[EXPOSE] Shutdown & uncovering Enad Global 7's Greed (incl. Sources)

[F1GHT3R™]

The shutdown was not the fault of Anti-Matter Games, its all just for EG7's wallstreet profit. Enad Global 7's profitability is at an alltime high and yet they still shutdown I.G.I mid-late development.

I did some digging and heres the proof (with sources):

Enad Global 7 Q1 2023 Financial Report:

Here is a direct quote from Enad Global 7 Q1 2023 financial investor report:
(Note: the mentionend currency is SEK swedish crowns but either way its a butt-load of moola)

Source: official report (pdf) from the official website from Enad Global 7
https://storage.mfn.se/198627cd-179b-4d0a-98d0-f9092e1cf27f/eg7-2023-q1-interim-report.pdf

INTERIM REPORT – JAN-MAR 2023 SUMMARY COMMENTS
We are pleased to report a great start to the year with solid Q1 results. Net Revenue for the quarter came in at SEK 571.7 (399.7) million, representing 43.0 percent growth year-over-year. Adjusted EBITDA came in at SEK 189.8 (106.6) million, increasing by 78.1 percent with a strong margin of 33.2 percent. The Group generated robust operating cash flows of SEK 170.6 (65.5) million for the period. All of the above represent all-time high figures for the Group.

The Group ended the year in its best shape in terms of its liquidity and balance sheet quality. The revolving credit line was fully repaid during the quarter, and the quarter-ending cash balance reached SEK 452.9 million.

Shutdown & Yearly Operation Cost:

And now according to their statement here
https://www.enadglobal7.com/mfn_news/enad-global-7-initiates-the-process-to-wind-down-antimatter-games-in-the-uk/

they are shutting down Anti-Matter just to save 50 million SEK ( = 4'624'100 USD) a year, pathetic...

The only "positive" thing i can say, is that the Anti-Matter-Games yearly operation cost more or less seems to be plausible after doing some research*:
(*atleast when calculating close to the worst case scenario)

Estimated Developer Salaries:

According to linked-in Anti-Matter has a head-count thats listed as anywhere from 11-50 employees and is located in the southwest of the UK.

As mentionend above EG7 is claiming operation cost a year is 4'624'100 USD, lets give them the benefit of the doubt and say Anti-Matter actually has 50 employees (that are all working fulltime)

Alright, in the UK the average Game Developer Salary (including Bonus Payments) a Year is roughly 44'000 GBP ( = ca. 54'300 USD)
With 50 Employees that means 2'715'000 USD a year.

source:
https://www.glassdoor.co.uk/Salaries/game-developer-salary-SRCH_KO0,14.htm

Estimated Office renting Cost:

In the UK the average office renting cost a year per person vary greatly and are anywhere between 150-1500 GBP. And the worst case scenario can actually be as high as 4000 GBP.

source:
https://www.instantoffices.com/blog/flexible-workspace/cost-rent-office-space-uk/

So again to be as fair as possible lets say, its right in the middle between the highest average and worstcase scenario, which would be 2750 GBP ( = ca. 3395 USD).
That would result in a yearly rent cost for all 50 employees at about 2'037'000 USD

Results:

If you add this together it ends up at 4'752'000 USD operation cost a year which is close enough to their 4'624'100 USD claim.

Pandemic, Working from Home & important Notes:

Its important to note, that during the Pandemic AMG supposedly had a lot of staff working from home. This accounts for almost 2 years during the development. During that period the office rent cost is unknown but it could have been potentially either substantially lower or identical. I could not find exact numbers, thats why i refrain from speculation.

However, what is confirmed by EG7 themselves, is that the effort from AMG to transition more staff into work from home has continued well beyond the lockdown and was prior to the shutdown still ongoing. Heres another direct quote from the report linked above:

TOADMAN STUDIOS AND ANTIMATTER GAMES
The studios continued to focus on transitioning to WFH. Additionally, the efforts to place the internal games with a third-party publisher is ongoing. During this transition period, the profit margins for the studios are expected to be lower with reduced capitalized R&D until sufficient ramp up in WFH projects is achieved.

Interestingly, this section also mentions, that EG7 expected lower profit margins during the transition period and also that they already were looking to sell the IP to a third party publisher, regardless if this transition was completed or not.

