The entire week has been filled with news reports of closure, retrenchments and layoffs. With the economy spiralling downhill, game publishers and studios feel the heat as well. Depressing news throughout.
Multiplayer blog reported:
THQ is reducing its employee headcount by 600, consolidating the number of studios it owns and making changes to game development. One notable switch will be a reduction in the number of “core gamer” titles the publisher producers.
Kotaku published an interview with Mythic General Manager Mark Jacobs:
Since the launch last year, the demand for customer service has gone down as players become more familiar with the game. Obviously, demand for a large QA and play-testing staff also falls after launch. As a result, we saw a staff reduction which is in line with the company-wide initiative. In no way does this conflict with our commitment to customer service. Staffing numbers will always map to consumer needs – it goes up when we launch new products and expand popular ones, and comes back down as players become familiar with the game.
Gamasutra got John Ricitiello resonding to the recording a $631 million loss for Q3 2008:
The widening losses are prompting EA to expand its restructuring efforts slightly, however. With the company's results announcement today, EA said it now plans to lay off 11 percent of its workforce, or 1,100 employees, and to close 12 of its facilities. On the company's call to investors, it said these closures would favor "high-cost" locations.
Whoever said that the video game industry would be recession proof? Clearly the dwindling investment and consumer dollars are putting the pressure on big developers. Smaller developers/publishers like Stardock, profits from having leaner operations and servicing a smaller niche market.
It looks like the reduced consumers purchases added with the ever increasing development costs have lead to reduced revenues(and even loss).
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