How Square Enix made GRIN go bankrupt

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#1 Edited by Hampe (175 posts) -

Swedish newspaper Aftonbladet revealed the details about how developer GRIN was left behind by Japanese giant Square Enix. It's an extensive text about the company's successes and failure. I thought it was such a good story that I wanted to translate bits of it to you, so even you can get a hold of this awesome scoop! I've translated the most vital parts of the text, so not everything might be covered. If you find something you find peculiar, please let me know and I'll answer you with the answers I can find in the article or confirm anything in the text. So, let's start.

It all begins...

After expanding and being one of the country's biggest studios, with Starbreeze and DICE being two of the other ones, GRIN got a hold of Yoichi Wada. Wada, being one of the giants in gaming industry with yearly salary of 17 million SEK,  entered the studio with his cortege in 2009. The reason? One of the owners, Ulf Andersson's, computer contained a big project. A whole new game concept under the concept name of "Fortress". The idea had been pitched to all kinds of distributors and when Square Enix got a hold of it, they acted quickly. "Fortress" was to be a fantastic new Final Fantasy-game. Other than that, they liked the visual style that GRIN had suggested.
 
Square Enix kept visiting GRIN many times. They researched the studio and found a company that seemed promising with good economy and talented people. When Wada got the chance to see a boss fight in the game Bionic Commando, that was currently being completed by the studio for Capcom, he decided. Now, Wada didn't have to see anything more. Square Enix was to let GRIN develop the next FInal Fantasy.
 

Then, what happened?

A month passed. Two months passed. Square Enix didn't pay a penny to the Swedish company.  No problems, reasoned Bo Andersson, the other owner. The distributors often didn't. But after three, four, five months? No money from the Japanese. Grin bled: the studio costed about 12 million SEK each month. The brothers, Ulf and Bosse, kept holding on. They were about to get to do a renewal of a well known classic game series.
 
"We wanted to revolutionize Final Fantasy, which is exactly what that series needs. The latest version sucks", Bosse Andersson said.
 
But Square Enix didn't pay up. Half a year passed. GRIN did everything that they had to do to keep the company developing the game. The closed all the offices in Sweden.  But it wasn't enough. Square Enix starved the the studio to death. Square Enix had been hit hard by the financial crisis and gambled with GRIN as a stake. When spring game, GRIN's Terminator Salvation got awful reviews and Bionic Commando sold way less then expected. The Japanese got defensive.
 
When the bankruptcy papers came in they revealed that Square Enix was meant to pay GRIN 16,5 million dollors. The payments was supposed to come in waves in accordance with the goals set up with the studio. According to the documents, Sqaure Enix had the opinion that these goals "hadn't been met in a satisfactory way".

"That was one big hoax from their part. We never had a problem during the development and we had delivered an amount of goals to Square Enix and confirmation from a producer via mail"
, Bo says.

The relation had been a success for along time. Until one day when Square Enix told GRIN to fax them everything. Even the music files from the project. "It's as stupid as it sounds. You can't send ascii- or binary code via fax. That's stupid as hell. Really. It's almost a criminal behavior". One day, GRIN had enough. So they sent Square Enix a screenshot from their own game Final Fantasy XII to test them. The response they got was "that doesn't look like a game in Final Fantasy's style." That's when they knew that whatever they did, Square Enix wouldn't back them up on this.
 
GRIN were out of money. The company was over.

Today, both the owners Bosse and Ulf are still in debt. And they still work with games. They've started a new studio, but this time, they won't set their trust in big distributors. They're enthustiastic about taking the new game and showing it to the press next week on E3. There, they will make their comeback.

Source: Aftonbladet.se

EDIT: Should be noted that the text above is a purely translated version (although shortened) of the article in the newspaper. It's not me who has written the article, but a Swedish game journalist. I'm neutral in this whole thing and haven't gotten any more information than what I've read.

#2 Posted by CarpetRemnant (374 posts) -

Wow. Wow. Thanks for translating, that's disappointing.

#3 Edited by PhatSeeJay (3322 posts) -

This one makes me sad to look at. Mostly because I couldn't be there to sign it myself, since I had to move after I had to leave the company. Had a great time there.
#4 Posted by ShiftyMagician (2129 posts) -

This was an amazing read. This part pretty much sums up how messed up the whole situation was: 

One day, GRIN had enough. So they sent Square Enix a screenshot from their own game Final Fantasy XII to test them. The response they got was "that doesn't look like a game in Final Fantasy's style." That's when they knew that whatever they did, Square Enix wouldn't back them up on this.  

