Arcen financial issues

The Arcen (AI War & Tidalis) guys have been having some financial problems lately. First they blogged about it and then PC Gamer posted an email from one of Arcen guys giving a lot of interesting financial details. From a developer standpoint this is pretty cool, because most people (including us) don't share much detailed sales/financial information.

I don't mean any disrespect for the Arcen guys, however I suspect that this is pretty much the normal state of affairs for most indie companies. Our expenses are pretty steady, but our income has really large spikes around release and sales and then they very quickly fall (actually retail works like this also). If you don't plan for the income to fall off the cliff and you let your expenses get too high, you will go out of business or at the minimum need to lay off people.

So basically Arcen's expenses are much higher than their current income and they are quickly burning through their cash reserves. We were very much in Arcen's state most of the last year. We even took out a small loan to stay in business. For us, it wasn't that I didn't expect the sales spike and drop off, it's mostly that our 2nd game (Kivi's Underworld) didn't sell nearly as well as our 1st (Depths of Peril).

Which brings me to my last thought, it sounds like they did exactly what we did, ship a fairly hardcore game first (AI War in their case, Depths of Peril in ours) and then as their follow up shipped a much more casual game (Tidalis for them and Kivi's Underworld for us). It sounds like that worked out just as well for them as it did for us. As in, not well at all. I haven't really said this publicly, but Kivi's Underworld was basically a mistake. I still think it's a really fun game, it's different from everything else out there, and I'm glad that someone made it. We even have some fans that think Kivi is the best game that we have ever done. The problem is that it just wasn't the right game for Soldak to make. I wonder if this was the same for Arcen and Tidalis.

Anyways, just some random thoughts.


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