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Linux Business

Loki Speaks up on Chapter 11 216

Posted by CmdrTaco
from the words-of-hope dept.
Traivor writes "Loki sent an email to all its customers about the chapter 11 filing. The most interesting bit is they claim to be making money." I've been rooting for Loki forever (and I've taken to buying all their releases even tho I don't have time to play them lately ;) Anyway, I've atached the email to this story so you can read it if you're curious.

The following is an email sent by Scott Draeker of Loki

Dear Friend of Loki:

As you may know, on August 3, 2001, Loki filed a Chapter 11 reorganization. As our valued customer, we wanted to let you know why we have elected to reorganize and how, if at all, it will impact our ongoing business.

Under US law there are two kinds of bankruptcy:

  1. Chapter 7 is a liquidation. We have not filed a Chapter 7 and have no intention of doing so.
  2. Chapter 11 is a reorganization. This will allow us to deal with our creditors fairly and equitably and at the same time continue to operate the company. We are still shipping products and porting new games and expect to be doing so for a long, long time.

Most of the debts we are restructuring through the Chapter 11 are well over a year old. They represent mistakes made by a young company. We've learned from our mistakes and become cash positive. Going forward we have every confidence that Loki will continue to be successful and grow.

We cannot say for certain how long Loki will remain in Chapter 11. It depends on many factors. However we do intend to bring the process to a conclusion as quickly as possible. Once our plan of reorganization is accepted by the court, our creditors will receive an agreed upon settlement and all other prepetition obligations will be fully and finally discharged.

During and after the reorganization your orders will continue to be honored. We will continue to provide end user support, bug fixes and new products. Negotiations are in progress to guarantee Loki a steady stream of additional AAA games to bring to Linux.

Most importantly, we'd like to thank each of you for your support over the years. Without our customers, we are nothing. The outpouring of support we have received in the last few days has been overwhelming, and we will continue to do everything we can to merit that support.

Kind regards,

Scott Draeker
President, Loki Software

This discussion has been archived. No new comments can be posted.

Loki Speaks up on Chapter 11

Comments Filter:
  • I'm realizing more and more lately that I don't need pc's for games. I haven't bought a pc game in months, although I've bought about 20 Dreamcast games. I'm going to buy a ps2 in a couple of months (after the price drops) and I'll get all of my games on that. After all, they're going to start making the same games for both. My computer will now be for computer stuff....
    now where's that codeweavers crossover thingie....
  • by jvmatthe (116058) on Friday August 17, 2001 @03:02PM (#2114254) Homepage
    Read the LinuxToday [linuxtoday.com] tell-all article here [linuxtoday.com] where it goes into the real story about Loki and how bad their situation is.

    Also, LinuxGames [linuxgames.com] did a retrospective article [linuxgames.com] the night that the Loki news first broke. It covers history, achievements, difficulties, and the possible future of Loki. Read it here [linuxgames.com]

    • Y'know, if the LinuxToday article is accurate, I'm not sure I have that much sympathy for the Colvin, the former employee of Loki; the article says that "Colvin loaned Loki nearly $100,000 via credit card, including at least one occasion when he charged all or part of Loki's semi-weekly payroll, which the company has refused to repay."

      I can understand being supportive of your company, or trying to keep your investments out of the red. (Colvin apparantly was both an employee and a company officer and investor.) But this seems like a classic case of throwing good money after bad. If they can't get bridge financing to meet payroll, they're in deep trouble already, and Colvin should have known that.

      I can accept a director or investor making an unsecured loan to their company. (It happens all the time with smaller companies, especially closely-held ones.) But charging a CREDIT CARD?!?! What the heck was he thinking?

      First, Loki would instantly lose whatever Visa skims off of the top, so it's bad for them. And second, Colvin, the lender, is stuck with interest payments. Last I checked, the borrower usually pays interest, not the lender. Either Colvin was incredibly naive, or Loki's execs who got him to do it were incredibly manipulative, or both.

      Opinions my own and not my employer's. This is not legal advice.
  • Do they mean cash positive, like they have earnings above $0?

    Or Amazon's definition, where you say you are cash positive (before all types of various expenses).
  • If Loki wasn't able to make enough income to pay debts they have now, how will they make enough to pay future debts?

    Retail sales of games for Linux would be more profitable if they would:

    • Bundle software within distros (Red Hat, Mandrake)
    • Use plain wrapping. No more glossy boxes.
    • Include other software and/or demos.

  • by cje (33931) on Friday August 17, 2001 @02:52PM (#2115989) Homepage
    Loki's whole goal is very laudable (making Windows games available natively for Linux.) However, as experience has shown, it isn't the most profitable venture in the world. Linux users are accustomed to getting their software for free, not paying for it. It therefore stands to reason that you cannot expect to make pots of money by taking software from a group of people who are used to paying for it (Windows users) and re-releasing it for those who are accustomed to downloading source tarballs (Linux users.)