Simply nonsense.  Anyways, can't wait to see what they have in store for us at E3.
#5 Posted by Quacktastic (1066 posts) -

Yoichi Wada seems like the biggest joke in the industry.  Did they happen to have the screenshot of FF12 they tested them with?  That would be cool to see.

#6 Posted by Slaker117 (4838 posts) -

Thanks for posting. Very interesting read.

#7 Posted by TheSeductiveMoose (3617 posts) -

Pretty damn sad that it happened on the day after Bosse's wedding.

#8 Posted by craigbo180 (1739 posts) -

People still use fax machines?  

@Hampe: Great read, thanks for translating man. I'm a little in the dark here though, what is the new company they formed called?

#9 Posted by Chirag4 (585 posts) -

Very interesting. Did the Swedish newspaper get all this info from ex GRIN employees?

#10 Posted by Khann (2831 posts) -

Dude was on 17 million a year?  
 
"Games are too expensive to make wah wah" 
"Here, have 17 million, Mr. Guy"

#11 Posted by MisterChief (831 posts) -
I hope Square go bankrupt. All they do is regurgitate the same shit every year anyway so I don't see what difference it would make.
#12 Posted by Hampe (175 posts) -
@craigbo180: No name of the new company is mentioned in the article. It's only stated that they're currently have started a new one.
 
@Chirag4: They got the information directly from Bo Andersson, which they interviewed.  
 
@Khann: Yeah, insane amount of money Wada has.
#13 Posted by Slaker117 (4838 posts) -
@craigbo180: SuperSledge. They haven't really said anything about it yet.
#14 Posted by buft (3316 posts) -
@Khann said:
Dude was on 17 million a year?   "Games are too expensive to make wah wah" "Here, have 17 million, Mr. Guy"
yeh thats a joke, i had a friend who worked for rebellion, pretty low down the chain he got £21,000 a year(i think thats around $30,000 )
#15 Posted by N7 (3586 posts) -

Dude. That's insane.
 
Given, I thought Terminator Salvation was a trainwreck, and I didn't very much care for Bionic Commando, but no company deserves to be treated that way. What the hell is wrong with SE anymore? :(

#16 Edited by Malphye (413 posts) -
@Quacktastic said:

Yoichi Wada seems like the biggest joke in the industry.  Did they happen to have the screenshot of FF12 they tested them with?  That would be cool to see.  

Interested in what screenshot they used. 
Nothing but disappointment from SE's corner.
#17 Posted by DonutFever (3551 posts) -

Sad. Does anyone know the name of Bosse and Ulf's new studio?

#18 Posted by Hampe (175 posts) -
@DonutFever: @Slaker117 said:
@craigbo180: SuperSledge. They haven't really said anything about it yet.
#19 Posted by JackSukeru (5910 posts) -

Well that sucks, would have been interesting to see what they would've done with Final Fantasy, even if I'm not convinced that it would be good. 
 
Still, E3 huh? Interesting.

#20 Posted by RIDEBIRD (1232 posts) -

Not only can't they make good games for shit (so, so worried about them japanizing and ruining Deus Ex), they can't handle their business? To be honest I kind of dislike JRPGs a lot, or most japanese games in general, but I can tell even FF have been getting more and more shit. I had to review FFXIV, and that is the worst game I have ever played in my 18 years of gaming, so I guess SqueenixEidos is just getting worse and worse.
 
It also kinda sucks seeing a big studio from your country fail, even though I only really liked GRAW. Which I think they did.

#21 Posted by Axersia (1615 posts) -
While it's inexcusable for Square Enix to not pay their dues on time (or ever), it's hard to believe that they were the sole cause of GRIN going bankrupt when they had 3 other games in development alongside Fortress -- all 3 of which tanked horribly. It sucks when people lose their jobs, but it's hard to have sympathy for a company who simply delivers bad work. Seems more likely that the studio grew too large too fast and bit off more than they could chew.

