According to a recent report from Kotaku, various Gearbox developers have been told they won’t be receiving the huge bonuses they were promised, following on from the highly successful release of Borderlands 3 last year.
Employees at the Texas-based developer are paid below average salaries when compared to the rest of the gaming industry, but those are designed to be offset by potentially lucrative “profit-sharing” bonuses, where Gearbox filters 60% of a game’s profits back into the company before sharing the 40% amongst its employees. Reportedly, the massive success of Borderlands 2 and the bonuses that followed gave many workers enough money to purchase their houses, a fact Gearbox apparently love to tout to new prospective employees.
Several employees who have spoken to Kotaku have stated that Gearbox management promised up to six-figure bonuses after the launch of Borderlands 3, but in a meeting conducted this week, Gearbox CEO Randy Pitchford dropped the news that the bonuses would be considerably lower than expected.
The reasons cited included an expensive switch to Unreal Engine 4 during the middle of development, along with a growing company and an “off-base sales projection”. On top of that, Gearbox were told that in order to receive royalties from the game’s publisher 2K, they’d have to recoup not just the game’s massive budget, reportedly in the region of $95 million, but also the budget of the game’s DLC, pushing the overall cost to around $140 million.
Pitchford himself reportedly told those in the meeting that if they were unhappy with the news, they were welcome to quit, but that he’s also seeking to get an advance on future royalties from 2K to give to employees. 2K’s parent company Take-Two reported in an earnings call back in February that Borderlands 3 managed to sell nearly 8 million units, and that it looks to be a “lifetime unit sales to be a record for the series”, according to Take-Two CEO Strauss Zelnick.
In a statement to Kotaku, a Gearbox representative stated that “a forecast update was given to the talent at Gearbox that participates in the royalty bonus to set expectations for the coming quarters”, but the fact remains that the promise of six figures bonuses was broken by management. Kotaku’s report concludes by saying that many current employees expect an exodus in the near future, and honestly, who could blame them?
UPDATE: Gearbox has sent us an official comment on this story, the same comment as the one sent to other publications, Kotaku included:
“Borderlands 3 represents an incredible value to gamers and an incredible achievement by the team at Gearbox Software. Our studio is talent-led and we believe strongly in everyone sharing in profitability. The talent at Gearbox enjoys participation in the upside of our games – to our knowledge, the most generous royalty bonus system in AAA. Since this program began, Gearbox talent has earned over $100M in royalty bonuses above and beyond traditional compensation.
“In the most recent pay period Gearbox talent enjoyed news that Borderlands 3, having earned revenue exceeding the largest investment ever made by the company into a single video game, had officially become a profitable video game and the talent at Gearbox that participates in the royalty bonus system has now earned their first royalty bonus on that profit. Additionally, a forecast update was given to the talent at Gearbox that participates in the royalty bonus to set expectations for the coming quarters. Gearbox is a private company that does not issue forward looking statements to the public, but we do practice transparency within our own family.”
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