    It seems to me that wealth creation could be maximized by doing the exact opposite thing: taking free games for Linux, packaging them, and then selling then to Windows users. What Windows user wouldn't purchase a copy of TuxRacer if he saw it on sale at Best Buy? XBill 2 would likely be a big hit. And think about it: the initial capital outlay is minimal (after all, the games are all free.) I'm willing to bet that we could sell /bin/ls to Windows users if we put it in a slick enough package and bought up enough ad space ("The Ultimate File Listing Tool for Windows!")

    Loki's heart is in the right place, but if they want to dig themselves out of the hole that they have found themselves in, the best thing that they could possibly do is reverse their name to Ikol and start doing the exact opposite of what they're doing now.
  • Well, this happened in the past to DigiCash [digicash.com] as many of you might remember. The point there was not that the company was really out of money, the point was to get rid of Dr. David Chaum. Look here [jya.com] for details. Today eCash Technologies [ecash.net] is a successful company with continuing support from the PREVIOUS Investors (the ones that pulled the plug). So, I do not think that this is the end for Loki. If they focus on their successful business and have patient Investors PLUS MANY customers. But that shouldn't be a problem, should it?
  • Different pictures (Score:2, Informative)

    by maelstrom (638)
    This Linux Today column [linuxtoday.com] seems to paint a different story. Implying that the company was on the edges for quite some time, being funded by employee credit cards.

    Who's right?

    • There is no "imply", employees were working for free, on verbal guarantees, and giving cash advances to keep the company afloat.

      Loki screwed them, mostly because they bent over.

      NEVER give anyone cash without a contract, unless you expect to lose it. Never work for free without an agreement on future compensation, unless you can afford to drop it.

      If you just let things get mushy like this, the end result is usually a lawsuit, and only the lawyers win.

  • When I was fresh out of school I bought a car for about $10k. After a while I got a job near my parents house, so I moved back in to save cash. I was late on one of the payments on my car they called tried to convince me to give them the car. Since I lived with the parents and could use thier extra car at the time it seemed reasonable, I did it. I got a bill a month later for $9500. They had sold my $10,000 car for $500 can were charging me the balance. I told them to F- off. Eventually I paid them $3k and we settled it. This sounds like almost exactly the same thing that is happening with Loki.
  • ...They represent mistakes made by a young company...

    Like a chair budget of $1000 per employee?? :)
  • by Anonymous Coward
    I've seen numerous people suggest that a simultanous Windows/Linux release would be best for both the Windows developer and Loki. That is not true for the Windows developer.

    Most Linux gamers buy the Windows version. They dual boot, use wine, use a second PC, whatever. A Windows sale is better than a Linux sale for the developer, they don't have to share anything with Loki. A simultanous release would result in many Linux sales replacing Windows sales, bad for the developer.

    After a few months the Linux vesion can be released and the purists who can only be reached with a native Linux version can be taken care of. As an added bonus other Linux loyalists who already purchased a Windows version will purchase a second copy to get a native Linux version.

    In terms of when to release a Linux version, simultaneous or after the Windows version, the interests of the original developer and Loki are in direct conflict.

    As to the theory that sales are lost when a port arrives after the original. The Mac porting experience shows this is not necessarily the case. Mac ports that followed the Windows version by a year or more zoomed to the top of the Mac sales charts. Their sales numbers being comparable to simultanous Windows/Mac releases.

    Oddly enough, Loki has a small benefit from not having a simultanous release. They don't have to support a 1.00 product, they get a few rounds of bug fixes and patches in their initial release. This in no way make up for the loss of sales due to Linux gamers who will only buy the Windows version. However some Mac porting companies have had their "profits" wiped out supporting buggy 1.00 releases.
  • by DoasFu (99077) <bennettdNO@SPAMgmail.com> on Friday August 17, 2001 @02:25PM (#2125892)
    You try to make it in this world, you work hard, you put out good products that people enjoy, and what comes of it? Some older God, snobby old economy type, chains you to a rock bed and drips acid on your face for eternity.

    Poor Loki. Poor, poor Loki.

    Boycott Odin!

    Dan
  • Loki (Score:2, Insightful)

    by I_redwolf (51890)
    How does anyone come to a substansial conclusion from that email? Everyone is talking about how Chapter 11 means death but that is far from the truth if you don't know the specifics. Just because a company files for Chapter 11 doesn't mean it's anywhere near going out of business and since we don't know the specifics what's the FUD all about?

    I think what happened was Loki was having a difficult time starting up. They finally started going and gaining income and either:

    1. Neglected to pay some creditors.
    2. Weren't in a position to pay creditors at the time.
    3. Accountant totally forgot about it.

