KSP2 is/was not a cash grab

[DeadJohn]

TLDR: The publisher earned maybe $2M from EA, and spent maybe $4.9M keeping development going since EA started. EA was not a scam to grab money.

There's a lot going on in other threads. KSP2 might be canceled. That sucks, but some forum members are claiming EA was a scammy cash grab all along. Here's my case that it wasn't a scam, just a case of a software project that went way off course. I use a lot of estimates here, but each time I'm rounding in favor of the case that it *was* a scam, weakening my argument.

EA cost: Some players may have gotten it for less on sale but I'll use $50 to weaken my case.

How many EA buyers? There's no hard data with official counts. There are estimates as high as 30,000 that I have no way to confirm. I'll be generous and bump that to 40,000 copies sold.

Total EA income: $50 * 40,000 = $2M USD in KSP2 EA sales. I'm ignoring the percentage that Steam takes which would further reduce income.

EA duration: EA started late Feb 2023. It's now 14 months later, which I'll round way down to 1 year to make the math easy.

How much was spent after EA started? I'll assume the layoff filing of 70 people were all devoted to KSP, as that's supposedly the only game the affected office was working on. People were making a wide range salaries, from managers down to much lower paid positions. I'll guess at average pay rate $70k annually. 70 people * $70k = $4.9M spent since EA was announced.

Those dollar values do not mean I know whether it is/was correct or incorrect to cancel KSP2. Only insiders know the full story of the amount of cash being burned, future sales estimates, whether the code is salvageable or better to restart major parts, and many other things.

[Urus28]

And you don't count equipment to make them work, software licenses, energy, office renting...

[steveman0]

It's a near certainty they didn't break even yet, but those estimates are just terrible. Both the sale counts and costs are way under reality.

[water.exe]

So steam database shows owner estimations and on the low end from playtracker it is reported about 250k and on the high end its 495k from VG insights which is roughly 12 to 24.75 million depending on the actual ownership of the game.

[Jaypeg]

8 hours ago, DeadJohn said:

TLDR: The publisher earned maybe $2M from EA, and spent maybe $4.9M keeping development going since EA started. EA was not a scam to grab money.

There's a lot going on in other threads. KSP2 might be canceled. That sucks, but some forum members are claiming EA was a scammy cash grab all along. Here's my case that it wasn't a scam, just a case of a software project that went way off course. I use a lot of estimates here, but each time I'm rounding in favor of the case that it *was* a scam, weakening my argument.

EA cost: Some players may have gotten it for less on sale but I'll use $50 to weaken my case.

How many EA buyers? There's no hard data with official counts. There are estimates as high as 30,000 that I have no way to confirm. I'll be generous and bump that to 40,000 copies sold.

Total EA income: $50 * 40,000 = $2M USD in KSP2 EA sales. I'm ignoring the percentage that Steam takes which would further reduce income.

EA duration: EA started late Feb 2023. It's now 14 months later, which I'll round way down to 1 year to make the math easy.

How much was spent after EA started? I'll assume the layoff filing of 70 people were all devoted to KSP, as that's supposedly the only game the affected office was working on. People were making a wide range salaries, from managers down to much lower paid positions. I'll guess at average pay rate $70k annually. 70 people * $70k = $4.9M spent since EA was announced.

Those dollar values do not mean I know whether it is/was correct or incorrect to cancel KSP2. Only insiders know the full story of the amount of cash being burned, future sales estimates, whether the code is salvageable or better to restart major parts, and many other things.

Not a scam if you think its worth your money. I've gotten a lotta hours outta this game

[RayneCloud]

11 hours ago, DeadJohn said:

TLDR: The publisher earned maybe $2M from EA, and spent maybe $4.9M keeping development going since EA started. EA was not a scam to grab money.

There's a lot going on in other threads. KSP2 might be canceled. That sucks, but some forum members are claiming EA was a scammy cash grab all along. Here's my case that it wasn't a scam, just a case of a software project that went way off course. I use a lot of estimates here, but each time I'm rounding in favor of the case that it *was* a scam, weakening my argument.

EA cost: Some players may have gotten it for less on sale but I'll use $50 to weaken my case.

How many EA buyers? There's no hard data with official counts. There are estimates as high as 30,000 that I have no way to confirm. I'll be generous and bump that to 40,000 copies sold.

Total EA income: $50 * 40,000 = $2M USD in KSP2 EA sales. I'm ignoring the percentage that Steam takes which would further reduce income.

EA duration: EA started late Feb 2023. It's now 14 months later, which I'll round way down to 1 year to make the math easy.

How much was spent after EA started? I'll assume the layoff filing of 70 people were all devoted to KSP, as that's supposedly the only game the affected office was working on. People were making a wide range salaries, from managers down to much lower paid positions. I'll guess at average pay rate $70k annually. 70 people * $70k = $4.9M spent since EA was announced.

Those dollar values do not mean I know whether it is/was correct or incorrect to cancel KSP2. Only insiders know the full story of the amount of cash being burned, future sales estimates, whether the code is salvageable or better to restart major parts, and many other things.

Do you work there? Because if you don't work there, you have no idea what you're talking about. We have no way of knowing the full cost of operations for intercept games taking in to account the building, computers, licenses, utilities, different pay scales for seniority and senior leadership, et all. 

[NH4Cl Enthusiast]

If anyone has insights into typical publisher - developer contracts, I'd be interested to know if my speculation holds any merit at all. My theory is that T2 had contractually agreed to continue funding IG for a full year after release. That's why they forced out the EA last year as they already had marked IG to be on the naughty list. I'd be surprised if these cost reductions haven't been on the upper management radar for some time now and they wanted the option of putting down this particular lame horse.

