An open letter to James and Alexander

[Tommeh Brownleh]

A little off topic here, but am I the only one who read the OP in Yahtzee's voice?

 

[LetalisK]

Dear Alexander Macris,

You probably won't respond to this, which is understandable, but I do hope you see it. I can't say I agree 100% with either side of this situation, but I would like to thank you for being so open and communicative about it. Often times other websites I've belonged to would sweep any controversy under the rug and ban anyone who even spoke of it, let alone criticized them, often over much smaller issues than this. The fact that you've openly discussed this with courtesy, humility, and haven't taken action against members who disagree with what you've done or have said some very negative things about yourself and the Escapist is a strong indicator to me about whether or not the Escapist has been operating in good faith in the past. It's sad that the behavior you have exhibited isn't standard when situations like this arise elsewhere, whether it be websites or large businesses, but I will take what I can get and hopefully it becomes more common. Thank you.

I won't speak on this situation as if I held the truth over everyone else, but you're quoting James out of context.
You're quoting things James said about how the EC team's yet-to-be-set-up indie publishing fund would operate. What he meant was that when their Indie game non-profit publishing project took off, they would be transparent about how it operated and what happened with it, nothing more.

What money do you think they're talking about if not the money invested into the indie publishing fund?

Regardless of who's right or wrong, assuming one party is even right, the indie publishing fund is at the heart of this issue. As such this case should be treated with the transparency we were promised.

Yeah, that's the main issue at this point for me too and I don't understand why it's been so overlooked by the majority of Escapist members. If James is using the overflow from the fundraiser to help Allison for his own personal projects then I take serious issue with him and question his ability to operate in good faith.

Edit: Also, include the fact that he tries to deflect the issue by painting it as a completely selfless act when it clearly is not calls his integrity and honesty into question even more.

 

[Archon]

If the Escapist wants to host a "save the Escapist" fund-raiser, do that. I know that broadcasting dire financial straights might scare big-time investors, but it also might garner you grass-roots support from the people that actually utilise the site as well.

Thank you for your reply. Honestly, if I thought we could fund the Escapist via a Kickstarter/RocketHub drive, I would do so in a heartbeat. I just don't think it would work. Unfortunately, our experience with Publisher's Club has suggested that the volume of users inclined to pay to support us is small. The cost of running a website that gets our volume of traffic per month is painfully high.

 

[Frankie Villanueva]

Hagi, shut the fuck up. Quit bitching about shit you're not involved in. We get it, you're smarter than everyone else and if you were there this all would've been avoided. Just stop talking and let the big boys handle this.

 

[krellen]

Thank you for your reply. Honestly, if I thought we could fund the Escapist via a Kickstarter/RocketHub drive, I would do so in a heartbeat. I just don't think it would work. Unfortunately, our experience with Publisher's Club has suggested that the volume of users inclined to pay to support us is small. The cost of running a website that gets our volume of traffic per month is painfully high.

You don't advertise the Publisher's Club correctly. It's marketed as a nice little bonus you guys are appreciative of - not as a dire necessity for the continuance of the site. If it is, in fact, the latter, you may be surprised by how much support you have.

Another important point with regards to donations is price-points; some people might be willing to chip in $5, another $20, and another $100. Your Publisher's Club is a set price-point that excludes all of the first group, many of the second (who might view the returns they get as not worth it) and relies largely on the last group. The last group isn't very large.

 

[Althus]

This post was a amazing demonstration of intelligent, calm and well constructive conversation, even if not be twin the 2 involved parts. It just shows that the right way to try to fix a problem is discuss it, not starting pointing fingers and say its "your" fault and not "mine".
But we all know that whit this mess all are losing, and specialty wend there is money involved things tend to go crazy.

So a advice from a complete stranger, to all of you is this , sort your shit out, and fix it the best way you possible can, because you probably now have your dream job and are working hard to make it work,and if you mess it up and take a bad decision you might lose it and regret it the rest of your life.

 

[Althus]

Hagi, shut the fuck up. Quit bitching about shit you're not involved in. We get it, you're smarter than everyone else and if you were there this all would've been avoided. Just stop talking and let the big boys handle this.

He might not be involved but dosent he have a right to share is opinion like every one is doing?