    There are too many "ifs" to even speculate. So don't it makes you look like a jackass and in the mean time.. Play a game.
  • I am rooting for you, Loki, both because I believe in the Linux gaming community and I like what you are doing as a company. However, the news I read over at LinuxToday has me feeling troubled. Please, PLEASE shape up and try to make prudent decisions. You have a respomsibility both to your clients/fans as well as to your employees. Companies who don't deal fairly with their own people nor who make unnecessary blunders won't have the support of their customers for long.

    Here's to more games for Linux!
  • Nerds around the world will stand in line for warcraft 3 based on the stuff I've seen so far.

    Port away!
    • Just one problem, Blizzard has been turning their nose up at Loki for ages. Starcraft if the ONLY thing that keeps my win2k box alive and well, and I have a lot of friends who are the same way.

      Just a thought, ever wonder if a certain Redmond company knows this, and has paid Blizzard off to keep their great line of games windows (and I guess Mac) only.
  • Almost sold out... (Score:3, Insightful)

    by pipeb0mb (60758) <pipeb0mbNO@SPAMpipebomb.net> on Friday August 17, 2001 @03:19PM (#2130096) Homepage
    Funny.
    Back at LWE in NYC this Spring, Loki approached the now defunct Chilliware, looking for a buyout.
    Many phone calls and meetings later, a sum of $250,000 was reached; this would give Chilliware 100% rights to Loki software.

    $250k aint alot of cash folks. Any company that can go under for that small an amount, well. Sheesh...

    BTW, other companies that almost sold out to Chilliware:
    *GNUCash (Houston, we have a problem...)
    *Hancom
    *EasyLinux (Hi Hans!)

    Luckily, Chilliware imploded, thanks to the CEO's wandering eye and hands.

    -----------------
    Oh yeah, I have the source for iceSculptor, Mentor and Mohawk, if anyone wants to buy it...Chilliware owes me some big cash, and since none of the 'principals' will respond, I'll take it this way instead.
    -----------------

  • You are the CEO of a financially trouble linux company. Your tech stocks took a real plunge. You must somehow maintain your customers faith, and restructure the company to be a dominating force in the market. You have just sent out the letter, and the future is in your hands. I wonder if loki will think it's a big enough hit to market. (sell the life story and turn it into a game, kinda like a twist on pee wees big adventure) uh oh, i gotta run............ here comes a spork.
  • It seems like they're just delaying the inevitable to me (seriously not trolling here). You simply don't file bankruptcy of any kind unless you are in dire straits. I'm rooting for them all the way, but no matter how you spin it chapter 11 = seriously troubled company.
    • Complex question (Score:3, Insightful)

      by Anonymous Coward
      Companies survive Chapter 11 Bankruptcy filing:Schwinn Bicycles, Southwestern Life Holdings (formerly PennCorp Financial Group - insurance), S.H. Leggit Co. (Major RV/Mobile home manufactures, Orion International Technologies are recent examples. So writing Loki off automatically is unfair.

      However, this poster is correct in his guess that it is the exception rather than the rule. I can't vouch for this statistic but according to this article

      http://www.nmbiz.com/issues/00/Jan/Orion.htm

      Only 8% of companies that file from Chapter 11 emerge. Other articles I've read have executives stating that being in Chapter 11 is like having the courts run your company. Agressively attacking debts (chapter 11 essentially protects you from having creditors shut down your company) and emerging quickly seems to be a key to success.

      In the meantime, what the hell do you all know, yah nay-saying twerps. Of course Loki is going to put the best possible spin on what is obviously a life-support measure. They wouldn't be filing if they weren't about to be shredded by their creditors otherwise. But in the meantime, other than simply disappearing in a puff of venture capital like most of the ill-conceived and overextended startups of the last 5 years, they are working to pay off as much of their debts as possible on a sustainable schedule. In the meantime, they keep contributing to the economy, their employees still ahve a job, and they still have a chance. Whether they manage to be one of the 8% is up to their customers and how wise the choices they make going forward are.

      • by Anonymous Coward
        "Whether they manage to be one of the 8% is up to their customers"

        Yup. That's why I just dropped 100 bucks on loki's site buying a book and a couple more games. I think this brings the total of Loki games I own up to, er, 8 or so.

    • Really the point is that rather than pumping more revenue into maintaining large old debts, they can use chapter 11 to free up that revenue so that they can restructure and grow the company. Then, in theory, they can pay those debts off when they are in a position that those debts aren't completely sucking up their revenue.

      If they were in really dire stratis they'd do a chapter 7. Chapter 11 is usually a way to get above water from the initial costs of starting up, fast growth, etc.
    • Re:Buying Time (Score:2, Informative)

      by jguthrie (57467)
      You know, less than a decade ago Continental Airlines went through "Chapter 11", and their airplanes still take to the air every day. Yes, a bankruptcy is a dramatic step, but smart people who own a business will consider it long before the company is on its last legs.

      It can also be good for the creditors, too. You can't get money from a company that's filed for Chapter 7, as that means the company has gone out of business, but generally the payments are rescheduled in a Chapter 11 bankruptcy so the creditors at least have a shot at getting all of what they're owed.

