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Crytek Keeps Doors Open with Licensing Deal for Video Game Engine

By Christopher Mohr, TMCnet Contributing Writer

According to sources speaking on condition of anonymity to video game site Kotaku, Crytek has agreed to an agreement that would allow Amazon to license its video game engine, CryEngine 3. The amount of the deal is said to be in the $50-70 million range and would help Crytek resolve its financial struggles. It also helps Amazon move further along in its quest to become a major factor in the video game industry.

Frankfurt, Germany-based Crytek has additional facilities in Europe, Asia, and in the U.S. It develops games including Far Cry, the Crysis series, and Ryse: Son of Rome and Warface. According to its site, the company’s CryEngine video game engine has been licensed to develop games for the PC, Xbox One, PlayStation 4, Wii, and the iOS and Android (News - Alert) environments.

In June 2014, Kotaku and other news outlets reported that Crytek was having financial struggles. This led to employees not being paid on time at the company’s German and U.K. based facilities, and the cancellation of several projects, including a sequel to Ryse. Several employees left the company and had complained of low morale.

Recent activity by Amazon shows the company is serious about becoming a major force in the video game industry. In February 2014, it acquired Double Helix Games, which developed Killer Instinct. The hiring of prominent designers Kim Swift (News - Alert) and Clint Hocking, along with writer Erik Nylund are not the types of moves a company that only wants to dabble in video games would make.

A report from DFC Intelligence predicts that the industry has the potential to reach $100 billion in revenue by 2018. It’s understandable why Amazon wants in on this market and games are an extension of some of the other forms of entertainment the company has offered for years.

For Crytek, the licensing deal allows it to stay in business, but for how long? Can the company go back to developing more games or is the influx of money from Amazon simply delaying an eventual demise?