Further it's possible that the clause gave freedom for IG to work as they see fit, and at this point when the EA release was a mess, IG decided that their best bet is to try to use the full year they have left and develop that mysterious kerbal themed cash grab in the hopes that they could push it out quick enough to make enough money to avoid the executioner's block. That would explain why the development of KSP2 was so slow and why it would make sense to direct resources into another project when the main event is practically on fire. Eventually their gamble didn't pay off and here we are. 

I don't know if that makes it a cash grab or not, but to me it would make sense. I don't believe T2 is a very consumer friendly corporation so they're probably just going by the numbers. All of this of course just piles the brown, smelly stuff on the individual devs who lost their jobs and the consumers who never got what they paid for. As they say, excrement rolls downhill.

[Oak7603]

It was clearly a cash grab as all EA titles are - come and buy our product that is "GOING" to be cool and be one of the first to support it yadda yadda. They 'grab' the early 'cash' and put it in to the development fund.

Whether it made a profit or not is a different question completely and doesnt have any bearing on whether it was a cash grab or not, that would only indicate if it was a succesful cash grab. I have no idea if KSP2 was a succesful cash grab but I would say not or we wouldn't be discussing the tings we all are today.

[DeadJohn]

5 hours ago, RayneCloud said:

Do you work there? Because if you don't work there, you have no idea what you're talking about. We have no way of knowing the full cost of operations for intercept games taking in to account the building, computers, licenses, utilities, different pay scales for seniority and senior leadership, et all. 

Do you see any plausible way their income from EA was greater than their expenses since EA was announced? Reread my OP for context and I think you agree that things were even more expensive than my purposely low estimate. If EA was just a scam all along to steal KSP players' money, then they would have started EA and shut down the project shortly after.

I have no skin in the game. When I first saw the status of EA after already being 3 years late, I expected 3 more calendar years before they could reach the end of the EA roadmap so I didn't purchase it. KSP2 still doesn't have enough features to pull me away from KSP1. I wanted to see KSP2 succeed but in the end it's only a game.

Edited May 2 by DeadJohn

[HebaruSan]

12 hours ago, NH4Cl Enthusiast said:

My theory is that T2 had contractually agreed to continue funding IG for a full year after release. That's why they forced out the EA last year as they already had marked IG to be on the naughty list. I'd be surprised if these cost reductions haven't been on the upper management radar for some time now and they wanted the option of putting down this particular lame horse.

That would have been plausible if the studio was an independent entity like Star Theory, but this studio was a wholly owned subsidiary of the publisher. I don't think contracts are how that sort of thing is managed.

[Westinghouse]

There's no way that KSP2 was ever planned as a 'cash-grab' apart from in the normal sense that the publisher planned for it sell well and make them plenty of money.

Releasing it at full price in a broken state and marketing it as 'Early Access'...... yeah, that comes off as a cash grab to me, even if it was probably Private Division's way of lighting a fire under the Intercept team to get their act together and release something. It didn't work of course.

The mysterious second Kerbal themed game Intercept were working on? That was probably put into development more to give the Intercept staff something to justify their existence to corporate. While bug fixing and colonies milestones were being worked on by the engineering team, they would have been an awful lot of artists, designers, UX people, the composer and sound designer etc. sitting around with nothing to do, so that Kerbal spinoff game was put into production. Again, it didn't work. Eventually the PD accountants were going to stick their noses in ask uncomfortable questions about why they, a publisher, had dozens of game developers on payroll and all the overheads that come along with them. And so that resulted in the end of Intercept Games.

[dave1904]

I think Take Two wanted to pull the plug beforehand because they saw the state of the game after all that time. EA was not a cash grab but a way for them to see if it was even worth spending all that money on it.

[Kerbart]

13 hours ago, RayneCloud said:

Do you work there? Because if you don't work there, you have no idea what you're talking about. We have no way of knowing the full cost of operations for intercept games taking in to account the building, computers, licenses, utilities, different pay scales for seniority and senior leadership, et all. 

I doubt an exact calculation is the point. Clearly they're conservative ballpark issues, There's a lot of glee on social media "you suckers deserve to be out of the $50 you paid, this scam was the plan all along" and the point is that a con like that would be money losing and yield very little return for the damage in reputation if ever uncovered.

Maybe the revenue was $10M and the expenses were "only" $3M. Would T2 risk legal trouble for a measly $7M profit for the project?  (and I doubt that office space is that cheap in Seattle, and don't forget expenses like the launch party and that trip to Germany). And why would T2 pick a nerdy space build game if their intention was to sell millions of EA copies? Why not a RPG or FPS?

[Sirad]

7 hours ago, Kerbart said:

And why would T2 pick a nerdy space build game if their intention was to sell millions of EA copies? Why not a RPG or FPS?

I guess thats called 'side business'

My cynical view:

The IP (kerbal space program) is not as big as GTA but with the solid Fanbase you can generate a nearly guaranteed ROI with nearly zero risk. The IP guarantees a solid Base of customers that will buy the Game instantly at any state because they are longing for the sequel. so why not cash in for some bucks if they lay abroad and the risk is nearly Zero ? Set the Price for EA to 50 Bucks because you need that first rush until the Fans notice whats going on (or not, in that case)....

Its a simple calculation: evaluate the fanbase that will instantly buy the game if it comes out (i guess there are people in the offices that can do that) , evaluate the costs of hyping the game, evaluating the costs of buying the IP + recycling the codebase and the coders. Summarice that up and you will have a fixed date when the game has to be published to generate a pre calculated return of investment.

If you go into an apple shop, they will sell you a charging cable for a few bucks, even if the shop can not run on that income, its a side business thats generates some minor income too. Why wasting the possibilities of a few safe bucks ?