DarkUnderlord said:
SP game is funded by Matt and Trey. If you would look at EA only about 30% goes into game development and the biggest chunk goes to marketing. You can't sell a mainstream game without marketing. It has nothing to do with Obsidian paying bills.
1. You're an idiot. See #4.
2. THQ don't have the money to market it. In fact, THQ don't have any money at all right now.
3. If the South Park guys are funding this for Obsidian, why are THQ even involved and "delaying" the project? I assume they were chosen to carry some of the cost - in order for them to get their own return out of that investment. If THQ goes down, the South Park LLC (which is a partnership of Matt, Trey and Viacom) may not have enough to complete the development - or may decide it's not financially viable enough to proceed by taking on the extra risk and footing the entire bill themselves. That's of course, after the lawyers have sorted out the mess.
4. THQ have already delayed the game. Not the South Park guys - THQ are saying they did. And the game's development is already hinging on Matt and Trey's involvement, which is being worked around their TV schedule which is causing its own delays. Money needs to be coming in during those periods if Obsidian intend to keep that team around.
5. Remember, you're the one who's saying SP is the project that's paying for all of Obsidian's floor-space. Obsidian can't even afford to keep the SP team together. That has EVERYTHING to do with Obsidian paying bills.
1. They did what they could to survive. If they would have rented a small office to accommodate 50 people, without sound and other studios they probably would not have lasted that long.
They lasted just fine in Feargus' attic before they got that office space.
Obsidian, circa 2004:
After we left Black Isle, Obsidian was seven of us working in my attic--amazingly we only blew a fuse twice. After we signed the deal to do KOTOR II, we were able to bring on six more people right away. By the end of 2003 the team had grown to 20, and as of last month, we had about 27 people working on the game.
2. Keeping that much space is retarded idea to begin with.
I'm glad you and I agree on something.
They need that area to be able to produce AAA titles if they keep coming. That area was never intended for PE.
Oh right, so now they're
wasting potentially valuable office space that could be used for AAA titles - on P:E.
You really are an idiot. It's like you can't even comprehend what's happening. My
entire point is that they have this office space which is too damned expensive for their team. You keep arguing against that,
while agreeing with it. You say this office space is magic space that's "already paid for", when it's clearly not. Something has to pay for that space. And right now, the P:E team are in that space - so guess what, P:E is paying for it.
I know you're only in High School right now - but please take up a basic "Business Studies" lesson at least.
DarkUnderlord said:
4. But a question: Does this seem like a good business plan? Does this seem like a good strategy to rely on? To rely on other AAA projects - which themselves are of a tenuous nature - in order to complete a project funded with goodwill via KickStarter? And if Obsidian think it's "okay" to use South Park money to pork-barrel their office space, in the event they lost SP, why wouldn't they then think "Well, we've got all this KickStarter money... We could just use that! And I'm sure we'll get another AAA title later!"
4. They are not doing that.
Does your brain actually keep track of what you've been saying or do you just think random thoughts at the time and write down whatever comes out? This is you, so emphatically, earlier in this thread:
That enforces my point that there is no need to transfer costs to PE as they are already paying for floor space. That actually means that you can cram 150 people in there and your rent won't increase, because surprise they have already payed for it!!!!
How on Earth can you argue that on one-hand, "just a few hundred thousand" could be what saves P:E and gets it to completion, while on the other, you blithely throw away hundreds of thousands of dollars worth of office space because "it's already being paid for"?
Already being paid for by whom? And where did that money come from? If it's coming out of the South Park budget (their only source of income?), then why are they spending that money on office space they don't need, instead of on South Park?
Yes, most likely from SP as it is the only AAA title in the making ATM.
Note the bolded "surprise" and the four exclamation marks at the end of that first quote for added emphasis. This is what l3loodAngel actually believes. That is, the P:E budget does not include costs for floor-space. "It's free!!!!!!1!11!oneonetwo"
l3loodAngel even agrees that that "free space" is being paid for
by South Park.