Either way, since the office rent accounts for almost half of the yearly expenses, a significant reduction in yearly operation cost after the transition was to be expected. This makes the timing and reasoning of the shutdown even more questionable.

Estimated Development Time & Cost:

Toadman Interactive (subsidiary of EG7 & owner of Anti-Matter-Games as of 2019) announced, back in 2019, that a new IGI game was in development, so again lets be extremely generous and say thats when the entire team started development fulltime (also ignoring the pandemic and the simultaneous development of the second game 83'), that would be almost 5 years as of today. Multiply that by the yearly operation cost and you get 23'120'500 USD.

Hypothetical Sales Figures & Profit of I.G.I Origins:

**EDIT** 01.06.23
Corrected due to some errors regarding the 30% steam cut. math is hard, go figure :/
But the good news is, i expanded it and made it hopefully more well-arranged.

Now lets make it depressing and do some more "guesstimate" math ourselves, to truly expose EG7s bullsh*t and shed some light on I.G.I Origin's profitability.

The different scenarios where the game would have been released will be simulated with the following parameters;

Estimated Sales Figures:

First with conservative estimated sales at 1'000'000 copies sold (more info on that specific target below) and second with 1'500'000 sales (avg. lowest SteamDB sales estimate for Rising Storm 2: Vietnam).

Estimated Retail Prices:

The retail prices choosen are 30$ (based on previous titles from Anti-Matter-Games)
and 40$ (due to being the average price of games with a similar development scope a.k.a "double A" Games).

Profit Calculations:

(Note 1: The following profit calculations are without Taxes applied and account only for PC platform releases.)

(Note 2: Valve also collects a quite hefty 30% from all steam sales, this has been factored into calculations.)

Release 2023, 30$ Retail Price, 1'000'000 Copies sold:
30'000'000$ income - 9'000'000$ Steam Tax = 21'000'000$
21'000'000$ - 23'120'500$ development cost = -2'120'500$ loss

Release 2023, 30$ Retail Price, 1'500'000 Copies sold:
45'000'000$ income - 13'500'000$ Steam Tax = 31'500'000$
31'500'000$ - 23'120'500$ development cost = 8'379'500$ profit

Release 2023, 40$ Retail Price, 1'000'000 Copies sold:
40'000'000$ income - 12'000'000$ Steam Tax = 28'000'000$
28'000'000$ - 23'120'500$ development cost = 4'879'500$ profit

Release 2023, 40$ Retail Price, 1'500'000 Copies sold:
60'000'000$ income - 18'000'000$ Steam Tax = 42'000'000$
42'000'000$ - 23'120'500$ development cost = 18'879'500$ profit

Lets say the game required 1 more Year development, which results in a total development cost of 27'744'600$.

Release 2024, 30$ Retail Price, 1'000'000 Copies sold:
30'000'000$ income - 9'000'000$ Steam Tax = 21'000'000$
21'000'000$ - 27'744'600$ development cost = -6'744'600$ loss

Release 2024, 30$ Retail Price, 1'500'000 Copies sold:
45'000'000$ income - 13'500'000$ Steam Tax = 31'500'000$
31'500'000$ - 27'744'600$ development cost = 3'755'400$ profit

Release 2024, 40$ Retail Price, 1'000'000 Copies sold:
40'000'000$ income - 12'000'000$ Steam Tax = 28'000'000$
28'000'000$ - 27'744'600$ development cost = 255'400$ profit

Release 2024, 40$ Retail Price, 1'500'000 Copies sold:
60'000'000$ income - 18'000'000$ Steam Tax = 42'000'000$
42'000'000$ - 27'744'600$ development cost = 14'255'400$ profit

Sale Comparisons to other Examples in the Industry:

By now you may be wondering how i came up with 1'000'000 copies sold, seems a bit much, right? Well, not really, when looking at the current gaming industry and compare similar double A productions, similar genres etc. 1 million Units seem to be around average even when guessing very conservatively. In fact, when moderately well recieved (steam score 70% or more) then chances are pretty high, that it will sell quite a bit more than that in its entire lifespan (which is longer due to being singleplayer).