 

[Archon]

Option 5 probably has some possibilities. One that occurs to me is taht you do have the advantage of a dedicated audience in a strongly defined demographic. Stop thinking about that just in terms of advertising ancilliary products and think about it in terms of your main content as well. EC, Yahtzee, Dorealas & Associates, Unforgotten Realms, all have managed to get large numbers of followers based on the Escapists audience. "We're not gonna take your IP, other than exclusive usage rights to anything you choose to send us. We'll handle serving up your content to our dedicated and motivated audience (and here you can point to the donations that EC received), and in return we get all ad-revenue from doing so. In addition, our bright and innovative people will come up with extra ways to generate cash from your IP, (Tshirts, posters, contests, DVDs, donation campaigns, etc) and take a cut from each.

Kwil, very insightful. You are correct that Russ has definitely moved the site more mainstream. By and large it has been successful in that traffic is considerably increased, and we've had a FEW non-endemic ads (I think you'll all seen the Slim Jim ads?) But it's not yet enough.

Your point #5 is very interesting. It's actually akin to how record labels are attempting to make money in the post-napster/itunes world. The new label-musician arrangements are called "360 degree contracts", and the label takes a percentage on not just music sales, but merchandise, concerts, and so on. We do in fact have a clause that shares revenue for all ancillary revenue streams, but we haven't figured out how to make more money from those other areas, though. To date our revenue from merchandise is only about 5% of our revenue from advertising, and our ad revenue isn't that much.

I had hoped we'd make money from affiliate sales (some of you have noticed that we added affiliate links to a lot of our content) but most people don't click on them. I think people come here to talk about games in general, but we're not the consumer guide that sells games.

 

[zephae]

Mr. Marcis,

"I am not sure where I'm double speaking."

Allow me to assist you then:

"we are not making any claim on any Rocket Hub money;"
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"we said he should use $9,500 to create more episodes of the show that the money was supposed to be used to save."

That sure looks like making a claim on the money to me. Now, I expect that you view that quote as a suggestion or a preference but not a "claim" in the sense that "we control this money" or any other such legal issue. Still, the fact remains that you (and James to a lesser extent) are jumping in between legal terms and a more casual tone which creates a lot of confusion.

It's quite refreshing to see that you have dropped your request for a portion of the RocketHub money, though I still look forward to reviewing your e-mail correspondence. My main issue with you was much less about the missing payments, which is not uncommon in your industry, but rather that you wanted to pay the EC crew with proceeds from their independent charity project. However, in another example of the confusion your explanations have caused, you originally called the RocketHub initiative a "joint-effort," a claim that has subsequently been undercut by other statements you've made, the T-shirt issue being the most obvious one. It would've been more accurate to say you simply offered up your assistance instead of making sound like you were a partner.

 

[krellen]

I had hoped we'd make money from affiliate sales (some of you have noticed that we added affiliate links to a lot of our content) but most people don't click on them. I think people come here to talk about games in general, but we're not the consumer guide that sells games.

You might try focusing on less mainstream games - the indie and small-publisher sorts that may appeal more to core gamers than mainstream gamers. I know for me, personally, there has been absolutely no high-profile games this year I'm all that interested in buying. My purchases have all been from GOG.com or small, indie games. Maybe if I was more aware of what else was out there, I would have things to buy, and I could buy those things through an Escapist affiliate link were one made available.

Going mainstream doesn't really seem like it's working very well for game publishers (usually only the one or two big mainstreams win the fight, and everyone else flounders), so maybe it's not the best tact for game reporters to take either.

Also, tell Mr. Pitts to be less of a douche. I'd already become disinclined to the Escapist before this because of him. I have to be nice at my job no matter how much the people I work with annoy me, and it's no different for him.

 

[Archon]

**Raises hand**

Hi Alex. Im confused as to what situation the show is currently at. Is the show "Pulled" or is there still a chance of saving this mess, and it is a mess, and having things get back on good terms. Is this now a wedge issue with both sides no longer able to do business or could we possibly see things go back to a sense of normaility?


Also there seems to be a bit of a knife fight going on. There seems to be pretty contrary stories going on both sides. If the story you tell is 100% treu then james as come down withe the carzies, gone loco in the coco so to speak. I don't beleive this to be the case and i think you are both reasonable parties so why do both accounts make the other out to be pretty unreasonable. If Jame's story is 100% accurate then the escapist has acted in an almost cartoonishly disgusting way and i wouldn't expect that from the site either. There seems to have been a real breakdown of communications and gulf of expectations and it seems that if everything you said has happened has done so then there wouldn't be any problem.

I supoose i have a hard time seeing that there would be such a lack of concreat terms between you two as would seem to an outsider to be the case.

Yours somethingly (since everyone is doing it here these days)

The Monkey of Scrump

Monkey, thanks for your note. No one escapes their own biases so I'm sure a third-party reading the record would see things differently than any party does.