That means Obsidian are relying on South Park in order to keep the space that is being used by P:E. You agree that that is precisely what Obsidian are doing.
But you're so fucking dense you then say "They are not doing that."
5. They have free space that they have to use to finish AAA project and they also have free space that can accommodate PE team. So you want them to rent office space to for PE to do the justice.
Prosper? Is that you?
l3loodAngel said:
DarkUnderlord said:
l3loodAngel said:
DarkUnderlord said:
If I misunderstood you, then fair enough. But it's good to know you agree that there are costs that must be paid - and paying them for empty space is a waste.
You have got to be kidding me. A wall in an rented FSG office to stop air circulation?
1.You're the one who raised a "wall will separate heat/conditioning from coming to that unused space". I have no idea what the fuck you were trying to do. 1. Given you also think that lights in an office building are "turned on in the evening or night." For all I know, you probably thought you'd stumbled onto a genius idea.
1. How about sarcasm?
I considered that but this is the chain of events:
1.
Infinitron, showing his complete
lack of basic business practice says "
What if Obsidian, as a company, has its own dedicated budget for overhead which is separate from all other budgets?".
2.
I replied: "So what you're basically saying is that Obsidian should remove one of its costs of production from the game itself - and pay for it with this 'other money' which they apparently have."
3.
You said: "Let me illustrate with a simple example. Your company X is renting floor space to run a company. It rents two floors in the building and it has 70 sq meters of leftover space that the company can't utilize. This area must be cooled/heated, paid for and can't be rented. You are not renting new space for your production! So this unused area is a dead weight loss for the company anyway, but it's the cost of running the big project such as South Park."
4.
I reply: "Because you just said it:
This area must be cooled / heated. [...] Heating and cooling that empty floor space is a huge cost. Your example is only a sign of financial mismanagement and incompetence. It means they're wasting money by having such a large amount of empty floor space left around. They're paying for a bigger building then they need."
5. I think my point is pretty clear here that I'm saying "Heating and cooling costs money". But then
you reply with this: "Not all countries use heating by electricity since it is one of the most expensive sources of heating. But you do know that. If you rent 100 sq meters, but you use up only 80 do you think that you won't have to heat/cool the place? A magic wall will separate heat/conditioning from coming to that unused space. 50$ should be the cost of electricity or direct production costs and ONLY for a single PC electricity usage."
You first re-emphasise that "pfft.. electricty for heating, that's expensive! They wouldn't use it!". If you're agreeing that heating / cooling is expensive, why say this? You then say this strange line "you think that you won't have to heat/cool the place?" when it's
PRETTY GOD-DAMNED CLEAR that I just said how expensive that is to do,
that it must be done, and that this is one of those
wasted costs that are Obsidian are spending their money on. Once more "they're wasting money by having such a large amount of empty floor space left around". But then with your final line,
you re-state your point that we "ONLY for a single PC electricity usage".
I really think your problem here is English: You don't fucking speak it - and you sure as hell don't understand it.
DarkUnderlord said:
l3loodAngel said:
A business plan out of altruistic notion?
Well they sure as hell don't have an actual business plan. I honestly think they went "Shit, we need money. Uhh... KickStarter anyone?"
You are accusing Obsidian of fraud here without any proof. Present hard evidence or shut the fuck up.
No, that's not technically fraud. Look, English clearly isn't a language you understand so you should check a dictionary before you throw those words around.
My point here is quite simple (as are my other points - all of which seem too complicated for you to grasp), Obsidian lost a AAA project. They didn't have any money - they even had to fire a bunch of people. As such, without the people to fill them, they would need to move out of their offices because they're too big. You can't afford a whole floor when you don't have the projects to pay for the space.
Now, you and I seem to agree on this very basic principle.
One way of rectifying this is to get another project. Again, you and I seem to agree here. Obsidian need a large number of AAA projects on the go (2 - 3) in order to maintain their space... But they don't have that. They've got South Park - which itself is on shaky ground given THQ's situation. Without another project or 2, they can't afford to keep the space. Not with just South Park's money.