      Of course, the folks at Loki probably would rather have not filed for protection, as it is a very public admission of being in over your head, but this doesn't mean that they're going to go under no matter what.

    • Re:Buying Time (Score:3, Insightful)

      by shagster (2319)
      Actually, chapter 11 is used to project a serious debt or can even been use to project against serious (in value) lawsuits claims.

      I know that USG (http://www.usg.com) filed for chap 11 (http://www.usg.com/special/) basically as protection for a class action lawsuit against serveral serveral companies (including them) for asbestos-related claims. As they were the only company that had not filed Chap 11, everybody was going have them.

      Chap 11 can be used to project a company because of large debt. Allowing them to restructure and the debt and while making sure they don't increase it.

      While it is true that those plans may not work. Chap 11 is designed to allow companies to attempt to corrected a large debt problem will still providing to the people we are entailed to the money.

      Just because a company files Chap 11 does not mean they are doomed. It means they made stupid mistakes before and hopefully they can correct it.

      If Loki is making money (minus of course the debt) then they have a good chance of continuing to move forward.
    • by mindstrm (20013) on Friday August 17, 2001 @02:26PM (#2154879)
      IT's for when you owe people money, and you can't pay. The idea is that you can stave off the creditors for a while, deal with them all fairly and evenly, and allow your company to start making some money. This doesn't mean 'making money because they don't have to pay bills'... it is designed to give them breathing room in order to dig their way out.

      A *seriously* troubled company wouldn't bother with Chapter 11... they would just dissolve.

  • Making money (Score:2, Interesting)

    by Mordred (104619)
    "The most interesting bit is they claim to be making money"
    They may be making money now (current quater) but are still losing money off their previous debts, which is why they're going Chapter 11. Still I'm kinda surprised that they've even broke even.

    Good luck to 'em.

    Mordred
  • Now if they can just survive long enough to actually release Deus Ex...

    Seriously, I own a lot of Loki products and hope they stay around... I enjoy an occasional game and REALLY don't want to keep a Windows box around just for that...

    • Hell yeah!

      They should push Deus Ex out the door whether its ready or not. That's the game I've been paying them for this whole time. I hope they can keep afloat until they release it.
    • I enjoy an occasional game and REALLY don't want to keep a Windows box around just for that...

      So go grab a Playstation 2 or Nintendo Gamecube when their prices drop. I've found it's more fun to play games that I can play with up to three of my friends in the same room than it is to play multiplayer over the 'net anyhow. It's also nice to be able to play on a big-screen TV set.

      Another neat thing about consoles is that they're easy to pack up and take to a friend's place as well.

  • mmm... Loki Good. Me want more.
  • by Ars-Fartsica (166957) on Friday August 17, 2001 @02:23PM (#2131440)
    This note is not realistic. Once you have filed Ch. 11, you are seeking legal protection from ceditors. So you are out of the woods for now, but no one will ever loan you money again.

    I don't see how you can realistically operate a company with no line of credit. Loki will be sold, its almost certain.

    • In the business literature, there are any number of cases where a company files for bankruptcy, and then finds that banks (or whatever) are MORE willing to lend them money.

      The deal is that the "bankrupt" company restructures its current debt, creating a situation where it can take on more debt. Of course, the new debt will be more expensive (higher interest).

      Usually, the debts are worked out s.t. the individual payments are less, but over a longer period. What ch. 11 does is force the creditors to rework the loans that are already outstanding.

      just a thought.
    • Not necessarily. LTV Steel in Cleveland has been in and out of Ch. 11 a number of times in the past 20 years, primarily because of forces outside its control. Like many American steel companies (and the auto industry), it had grown fat on subsidies and protective tariffs. When those were cut out, it went into protection as it found ways to cut size without cutting production. This has been going on again lately with the question of foreign steel being dumped here. When you operate a massive, full-bore steel foundry and mill (like most steel companies did), your costs are enormous compared to the european mini-mills.

      Chapter 11 is also similar in some ways to a debt consolidation loan. You're taking on a huge new debt, but getting rid of all your old ones at the same time. You still have to pay your old creditors, but once they've got their share, they're over with. All that's left is the guy/bank/venturist who spotted you the money to pay off the loan sharks.

      (Snide comment at the risk of being modded down: Do you really think M$ needs a line of credit?)

    • Once you have filed Ch. 11, you are seeking legal protection from ceditors. So you are out of the woods for now, but no one will ever loan you money again.

      That's nonsense. Think like a lender. Company screws up, takes on too much debt, wastes money, etc, company files for protection, company pays off debts in an orderly way, company emerges without debt. Now what have you got? You have management with proven workout experience. You've got a proven business model. You've got a debt-free company. This adds up to: prime lending target.

      When a company emerges successfully from Chapter 11, one problem it definitely does not have is finding new credit. The real question is, will they be willing to take on so much debt again, so fast? Probably not. Once burned, twice shy.