Two examples (i tried to cherry pick some examples with best relevancy):

1. Comparing in-House; Rising Storm 2: Vietnam according to steamDBs estimations sold anywhere between 1.5 - 4.6 Million Units* (*granted not all at full price)

2. Genre comparsion; Sniper Ghost Warrior: Contracts 2. A somewhat niche singleplayer stealth action sniper FPS developed by Underdog Studio (subsidiary of CI Games) with a very similar sized dev Team and double A budget sold an officially confirmed 1 million copies in under a year, at 40 USD retail price.

Shared Development with AMG's second Game "83'":

Another important thing to note is, Anti-Matter also had the multiplayer FPS called 83' in development (think cold war era sequel to Rising Storm), which shares a substantial amount of assets with I.G.I Origins. According to Anti-Matter themselves it has been put on hold around a year ago to focus development fully on I.G.I.

Which also means the operation cost for the 4 years before that actually account for two games! Therefore the profit margin per game would be even higher, if both games would have been released.

Verdict/Conclusion (TLDR):

The cancellation and shutdown came pretty unexpected and after reading EG7's official statement, i got a feeling that somethings do not add up.

But despite that, the first goal of this report was to objectively analyze the situation, to see if the shutdown was justified. However as more information surfaced, this goal changed to make a point.

That point is, that I.G.I Origins would still be profitable, even when assuming the worst case scenario regarding the current sum of development costs.

Speaking of which, if i would have taken into account the pandemic, the potential release of 83', more moderate/average numbers for office rent and taking part time and work from home into salary consideration, then the estimated development cost in my calculations would substantially sink, which would make profits not only even higher but probably also more realistic.

Therefore one can only arrive at the conclusion, that the shutdown was most likely NOT justified and only served EG7's short-term profits and to satisfy share-holders.

Final Words & Legal Notice:

So yeah thats about it for this wall of text, truly a damn shame. Maybe going indie and releasing Early Access could help, but thats a story for another thread:
(which will be linked here)
https://steamcommunity.com/app/1186430/discussions/0/3833171785699584179/
**EDIT** 01.06.23 The thread i made that discussed this has been removed by moderators, not quite sure why, may need to investigate. Sorry for the inconvenience.

If you made it this far, thanks alot for reading! The last thing below will be tinfoilhat legal bullcrap:

Legal Notice:
All the information provided is from publicly accessible sources, nothing was leaked nor illegally acquired.
Anything thats speculative has been declared as such and therefore may unintentionally not be 100% accurate.

Or in other words TLDR:
EG7 and their lawyers can go and kick rocks.

[AstroAss]

Chasing short-term profits on paper just to save their lavish life over at the top - it's basically what it is. The amount of wasted money here to me is just unimaginable... What kind of logic is it to scrap a project in late development, instead of just letting it cross the finish line and sell???
When a mate of mine left AMG - I knew something was up...the writing was on the wall back then already.

Disappointed, but not surprised. I hope the EG7 suits choke on their money.

P.S.: Your math on the "steam tax" is incorrectly applied. You need to apply the "Steam Tax" to the $30M figure (where you assumed 1M sales), NOT the profits lol. So that ends up with just $20M for the rest of the math and an assumed net loss in dev costs immediately (though we can probably safely say they did not spend that much over the last 4 years) - but that's again, over 2 games, as you mentioned, with only IGI:O assumed to launch, so still in the green!
The rest is highly speculative, so can't fault it, even if we can't project any sales figures.

[HAHAHAQWERTYASDF]

Can't get any depressing than this mate

[F1GHT3R™]

Originally posted by AstroAss:

Chasing short-term profits on paper just to save their lavish life over at the top - it's basically what it is. The amount of wasted money here to me is just unimaginable... What kind of logic is it to scrap a project in late development, instead of just letting it cross the finish line and sell???
When a mate of mine left AMG - I knew something was up...the writing was on the wall back then already.

Disappointed, but not surprised. I hope the EG7 suits choke on their money.

P.S.: Your math on the "steam tax" is incorrectly applied. You need to apply the "Steam Tax" to the $30M figure (where you assumed 1M sales), NOT the profits lol. So that ends up with just $20M for the rest of the math and an assumed net loss in dev costs immediately (though we can probably safely say they did not spend that much over the last 4 years) - but that's again, over 2 games, as you mentioned, with only IGI:O assumed to launch, so still in the green!
The rest is highly speculative, so can't fault it, even if we can't project any sales figures.

