This Game Dev Unable to Pay Staff on Christmas [UPDATE]

"Recent rumors of Red 5 Studios' financial situation are not accurate."


[UPDATE 3] Red 5 has now issued an official statement on the matter, confirming that all employees have been paid in full.

"Red 5 Studios, Inc has paid all employees in full. Recent rumors of Red 5 Studios' financial situation are not accurate.

"Firefall is currently operating a limited-account beta test in China. Red 5 studios is encouraged with peak 2nd day retention reaching 84% and working on optimization and content updates for both US/EU and China clients. The upcoming content is now being tested internally and scheduled to be updated to the Firefall US/EU servers in Q1 2016.

Red 5 Studios continues to develop content for Firefall and is planning to have synchronized global updates after the US/EU update. In the first half of 2016, Firefall will have a major content update in China in preparation for the Chinese Open Beta test. Red 5 Studios is committed to provide a high quality interactive experience to gamers all over the world. For more information, please visit"

[UPDATE 2] Game Informer now reports that staff were paid on December 30, though Red 5 has yet to offer an official statement on the matter.

[UPDATE] Game Informer reports that Red5 held an all-hands meeting on Monday where management explained that the missed payments on Christmas day were at least partially the result of potential investments failing to materialize. Attempts will reportedly be made to play employees December 30, while the developer is also considering a move to a monthly pay schedule. But nothing is official at this point.

The original story is below.

California-based game developer Red 5 (Firefall) was unable to pay its staff on December 25--Christmas Day. That's according to several sources cited in a new report from Kotaku today.

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Paychecks at the studio are usually delivered every other Friday. However, staffers didn't get paid on December 25, and some were reportedly sent the following memo:

"Hi Team, I regret to inform you that Red 5 currently does not have the funds necessary to meet our payroll scheduled for today Friday, December 25. Due to this, there will not be payroll paid this week.

"Red 5 and The9, our parent company, is currently working to resolve this, during the holidays, as soon as possible. We are hopeful we’ll be able to resolve this and will update the team immediately."

As Kotaku explains, Red 5 has faced challenging times of late, including the ousting of some of its founding staff in recent years. Chinese company The9 bought a majority stake in Red 5 in 2010. In 2012, the studio announced plans to open a European headquarters in Ireland, creating 30 jobs as a result.

Kotaku was unable to reach Red 5 for comment. We have reached out to the company and will update this post if any new information becomes available.

The company's main studio is in Laguna Hills, California. Red 5 was founded in 2005 by a number of former Blizzard Entertainment employees.

For more on this story, be sure to read the full Kotaku report.

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