World Class Villains

News is out that Team Bondi has been put into administration, which is a way of saying, “all their assets are being sold to pay back their debts”.

And that's the end of that.

Some have raised questions about this event being linked to the claims of people being overworked in crunch mode at Team Bondi, but the real answer is “not directly”. It is more closely related to the poor management of Team Bondi, who very likely racked up a lot of debt to publishers since it started development in 2003.

LA Noire sold over 4 million units. Launch price was $60, so that’s US$240m in revenue, but only about 50% of that goes back to the publisher – US$120m – and then its a matter of the contract between the dev studio and publisher about how much the studio actually gets. LA Noire’s prototype DepthAnalysis’ Motion Scan technology was rumoured to be very expensive to develop, plus the cost of 8 years of staff, rent, etc could have easily eaten up the kind of money seen by Team Bondi. (The rumour is that Sony invested US$20m in Team Bondi from 2003 – 2006, when ‘ownership’ of LA Noire was taken over by Rockstar.)

But the other driving reason why Team Bondi is shutting up shop is that it’s just too expensive for a US company to invest in Australia for game development. It costs more to develop here than it does in the US under current exchange rates. Despite Bondi’s success, it’s cheaper for Rockstar (or anyone) to move key staff to another country to work on LA Noire’s sequel (should such a thing happen) than to fund the continued operation of the Australian studio.

And thus another name is added to the list of dead Australian gaming studios.