Flagship Studios Update

Posted by Stropp on July 16, 2008

After a few days of announcements, claims, and speculation, there is finally an official, if not somewhat obscure, statement from Flagship Studios posted on the Hellgate: London forums.

“It is with deep regret that I must announce that Flagship Studios has laid off most employees. However, the core management and founding team members are still at Flagship.” said Bill Roper, CEO of Flagship Studios. “The past five years have been an incredible experience for us, but unfortunately, we couldn’t sustain the size of the company any longer.”

Flagship Studios owns the rights to all its technology and IP, including Hellgate: London and Mythos. Due to the current situation, Flagship will not be taking any new subscribers for Hellgate: London, and all current subscriptions will not be billed.

Flagship wishes to extend their heartfelt thanks to those that have supported the company and games over the past five years.

So what does this mean?

I expect that first of all, this will mean a lawsuit of some sort. Hanbitsoft has made claims on the IP of both Hellgate: London and Mythos, and despite the confusing ping pong game played with those properties, obviously really wants one or both of them. If this is all a bluff, then perhaps they won’t sue for the rights. I suspect though that Hanbitsoft see a tremendous opportunity here and I doubt they’ll let it go.

While it appears that the announcement from Flagship Studios is simply putting on a brave face pending the final closure of the business, I’m wondering if the founding team and core management are hunkering down for a last ditch effort to keep the company alive. These guys created a company, and while some commenters have questioned the motives of the founders, I’m pretty sure they don’t want the company to die. Entrepreneurs put a lot of themselves into their projects — time, emotions, even health — it can be hard to let it go.

There’s a couple of possibilities.

1. From what I understand, most of the founders have a background in development. If they dust of their skills, there is probably enough of a team to continue development on Mythos and fix bugs on Hellgate: London.
2. They could do a fire sale. Sell some or all of their assets and IPs (dependent on any legal action by Hanbitsoft) to cover their debts. Hypothetically they could sell of the rights to Hellgate, sell their subsidiary Ping0, move to smaller offices selling the current building if they own it, and use the funds to finish off Mythos.
3. Get Flagship Studios back into shape and sell the entire company in an attempt to recover as much of their initial investment as possible. The founders and core team would probably have to stay on after this happens, but at least they’d be able to start rebuilding the team.

All of the above is just speculation. What will happen from here on in, is anybodies guess. For one thing, the whole situation isn’t at all clear and there will probably be details emerging in the next weeks that put the situation in a new light.

Personally, I’d like to see Flagship Studios survive and go on to fix up HG:L and release Mythos.

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