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Gearbox has been accused of reneging on staff bonuses typically given to employees as part of the company’s profit-share scheme.
As detailed in a report by Kotaku, the Borderlands 3 developer offers its team “below-average salaries for the video game industry” because it’s profit-share scheme sees 40 per cent of royalties shared across staff, with the other 60 per cent going back into the studio and its parent company.
The quarterly bonus scheme – which has reportedly been varied by “more than a dozen current and former Gearbox staff who have spoken to Kotaku over the years” – “can be lucrative”, offering substantial bonuses large enough to buy houses, as evidenced by some colleges who purchased homes with royalties made from 2012’s Borderlands 2.
However, in a meeting Gearbox CEO Randy Pitchford told staff that bonuses would be – to use Kotaku’s parlance – “significantly smaller than expected” because the game exceeded the original budget and did not meet the company’s internal sales projection. Opening a new studio in Quebec and expanding the team during development also contributed to increased costs.
“Pitchford reportedly told those who didn’t like the change that they were free to quit,” the Kotaku report said.
Of the six developers that communicated with Kotaku, some allege they had been “promised a bonus of at least $100,000”.
“Borderlands 3 represents an incredible value to gamers and an incredible achievement by the team at Gearbox Software,” Gearbox told Kotaku in a statement. “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.”
Borderlands 3 became the fastest-selling game in 2K history, shifting more than five million units in its opening five days.
Along with claims the latest Borderlands game has achieved “multiple record-setting milestones”, 2K says within its first five days, 50 per cent more consumers had purchased Borderlands 3 when compared with Borderlands 2, making it the “fastest-selling [game] in 2K’s history, as well as the highest-selling title for the label on PC in a five-day window”.
The latest sales bring the Borderlands franchise’s total sales to exceed $1 billion in net bookings, becoming the second franchise in 2K history to achieve this milestone.
“Borderlands 3 marks 2K’s highest percentage of digital sales for a cross-platform, cross-distribution title, with more than 70 per cent of consumers purchasing the game digitally in its first five days of release,” a press release from 2K said at the time of Borderlands 3’s release. “In addition, Borderlands 3 delivered the highest pre-order sales figures to date for a 2K title, as well as broke pre-order records with the Epic Games Store. Initial sales of Borderlands 3 have exceeded the label’s expectations and, in particular, PC sales of the title through the Epic Games Store have been incredibly strong.”
Ex-Gearbox lawyer, Wade Callender, filed a lawsuit against CEO Randy Pitchford last year, accusing him of contract violations and fraud involving Gearbox, a separate real estate company that they both owned, and Callender’s contract of employment. The filing accuses Pitchford of being “a manipulative and morally bankrupt CEO who shamefully exploited his oldest friend”.
The filing includes allegations that Pitchford received a “secret” $12 million “executive bonus” and lost a USB drive that contained sensitive corporate documents not just for Gearbox, but also 2K, Sega, Sony, Microsoft and others. It further alleges the USB stick also contained Pitchford’s “personal collections of underage pornography”.