As for what's happened, I'm reminded me of the initiation of World War One - Well-meaning leaders on all sides accidentally lead their nations into the most devastating conflict in history.

 

[Hagi]

Ryan,
Thank you for your very kind note.

I actually have had several meetings with my staff about getting people paid. Last week was actually one of our most successful weeks ever in terms of getting our accounts payable cleared up - a lot of people got sent checks, James included. But this was due to some cash from our investors, not due to improving economics.

In general, since the recession began, we have reduced our in-house team by 40%, reduced our freelance expenses by 50%, reduced the rent on our office by 50%, and reduced our bandwidth bill by 30%. Our current office is in a basement with no windows. There is a limit to how much we can cut before there's only bone left.

The reason for the harsh circumstances is that we largely depend on videogame publishers buying ads. Unfortunately, the sales of core videogames are at a 5 year low right now. See, for example, this article: http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/06/may-2011-video-game-sales-lowest-since-october-2006-npd.html

Lower sales means smaller ad budgets. Smaller ad budgets mean that the publishers place their ads on the largest sites exclusively where they get maximum reach. The problem is worsened by the recent trend towards making games that cater to "mainstream" rather than "core" audiences. Not surprisingly, you guys are considered a core audience, and therefore less desirable to advertisers than non-core gamers, I guess. The result is that we get even fewer ad dollars. Finally, Google, Facebook, and so on, keep adding more and more ad options, and search ads swallow even more dollars. This is why so many sites, like NY Times and The Onion, are switching to paygates. Nobody's making any money on online ads.

So from where we stand, our options seem to be:
1) Migrate to being a mobile and iPad content company, and hope revenue trends there stay strong
2) Switch to pay-gates for revenue, infuriating many loyal customers who can't afford to pay
3) Change our content to be more mainstream to attract ads, and lose our old core-gamer focus
4) Stop paying for content and be like HuffPost, losing the quality of our content producers
5) Something I haven't thought of

What would you do in my shoes?

That's probably more business discussion than you cared to hear, but I figure that since this situation has shined a spotlight on our business, more transparency is always better.

Hey Alexander,

Might I suggest a more extensive version of this be published as a sort of article here on the Escapist?

Publishing a clear and factual summary of the Escapist's financial state, how it got to be there and where you're planning to go from there (whilst please refraining from commenting on the EC situation, that should be resolved between you and James. With the help of a judge if no agreement can be reached).

I think this would go some ways in restoring faith with the community that while the current situation was not handled competently it was a singular bad judgement call and not a persistent flaw in management.

Your responsiveness and communication in these matters also inspires faith, although I will hold my judgement until more information is available. It is still a promising sign and if suitable action follows this can hopefully be considered a lesson learned and be put behind us.

Cheers,

Hagi.

 

[Yeager942]

Alexander, are you incompetent or just too inexperienced to handle this role? The Escapist didn't fail here, you failed. And you failed horribly. As CEO your job is to ensure that your company fulfils all it's contracts and that all these contracts are certain and complete. The fact that this situation arose in the first place means you failed disastrously, not only did you fail to uphold your contracts towards your employees by not paying them on time you also failed to ensure that whatever contract you had with EC about the donation money was certain and complete.

You should have made a formal agreement with EC in regards to the overflow donation money. If you failed to do this then you've got no rights whatsoever to any of this money, that's the price of a failure as fucking big as yours. Now I suggest you review whatever agreements you have with the EC crew and uphold these even if it ends up costing you. You don't screw others over because of your own incompetency, even if they're nice enough to bend over for you. If you're incapable of doing even that I suggest you find another job because seeing this mess here you're not even close to being competent enough to handle this.

Your sincerely,

Hagi.

Hagi,
You are right that I should have made a formal agreement with EC in regards to the overflow donation money. Because I did not, the result is the situation at hand. That was a huge error on my part. I don't think either party expected that overflow would even be an issue, so we both had different expectations as to what would happen when overflow did develop. As I have said repeatedly, we retracted our request that they use the overflow money on Extra Credits weeks ago when the sharp difference of opinion on this matter became clear. I do not understand why it is being brought up now other than as a straw man.

As for my inexperience, I've never disguised that I founded the company when I was 25 and have run it since. It was literally my first job out of school. Every day that we experience growth is the first day of my life running a company of this size. So, yes, I remain inexperienced in many matters. Hopefully I have done more good than harm overall in serving in my role at The Escapist, but that is ultimately for others to judge.

Thanks for attempting an even-handed response.