So, they sought another project. That project was P:E. Quite simply, overheads
would be included in P:E's budget - despite yours and others idiotic claims otherwise. Put as plainly as I can - and with small words so that you can undertand it when you translate it into whatever comunist European backwater it seems you're from - the office space and equipment that P:E need will be coming out of P:E's budget. It's that fucking simple. This is basic budget 101 stuff guys - if you've never been in a business and done this sort of shit, please at least take the time to read up on it before you open your talk hole and let your inane and ill-considered brain farts loose on the world ("it's already paid for!!!"
).
If Obsidian have any other spare room still left - then they need a project to take that space, otherwise, they can't afford it and it puts their entire rental obligations in jeopardy.
What you (and others) have been arguing, that they have "already paid for space"
is absolutely asinine.
DarkUnderlord said:
l3loodAngel said:
The thing is that if Obsidian run out of AAA projects it will have to relocate to a very small office and embrace their indie status.
Wait a minute, weren't you the one talking about prohibitive moving costs?
There is a difference between relocating to some small hole, scraping all built infrastructure to become an indie studio and moving with all SP, PE teams and with all the infrastructure.
Oh cool, so moving P:E is free but moving SP costs money. I love this deluded land your mind lives in.
Do I need to explain this in detail?
You can't explain anyting in detail. Please don't try. You'd garble the English language too much "to do the justice".
DarkUnderlord said:
They don't want that, but that may happen. Another thing is that you can't even bid for AAA projects if you don't have capacity to deliver and that capacity is incidentally floor space.
Actually it's more about staff and reputation and being able to put together a viable presentation. Troika started pitching Arcanum and they didn't have a whole floor for 200 people as their office space. Obsidian started in Feargus' attic. Of course, Troika failed because they didn't get "that next project" in time to stay afloat. Now Obsidian have got that money from a KickStarter. Think about it,
an obligation free pile of cash. $4 Million of it! With no publisher attached. And they're potentially going to blow it because they're relying on other, flaky AAA titles to keep them afloat.
Exactly. Troika went bust because they ran out of customers (publishers) and not because of the floor space.
It's like you either miss the point deliberately - or you're incredibly obtuse. Maybe if I keep numbering things for you, that might help.
1. You CAN bid on AAA projects without the floor-space. Obsidian did it.
It's how they built their company up. They started as 7 people in Feargus' attic when they landed KOTOR II and Neverwinter Nights II, both AAA projects. Therefore your assertion that they "need floor space" to "even bid" on AAA titles
is false.
2. Obsidian
need another AAA project to stay afloat. If they don't get that, they go bust
just like Troika. If they are relying on those AAA projects to pay their overheads - a bad business practice but a claim you repeatedly make - then that puts P:E's future in jeopardy. As it means that
without other AAA projects on the books, they can't afford to complete P:E.
DarkUnderlord said:
l3loodAngel said:
Don't make even a bigger fool out of yourself. You are the one yelling that remodeling costs a lot and now you tell me that a company that is broke according to you should relocate, pay for remodeling, have a production down time and etc. Not to mention that the sound and motion capture studios, could be the only thing keeping them in business. Do you even have a fucking clue how much it costs to make a sound room? With all the isolation and etc.
Yep, they sure spent a lot of money on that sound room, didn't they. Spend a lot of money, hope on a AAA title, have it cancelled, have to sack staff - but we've gotta keep the sound room!
That's an unfortunate turn of events, but what do you think they should do?
Not have spent so much on a sound room in the first place.
Sometimes, you just can't undo a fuck-up.
Dismantle the room and sell it as scrap? How much are they going to get and not mention the fact that they might be using it for SP as it should be heavily voiced game.
They made NWN and KOTOR without it, I'm sure they'll manage. Hell, South Park LLC have their own sound rooms in their television studios. If they're the ones really funding this thing, why not move the SP team in there during the off-season? It seems about as plausible.