Hi fella, absolutely agree, it just does not make any sense. I suppose thats capitalism in a nutshell. You even knew one of the devs, damn thats sad, hope he found a new place to work already.

Regarding the math, holy crap, you're right! Whoops, what a silly mistake. Guess as a member of the working class im not used to such high numbers lol.

Anyway thanks alot for bringing it to my attention, hopefully should be fixed now. I also refined the monstrosity that is my post, should be much more readable now. I even found some new infos regarding Anti-Matter-Games transition to work from home and added it aswell.

Cheers

[mw00]

Don't forget that they were supposed to use many assets from this game for their Rising Storm sequel, '83.

[FreeSp↑rit]

This is clearly a large scale project undertaken by a small team of devs. They should have remade IGI 1 and 2 in HD, that would have bought them more time.

[UnKn0wN]

Originally posted by FreeSp↑rit:

This is clearly a large scale project undertaken by a small team of devs. They should have remade IGI 1 and 2 in HD, that would have bought them more time.

yeah, I.G.I Origins was a quite ambitious project, you have to make sure stealth and gunplay are equally good and viable, freedom of choices, multiple ways of accomplish a mission and advanced AI to make all this engaging and fun.

not easy at all to pull off for a small team.

it may be that they were still far behind schedule and EnadGlobal7 just decided to pull the plug because of that.

while the OP makes good points, we don´t really know how development was going, I mean they never showed actual gameplay (which is kinda suspect tbh...), they went silent on news and progress for quite a long time..

I think Antimatter suffered mis-management issues, they first announced the multiplayer game 83, showing development vids and stuff, then all of a sudden they announced I.G.I reboot, again showing first vids and promoting the title, then last year if I am not mistaken they announced a change in engine mid-development, this surely further slowed down everything...

it doesn’t make sense to cancel a title this far in development if they were close to finish it, the reality may be that they probably needed a couple more years and EG7 just said nope, that´s too long...

sucks because this was exactly the kind of game I am missing soo much these days but yeah, I just hope they´ll be able to find a way to continue working on it and release someday..

but right now it seems sadly this game and 83 aren´t going to be made anymore.

[FreeSp↑rit]

Originally posted by UnKn0wN:

it doesn’t make sense to cancel a title this far in development if they were close to finish it, the reality may be that they probably needed a couple more years and EG7 just said nope, that´s too long...

Yeah, we don't know how close they were to completion of the project. If I were to guess they are no where near to finishing it otherwise they would not have risked this level of financial loss. I've seen developers working on projects like this and the bug fixing and testing alone takes more than a year or two even with a large team. Games have gotten insanely complicated man, there are so many weird nuances and platforms that its quite a nightmare for small teams to pull this off....it just gives the franchise a bad name.

[Chote Chatri]

If you develop a game for 3 years and all you have to show is scripted videos... This is what happens. I was sus for a long time that all these videos are just smokes.....

[Jason rifleman]

Ok, just removed the game from the wishlist. Devs disappointed us.

[M1LL3R]

Originally posted by Jason M1 garand:

Ok, just removed the game from the wishlist. Devs disappointed us.

Jason, the Dev Team isn't the guilty, i'm pretty sure of that and i hope they launch the game in the future with a new publisher. I keep the game in the wishlist, remove it in my opinion is a mistake, if AM Games look for a new publisher they could show the interest of the audience in those games (IGI Origins and 83) is real. I'm really disappointed too with all this ♥♥♥♥ :( And maybe someone from AM Games can tell us something about the actual situation.

[glennyboy1]

Suits...the cancer of creativity.

[700blank007]

What else can i do except cry? the game meant so much to me. the first pc game i ever played and which defines my childhood

[Voland]

main question is who will have rights to I.G.I. Origins

i mean, if it halfway done then we still have a chance for kickstarter

[76561198167566727]

Originally posted by glennyboy1:

Suits...the cancer of creativity.

Wdym?

[Golden Boy]

Originally posted by Auditormadness9:

Originally posted by glennyboy1:

Suits...the cancer of creativity.

Wdym?

publishers and higher ups and investors, suits.