CryEngine 5 business model is built on "appreciation and trust"

In an industry increasingly defined by companies that give their products away for free, it's only natural to stop thinking about where the revenue comes from. Supercell, a company that celebrated its sixth birthday only last month, is now worth somewhere north of $10 billion. Unity Technologies, which has stuffed ever more services and features into its already generous free tier, supports over 1 million developers every month. More and more, giving away as much as you can for as little as possible seems like the smartest way to do business.

The success of Unity is particularly relevant to Crytek, which, along with Epic, has changed the way it approaches its business in a direct and necessary response to the egalitarian Danish company's irresistible rise. Little by little, the dominant players in the engine market reduced the cost of accessing their products until, this year, Crytek went a step further than any of them. CryEngine 5, a new, VR-friendly iteration of the engine, would operate under a "pay what you want" model, where developers could donate any amount they wished from the revenue on a given project. And that entirely discretionary amount might not even go to Crytek, with each developer also afforded the freedom to divide it between the company and an "Indie Development Fund" for new projects.

"We did a free version of CryEngine back in 2012 or so, where we had a pretty huge response," says Avni Yerli, Crytek's managing director, when we meet at the Quo Vadis conference. "A lot of people used it, and what was interesting for us is to see what we needed to improve, what we needed to offer on top. We really took that to heart and really invested a lot in CryEngine going forward. With CryEngine 5, we decided that the time to go big is now, with basically free access and you pay what you want as a user."

"I think that people, developers, really appreciate what CryEngine is, and we trust to them to recognise this and pay a sum to Crytek"

No matter how far back in the company's history one wishes to look, this seems a strikingly bold move. When I first visited Crytek in 2007, just ahead of the launch of Crysis, it was the developer of boxed retail games with the kind of eye-melting visuals that served as an advert for its bleeding-edge engine. CryEngine wasn't free at that point - far from it - and neither were Crytek's games, but the company ultimately pivoted towards the fast growing free-to-play market, going so far as to pledge that it would abandon the premium model following the completion of Crysis 3.

That pledge arrived in 2012, and the years since have proved troublesome. Whether it was increasing competition in the engine market or a failure to execute on its free-to-play strategy, Crytek hit the rocks very publicly in the middle of 2014, with rumours of months of unpaid wages and a mass walkout among its staff. The company's management found sorely needed investment the following month, with that money widely believed to be a $50 million to $70 million licensing fee from Amazon for the CryEngine. Amazon's announcement of Lumberyard earlier this year is as close as anyone has come to an official acknowledgement of that rumour.

This new boldness, then, may have been forged in the crucible of that difficult time. Yerli stops short of agreeing the point, but he does concede that, "We wanted to do something new. We were thinking about the space, what the competition was doing, what other engines were doing. We wanted to offer something fresh. Then the idea of pay what you want came up and we immediately liked it. We worked on it and had to convince a lot of people in Crytek that it's the right thing to do as well, but in the end everybody was very comfortable. With a brave new step, that's what you have to do."

While it may be heading towards the brave and the new, Crytek isn't willing to sacrifice its place on the cutting-edge of engine technology. Indeed, Yerli sees the emergence of virtual reality as a perfect opportunity to remind the world of the company's longstanding commitment to high performance and high-res graphics. Unity and Epic are both just as focused on the VR market, of course, but Yerli believes Crytek's strategy has a breadth that its competitors lack.

"We want to make sure that developers can build prototypes very fast, very quickly and then look for funding - like through crowdfunding, Kickstarter," he says. "We want to drive that going forward, to make sure that developers are not necessarily depending on external funding from publishers. They are not looking for big money anyway, but we can enable them to have a fast prototype and go out there and find some money. That's the main strategy behind it."

This is a recognition of the fact that, while there is a great deal of interest in VR among developers, the market may be several years away from being commercially sustainable. Yerli sees VR as the best possible place for independent developers to target, and so appealing to students and new studios is one of the pillars of Crytek's new direction. It's the reason why the company is now working directly with universities in its VR First initiative, it's why the long-game of a pay what you want model was preferred to more established alternatives, and it's why CryEngine users will have the option to divert theur donations to support other new projects from small developers.

"It's about the new wave," Yerli says. "Our objective is to allow students and universities to get access to high quality development tools and hardware, to make sure they are trained to the best level possible by the time they are ready to go out into the market."

"When we worked on this we were also concerned about, okay, will this work or not? We don't expect a conversion of....everybody. Maybe a similar conversion to a free-to-play game"

When it comes to a strategy like this, it's only natural for a company to emphasise the altruism present in its details. But Crytek is a business, not a charity, and regardless of how much money it now has in the bank there is something discomfortingly hopeful about Yerli's description of how the company will eventually secure a return on its investment. At its root, the future of the CryEngine now seems to hinge on the honour system.

"Really, it's built on appreciation and trust," Yerli continues. "I think that people, developers, really appreciate what CryEngine is, and we trust to them to recognise this and pay a sum to Crytek. Or to decide to allocate, let's say, $100, and to give Crytek $60 or $40 and the rest for the Indie Fund. We want to drive toward that: one for Crytek, but one for our Dev Fund as well.

"But you're right: when we worked on this we were also concerned about, okay, will this work or not? But we trust our development community to show that appreciation. We have looked to other industries that have used similar models, and overall it was encouraging enough. We don't expect a conversion of....everybody. Maybe a similar conversion to a free-to-play game."

And, like the free-to-play model, perhaps Crytek will come to rely on whales; those developers who build huge success in the burgeoning VR market due to its generosity and support, and then feel compelled to give something back. The question is how quickly that moment arrives, and how many will choose to repay Crytek's support. The fact that Crytek still develops games will help in that respect, Yerli says, but the end-game is to make the CryEngine a self-sustaining business.

"That's why we say that we have a way in front of us to go," he says. "We are not there yet, that's for sure, but we are getting a very positive response from people using CryEngine, and all the indie developers and new developers using CryEngine. It's a process. We have done a couple of things, and we have to do a lot of things more. But we are prepared to do those things."

GamesIndustry.biz is a media partner for the Quo Vadis conference. Our travel and accommodation costs were provided by the organiser.