      • Now what have you got? You have management with proven workout experience. You've got a proven business model. You've got a debt-free company. This adds up to: prime lending target

        No, you have the same management as the ones who landed in this mess in the first place. Secondly, there is no long-term business model here - they're porting software.

        Yes, there were lenders who "thought" like you at one point - we got the S&L crisis.

    • by rekoil (168689)
      That isn't quite true - yes, it is substantially more difficult, and more expensive, to obtain credit after filing Chapter 11, but it isn't anywhere near impossible. "Sub-prime" financing is a legitimate sector of the credit industry, and these institutions lend to companies as well as to individuals.

      Mind you, a company with a bankruptcy in its history will pay substantially higher interest rates and have its finances put under much closer scrutiny than otherwise, but if the company is otherwise financially sound, and as the letter states, cashflow-positive, there's somebody out there who will lend them money. The question is, how expensive will the credit be?
      • They're going to spend the bulk of their time satisfying the court (at first) and creditors (if they last that long) and their products will definately suffer as a result. It's more than most companies can bear.

        • Some of the executive will be spending a lot of time satisfying the courts and creditors. Most of the programmers and and game designers (those who don't have executive duties) will remained focused on doing game work.
    • by Xerithane (13482) <xerithane@@@nerdfarm...org> on Friday August 17, 2001 @02:30PM (#2154587) Homepage Journal
      I'm not sure of your logic on this. If you go through the Chapter 11 successfully and fairly, it doesn't taint your record and cause them to flee like you're a lepar.

      Besides, if the company is as Scott said, Cash positive the line of credit is probably not a huge concern. They already have their shop setup, which is most of the costs of any company. They have employees, and are "balanced" out. All expansion and everything can come from their profit margin.

      I'd be more surprised to see Loki sold than Loki buying or expanding their business model in the next 2 years. Chapter 11 isn't the end-all-you're-screwed, you still deal with your creditors. Everyone should walk away mostly pleased. That's what the purpose of it is.

      • Besides, if the company is as Scott said, Cash positive the line of credit is probably not a huge concern.

        Oh come on, if everything was champagne and lollipops, they wouldn't have filed in the first place.

        Given the history of VA, Penguin, and other pure linux companies, Loki will be reduced to the equivalent of loan sharking to finance the place in the long run. Reputable creditors will keep a safe distance.

        • No, a lot of companies pull out of Chapter 11. It's not champagne and lollipops. Most of the time it's stupid decisions made in the beginning of the company, like Scott said.

          The purpose of a Chapter 11 is to re-establish a relationship with your creditors so you can start getting your business setup again.

          You file because of bad times, bad decisions, bad whatever. Hopefully it goes good, and it fades into history.

    • by MeNeXT (200840)
      no one will ever loan you money again.

      This should read no one will loan you money in the near future. If Loki has a positive cash flow and can show that they were in the BLACK for over a couple of years (depends on the creditor), then there is a chance that they will lend you money at THEIR terms(ie. Prime +5 and such). Ch.11 is made to help business survive when there is a possibility for success. We will know more in the next couple of months.

  • Heh (Score:5, Funny)

    by Wind_Walker (83965) on Friday August 17, 2001 @02:24PM (#2131445) Homepage Journal
    I've been rooting for Loki...

    So YOU'RE the one who's been breaking into my boxen...

  • All I can say is this:

    I'm crossing my fingers for them!
  • I'm on the edge of my seat waiting for TripTic Blaster and Gran Turismo Safe driving edition.
  • Sound very typical (Score:2, Informative)

    by 2Bits (167227)
    The tone and wording of the letter sound very typical of a company in ch. 11. Have you compared the letter/press release of different companies in the same situation?

    I remember when I was interviewing at Montgomery Ward in 97 for a network design engineer position. I didn't follow the news, so I didn't know MW had just filed ch. 11 the day before the interview. The director who interviewed me brought up the issue as soon as we sit down. It sounded almost exactly like this.

    Ch. 11 gave them almost 4 years, but it still went down.

