I think it’s safe to say that Borderlands 3 was a hit. The core game was an addictive grind of loot ‘n shoot fun that sold five million copies in the first week, the DLC has been a welcome extension of the formula and the fandom is very very happy right now. A pity the same can’t be said for the people who made Borderlands 3, as it looks like all their hard work has resulted in them feeling that they have been short-changed come the day of a promised bonus payout.
According to Kotaku and multiple sources who worked on Borderlands 3, Gearbox employees are feeling the pinch right now as the big payday that they were promised turned out to be much smaller than what they were promised for their hard work. Here’s how the maths works: Gearbox admittedly pays below the industry standard when it comes to developer remuneration but the catch here is that said workers can opt into a profit-sharing arrangement that makes up the shortfall.
If a product does gangbusters, 60% of the game royalties will go into the Gearbox coffers and the bank accounts of the owners, while the remaining 40% gets divvied up amongst employees. Which should result in the Gearbox team working their hardest to ensure that everyone profits handsomely from a quality game. The approach was a godsend for employees who worked on 2012’s Borderlands 2, as the record numbers posted by that game’s sales resulted in huge bonus cheques that even allowed some of the staff to buy houses according to Kotaku.
With Borderlands 3 being a smash-hit right out of the gate, those big paydays were expected by the staff and even promoted by Gearbox themselves so that new blood could be lured in to work on the project. The reality was more disappointing however, with smaller royalty bonuses being paid out that left many an employee feeling disappointed.
In response to the report, Gearbox claimed that the $140 million development cost had to be paid back to its publisher 2K Games before they could start writing cheques, a standard practise in the industry that the company says has resulted in them only seeing profits now well after the game was released. Gearbox also claimed that the increased staff, higher production cost and sales projections being inaccurate also led to smaller bonuses, but that royalty payments are proceeding nonetheless and that “over $100M in royalty bonuses above and beyond traditional compensation” have been paid out so far.
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.
It’s a different story according to the developers who were expecting and banking on much larger payouts that they were promised, with many at the company remembering how Gearbox CEO Randy Pitchford was taken to court last year by former Gearbox general counsel Wade Callender who alleged that the controversial boss had managed to negotiate a $12 million “executive bonus” for himself from Take-Two Interactive that would count as an advance on the company royalty scheme.
That court case was eventually dropped due to it being deemed as having no merit, with Pitchford himself being exonerated in the process. According to Kotaku, that sum was paid back from the 60 percent of the profit share plan within Gearbox.
Last Updated: April 7, 2020