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Loki Speaks up on Chapter 11
The following is an email sent by Scott Draeker of Loki
Dear Friend of Loki:
As you may know, on August 3, 2001, Loki filed a Chapter 11 reorganization. As our valued customer, we wanted to let you know why we have elected to reorganize and how, if at all, it will impact our ongoing business.
Under US law there are two kinds of bankruptcy:
- Chapter 7 is a liquidation. We have not filed a Chapter 7 and have no intention of doing so.
- Chapter 11 is a reorganization. This will allow us to deal with our creditors fairly and equitably and at the same time continue to operate the company. We are still shipping products and porting new games and expect to be doing so for a long, long time.
Most of the debts we are restructuring through the Chapter 11 are well over a year old. They represent mistakes made by a young company. We've learned from our mistakes and become cash positive. Going forward we have every confidence that Loki will continue to be successful and grow.
We cannot say for certain how long Loki will remain in Chapter 11. It depends on many factors. However we do intend to bring the process to a conclusion as quickly as possible. Once our plan of reorganization is accepted by the court, our creditors will receive an agreed upon settlement and all other prepetition obligations will be fully and finally discharged.
During and after the reorganization your orders will continue to be honored. We will continue to provide end user support, bug fixes and new products. Negotiations are in progress to guarantee Loki a steady stream of additional AAA games to bring to Linux.
Most importantly, we'd like to thank each of you for your support over the years. Without our customers, we are nothing. The outpouring of support we have received in the last few days has been overwhelming, and we will continue to do everything we can to merit that support.
Kind regards,
Scott Draeker
President, Loki Software
Given what I know now, I'd say wait to buy Loki products until someone other than Scott Draeker is in charge there.
Why? Does it matter if they are still funcitoning or doing well for their product to be useful to someone?
If they have developed a game you want to play, there's no reason not to buy it dispite the condition they happen to be in. At best, in the long run it won't matter, at worse, there won't be any more patches for your software. You'll still have the game you purchased.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
Also, LinuxGames did a retrospective article the night that the Loki news first broke. It covers history, achievements, difficulties, and the possible future of Loki. Read it here
Curmudgeon Gamer: Not happy
You try to make it in this world, you work hard, you put out good products that people enjoy, and what comes of it? Some older God, snobby old economy type, chains you to a rock bed and drips acid on your face for eternity.
Poor Loki. Poor, poor Loki.
Boycott Odin!
Dan
I'd suggest instead buying the games you think you'd like to play, and not buying the ones you won't.
I don't fully understand the idea of supporting a company on principle, or based on who is in charge. If they produce quality product that I want, I'll buy it.
I can see arguments for not buying from companies whose owners have political or ethical stances you disagree with, like Dave Thomas of Wendy's (outspoken anti-homosexual). But because their president has poor business sense? That's the sort of thing that either they'll straigten out, or the market will straighten out for them, but doesn't seem like a worthwhile use of, effectively, a boycott. But hey, if you have moral and ethical issues with people who can't manage a company and its debts, knock yourself out.
-- Kate
So YOU'RE the one who's been breaking into my boxen...
If you really want to know what happened, check out this Linux Today Story.
Basically, Scott has been screwing his employees over for the last 18 months, and when he was told to pay up, cowardly claimed chapter 11 so that he could continue paying himself, and no-one else.
I think all of this sympathy is misplaced.
Most of the debts we are restructuring through the Chapter 11 are well over a year old.
We've... become cash positive.
It doesn't work that way. You may have income, but you're not positive if you can't pay your debts. Part of a successful reorganization is recognizing the situation you're in so you can fix it.
I wish them the best of luck, but they have some more thinking to do.
I've been dissapointed by Loki once recently. I was thinking of moving from windows to linux on my home gaming system, figured i'd be able to play tribes 2 in linux, since i had heard it was done. I didn't realize the windows cd isn't patchable (like q3a is). To make things worse, Loki only sells complete CDs, not patches. And after spending 70$ on the win version, i figured i may as well say in win than move to linux and pay it again. If he had, for example, been selling a 15 dollar patch, i may have migrated.
You obviously don't hang out on the Loki newsgroups do you? This must be the most asked, most discussed question on those newsgroups.
