Today’s news that Crytek has sold the Homefront IP to Koch, closed its UK studio, and all-but-shuttered Crytek USA is both disappointing and saddening. How did such a prominent developer almost run out of cash? After all, this is a company whose second game was advanced enough to be used as a PC power benchmark for years, and whose proprietary engine (which it licences to other studios) is one of the most technically impressive available today.

Of course, without insider knowledge, it’s impossible to know the full story behind Crytek’s gradual slide-cum-abrupt plummet. However, poring over the direction the company has taken since Crysis does provide some clues. The short version: following the heady days of Far Cry and Crysis, a series of ill-advised design decisions have seen the company move away from what made those games so successful, and have cost the company its hardcore gamer fan base in the process.

The trouble began with 2011’s Crysis 2. A fine game in its own right, its narrow world and console-led development nonetheless saw it pale in comparison to its predecessor. This was particularly apparent on PC, and the hardcore audience viewed the game as evidence Crytek was turning its back on those who had made it famous. Crysis 2 sold more than two million worldwide on the strength of decent reviews and its name, but gamers took note: Crysis ain’t what it used to be.

The fall of Crytek: How did it come to this?

As a result, Crysis 3 – a solid if undistinguished title in a vast ocean of quality first-person shooters – was released just under two years later to indifference from the PC crowd. Despite Crytek’s renewed focus on that platform, the game was largely ignored by PC owners, although it sold okay on console.

However, it was a loser overall: at somewhere south of two million sales overall*, it wasn't as popular as its predecessor. Publisher EA said sales were "well below" those forecast, and publicly referred to the title as "a failure".

Later that year, Crytek took a couple of PR hits as well. The first came when an anonymous blogger claiming to be a former Crytek employee asserted that working conditions at Crytek’s Frankfurt offices were abysmal. “Several ex-Crytek employees have already been successful in mounting legal battles and won settlements, yet Crytek still treat staff as disposable pieces of meat to be discarded at will,” he or she wrote. This would come to haunt the studio later when a PR blunder saw it send a tweet that appeared to celebrate the crazy overtime hours its staff were putting in.

A few months later, Crytek’s Rasmus Hojengaard riled gamers with his declaration that blocking used games would be "absolutely awesome". Following that, Crytek CEO Cevat Yerli burned off any remaining goodwill by declaring that the gaming’s standard pricing model was “literally milking the customers to death”, and that his company would soon only develop free-to-play titles as a result. The irony.

The fall of Crytek: How did it come to this?
The fall of Crytek: How did it come to this?
The fall of Crytek: How did it come to this?

Its first game to use such a model was yet another first-person shooter. Warface launched in China before expanding to Russia, Taiwan, Korea, and eventually the West on both PC and console.

Despite Crytek’s FPS credentials (and the support of online gaming specialists Tencent, Nexon, and others), the game represented a huge drop in quality for the German developer, was poorly received by critics, and sunk without a trace in the West – but not before its sexualised female soldiers caused a minor stir.

The most recent game Crytek shipped was equally dire, something many saw coming thanks to underwhelming previews and some interesting statements by Crytek CEO Cevat Yerli.

“People say that graphics don’t matter, but play Crysis and tell me they don’t matter,” he said in early 2013. “It’s always been about graphics driving gameplay… Making things look spectacular and stylistic is 60 percent of the game.”

If those statements were true, the spectacular visuals of Xbox One exclusive Ryse would have seen it a contender for game of the year despite its 720p resolution. Instead it was a stodgy, quick time event-laden, gameplay-free mess whose lot was further wounded by the comparatively slow sales of its chosen console. Rumours soon began that the game’s low sales and chilly reception had seen plans for a sequel ditched.

Looking back on all of this, it’s fairly easy to see why Crytek was struggling, and why it was keen to rid itself of Homefront: The Revolution. The high-budget first-person shooter genre is among the most ruthlessly competitive and high-risk out there and besides, Titanfall and Advanced Warfare, and Battlefield: Hardline prove that it is finally moving on from the long-stale modern military setting.

Moreover, Revolution’s hook – that the USA has been invaded by a united Korea – has been blunted thanks to similar ‘USA under siege’ plotlines in other big FPS games of late. Anyone who has touched an FPS in the past half-decade can outline the setting and story beats for you blindfolded.

The fall of Crytek: How did it come to this?

Besides which, Revolution is shipping without the one thing critics agreed saved Homefront from being a complete turd: its competitive multiplayer. That mode has been scrapped in favour of a co-op campaign whose open-world structure and ambitious resistance metagame screams “expensive”.

During Homefront’s development, mismanagement, incompetence, and pride killed Kaos studios. Are such things contagious? Crytek isn’t done, of course. The sale of Homefront, offloading of Crytek UK, and staff losses at Crytek USA will all only help its balance sheet, and it still has the CryEngine to licence out – an engine that features in Star Citizen, among others.

However, in losing Crytek UK (formerly Free Radical Design), it also lost a group of developers responsible for an IP that could have singlehandedly pulled it from the mud: the wild and wacky TimeSplitters. And as recently reported, Crytek devs are gagging to make a TimeSplitters title.

Instead, it’s betting on free-to-play shooter Hunt: Horrors of the Gilded Age and Arena of Fate, a MOBA that’s years too late to even think about making an impact in the now-crowded genre. Good luck, Crytek. You’re gonna need it.

*An earlier version of this story had Crysis 2 sales at 200,000. Damn you, decimal point! We regret the error.