  • 08/15/2001: Wednesday Loki Is Dead ... Score: -1 Insightful Loki, a company devoted to porting popular Windows games to the Linux platform, filed for bankruptcy protection early this week. Although this may look like the official death of Linux as desktop alternative, posters on Slashdot insist that this is all "good news" for Linux enthusiasts. Owing millions of dollars in licensing fees to various game developers, Loki failed to find a market selling games to people who are not used to paying for software. It seems the company could not convince enough game enthusiasts to shell out another fifty bucks for a Linux version of a game they already own for Windows. Most of the posts on Slashdot mourned the loss of a another Linux-friendly company. Although this was one of many Linux bankruptcies in the past few months, users of the operating system maintain that the desktop OS war has already been fought and won ... by Linux ... dammit. Slashdot prides itself on the open-mindedness of its readership and the lively egalitarian debates held on its pages. For example, in response to one post questioning the need for Linux as a mainstream desktop operating system, a user responded with a mature and reasoned post: "Fuck the shut up, all of you! I'm writing a bot to make sure that any anti-Linux poster gets banned from /. or at least modded down. All of your negativity is getting in the way of our free and open forum." It is fortunate that the Linux community has such an open and democratic forum to vent their frustrations [if they were frustrations, which they certainly aren't]. Just as Henry Ford offered the public a panoply of colors for his early automobiles as long as they were black, Slashdot accepts the entire spectrum of opinion on issues of open source and the free software movement. "You are all a bunch of ridiculous fucktards," wrote a user named Anonymous Coward. "To all of you FUD-mongers who see Linux only as a server OS only, you should troll someplace else. You are not wanted here in our welcoming community. Slashdot is all about freedom of speech. So, shut the hell up before I use my various /. Logins to flame you into oblivion!" The quality of opinions expressed on Slashdot have remained high even as the quantity of posts grows exponentially. The reason for the sudden rise in traffic may have something to do with the increase in the amount of free time the average dot-com worker has these days. Since Slashdot as much a game as message board [users are objectively "scored" on every post], some have devised tricks to get their comments moderated up. One of the easiest ways to accomplish this is to pick a random quotation and plug in the appropriate proper nouns for instant wisdom. "Loki is dead." wrote one poster. "Long live Loki." "I come here to bury Loki, not to praise them." "Forst Pist," added another. "All your base are belong to us!" All told, the Linux community is upbeat [and not at all defensive] about the recent round of set-backs [if you want to call them that, because they're not "set-backs" at all]. In the aftermath of Loki's demise, however, Linux users will always have their old stand-by to fall back on: playing stolen Windows games. Jim42688: Go ahead, mod me down because I stuck a mirror in front of you...
  • If anyone from Loki is reading this, are you planning on porting Heroes of Might and Magic IV? It's scheduled to be released next month (although that's not official) and I'm wondering if I should wait to buy the Linux version.

    I want to buy the Linux version. I would prefer to buy the Linux version. However, I mostly just want to play the game. I've been playing III since it came out, and am eagerly awaiting IV. The reason I didn't buy III for Linux is that I had already bought it for Windows when it first came out.

    What does everyone else here do? Say that the answer is "We're porting it. It will be a few months." What do you do? Buy both? Wait? I can't see waiting more than a couple of weeks. If it's a simultaneous release, I'll buy the Linux version. But if it's not?

    Seems like there's no easy answer.
  • In the earlier thread, I urged people to help out Loki by buying their games. In light of recent information (both obtained through friends in the biz and various web articles), I have changed my mind.

    I've worked for companies where someone held things together using their personal credit. That's a sign of poor management at best, and sheer stupidity at worst.

    Given what I know now, I'd say wait to buy Loki products until someone other than Scott Draeker is in charge there. That's what I intend to do, at least. I was going to buy the Linux port of Kohan this weekend (I own the PC version already); now, I think I'll wait and see where Lokie ends up before giving them my money.

    • by Jace of Fuse! (72042) on Friday August 17, 2001 @02:47PM (#2111529) Homepage
      Given what I know now, I'd say wait to buy Loki products until someone other than Scott Draeker is in charge there.

      Why? Does it matter if they are still funcitoning or doing well for their product to be useful to someone?

      If they have developed a game you want to play, there's no reason not to buy it dispite the condition they happen to be in. At best, in the long run it won't matter, at worse, there won't be any more patches for your software. You'll still have the game you purchased.
    • Given what I know now, I'd say wait to buy Loki products until someone other than Scott Draeker is in charge there. That's what I intend to do, at least. I was going to buy the Linux port of Kohan this weekend (I own the PC version already); now, I think I'll wait and see where Lokie ends up before giving them my money.
      I'm not sure I understand the logic here. You want to withhold your money from them to punish them for their accounting practices? You want to "see where they end up" first? I'll tell you how they end up; they end up slightly deeper in debt.

      What does it matter how they "end up" anyway? You'd still own the game (<nitpick> the license </nitpick>), so what would it matter anyway?

      Almost all companies in the world started on money financed by personal debt. It would only be stupid if they didn't file for chapter 11 protection before they got in too deep.

    • by Kirby (19886) on Friday August 17, 2001 @02:47PM (#2130749) Homepage
      I'd suggest instead buying the games you think you'd like to play, and not buying the ones you won't.

      I don't fully understand the idea of supporting a company on principle, or based on who is in charge. If they produce quality product that I want, I'll buy it.

      I can see arguments for not buying from companies whose owners have political or ethical stances you disagree with, like Dave Thomas of Wendy's (outspoken anti-homosexual). But because their president has poor business sense? That's the sort of thing that either they'll straigten out, or the market will straighten out for them, but doesn't seem like a worthwhile use of, effectively, a boycott. But hey, if you have moral and ethical issues with people who can't manage a company and its debts, knock yourself out.

