Game Insight to employees: "There will be no severance payments, return the equipment"

For more than two weeks, Game Insight has refused to pay laid-off employees a salary for the last working month. They are also denied compensation, and they also demand to return the equipment (at their own expense). About what is happening, editors App2Top.ru the company’s employees told us.

The material was written on the basis of an interview with a source familiar with the situation. The information provided was confirmed by five employees of Game Insight. Some of them asked for anonymity.

Without salaries, compensation and equipment

On June 24, Game Insight employees were supposed to receive the salary due to them for June. However, they did not wait for the money. Instead, the former employees were contacted by a previously unknown Pavel Sedov, who stated that he was engaged in the liquidation of the Game Insight business in Russia.

Note 1: According to the RusProfile service, Pavel Sedov is indeed the head of Game Insight LLC in the status of liquidator since June 21, 2022.

At the general call, he hinted that there might not be severance payments or other compensations. He explained this by the fact that the current legal entity does not have sufficient funds in the account.

“He said that he could not guarantee their payment due to the impossibility of transferring money from the customer (Lithuanian legal entity),” one of the sources clarifies the wording.

At the same time, the salary balances for June will still be paid, but only to those who sign papers on the voluntary termination of the employment contract.

To the question of the employees about what the party involved in this is planning to receive from the liquidation of the business, the following answer was received: “I will get everything that remains after paying employees salaries. Consider me an altruist, I have no money from this story.”

As one of the sources noted, Sedov made it clear that he himself was at a disadvantage until the liquidation was completed. “We are all in the same boat here,” he said during a conversation with employees.

At the same time, the liquidator demanded to return the equipment (computers, monitors, tablets) that the company had previously provided to them. People should do this at their own expense. Otherwise, he hinted at the possibility of a trial.

“There was approximately the following wording: “If the company is declared bankrupt, there will be a sale of the company’s assets. The equipment is an asset of the company, so please give it away,” one of the employees of Game Insight reports.

Recall that people from all over Russia worked on Game Insight. Including in Murmansk, Taganrog, Nizhny Novgorod. Delivery of equipment from these cities to Moscow, where it is necessary to return the “iron”, can cost an amount comparable to the salary of an employee.

Forced to resign on their own

Now employees are offered three options for termination of employment relations with Game Insight LLC:

• at their own request (with possible payment of vacation pay and salary for June);
• by agreement of the parties (with possible payment of vacation pay, severance pay in one salary, laid down by the Labor Code of the Russian Federation, and salaries for June);
• in connection with the liquidation, which is due to take place in September (according to the liquidator, there will be no money, however, it was indicated in the notification letter that it was possible to retire prematurely after liquidation, having received severance pay proportional to the salary before the date of liquidation).

“The agreements are drawn up in such a way that it will be difficult to challenge any of them under any circumstances,” the employees say.

The liquidator, apparently chosen for this role by the former leadership, stressed at the call that under any of the options he does not guarantee payment, but only “is obliged to do it by law, but there is no money.”

As employees say, throughout the meeting, he pushed them to the first two options for termination of employment relations, explaining that this way the chances of getting money are somewhat higher.

Not all employees have the opportunity to wait for the results of the liquidation. They need to live on something, which means they need to look for a job, for which they will have to back down.

Thus, the liquidator, without paying employees the salary they are entitled to for June, forces them to withdraw any claims from the company as soon as possible.

Why is it so important to him?

Game Insight is trying to go through the liquidation procedure. She will not be able to do this if the company’s debts are discovered by the regulatory authorities (that is, if the liquidator does not force employees to sign papers according to which the dismissal will be spelled out as committed “by agreement of the parties“).

If the liquidation fails, then the bankruptcy procedure begins instead. In this case, the regulatory authorities will seek funds from persons affiliated with Game Insight LLC to repay debts. It is clear that the “affiliated persons” do not want this, because they have money and they do not want to lose it.

The fact that there is money becomes obvious when it turns out that not all employees are forced to quit, leaving without a salary.

Three groups of employees

Today, former Game Insight employees can be divided into three groups.

Note 2: the term “former employee” is a convention, because, as we noted a little above, the company is still in the process of liquidation and there are people in it who refuse to sign papers on termination of the employment contract “by agreement of the parties“. At the moment, they actually remain employees of the company.