@RockmanBionics said:
Well that sucks, would have been interesting to see what they would've done with Final Fantasy, even if I'm not convinced that it would be good.  Still, E3 huh? Interesting.
It was gonna be a 5-hour action game. There's design docs, screenshots, and tech demo footage floating around the net.
#22 Edited by damswedon (3185 posts) -
@N7 They know that at any moment they can make the FFVII remake and they will be rolling in it. Hell I think they rake it in every time they rerelease a single digit Final Fantasy game.
#23 Posted by N7 (3586 posts) -
@damswedon said:
@N7 They know that at any moment they can make the FFVII remake and they will be rolling in it. Hell I think they rake it in every time the rerelease a single digit Final Fantasy game.
#24 Posted by MattBosten (497 posts) -

I'm going to avoid spouting vitriol at Square Enix as we're only seeing the situation from one perspective, although it does seem rather underhanded what SE have done is this circumstance. It's never nice to see people lose there jobs, I think this was probably part of the reasons behind the closure but I think GRIN were a also victim of their own success. They then expanded quickly and took on too many projects too soon, quality dipped, and this left GRIN in trouble. 

#25 Posted by rick9109 (152 posts) -

@MisterChief said:



                    I hope Square go bankrupt. All they do is regurgitate the same shit every year anyway so I don't see what difference it would make.

                   

               


 
    

Actually the problem is that they don't just regurgiate the same shit every year, and that it takes 5 years to get a Final Fantasy game and they change it so much that their core audience is unhappy.   There are plenty of jRPG fans that would just love for them to remake Final Fantasy VI every time. 
#26 Posted by craigbo180 (1739 posts) -
@Slaker117: Cool. I'll be sure to keep an eye out for them.
#27 Posted by Damodar (1343 posts) -

All the monetary figures in this article are in Krona, I assume?

#28 Posted by Hampe (175 posts) -
@Damodar: Everything except....
 
@Hampe said:
When the bankruptcy papers came in they revealed that Square Enix was meant to pay GRIN 16,5 million dollors. 

Seems like I forgot to add SEK after Wada's salary. It's fixed now.
#29 Posted by SomeJerk (3216 posts) -

Thank you for the translation. I've got a bunch of developer diaries from back when DICE was Digital Illusions out of 1993-1994 to translate the moment I stop being lazy..

#30 Posted by ninjakiller (3405 posts) -

The real question is who are the morons who buy anything with a FF on the cover?  

#31 Posted by jkuc316 (981 posts) -

Man, that makes me think of Square Enix badly. Still not enough to make me hate them though.

#32 Posted by Tetsuo (57 posts) -

It sucks that they got fucked over, but what killed Grin was making too many shitty-to-mediocre games.

#33 Posted by mracoon (4967 posts) -

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.

Moderator
#34 Posted by buzz_killington (3532 posts) -

They're showing their new game at E3?? Boy, I sure do hope so.

#35 Posted by xaLieNxGrEyx (2605 posts) -
@mracoon said:

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.


My thoughts. I'm smelling bullshit and blame in this whole situation.
#36 Posted by Animasta (14673 posts) -

I heard wada, after this was all over, went over to the final days of the grin studio and kicked everybody in the shins while twirling a fake mustache he bought for just such an occasion.

#37 Posted by blueduck (964 posts) -
@mracoon said:

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.

Yeah but it has nothing to do with the critical perspective since where talking money here. Those games still could have sold enough to keep the company going.
#38 Posted by Hero_Swe (1131 posts) -

I recall that while those 3 games were indeed quickly developed. They did sell and there were people that liked them. The numbers were okay for GRIN. I knew  the entire time the fault lay at SE and to hear it come from the top warms my heart.  
 
There are far too many things I'd like to do to Yoichi Wada but I cannot mention any of them here. But here's what I'll say. Never do business with Square Enix.
#39 Posted by Towers (96 posts) -
Aftonbladet is kinda notorious for sensationalizing stories as well. They're sorta the Fox News of Sweden. 
 
http://www.thelocal.se/21710/20090827/ 
 
I'm not saying that this article is something completely made up but I take pretty much EVERYTHING Afonbladet says with a HUGE grain of salt. All my experience really comes from them and Sports (Hockey) where they really lie out their asses.
#40 Posted by mracoon (4967 posts) -

@blueduck said:

@mracoon said:

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.