      • My choice to "not" buy" Kohan for Linux is based on the ethics of Loki. I already have the game for Windows; I don't *need* Kohan (or any other game, for that matter) on Linux. I was going to buy it to support their effort.

        Research, however, has convinced me that Loki has not acted honorably. And I will not lend my support to a dishonorable company. If commercial Linux games are a viable business, someone else will pick up the market and -- perhaps -- do a better job both ethically and financially.

    • Given what I know now, I'd say wait to buy Loki products until someone other than Scott Draeker is in charge there.

      Well now, wait, surely it's due to Scott Draeker that SDL is free as in speech? I'd hope that after the workout they continue policies like that.

  • I guess the point of this letter was to try to convince Linux fans that Chapter 11 wasn't the end of the world, that Loki wasn't going under.

    I think Loki needs to not only restructure its debts, it needs to restructure its business practice. Instead of paying hefty royalties to produce Linux versions of games that are already released, perhaps Loki could focus on more "timeless" games. You know, the games that aren't based on the latest and greatest graphics (Tribes 2) and aren't any fun after a year. They're expensive to produce, require high-end hardware, and only have a short 1-2 year shelf life before nobody wants it.

    I think Loki could make a fair amount of money creating a unique game and producing it for both Windows and Linux. I'm not convinced that money can be made in the porting business, but a well-run game design place can. Focus all of Loki on one good game, of whatever genre, and market it well. Sell both Linux and Windows versions. If you buy one version, you should be able to get a 50% or more off the price of the other version. Sure, Loki can still port a game or two (c'mon, port Civ III - I'll pay $50 for it!). I high-end game companies have a hard time making profits off of games because of expensive development costs. Loki has a solid base of games that work great and can generate some revenue while they develop their own games that have a sensible budget.

    Too many game companies are focusing on great graphics and the latest 3D cards. Instead, the focus should be on playability and creativity. If Loki makes a great game and has a version for Linux and Windows, it's sure to make a good chunk of money.

    • Seriously. Buying the license from EA (or whomever) can't cost that much, it should be possible to make a network/client model, and as we all remember, multi-player on C64 (or Atari x00) was doable.

      Hell, I'd pay $20 for that. I'd even buy two copies to play against my wife.

  • by Anonymous Coward on Friday August 17, 2001 @03:51PM (#2135759)

    If you really want to know what happened, check out this Linux Today Story [linuxtoday.com].

    Basically, Scott has been screwing his employees over for the last 18 months, and when he was told to pay up, cowardly claimed chapter 11 so that he could continue paying himself, and no-one else.

    I think all of this sympathy is misplaced.

    • I'm not sure I have much faith in any particular story at this point. And they all wind up the same way, in any event.

      1: If you want a linux game company, then you buy linux games.

      2: If you want the creditors to be paid back, then you want the company to remain solvent.

      3: If it's not important to you, notice it to avoid analogous situations yourself, and then ignore it.

      4: If you want the company to fail, or want the creditors to not be paid back, then spread FUD.

      I can't really think of any other cases off hand. The purpose of chapter 11 is to allow one to pay off. It doesn't get you off the hook for paying. So your assertion is a bit ... unreasoned.

      One item worthy of note. If Loki owes you money, be sure to make certain that you are listed in the chapter 11 filing. Otherwise he literally won't be allowed to pay you until after he has paid off everyone listed.
  • sigh (Score:4, Insightful)

    by Gruneun (261463) on Friday August 17, 2001 @02:32PM (#2137330)
    Most of the debts we are restructuring through the Chapter 11 are well over a year old.

    We've... become cash positive.

    It doesn't work that way. You may have income, but you're not positive if you can't pay your debts. Part of a successful reorganization is recognizing the situation you're in so you can fix it.

    I wish them the best of luck, but they have some more thinking to do.
    • Scot mentions that most of the debts are over a year old. yeah, they have debts to activision from a while ago, but anything recent has been either paid off, or they could pay off easily, if they didn't have these few bigs one from the past on them. They probably have a few debts all over the place, but their really seeking an extension on one or two big ones that are bringing them down. That's what I got out of it at least. If they could cover their asses for a little longer, they'd be looking good. I could be wrong. *Shrugs*
    • Re:sigh (Score:2, Informative)

      by Anonymous Coward
      That is not what the definition of cash positive is. Because of the way modern accounting works many of the things you have pushed off or "hidden" until later can come back to hit you once your income does far outweigh your expenses. In many cases these debts now have severe penalities which cripples your ability to continue to function. By seeking Chapter 11 you are saying that, "Hey I am making money and I can pay you guys... just give me a little more time." Good or bad this is the way it works.

