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Pillars of Eternity II SEC filing confirms Tyranny DLC on the way
Company News - posted by Infinitron on Tue 21 March 2017, 11:21:57Tags: Obsidian Entertainment; Pillars of Eternity II: Deadfire; Tyranny
One of the advantages of Fig is that it forces developers that use it to publicly disclose financial details that are usually confidential in the interests of their investors. The always-resourceful Fairfax spotted the SEC filing for Pillars of Eternity II yesterday. In addition to the expected details and caveats related to the game's Fig investment scheme, the document contains juicy information about Obsidian's business history in the past five years, including budgets, revenues, profitability and cancelled projects. And yes, it confirms that there's DLC for Tyranny on the way, something that we've suspected since Paradox's 2016 year-end report last month. Here's the relevant chapter:
Dark Rock Industries Limited is a privately held California corporation formed in 2014 (“DRIL”) and the owner of the intellectual property rights associated with Pillars of Eternity II. Obsidian Entertainment, Inc., a privately held California corporation, is a video game development studio based in Irvine, California (“Obsidian”) and an affiliate of DRIL. DRIL is the licensor of Pillars of Eternity II. Obsidian will develop Pillars of Eternity II on behalf of DRIL for delivery to Fig under the Pillars of Eternity II License Agreement.
Obsidian originally owned the intellectual property rights associated with Pillars of Eternity, including the technology used to develop Pillars of Eternity (collectively, the “Pillars IP”). In January 2015 transferred the Pillars IP to DRIL. DRIL has the same owners, with the same percentage ownership interests, as Obsidian, and Feargus Urquhart is the CEO of both companies. DRIL, as intellectual property owner, has previously relied on Obsidian to develop Pillars of Eternity: The White March Parts I and II. It is DRIL’s intention to continue to use Obsidian to develop Pillars IP products.
Obsidian was founded in 2003 by former members of Black Isle Studios. Since then, Obsidian has gained notoriety for a number of critically successful role-playing games developed with both licensed and proprietary intellectual property. Obsidian had its first game, Star Wars: Knights of the Old Republic II – The Sith Lords, published in 2004 by LucasArts. Over Obsidian’s history, it has shipped 16 games across 8 platforms. In September 2012, Obsidian launched a Kickstarter campaign to fund Pillars of Eternity and raised almost 400% of its initial goal of $1,100,000, collecting $3,986,929 from 73,986 backers.
Obsidian has a history of developing games on multiple platforms, and many of its games have met with critical and commercial success. During the most recent five calendar years, and since then, the following games developed by Obsidian have been published:
Among the seven Obsidian games that have been published and released since 2012, five games generated sales receipts to DRIL/Obsidian that exceeded Obsidian’s development costs, and two games generated sales receipts to DRIL/Obsidian that were less than Obsidian’s development costs. DRIL and Obsidian believe that one of these two games that have not covered their development costs will cover those costs within approximately the next 18 months. Pillars of Eternity, launched in March 2015, had as of December 31, 2016 sold approximately 954,000 units and generated approximately $16,500,000 in revenue for DRIL/Obsidian. The foregoing sales information is not a complete representation of the financial performance of the games cited, because it does not include all the expenses that would affect whether a game is profitable. Also, such information has not been prepared in accordance with GAAP, nor audited in accordance with GAAS.
Obsidian has developed games with development budgets across a wide range of sizes, from budgets of approximately $1.5 to $55 million. Fig believes, and DRIL and Obsidian have reported to Fig that they believe, that the funds from the Fig crowdfunding campaign and internal investment by DRIL and Obsidian will be sufficient to complete the development of Pillars of Eternity II: Deadfire to a commercially marketable level, consistent with the Pillars of Eternity II License Agreement.
Obsidian currently has four games in development: Pillars of Eternity II; Tyranny DLC; Pathfinder: Adventures; and an unannounced title with a major publisher. Fig, DRIL and Obsidian are of the view that Obsidian is sufficiently staffed to handle the development of all these games. Obsidian employs approximately 175 full-time employees, including development personnel specializing in design, animation, 3D art, audio engineering, production, writing, programming and concept art. From time to time, Obsidian works with contractors for specialized work relating to game development, such as quality assurance.
Over the fourteen years since its founding, Obsidian has had four projects in the process of development cancelled prior to their release. These projects were cancelled due to various reasons, including in one case the inability to secure completion funding; in another case concern by the publisher over marketability arising after the pre-production phase was completed; in another case concern that the product budget was going to grow to a level that was not justifiable in light of sales projections; and in another case the publisher’s decision that the product would not fit within its portfolio. Two of these cancellations resulted in Obsidian failing to cover its costs, while the other two cancellations did not. In connection with the two most recent of these cancellations, Obsidian responded in part by reducing its headcount, in December 2016 and in March 2012.