Simply put, it doesn't make any financial sense for Loki to do this. Selling games on the Linux platform will, at least for the immediate future, be selling to a much smaller market than the Windows platform. Therefore the economies of scale which allow the cost-cutting seen with Windows games are just not an option for Loki - if every Loki game could be run on Linux by buying the Windows version (often more cheaply) and patching it to run on linux, Loki would not have released as many games as it has and it would be filing for Chapter 7. Bust. Finito. Gone.
Even allowing people to pay purely for the patch rather than new physical media would cut any margins they currently enjoy to nothing. Out of the $15 you propose, you can forget about $10 dollars as tax and payment to the original vendor (id software, Dynamix, etc.) and only leave tiny crumbs for Loki. $35 would probably make about the right margin - you can buy most Loki games for that and get a Linux-specific manual as well.
Have I been disappointed with Loki? No - everything I have bought has run straight out of the box. Most problems are fixed promptly and the installation and patching is an easy, trouble free process. And quite frankly, Urban Terror rocks my world :-)
Cheers,
Toby Haynes
Anything I post is strictly my own thoughts and doesn't necessarily have anything to do with the opinions of IBM.
Pervert.
Besides, if the company is as Scott said, Cash positive the line of credit is probably not a huge concern. They already have their shop setup, which is most of the costs of any company. They have employees, and are "balanced" out. All expansion and everything can come from their profit margin.
I'd be more surprised to see Loki sold than Loki buying or expanding their business model in the next 2 years. Chapter 11 isn't the end-all-you're-screwed, you still deal with your creditors. Everyone should walk away mostly pleased. That's what the purpose of it is.
Dacels Jewelers can't be trusted.
IT's for when you owe people money, and you can't pay. The idea is that you can stave off the creditors for a while, deal with them all fairly and evenly, and allow your company to start making some money. This doesn't mean 'making money because they don't have to pay bills'... it is designed to give them breathing room in order to dig their way out.
A *seriously* troubled company wouldn't bother with Chapter 11... they would just dissolve.
1) While I'm not a hardcore gamer, I enjoy playing a game from time to time
2) It makes sense to support a company who makes cool stuff for your platform of choice (similarly, I donated to Mandrake after downloading their latest release). I have a decent job and can afford to miss some cash in exchange for a quality product.
3) Not everything should/can be free. If you want Linux ports of closed source (ie: professional) games, someone will have to pay for them. Otherwise resign yourself to the fact that you'll have to resort to the likes of Tuxracer and Freeciv in terms of games (and I'm not dissing these games, they're written by hobbyists and simply don't compete in the professional game market).
So to sum it up, if you want Loki to be around a year from now, fork over some $ for a game. If you think the price is too steep, team up with your fellow Linux diehards and purchase a game for a few of you. While not exactly right/legal, it's still better if 3 people buy 1 game to share than nobody buying the game at all. Loki makes quality products for our favorite OS; I hope that they'll still be around a few years from now ...
So, let's say that you buy the right to port title 'A' to Linux for US$200,000 and the right to port a less-popular title 'B' to Linux for US$35,000. You could easily lose money on the first deal and make it back up on the second one, even if it sells fewer copies. Game publishers will charge much more for 'hits' than duds, which is why the ported Linux games are usually pretty good titles, but not the cream of the crop titles (which probably cost much more to port than they could hope to recoup). Certain publishers are very harsh, which is probably why Halflife was never sold at retail....
Basically, the game publishers want money up front and they have no risk. The porting houses take on all the work and risk whenever they port a title; small companies like Loki and Aspyr can be hurt because they have no leverage -- it's a take-it-or-leave-it deal. Also, you probably won't see parity on title releases unless the developers believe in the moral proposition (id and Blizzard seem to be the only companies that do -- and id is the only one that will do it outside of Macintosh), because if the game is wildly successful the pulisher can make more money by squeezing the retail sales than by granting porting rights. After the game's sales dissipate they can get another injection of cash by selling the porting rights to smaller companies and let them assume the risk of sales. Hence, Linux is very tricky to play -- most users can just boot into Windows if they want to play a game badly enough (ahem, CmdrTaco + Diablo).
The wheel is turning, but the hamster is dead.