Tuesday, March 16, 2010

Bad News for Catalyst

One of the RPG darlings of the last few years is in bad shape. From RPG.net by way of Fear the Boot:

OK, as you may well have been able to surmise from release schedules, Catalyst Game Labs is in a bit of a financial pickle, and it is somewhat unlikely that they will retain the license to make Shadowrun products. This is not because Shadowrun hasn't been selling enough to cover expenses, but merely because a significant quantity of money is missing outright. Reliable sources put this figure at roughly $850,000. Which sounds like a lot, and it is. It is roughly 40% of Catalyst's entire sales for last year, missing over a three year period. There will of course be lawsuits, and there are already people drawing up legal documents accusing Loren Coleman of having hired people to construct an extension on his house through the company as "freelance writers" and somehow reporting an estimated $100,000 of convention sales as $6,000. Whether that is actually true or not is - of course - a matter for the courts to decide. And decide they presumably will.

But what that means for Catalyst as a company is pretty bad. It costs several dollars to print a book even when the pdfs are finished and ready for publication. A print run of say, 50,000 books (like the print run of Runner Havens) would cost somewhere between $150,000 and $250,000 to print and ship to distributors. And while it eventually sold to distributors at ~$15 a book (a total take home of $750,000), it did so over a period of three years, during which time they were paying interest on loans and paying for storage, and advertisement and so on and so forth. A book like that isn't actually taking home half a million in profits. Which is a bad thing, because it means that even if there was a complete book printed and ready to sell, even a total and rapid sell through would not pull the company out of the financial hole it is in - and the shortfall means that it does not have the cash on hand to start the ball rolling with a new major printing.

The tiny amount of drachmas that are left in the coffers are being used to print up tiny print runs of books that have sold through - another 3,000 books of Runner's Companion for example (~$15,000 to start up, maybe $30-40k towards paying creditors if it sells out). There simply is not the startup cash to bring upcoming books like the SR4 sixth world almanac or corporate guide forward. The writing is there, but the printing costs are not. Beyond that, the freelancers have not been paid, and some of them are withholding copyright until they are - meaning that even a tiny print run of these new materials is simply not possible.

Many SR writers are quitting, have already quit, or have handed in notices contingent on demands which - word on the street - will not be met. And CGL does not even own Shadowrun, it leases the intellectual property from Topps. It seems unlikely that they will be able to make their licensing payment when the contract comes up for renewal - in a couple of months. At that time, CGL will cease being able to print Shadowrun or Battletech materials (they would presumably keep the license to Cthulhutech and Eclipse Phase for at least a little while longer, because those are separate contracts).

So what does this mean for the future of Shadowrun? It probably means that someone else will create a company and start making Shadowrun again. After all, freelancers work for very little, and a well selling book can bring in tens of thousands of dollars in profits. $850,000 of embezzlement is seemingly enough to sink the company (whoever ended up with the credsticks), but I must point out that there was indeed eight hundred and fifty thousand dollars to steal, so Shadowrun is not - as a concept - insoluble. And I also point out that something similar happened to Shadowrun before. Indeed, twice before, as both FanPro and FASA before it collapsed under the weight of people not paying debts and having bags with dollar bill signs vanish mysteriously in the middle of the night. It's somewhat... poetic considering the subject matter of the game itself.

It is entirely probable indeed that when a new company comes to take the licence, many familiar faces will appear in the new company as if they had never left. Certainly back when FanPro collapsed back when I was working for the company, I simply started working for the new company as if nothing had changed. This happened back when FASA collapsed as well - those members of the team that were not extracted by Microsoft simply started turning in writing assignments to the new boss.

And yeah, I regularly go on shadowruns against Catalyst to find out what new releases are in store. Don't you?

-Frank