Yeah but it has nothing to do with the critical perspective since where talking money here. Those games still could have sold enough to keep the company going.

I'm quite certain all those games sold poorly. If a company keeps making bad games it's not unreasonable to think that's going to effect their bottom line.

Moderator
#41 Posted by Hampe (175 posts) -
@Towers: I must however say that the part of Aftonbladet working with games nowadays (that is Aftonbladet Spela) is certainly one of the best publications in Sweden for gaming news. LEVEL and Laser isn't even close to being as good, which is unfortunate with thoughts going to how good they were once.
#42 Posted by Slaker117 (4838 posts) -
@blueduck: @Hero_Swe: I don't know about the other two, but I remember stories about how poorly Bionic Commando sold. Something like under 50k in a month.
#43 Posted by Towers (96 posts) -
@Hampe said:
@Towers: I must however say that the part of Aftonbladet working with games nowadays (that is Aftonbladet Spela) is certainly one of the best publications in Sweden for gaming news. LEVEL and Laser isn't even close to being as good, which is unfortunate with thoughts going to how good they were once.
OK, I can accept that. I honestly don't read Aftonbladet that much but thought it was necessary to speak of their shady past.  
 
Thank you for clearing that up for me and any others that were curious.
#44 Posted by GunslingerPanda (4710 posts) -

What a very one-sided article.

#45 Posted by Cirdain (3076 posts) -
#46 Posted by Akrid (1356 posts) -
@mracoon said:

@blueduck said:

@mracoon said:

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.

Yeah but it has nothing to do with the critical perspective since where talking money here. Those games still could have sold enough to keep the company going.

I'm quite certain all those games sold poorly. If a company keeps making bad games it's not unreasonable to think that's going to effect their bottom line.

Those games mentioned sold a total of 3.09 million copies, according to vgcharts (Hate to use that as a source but it's the best we've got). Sounds pretty dire for games that were developed and marketed as AAA titles. 
 
Square had little part in the company going under.
#47 Posted by Cirdain (3076 posts) -
@Towers said:
Aftonbladet is kinda notorious for sensationalizing stories as well. They're sorta the Fox News of Sweden. 
 
http://www.thelocal.se/21710/20090827/  I'm not saying that this article is something completely made up but I take pretty much EVERYTHING Afonbladet says with a HUGE grain of salt. All my experience really comes from them and Sports (Hockey) where they really lie out their asses.
oh... right.
Do they often have a bi-monthly video games are bad for our society segment. Cos' I'm from the UK and the news dont get away with is as much as fox because some of us write letters of complaint to the news if any bullshit is smelt.
#48 Posted by MideonNViscera (2257 posts) -
@rick9109 said:

 There are plenty of jRPG fans that would just love for them to remake Final Fantasy VI every time. 

I'd buy that every time!
#49 Posted by Hampe (175 posts) -
@Cirdain said:
Do they often have a bi-monthly video games are bad for our society segment?
Nah, I wouldn't say that. Their gaming section is pretty well educated in the matter. Sure, sometimes some other bloke in the newspaper writes a shitty article about how "games are bad", but the consistent staff in the gaming part of the newspaper doesn't take that bullshit.
#50 Edited by blueduck (964 posts) -
@Akrid said:

@mracoon said:

@blueduck said:

@mracoon said:

While Square Enix certainly has their fair share of the blame this is a very one-sided account of the situation. GRIN did make a series of bad games, from a critical perspective, so it's not like they had no involvement in their own downfall.

Yeah but it has nothing to do with the critical perspective since where talking money here. Those games still could have sold enough to keep the company going.

I'm quite certain all those games sold poorly. If a company keeps making bad games it's not unreasonable to think that's going to effect their bottom line.

Those games mentioned sold a total of 3.09 million copies, according to vgcharts (Hate to use that as a source but it's the best we've got). Sounds pretty dire for games that were developed and marketed as AAA titles.  Square had little part in the company going under.
I've seen different lower numbers but if we use yours 3.09 million copies sold is not great but the company wouldn't have gone under  it they sold that amount. However, had a company said they were going to pay large amounts of money for development of a costly  game and then just never paid the money I could see how that would sink a company. I understand a lot of people love SE because they used to make  great games but any way you look at it, even if it didn't totally sink the company, it's is a dick move.

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