      I have no doubts they are making money every month. But as they stated they have so much debt they can't continue without some sort of protection. People do it all the time and so do companies.
  • by ergo98 (9391) on Friday August 17, 2001 @02:32PM (#2138114) Homepage Journal

    I've often wondered what the economics of a porting company like Loki are like. For instance Vendor X sells game Y for $49.95 and there are 100,000 potential customers, only 10,000 of them happen to be running a variant operating system that you aren't targeting. However, under further analysis you learn that 9,000 of them dual-boot to your target environment, so they're actually potential candidates anyways. So company Y comes along and offers to port your software for those 10,000 users. Now really despite the fact that it has a potential market of 10,000 users, really 9,000 were potential users already, so the porting is purely a convenience for them, and the 1,000 are truly bonafide new customers.

    Anyways you can see how economically this can get pretty convoluted, and it must be under tight terms that porting contracts written: I would presume that for the majority of the prospective market the original game was a candidate already. Bleh.

  • Don't buy Loki Games (Score:2, Interesting)

    by geomcbay (263540)
    So many people are advocating buying out Loki games to help them out...Don't do it!

    Yes, it would be nice to have decent games under Linux, but Loki is a terrible company. The creditor that sued Loki and caused this whole situation with them filing for bankruptcy was a former employee whom Loki (Scott Draeker, specifically) robbed blind! He's just trying to get some of the money he invested in the company (while working there for 19 months and not being paid) back.

    Support Loki's former employees (hint: all the good employees left the company already), but don't support the company or Scott Draeker.

    • Over a year? I have a really hard time understanding this. If my company failed to pay me on time, every paycheck, I would be gone, out of there, tomorrow. I just completely fail to understand the concept. If they don't pay you today, how on Earth are they going to pay you tomorrow?
      • Over a year? I have a really hard time understanding this.

        According to the article on Linux Today, the "employee" in question was also effectively a huge investor as well. He couldn't just "pack up and leave" because he'd already sunk large amounts of money into the company (including - again according to the claims in the article - paying for Loki's payroll off of his personal credit card! I'd say that, foolish or not, sinking over $100,000 into a company you work for is pretty strong incentive to hang around trying to get it profitable as long as possible...)

        Personally, it's starting to sound like the best thing for Loki is to move on, either as a different "legal entity" or not (i.e. have Loki liquidate its assets and have the remaining employees and other interested parties start a new company, buying Loki's liquidated assets) or still as Loki, but with somebody besides Draeker running it.

        • Well, what about the other employees who didn't get paid? Or anyone who's been in that situation. If my company said, "we have a wee bit of a problem, you won't be getting a paycheck come payday", I'd gather my stuff together and turn in my badge the next day. End of story, period.
    • Support Loki's former employees (hint: all the good employees left the company already), but don't support the company or Scott Draeker.


      Is it possible to do this? Are these former Loki employees selling Linux games? If I am selfish (and I am) and all I want is to get more games to play, it seems like continuing to support Loki is still the way to go.

  • You can actually figure out the likelihood of a tech company successfully emerging from bankruptcy by determining the Aeron Chair to Employee Ratio.

    Seriously, these are good guys who actually provide quality products at reasonable prices. It would be a shame to see them go.

  • Delivery Channel (Score:2, Interesting)

    by gordzilla (97994)
    I sincerly hope that this recent news about loki doesn't mean the end for them. However have you
    ever tried convince your local games shop to order in copies. I really hope they review thier distribution channel while restructuring. After all some of us aren't comfortable ordering merchendise from the internet (and is it any wonder with all the news about computer security problems).
  • by RNG (35225) on Friday August 17, 2001 @02:39PM (#2155016) Homepage
    While I'm usually not much of a gamer, I have purchased a few (3 to be exact) of Loki's games, for the following reasons:

    1) While I'm not a hardcore gamer, I enjoy playing a game from time to time
    2) It makes sense to support a company who makes cool stuff for your platform of choice (similarly, I donated to Mandrake after downloading their latest release). I have a decent job and can afford to miss some cash in exchange for a quality product.
    3) Not everything should/can be free. If you want Linux ports of closed source (ie: professional) games, someone will have to pay for them. Otherwise resign yourself to the fact that you'll have to resort to the likes of Tuxracer and Freeciv in terms of games (and I'm not dissing these games, they're written by hobbyists and simply don't compete in the professional game market).

    So to sum it up, if you want Loki to be around a year from now, fork over some $ for a game. If you think the price is too steep, team up with your fellow Linux diehards and purchase a game for a few of you. While not exactly right/legal, it's still better if 3 people buy 1 game to share than nobody buying the game at all. Loki makes quality products for our favorite OS; I hope that they'll still be around a few years from now ...

    • by Danse (1026)

      Neverwinter Nights is supposed to be released for Windows, Mac, and Linux at the same time, but with module creation tools only available for Windows. I was hoping Loki might be able to port the tools to Linux. Looks like the chances of that are extremely slim now. They seem to be trying to say that things aren't so bad, but it sounds like they're a lot worse than they are letting on.

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