You made a fool out of yourself too many times in this discussion to continue on such points.
Said the man who thinks office space is "already paid for".
DarkUnderlord said:
1. Aye? You were arguing earlier that this building doesn't allow you to drop office space - now you're saying they can just "cut it" and reduce their costs? Then you talk about how expensive moving is and how it's cheaper to stay where they are, 2. spending millions on office space they don't need - while they pay for that space all out of South Park, an RPG with a flaky and tenuous financial footing at best that's been delayed purely for financial reasons. Make up your mind.
3. And "reduce their contract size with publishers"? What the hell does that even mean? By all means, please elaborate as to how Obsidian can "cut costs with those things and thus reduce their contract size".
1. Oh brother. Obsidian can cut game development costs with those things, not their rent costs. Staying with this infrastructure can be cheaper than moving with it.
Of course staying with a sound room is cheaper then moving it. My point is they shouldn't have wasted the money on it in the first place. Given you think Obsidian just pay for floor space out of other projects, and Infinitron thinks they have some kind of "other budget" for overheads, according to your logic, Obsidian wouldn't haven't even accounted for it properly. You probably think "it's already paid for!!!"
And yet fail to consider the specialist sound technician(s) they'd presumably have to pay to operate the equipment, along with maintenance and other costs associated with keeping a room around that they may not be using full-time (such as paying rent for the space) - simply because it relies on them having 2 - 3 projects on the go at once to make it fully cost-effective.
Those are the expenses.
The simple fact is, Obsidian are a company that have
built themselves around having 2 - 3 AAA projects on the go at any one time. That's the only way all their overheads can be paid for - because they have some pretty nasty and expensive overheads. This means that the minute they lose a project, they need to make a decision:
1. Bear the risk and hope they get another project.
2. Reduce their overheads (in this scenario, by moving).
Now any reserve funds they have, would be to deal with 1. Those funds are not to "finish a project" as
Spectacle quite rightly says. It's to keep the lights on, the doors open (and the sound technician there) - while they work on gaining another project. There is only a limited time window they would have open to do this - much like Troika. If that time window closes, then they HAVE NO CHOICE but to reduce their overheads. That means either moving - and all the costs associated with that - or closing down (depending on how close they've cut it).
And by the way, you can't "cut costs" with a break-room.
SP pays for it, not Obsidian for SP. You see a developer develops game while publisher pays for it. In this case M&T pay for development, while THQ should pay for other costs.
And you think Matt & Trey want to bank-roll Obsidian's excess? What happens when the South Park game doesn't need a full-time sound studio - or they've finished with the motion capture aspect of the game? You think they'll be happy to pay Obsidian extra just so Obsidian can keep them around for other projects?
DarkUnderlord said:
If they will get rid of it, it might mean that they have to kiss AAA titles good bye.
Nah, they've got $4M cash from their P:E KickStarter! They can just spend that and keep their sound room. I'm sure another project will come along in time - you know, because they have a sound room - and they can just use the money they get from that next project to bankroll P:E., right?
It is after all, what you've been arguing Obsidian's business practice is.
No really, it's what you've been arguing. You said it just above. "M&T pay for it", "[office space] is already paid for". Add the sound studio, motion capture studio, and the extra lounges for other projects.
DarkUnderlord said:
l3loodAngel said:
I don't know where money come from.
This is the smartest thing you've said for the entire thread.
A sentence worthy of a quote...
He says, after insisting that "SP are paying for it".
DarkUnderlord said:
So Obsidian are either:
1. Relying on their own cash reserves to stay open, cash reserves which you claim are "only a few hundred k", while they burn through half that amount every month on rent.
2. Using money from one project to keep their business afloat financially. That is, instead of spending the money they've been given for a project, on that project, they're spending it on other projects.
3. What you've described is not a sound business model, nor is it sound business practice.
4. And this is what Obsidian are relying on:
Darksiders II is failing, end in sight for THQ?
