You know that personal film project they claimed one of the founders was distracted by? It was a Subnautica film they asked him to make.
You know that personal film project they claimed one of the founders was distracted by? It was a Subnautica film they asked him to make.
I mean, the publisher seems to be pretty stupid, because…how did they figure that $250 million?
There are two entries in the Subnautica series, Subnautica and Below Zero. Subnautica has sold “over 5 million copies” at a retail price point of $30. So that’s $150 million in gross revenue. For this back of the napkin math I’ll assume that the “over five million” and the number of copies sold at a discount come out in the wash. 30% of that gross revenue is going to immediatley go to Steam or whatever other platform, so the company got $100 million in net revenue before their own expenses like rent and power bills gets at it.
I cannot find sales figures for Below Zero, but it sells for the same price point and I don’t think it could have possibly sold more than Subnautica did, so let’s figure another $150 million gross, $100 million net.
Subnautica as a franchise netted its studio ~$200 million across the launch of two games selling ~10 million copies.
And Krafton had agreed to pay out a $250 million bonus for reaching a certain revenue target in 2025, which they were on track to do given the announced early access launch.
Just to put them in the black for that bonus, Subnautica 2 would have to sell better than both previous games put together at a higher price, and that doesn’t touch the purchase of the studio, operating expenses, or the dump truck of cocaine that must have been involved in these financial decisions.
I didn’t want to think they’re completely incompetent so I decided to do some digging. That $250 million is actually part of their acquisition deal. Krafton technically bought Unknown Worlds for $750 million. $500 million was paid up front and the extra $250 million was due for 2026 if Unknown Worlds met the performance clause. That $250 million has nothing to do with the sales of Subnautica, it’s part of the buyout.
This could mean they were always going to try and stiff Unknown Worlds. It also means it’s probably less about the people working at Unknown Worlds getting stiffed and more about the leadership expecting a payout that was agreed upon.
Okay, they spent $750 million for a studio that has barely made $250 million in its history. I still don’t think the math mathulates here.
So what? Things are mostly valued by what the projected performance is, not the prior performance.
Also it seems that Krafton assumed they would miss the performance criteria, so they thought they’d bought it for $500 million. That doesn’t sound unreasonable for a studio that made $250 million with a single release and already had more in its pipeline.
What do you base projected performance on if not prior performance?
I don’t think Unknown Worlds did have a $250 million single release; that’s probably what they netted across three games, Natural Selection 2, Subnautica, Below Zero.
Stupidity is an ingredient in betting against your own teams. Because this is what happens, you put yourself in a position where you don’t want your own victories.
Any way, I see it as our goal as the game playing public to figure out how to make this cost Krafton more than $250 million.