These groups are:

• “thrown out in the cold” is the largest group of people who refuse to pay even the salary due for the last month (as Sedov told employees, we are talking about 300-330 people);
• support team — employees who were offered to sign a contract with a new Russian legal entity, their task in a new place is to support previously released Game Insight projects (the latter’s revenue for June, taking into account the deduction of the share of stores and taxes, amounted to $1.3 million or 73 million rubles);

Note 3: according to one of the sources, it is possible that we are talking about Medjik Kraft LLC. This is indicated by two points. Firstly, it was from her e-mail address that proposals came to transfer to a new legal entity to work on the same games. Secondly, the company’s CEO changed on the same day that he changed for the first time this year at Game Insight (the company’s directors changed twice in 2022, the first time in March, then in June).

Note 4: according to unverified data, the new company that will operate the projects may also be LLC “Date Code”. This is stated by one of the sources with reference to an employee of Game Insight, who agreed to move to a new legal entity.

• The lucky team are a few employees who, according to unverified data, were offered to move to London to work on the Squad Blast game as part of UltraHorse Ent.

Note 5: UltraHorse Ent. studio is registered in the UK on May 10, 2022. It was opened by Anatoly Ropotov. Until March 16, 2022, he was the CEO of Game Insight LLC for eight years.

Since (a) there is a group of employees who were asked to get a new job in order to continue working on Game Insight projects and (b) Game Insight products continue to earn, it is at least strange to hear words about the lack of money.

Affiliated structures

Based on common sense, it seems obvious that the affiliated structures are the following:

• Lithuanian office of Game Insight (owns IP, is engaged in game marketing, money from the App Store and Google Play goes to his account);
• undergoing liquidation of Game Insight LLC (previously responsible for operating the company’s games);
• “Magic Craft”/”Date code”, which took over the operation of Game Insight projects (will be engaged in the operation of the company’s games);
• UltraHorse Ent. (he is developing a game that was previously an internal project of the company and was created in one of its Russian offices).

Most likely, all these structures have one owner or a group of owners. If this is a group, then it is most likely that there are:

• Igor Matsanyuk — Chairman of the Board of Directors of Game Insight since 2010, as well as the founder of the venture fund IMI.VC , whose portfolio project is Game Insight. Since 2015, he has been living in Lithuania, where he initiated the construction of Vilnius Tech Park, where the head office of Game Insight is based.
• Anatoly Ropotov — as we just noted, the former CEO of Game Insight LLC, who got the opportunity after the February events to launch a studio in London, possibly move a number of employees there from Russia and get the rights to the previously created Game Insight project.

Indeed, there may not be any money on the account of the Russian Game Insight LLC. But not because of management mistakes, but, most likely, simply because it was decided not to translate them this time.

The entire Russian gaming IT works according to a simple scheme. Cash flows are managed by the head office located abroad. As for the Russian daughters, they act as contractors.

Simply put, earnings from projects accumulate, as in the case of Game Insight, on the Lithuanian account. And already the Lithuanian office transfers funds to the Russian LLC for salaries, for the maintenance of locations, in general, for production costs.

The cash flow to the Lithuanian Game Insight has not stopped. The company’s games are still making money. However, IP owners do not want to share more with their direct developers.

Difficulties with payment could be explained, for example, by the fact that now, due to Western sanctions, it is not possible to transfer the required amounts of funds to the Russian account. Actually, this is one of the reasons why small gaming businesses began to close.

However, this is clearly not the case of Game Insight. The presence of a new LLC, which will assume the role of the operator of the company’s previously released games, suggests that a way to transfer money from a Lithuanian account to a Russian one was still found. Maybe very circumferential, but it doesn’t matter here.

The bottom line: if desired, the owners of Game Insight could normally (that is, by law) dismiss their employees. However, instead, an ugly story began in the spirit of “There is no money, but you are holding on.” No wonder people feel betrayed by the company.

As the employees write, the former management does not contact them, does not explain the situation either privately or publicly.

To the editorial board ‘s letters App2Top.ru Neither Pavel Sedov nor Anatoly Ropotov responded with a request to comment on the situation.

Result

Game Insight (at least, the owners of the Lithuanian head office), having retained all the IP (we are talking about such international hits as “Airport“, “Natives“, “Mysterious House” and Guns of Boom) and access to capital, dismisses ~300 people, denying them access to:

• salary for the last month of work;
• severance pay (in the amount of at least two more salaries);
• payment of vacation pay.

Parallel Game Insight (or related people):

• finds a liquidator who demands to return the equipment;
• launches two new offices. The first one is based in Russia and its task is to keep the company’s portfolio in a workable form. The second one in London will create games for consoles and PCs.

Addition

Most of the staff who helped write the material insisted on anonymity. However, two were willing to reveal their names. We give their comments below without notes.