Regards,
Alexander Macris

Well played, Mr. Macris. Well played.



I don't know, for all of James's wished to not do Escapist harm, why come out with this situation if not to turn the community against the Escapist?

P.S. /neutral shield.

 

[Dr. wonderful]

PS. Escapist community, stop acting like a bunch of morally outraged teenagers. We don't know anything about what's going on due to the large amount of pretty looking bullshit these two idiots are throwing our way. The only thing we need right now is real information, the only demand is access to the e-mails detailing all the conversations between both parties.

*AHEM*

I am a teenager!

But you're right, I'm normally calm.

CEO-LEVEL SNIP

and YOU.

...

I'm sorry for getting angry over something I have no idea over and jumping down the escapist throat with this post.

Spoiler

...You gotta be kidding me escapist.


YOU GO TO BE KIDDING ME! I mean, jesus christ, you guys could of gave her the goddamn money, she needed it! Hell, she could of work it off! I swear this is just...

ARRGH!

So, I'll just wait and see how this pans out.

 

[HentMas]

Snip

Dear Archon:

I am a business man my self, and I just wanted to tell you that at the end of the day James goal seems to open his... "Indie" thing and leave, the whole conversations, as you have demonstrated, points towards an approach in that direction, the "announcement" of the decision in Twitter even before things had become... sketchy or well, convoluted is a very giving fact.

I am but a fan of your site and would love to give you some insight due to my experience, i may be wrong my branch of business is not in publishing or advertising, but he is going to leave, there is going to be some "attempt" at re conciliating just to "make it clear" that he is not the "Bad Guy" and will leave at the sight of first trouble, and if you don´t give him any trouble he will find it, the main reason that someone starts the "process" by announcing it to the world is because they want everyone to know that they have already being wronged before and now they can just say "HE HIT ME WITH A STICK" and leave, even if its not true.

CUT YOUR LOSSES and SAVAGE as much as you can, don´t let yourself owe them one more cent, they will have you by the balls in this one, they have proven that their fan-base can leave with them the moment they choose to move to their "Indie" project, it might be tempting to try and bring back the show, because well, it IS popular... but as I have heard the IP belongs to you, DON´T LOOSE IT, its the only card you´ve got.

hope I helped you think with a more... Machiavellic point of view, never underestimate your business partners and always think the worse of them, and ALWAYS make them sign a "non disclosure" contract because your site lives out of REPUTATION.

 

[Archon]

Mr. Marcis,

"I am not sure where I'm double speaking."

Allow me to assist you then:

"we are not making any claim on any Rocket Hub money;"
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"we said he should use $9,500 to create more episodes of the show that the money was supposed to be used to save."

Ah, OK. Let me clarify. I wasn't trying to double speak, but I think I was chronologically unclear.

1) Our initial position was that the money should be used as follows: (a) subtract the cost of Allison's surgery; (b) subtract the cost of the merchandise; and (c) allocate 75% of the remainder towards Extra Credits production.
2) James felt that the remainder (c) should be used for his indie game publishing effort. While I disagreed, ultimately we didn't feel it was something worth contesting with James about. That left the only open question as the cost of the merchandise. James didn't like the amount it would cost do it with our Split Reason vendor ($16/shirt for production, shipping, and handling x 2000+ shirts), so he asked to do it on his own, and we said OK.
3) At that point, there was no longer any debate about the the Rocket Hub money.

That sure looks like making a claim on the money to me. Now, I expect that you view that quote as a suggestion or a preference but not a "claim" in the sense that "we control this money" or any other such legal issue. Still, the fact remains that you (and James to a lesser extent) are jumping in between legal terms and a more casual tone which creates a lot of confusion.

I apologize for any confusion and hope I have clarified things for you.

It's quite refreshing to see that you have dropped your request for a portion of the RocketHub money, though I still look forward to reviewing your e-mail correspondence. My main issue with you was much less about the missing payments, which is not uncommon in your industry, but rather that you wanted to pay the EC crew with proceeds from their independent charity project. However, in another example of the confusion your explanations have caused, you originally called the RocketHub initiative a "joint-effort," a claim that has subsequently been undercut by other statements you've made, the T-shirt issue being the most obvious one. It would've been more accurate to say you simply offered up your assistance instead of making sound like you were a partner.

Hmmm. From our point of view, we *were* acting like a partner. We suggested RocketHub in the first place, assigned a person from our marketing team to help promote it, then gave it an ad push, and then lined up the merchandise production at cost from Split Reason. In any event, if we're reduced to arguing over whether we were "partners" or "assistants" I think we're splitting hairs.

