Borderlands Developers Reportedly Deprived Bonuses Despite Strong Sales

Gearbox developers will receive bonuses far smaller than those predicted, Kotaku reported Wednesday.
Gearbox developers will receive bonuses far smaller than those predicted, Kotaku reported Wednesday. / Courtesy of Gearbox Software

Developers at Gearbox Software won't receive the royalty bonuses they expected in the wake of Borderlands 3's monumental sales success, according to a report published Wednesday by Kotaku.

Instead, employees will receive small bonus checks worth a fraction of the tens, or even hundreds, of thousands of dollars they expected, according to sources close to Gearbox speaking to Kotaku.

Gearbox offers employees below-average salaries for the games industry in exchange for profit-sharing, Kotaku reports. Royalties are split 60/40, with the majority going to the company and owners and the minority going to employees in quarterly bonuses.

Although this system has seen huge windfalls after big releases, such as Borderlands 2, it has had more limited success with the less successful Aliens: Colonial Marines (2013) and Battleborn (2016).

Gearbox management promised employees six-figure bonuses after Borderlands 3's launch, per Kotaku, with larger bonuses for long-time employees.

Gearbox president and CEO Randy Pitchford told employees the bonuses would be smaller than expected Tuesday, citing a more expensive development process than was expected, the recent expansion to a second studio in Quebec, Canada, and off-base sales projections.

Despite potentially series-high sales, development costs had ballooned when the team switched from Unreal Engine 3 to Unreal Engine 4 in the middle of the project. Gearbox's royalties were also cut into by the deal it made with publisher 2K, which made sure the game's budget, and its DLC budget, were recouped before the developer received royalties. Those budgets amounted to around $140 million dollars in total.

Pitchford reportedly told developers that if they were unhappy with the royalty system they could leave the company, and that he hoped to get an advance from 2K on future royalties to pay employees.

Gearbox issued the following statement to Kotaku:

"Borderlands 3 represents an incredible value to gamers and an incredible achievement by the team at Gearbox Software. Our studio is talent-led and we believe strongly in everyone sharing in profitability. The talent at Gearbox enjoys participation in the upside of our games – to our knowledge, the most generous royalty bonus system in AAA. Since this program began, Gearbox talent has earned over $100M in royalty bonuses above and beyond traditional compensation."

"In the most recent pay period Gearbox talent enjoyed news that Borderlands 3, having earned revenue exceeding the largest investment ever made by the company into a single video game, had officially become a profitable video game and the talent at Gearbox that participates in the royalty bonus system has now earned their first royalty bonus on that profit. Additionally, a forecast update was given to the talent at Gearbox that participates in the royalty bonus to set expectations for the coming quarters. Gearbox is a private company that does not issue forward looking statements to the public, but we do practice transparency within our own family."

Some Gearbox employees told Kotaku they expect a talent exodus in the studio's near future.