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Conclusion
Until the last 2 years, Warthog had proven itself to be a dependable and well managed development
company with a creditable history of consistent profitability (an extremely rare occurrence amongst games developers). It had an experienced development division with some 100 titles under their collective belts and
a number of high-selling titles under the Warthog name which made the Company a promising prospect. However, a combination of bad luck and bad judgement brought this success story to a grinding halt in late 2002 and
early 2003 and led to the Company's effective disposal in November 2004 to Tiger Telematics.
The bad luck came in the form of three publishing partners either going under or experiencing sufficient
financial difficulty to halt contractually due milestone payments mid project. However, the Warthog management are guilty of some substantial errors of judgement. Firstly, they let the Company grow too large
too fast, in the ill-advised pursuit of contract volume and advance-based revenue growth over product and contract quality, and development efficiency improvements. Whilst growth to support growing demand is no sin,
poorly managed growth almost invariably leads to product quality compromises and once this starts a downward spiral of diminishing publisher quality, declining production budgets and values sets in. At one point,
Warthog dealt with Microsoft, Activision and Infogrames. By the time of its sale to Tiger, it was struggling to find any publishers interested in its products at all such was the decline in the Company's reputation.
Put simply, games development companies do not scale well. In addition to quality problems, the larger a developer becomes, the larger the burden is of signing new products and the more susceptible it
becomes to product signing delays. Such delays or signing failures can result in potentially crippling cashflow problems should a number of projects suffer concurrent problems. This in turn can lead to developers
grasping the nearest publisher contract to stem the cash outflow and such deals are rarely favourable for the developer and are often made with the smaller, weaker publishers who are less likely to produce a hit
product and may even be financially vulnerable themselves.
It would have taken a substantial change in fortunes for Warthog to have survived as an independent developer and Warthog shareholders should welcome
the fact that some value will be achieved from its sale to Tiger unlike Argonaut shareholders who will have lost everything.
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