"
Today, THQ's market value has dropped another 30%, bringing the company's overall worth to an abysmal $7.27 million USD"
1. Exactly. If a company burns a million a month it should have few 100k stashed.
2. Well they need that stuff to finish SP, so it's the cost of finishing the game. It's bigger than the cost of previous projects since they all share the costs. Now the burden is on SP since 1 million for PE would just pay for rent according to you.
3. Obsidian is in a tough business situation, that cannot be painted in different color. I will repeat this yet again: If Obsidian will go bust it will be because they don't have customers and NOT because they rented too much floor space. I do no know how you managed to derail this discussion from minor accounting issue, to Obsidian being a grifter company that made a huge scam. You sound like Rush Limbaugh or Ted Nugent so I won't indulge your insanity any more.
4. They rely on what they can. How does this affect you or PE it's above me, but have it your way.
1. Yes, and that money's NOT for game development (Read: Staff). It's to cover the overheads during a lax period. You said it yourself earlier when you talked about factories hiring and firing staff - but not moving premises as their staff shrinks and grows.
2. And that's an EXCESSIVE burden to place on one single project. They don't NEED the sound room all day, every day. They don't NEED the motion capture studio everyday for South Park. It would be cheaper to rent these things as they need them, rather than paying for them to be staffed and maintained - and kept within their office - while they're not being used.
3. Yes, Obsidian are in a tough business situation. It's tough
because of their overheads. 30 - 50 people working on South Park don't need an office floor designed for 150 - 200. That means wasted space. It means
a larger proportion of the game's development budget needs to be spent on maintaining those overheads. That's less money for staff to work on the game. Alternatively, it means Obsidian need to draw on their own funds and pay those overheads - in the hopes that another project comes along to fill that space.
Let's do it simply. South Park might look something like this:
- Staff costs for 50 people ($4,000 per month each) = $200,000 | $3,600,000 for 18 months
- Floor space for 50 people (200 sqf ea @ $2.55 per month) = $25,500 | $459,000 for 18 months
- Other overheads (accounting, telephones etc..) @ 20% of wages = $5,100 | $91,800 for 18 months
Total monthly cash burn = $230,600
Broken down into percentages:
- 11.1% of the budget is going on office space
- 86.7% on staff costs
- 2.2% on other overheads
For an 18 month development time, that works out to $4,150,800 as the total project cost. Add on a 10% profit margin and it becomes a $4.6M budget.
But here's Obsidian's problem....
l3loodAngel said:
Already being paid for by whom? And where did that money come from? If it's coming out of the South Park budget (their only source of income?), then why are they spending that money on office space they don't need, instead of on South Park?
Yes, most likely from SP as it is the only AAA title in the making ATM.
- Staff costs for 50 people ($4,000 per month each) = $200,000 | 3,600,000
-
36,000 sqf of floor space (sound room, motion capture studio...) = $91,800 | 1,652,400
- Other overheads (accounting, telephones etc..) @ 20% of wages = $5,100 | 91,800
Total monthly cash burn = $296,900
Broken down into percentages:
- 31% of the budget is going on office space
- 67.3% on staff costs
- 1.7% on other overheads
All that office space is increasing their cash burn
by a whopping 30% on their total monthly spend. Obsidian needs to find an extra $66,300 every month just to keep their office space. That's equivalent to almost 17 employees under this scenario (which is at dirt cheap wages).
So, they can pull that cash out of their reserves... But their reserves are only "a few hundred k", let's say $300k, which would give them 5 months breathing room to find another project
before they go broke.
... or, as you're been saying, they use the cash SP are giving them to fund it. But SP are only giving them (with a 10% profit margin) an average of $253,660 per month. They're still short $43,240.
At some point,
something has to give. They just don't have enough money. This is the basic business concept I've been trying to explain. At how something as simple as excess office space:
1. Is NOT free. It has to be paid for somehow.
2. And how paying for it affects the projects you're working on.
