Eugene Soto, the Chief Financial Officer, meets with you to review the financial considerations of the upcoming merger.
“Though Binary Frontiers Entertainment presents the strongest offer in terms of pure numbers, I must admit the two offers are closer than I initially thought,” he says. “Let’s go over what we know.
“BFE is a larger company and their offer of cash, stock, and royalties on our existing products is more generous than Kaijusoft’s. The Board will no doubt be happier to see us merge with an established brand, but I believe they would accept a recommendation of either offer, in the end. We know that BFE’s business model relies on extensive focus testing, establishing long-running franchises, and lengthy development cycles. It’s a stable approach, but rather inflexible and not always as popular with today’s customers.
“Kaijusoft, on the other hand, is an up-and-coming company. Their smaller size means their offer is weaker, but they’ll have more room for our employees. Furthermore, they have more agility in their business model, though their love of innovation is a high-risk strategy. If we accept their offer, we’ll be able to grow alongside them and reap the benefits-the deal would be closer to a true partnership. In BFE, we would be only a smaller part of a large organization, more valued for our assets and intellectual properties than for our employees and leadership team. However, if Kaijusoft’s growth doesn’t pan out, our investors will suffer.”
Sales and Marketing Report
Renee Cavanaugh, the VP of Sales and Marketing, enters the conference room with a carefully-prepared presentation on the merits and weaknesses of Kaijusoft and BFE’s marketing strategies.
“Both companies use a marketing style different from our own. Let’s start with BFE,” she says, projecting a series of graphs and charts as she reviews the past week’s findings. “BFE’s business model involves focus-tested, big-budget products. Their games are a source of solid, dependable profits, but they’re not remarkable. In movie terms, they make summer blockbusters, not Oscar-winners. In terms of marketing, BFE takes a questionable approach. They pay money to social media personalities for positive coverage, but their endorsements aren’t always marked as such. Those methods could lead to trouble, though so far they’ve avoided legal repercussions. BFE is also making a push to put their customers’ private data to use in marketing. Some would claim they’re violating their customers’ expectation of privacy; others would call it an effective supplement to their strategy.
“As to which company I’d recommend merging with, well….” She hesitates, clearly unwilling to commit to either company outright. “I think BFE has an edge insofar as they’ve been in business longer. They’ve proven themselves. But Kaijusoft is a rising star. Merging with them could pay off big.”
Human Resources Report
Jill Kennedy, the VP of Human Resources, meets with you to review the impact the merger will have on Evolution Games’ employees.
“I don’t have a clear recommendation,” she says up front. “Neither of our two suitors is a perfect company, and the merger is going to create upheaval and turmoil in the team no matter which offer we accept.
“If we merge with Kaijusoft, more of our current structure would remain intact. Many of our employees would stay on, because Kaijusoft has expressed an interest not only in our technology and intellectual properties but also in our programmers and creative talent. They’re prepared to offer employment guarantees for our current leadership for a certain time, as well. However, we’ve learned of Kaijusoft’s reputation for mass layoffs during the ends of development cycles. Their organization maintains a loyal ‘inner circle’ of long-term employees-everyone outside that circle is expendable. Kaijusoft might keep the majority of our staff, but I can’t say how many will enter the inner circle before the next cycle of layoffs.
“If we choose Binary Frontiers Entertainment, the worst damage will happen up front. BFE won’t be interested in retaining most of our current staff-even our upper management won’t be guaranteed a position in the reorganized company. However, they’re offering a nice compensation package for our leadership, so the blow will certainly be softened. Anyone on our staff who survives the initial wave of layoffs will have a secure career for some time-BFE has a great reputation for loyalty. That job security will come at a price, though, as we’ve learned that the demands on employees can be extremely high during crunch time.
“As I said, neither company is an obvious winner to me. Normally, I’d prefer a company like Kaijusoft since merging with them would keep more of our staff employed, but with their reputation, Kaijusoft isn’t necessarily a better choice.”
Janice Denton, the Chief Compliance Officer, discusses the issues surrounding the two companies offering to merge with yours.
“The choice won’t be easy,” she says. “I confess I’m not thrilled with either option, but the Board will expect a proposal for one company or the other. I see a number of compliance concerns from both companies.
“The most prominent issue is within Kaijusoft. Kaijusoft fosters a culture of harassment toward women, a work environment that has led to complaints and at least one lawsuit. Patrick, their CEO, has taken some steps to correct the problem by firing the Chief Compliance Officer and VP of Human Resources. However, considering the worst complaints came from the marketing team, I’m not so sure Patrick fired the correct people. He may have some blind spots where certain members of the team are concerned. Kaijusoft also produces games with strong similarities to other companies’ work-a copyright lawsuit could be forthcoming if they aren’t careful.
“Binary Frontiers Entertainment has a diverse leadership and a fairly positive work environment, but they produce violent games that they proceed to bully through the ratings board. I don’t like their products, but they certainly have a right to make them. What troubles me is the strings they pull to sell their mature-rated games to teens. Between their manipulation of the ratings board, their questionable use of private data, and their extreme demands on employees, BFE could face a lawsuit from a number of angles.
“I had a strong preference for Kaijusoft initially, but I confess that choice is due to my personal bias. BFE produces the sort of ‘entertainment’ that creates misogyny, aggression, and intolerance in our youth. And yet, as a woman, I can’t say I’m eager to join Kaijusoft’s workplace. I only hope that whichever company you choose to merge with, you aim to change the culture for the better.”
Martin Nguyen, the Chief Technology Officer, meets with you for a final recap of the pros and cons of both offers.
“I gotta say, I’ll be glad when this mess is over,” he says. “I don’t even think I care too much who we merge with, so long as it’s just done, you know? Anyway, here’s what we’ve got.
“Kaijusoft’s more interested in our creative talent: our artists, writers, and so forth-so they won’t just strip us for parts like BFE will. We’ll have a bigger presence on the team-I think we’ll even have a new name for the company after the merger. Kaijusoft will keep our programmers and animators on for a while, but we know how their layoff cycles work-most of those guys will be out of work after the next big release. Kaijusoft has also been in hot water for creating games that are a bit too similar to other companies’ work. We’ll have to work with them to avoid making rip-offs in the future. But, hey, that’s why they need more creative talent, right?”