 

[gabrieldevue]

As many other posters, I am probably not qualified to say anything. I just heard of a show that got cancelled due to low popularity. It was planned for 6 seasons, 2 seasons were done and the IP-owner refused to try other solutions. The creator of the show had other possibilities in mind and now - we, the public, are sufferers... Because we will never see what amazing storylines would have happened, because the IP lies in some drawer.
Who knows if EC would habe been as popular, if it would have been restricted to youtube. But... EC _IS_ the writer James and the Narrator Dan.
I love this site so much and thanked the Escapist with glorious enthusiasm for bringing us shows like ZP and EC and Moviebob on a regular basis. But these shows are hard work for their creators and if they cannot concentrate on doing them but have to worry about earning money first? It might demage a show.

I hate this public fight. When I heard that EC would probably leave the Escapist I really wanted to know why. And I am glad that there are statements from both sides. But since they contradict each other I am no smarter than before.

A very, very sad gab.

 

[Archon]

Hey Alexander,

Might I suggest a more extensive version of this be published as a sort of article here on the Escapist?

Publishing a clear and factual summary of the Escapist's financial state, how it got to be there and where you're planning to go from there (whilst please refraining from commenting on the EC situation, that should be resolved between you and James. With the help of a judge if no agreement can be reached).

I think this would go some ways in restoring faith with the community that while the current situation was not handled competently it was a singular bad judgement call and not a persistent flaw in management.

Your responsiveness and communication in these matters also inspires faith, although I will hold my judgement until more information is available. It is still a promising sign and if suitable action follows this can hopefully be considered a lesson learned and be put behind us.

Cheers,

Hagi.

Hagi, thanks again for your kind words. I will talk to Russ and crew about your idea. It may be the case that a detailed explanation would go far. Thanks again.

 

[krellen]

Hmmm. From our point of view, we *were* acting like a partner. We suggested RocketHub in the first place, assigned a person from our marketing team to help promote it, then gave it an ad push, and then lined up the merchandise production at cost from Split Reason.

Sounds like you were a partner, but you were just unaware of how charity usually works. Corporate partners in charities donate their time and resources to the charity - that is their contribution to the charity effort. They are not compensated for this (though they can write-off the donation as such.)

It wasn't unreasonable for you to expect the charity to pay for the merchandise, and it sounds like this is happening now, so you're okay on that front. In regards to the Publisher's Club memberships, however - that, along with your marketing time, would serve as The Escapist's contribution to the charity. It would not typically be repaid. It sounds like you've dropped this as well, so that's another good step.

At this point, I think what remains is bad blood and a lack of faith on EC's part in your ability to uphold your deals in the future (and possibly on your part towards EC's commitment to making The Escapist better). As both the larger party and the one who made the initial mis-steps (even if you have since backed off them), it (perhaps unfortunately) falls to you to take the first steps. Paying James is a good step on that, presuming the "check is [indeed] in the mail".

 

[Archon]

It wasn't unreasonable for you to expect the charity to pay for the merchandise, and it sounds like this is happening now, so you're okay on that front. In regards to the Publisher's Club memberships, however - that, along with your marketing time, would serve as The Escapist's contribution to the charity. It would not typically be repaid. It sounds like you've dropped this as well, so that's another good step.

At this point, I think what remains is bad blood and a lack of faith on EC's part in your ability to uphold your deals in the future (and possibly on your part towards EC's commitment to making The Escapist better). As both the larger party and the one who made the initial mis-steps (even if you have since backed off them), it (perhaps unfortunately) falls to you to take the first steps. Paying James is a good step on that, presuming the "check is [indeed] in the mail".

Krellen, thanks for your reply. I agree with you that it fell to us to take the first steps. That is why two weeks ago we said the first step would be to get James fully paid up, and that's why we have now paid James in full. I wish I'd been able to get him paid faster, but I wasn't able to.

FYI the entire RocketHub effort has never been a charity legally - RocketHub expressly forbids charities on its site, and all the backers aren't entitled to a deduction for a charitable donation. Legally the backers are getting their t-shirts and rewards in exchange for their money, and that's that. The Escapist isn't going to be able to deduct any of the advertising or Pub Club memberships as charitable deductions, either. I serve on the board of directors of two not-for-profits and do charitable work for Cystic Fibrosis Foundation, St. Judes Children's Hosptials, and a few other groups, and the guidelines there are very precise. RocketHub is not that - it's an essentially unregulated crowdfunding tool. I don't know that it matters per se, but you seem to be detail oriented and I think it's worth noting the details.