Trion Worlds sells to Gamigo, layoffs hit majority of staff
Echoing the sad round of layoffs that marked the closure of adventure game developer Telltale Games, Trion Worlds has been bled for most of it’s staff following a sale to a third-party.
German-based mega-publisher Gamigo recently acquired Trion Worlds, the makers of RIFT and ArcheAge, who had allegedly run into financial trouble over the last few years due to waning popularity in their games. While it’s very hard to judge the financial health of a private company, it’s possible take a snapshot from certain public statements and gauge a general state of affairs, and things don’t seem to have improved since 2017.
Trion Worlds took out some high interest rate PIK bonds, at nearly 12% in 2017, following a series of funding rounds from various major capital groups a few years earlier, and even with that cash infusion, the high interest rate could signal trouble.
For context, PIK bonds are cumulative, say a bond is worth $5 million. At 12% interest, the $600,000 interest incurred on the bond would be added to the existing debt on said bond. So in that case the bond at end of term would represent $5.6 million in debt.
For those that don’t know, a high interest rate on bonds indicates that the credit rating of a company might be extremely poor. For comparison, Tesla was issued bonds in 2017 with a rate around 5%, with a B3 rating. In layman’s terms, that credit rating indicates a very poor prospect for investment. Now of course this isn’t the only signal of the financial health and future prospects of a company, but it doesn’t help paint a bright picture if the credit rating is poor. So what does all this say about Trion? Well, this sale was probably a long time coming.
“The successful acquisition and subsequent integration of Trion into our portfolio substantially strengthen gamigo’s position in the European and American gaming market. On the one hand, we add similar and successful brands and games to the already broad gamigo portfolio, on the other hand, we are looking to unlock substantial synergies with the group’s existing business to further benefit from the remarkable growth potential that the gaming market offers.”, comments gamigo’s CEO Remco Westermann.
All in all, this does mean that Trion’s games will continue for some time. Things aren’t looking so good for the Trion Worlds staff though. As more than 200 employees have been cut, leaving a skeleton crew of 25 people behind, seemingly to help close up shop. It seems like Trion will be stripped to the bone, and then the development of it’s most profitable games will be continued at other development studios owned by Gamigo. We can probably expect the shutdown of some less-profitable games to be announced in the coming months.
Official Company Statement via Rift Forums
Greetings — We can confirm that there has been a transaction involving Trion Worlds and its games.
While many of the names and faces you’ve come to know in our studios will remain on through this transition, others will not be making the journey. To those who are leaving us, we are forever grateful for your incredible work and contributions over the years.
We’d like to assure our communities that the games will continue on in capable hands moving forward, as everyone involved is aiming to make this transition as smooth as possible for you. We will have more information to reveal as soon as we possibly can.
From the bottom of all of our hearts, we thank you for your time and dedication to our games and hope that you’ve enjoyed the experience as much as we have. From spending time with you in game, to seeing you at conventions, to talking with you on livestreams and forums, it’s been our pleasure to be a part of this exceptional community with you since our first launch more than seven years ago.
Please know that you have our deepest gratitude. As for our games, we hope you continue to enjoy playing them far into the future!
The Trion Worlds Team
We wish the employees who were laid off luck in their future efforts, and hope they land back on their feet soon.
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