Borderlands 3 Developers Accuse Gearbox Of Shorting Bonuses
Gearbox Software developers will be receiving much smaller Borderlands 3 royalty checks than they were promised by management, according to a new report. That’s despite Borderlands 3 selling over 5 million copies in its first week and going on to sell nearly 8 million copies by February. Gearbox yesterday informed a number of its developers that the Bordlerlands 3 bonuses they had been expecting would be greatly reduced.
These royalty bonuses are a profit sharing scheme at Gearbox, which the company uses as an incentive for developers to accept a lower wage, but with the potential for higher earnings later on. With Borderlands 3 being a huge game, Gearbox higher-ups apparently told employees to expect six-figure bonuses, but it turns out that won’t be happening.
From the employees that spoke to the site, many of them were promised six-figure bonuses, but Pitchford said that the reasoning behind the major cutback was due to the development costs for Borderlands 3. Along with the base game and the DLC that is still in motion, the entire project is costing publisher 2K a rough sum of $140 million dollars. Based on an agreement with Gearbox, the developer would not receive royalties until all costs were covered.
A statement Gearbox responded with the following:
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.
In 2016, Randy Pitchford reportedly took a $12 million bonus as an advance against Borderlands profits. This led to a lawsuit which was eventually dropped. However, Kotaku notes that this bonus came out of the 60% company share, so it would not have affected the revenue sharing scheme that regular employees participate in. It may, however, have helped set high expectations when combined with the success of Borderlands 3 according to Take 2, that company management had said to expect large bonuses, and the legacy of the large Borderlands 2 bonuses.
Gearbox Software’s explanation for the smaller-than-expected bonuses is that Borderlands 3 cost more to make and sold fewer copies than the company was expecting, and that the studio ramped up hiring during its production. The game’s increased cost comes from a mid-development switch from Unreal Engine 3 to Unreal Engine 4 and a contract with 2K Games that required Borderlands 3 to make back both its own budget and the budget of the game’s DLC before Gearbox would receive royalties. Still, both Borderlands 3 and its DLC have been successful by all accounts, and there’s no sign that Gearbox gave any hint that its developers should expect lower bonuses before now. Instead, Pitchford reportedly told employees that if they were upset at the surprise announcement, they should quit their jobs.
Royalty bonuses were apparently a big selling point when it came to hiring new employees as those who worked on Borderlands 2 for the company previously said to have been able to buy a house thanks to the bonuses they had received. It was also mentioned that another factor leading to the disappointing bonuses was due to the company increasing in size with now having a second studio in Canada. Pitchford also reportedly did not say that the coronavirus had any part in the decision and those who were upset about the announcement could quit if they were unhappy.
While the story is certainly unfortunate, it should serve as a reminder to fans just how much work and effort goes into the games that players enjoy. It can often be difficult to understand how costly development is, and how little some people in the industry get paid to make the video games that people get so much entertainment out of.