, and covid.

Why is Take Two seen as the bad dude, when it was the emplyees of Star Theory that accepted the new jobs and left the company?
And why should the staff be seen as the bad dudes either?
People all the time leave their current job to get something better or more stable.

It's a typical non story from this 'investigative journalist' dunce.

 

[Falcs]

Such a big, hard, juicy, throbbing first story.

 

[Horatius]

the implication in the tone of the writing is that this was all done as a predatory scheme to deliberately destroy the company, but what's the actual evidence for that lol. not saying that couldn't be true, but equally you could say if negotiations went bad with the upper management and take 2 pulled out of the deal solely because of that, then how is any of what transpired wrong? they thought the deal was bad, but still had faith in the product and the actual team that was making it.

i guess theoretically you could say poaching staff is bad in general but that is a natural part of business competition, usually poaching is a good thing for employees, it's only a pain in the ass for the business/management. employees are free to leave jobs if they receive better offers, which is exactly how it should be.

honestly this looks more like a "these guys are asking for too much money, fuck em, we're better off making it ourselves" thing than an evil scheme of some kind. feels like jason taking a worldview rooted in an oppressor vs. oppressed narrative and reflexively applying it to business journalism covering the decisions of large corporations. might fly with his peers and audience in other types of video game writing,, but here it feels bizarrely sentimental. business is business. compete or die. that is how it must work. take 2 isn't a monopolist crushing all small mom & pop competition or something idk.

 

[theclaw135]

Take 2 owns the game and can assign whatever studio they want.
But I think there were bad decisions on both ends. Star Theory's business operations were dependent on Take 2, and their collapse was imminent if negotiations went south.

 

[oldergamer]

I don't see anything wrong.

TakeTwo had a contract with Star Theory to make the sequel to Kerbal Space Program (which Take Two has it's rights).
Star Theory didn't like the contract.
Take Two cancelled the contract but liked how the staff worked.
Take Two creates a new studio to keep working with the game and offers job to Star Theory's staff (possibly with a better wage or benefits).
The majority of the staff from Star Theory accept their new jobs at Take Two.
Then, Star Theory closes because they weren't able to pitch their new game at gdc, and covid.

Why is Take Two seen as the bad dude, when it was the employees of Star Theory that accepted the new jobs and left the company?
And why should the staff be seen as the bad dudes either?
People all the time leave their current job to get something better or more stable.

You can't be this dumb. This is a classic tactic publishers have been using since game publishing was a thing. It will cost you less to pay a company to make games then it will to cut funding and hire the employees directly.

There's no logic that can be applied here that makes Take Two look like the good guy.

 

[FranXico]

 

[Breakfast at Noon]

"tried" = did.

Fucking scum.

 

[Miles708]

I could be mis-remembering here, but didn't Bethesda use a similar tactic to acquire ID?
Wasn't Prey 2 cancelled because they've tried doing something similar?

 

[Dick Jones]

It's a typical non story from this 'investigative journalist' dunce.

So great he never broke the story of how his colleagues were racist, and never spoke about that kotaku article circulating video game child porn images. So brave, like Watergate levels of journalism.

 

[kraspkibble]

oh shut up Jason

he should really change that god awful photo of him. use something else. ideally not another gommy looking photo of himself. fucking sick of seeing his face.

 

[FloatingIslands]

You can't be this dumb. This is a classic tactic publishers have been using since game publishing was a thing. It will cost you less to pay a company to make games then it will to cut funding and hire the employees directly.

There's no logic that can be applied here that makes Take Two look like the good guy.

It's a classic tactic and it's called competition.
Star Theory couldn't offer a better deal to their employees and they left.
It's not like the staff was forced to leave Star Theory, they chose to.

 

[Clear]

You can't be this dumb. This is a classic tactic publishers have been using since game publishing was a thing. It will cost you less to pay a company to make games then it will to cut funding and hire the employees directly.

Its not a "classic tactic"! Its a mess that benefits noone.

What do you think happens to productivity during periods of instability like this? People wondering if they'll be getting a paycheck at the end of the month tend to look out for themselves, not their (soon to be former) management.

As per fucking usual its people thinking emotionally about business i.e. MONEY matters.

Cutting funding jeopardizes the project, the thing that they need finishing in order to get a return on their investment. If the publisher wants to fuck you they simply withhold or delay royalties after the thing is finished, because doing it during means they end up losing out just as badly!

 

[alabtrosMyster]

So great he never broke the story of how his colleagues were racist, and never spoke about that kotaku article circulating video game child porn images. So brave, like Watergate levels of journalism.

What an horrible, disgusting person she is. I bet she once argued with some Japanese person about sushis too! She should not have opinions on foods from different places/cultures. Also, never mind the dead lines, let any person of color (I hate that way of saying it) have their voice at any time, this is important, no matter what they say!

 

[element]

It's a classic tactic and it's called competition.
Star Theory couldn't offer a better deal to their employees and they left.
It's not like the staff was forced to leave Star Theory, they chose to.

This isn't a classic tactic at all and nothing remotely about competition.

Company A funds Company B. Company A stops funding Company B and sends out "well now you have no money and no game come and work with us" is not a competitive tactic and not a normal tactic used. At least not this transparently.

Knowing some of the players and from the details in Jason's article a couple things likely happened.

Star Theory needed more time, which is more money.
Given the further investment in the project, Take2 likely wanted equity in the company to protect their investment and the two companies couldn't find a number to agree on.
Take2 ran the numbers and found it cheaper to cancel the project and move development to another studio.

Another aspect to consider given the poaching aspect of this is Take2 didn't want to continue working with the leadership of Star Theory. So Take2 cancelled the project instantly putting a fully staffed company into a difficult scenario of making payroll or having to lay people off.

 

[oagboghi2]

the implication in the tone of the writing is that this was all done as a predatory scheme to deliberately destroy the company, but what's the actual evidence for that lol. not saying that couldn't be true, but equally you could say if negotiations went bad with the upper management and take 2 pulled out of the deal solely because of that, then how is any of what transpired wrong? they thought the deal was bad, but still had faith in the product and the actual team that was making it.

i guess theoretically you could say poaching staff is bad in general but that is a natural part of business competition, usually poaching is a good thing for employees, it's only a pain in the ass for the business/management. employees are free to leave jobs if they receive better offers, which is exactly how it should be.

honestly this looks more like a "these guys are asking for too much money, fuck em, we're better off making it ourselves" thing than an evil scheme of some kind. feels like jason taking a worldview rooted in an oppressor vs. oppressed narrative and reflexively applying it to business journalism covering the decisions of large corporations. might fly with his peers and audience in other types of video game writing,, but here it feels bizarrely sentimental. business is business. compete or die. that is how it must work. take 2 isn't a monopolist crushing all small mom & pop competition or something idk.

Not only is it a natural part of buisness, poaching is a way for employees to get a big pay raise.

 

[PleaseWaitStation4]

 

[D.Final]

Yeah....