Hundreds of people lost their jobs when Guns of Boom developer Game Insight announced the liquidation of its Russian entity last month. The company, which refuses to pay salaries and demands that employees return their computers, says that it has no money in its accounts, although its games continue to generate revenue.
Guns of Boom
Last week, game development outlet App2Top published a report on the current situation within Game Insight and the liquidation of its Russian entity. The information was provided by an anonymous source familiar with the matter and was confirmed by five Game Insight employees (most of them preferred to stay anonymous).
Key entities and people mentioned in the report
- Game Insight’s headquarter in Lithuania, a company that owns IPs, promotes games, and collects money from the App Store and Google Play.
- Game Insight LLC, a Russian entity that had been developing and operating the company’s games before the liquidation.
- A new Russian entity, which should replace Game Insight LLC and support the company’s existing games.
- UltraHorse Ent., a new studio affiliated with Game Insight and registered in the UK on May 10, 2022. It is now working on Squad Blast, an upcoming game for PC and consoles.
- Pavel Sedkov, a third party who has been the head of Game Insight LLC as its liquidator since June 21.
- Anatolijs Ropotovs, the former CEO of Game Insight LLC. He is now listed as the founder and CEO of UltraHorse.
- Igor Matsanyuk, Russian-born entrepreneur who has been chairman of Game Insight since 2010. He is also the founder of the IMI.VC fund. Matsanyuk moved to Lithuania in 2015 and was involved in the construction of Vilnius Tech Park, an IT startup hub where Game Insight is headquartered.
What’s happening at Game Insight?
- Pavel Sedkov contacted the staff on June 24 to announce the liquidation of Game Insight LLC. It is worth noting that employees never met him before and weren’t notified by the leadership in advance.
- Employees were informed that they may not get their salaries for the month. Chances of receiving severance pay or other compensation were also low.
- Sedkov cited the lack of sufficient funds in the entity’s accounts as the main reason.
- The only way for employees to get a salary for June was to sign the voluntary termination letter.
- “We are all in the same boat here,” Sedkov reportedly said, adding that he was carrying out the liquidation on an almost altruistic basis.
- He also demanded that employees return computers, monitors, and other hardware provided by the company. Sedkov told them to do it at their own expense, threatening to sue them otherwise.
- So the staff has three options right now: 1) sign a voluntary resignation letter and receive a salary for June; 2) resign by mutual agreement and get a chance to receive an additional severance pay equal to a one-month salary; 3) leave the company after the completion of its liquidation in September.
- Sedkov noted that people who choose the third option are unlikely to receive any money. He also said that payments are not guaranteed to anyone, although he is obliged to do so by law.
- Game Insight won’t be able to complete the liquidation if local authorities find that the company has any debts. That’s why Sedkov has been trying to force employees to resign by mutual agreements asap.
- If the liquidation fails, Game Insight LLC will be declared bankrupt. This means that regulators will collect funds from entities affiliated with the entity to pay off debts. These affiliated parties might include Igor Matsanyuk and other people mentioned above.
Does Game Insight really have no money?
- According to the report, around 300-330 people have been neglected completely, meaning that they probably won’t be able to receive even their salaries for June.
- However, some employees were offered to sign a contract with a new Russian entity, which will support Game Insight titles. There is also a group of people who were invited to relocate to London and work on new games at UltraHorse.
- According to AppMagic, the company’s titles generated $1.3 million on iOS and Android last month. So Game Insight definitely has money to pay employees at the soon-to-be liquidated office, although its Russian entity might really have no funds in its accounts right now.
- There are definitely some difficulties in transferring funds between countries due to the Western sanctions. However, Game Insight has already opened a new entity in Russia, meaning that it probably found a workaround to bypass restrictions and transfer money from its Lithuanian account.
- As mentioned in the report, many game developers with Russian roots, including Game Insight, have been working on a certain scheme for years. All income is accumulated at the head office located abroad, which then transfers money to other offices using its Russian entities as contractors.
- Taking into account all the things mentioned above, Game Insight probably had options to legally lay off its Russian employees and offer them severance pay. However, the liquidation has taken a much more unpleasant turn.
- As a result, some employees are now feeling betrayed by the company. The former management neither got in touch with them nor tried to explain the situation.
Founded in 2009, Game Insight is best known for its free-to-play mobile and social network games. Its portfolio includes hits like Airport City, The Tribez, Mystery Manor, and Guns of Boom.