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EA: It’s In The Game (The Unemployment Line, Specifically)
Yeah, this kind of sucks for a lot of people I know.
This action will result in the closure of several facilities and a headcount reduction of approximately 1,500 positions, of which 1,300 are included in a restructuring plan. The majority of these actions will be completed by March 31, 2010. This plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million.
Which is important, given how they just spent $300 million to buy a Facebook game developer!
The axe is already falling everywhere, with Mythic in particular being gutted. No idea on specific numbers, but unofficial reports have “80 people today, which is about 40% of the company and responsible for 90% of the content”. (Source)
Not a good time to be looking for work. Ahem.
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about 9 months ago
Purely gut-wrenching. To announce that many cuts and the gutting of Warhammer (which is what this is appearing to be), and then turning around and doing a, “HO-HO-HO WE HAVE A FACEBOOK APP DEVELOPER NOW!” makes me sick. Having been a victim of the EA Layoffs back in February, my hopes are that none of the people I know who are still working there were laid off. Best wishes to those that were though, times are brutal it seems.
about 9 months ago
Could be a good time to start a development house, though. Plenty of talent will be available. And desperate.
about 9 months ago
@TPRJones – probably not many investors though – you’d need sizable startup capital, and getting people to front up for an MMO in this market…?
about 9 months ago
If this had happened a couple of weeks ago I’d certainly be sitting here going “Yeah, they’re nuts”. We’re in a major market correction. That they’ve held out on a major round of layoffs this long is impressive. I think those people were dead on their feet, they just didn’t know it (or did and couldn’t do anything about it).
Mobile and Social game development is hot. I don’t think EA had a Social platform prior to next week. Consider that Amazon and Paypal are in a huge turf war over who will monetize it. So that $300M? Chump change for EA and they might make it all back.
That having been said, I don’t like EA any more than I did before. Sadly, resistance is still futile.
about 9 months ago
about 9 months ago
There’s a certain sick irony in the very real possibility that there’s no one left to put out the obligatory “we didn’t need those guys anyway” press release.
about 9 months ago
Bittersweet.
On down side, all these people are no longer working.
On the up side, all these people are no longer working for EA.
about 9 months ago
The reason i support indy developers. Big company’s such as EA are starting to abandon the pc platform and make direct ports to pc with higher costs to the consumers. I hope fellow gamers wake up and start talking to the game developers with our money or lack of money i should say. The gamers are getting treated bad the employs worse. I can only hope these people can find more work. Maybe some of these people will start there own company and treat there pc gamers well. If you treat your costumers well they will give you money, just look at unknown worlds. I personally have gave them over 100$ between donations and preordering natural selection 2. Why? because I believe Charlie wont bend us pc gamers over for a quick buck.
about 9 months ago
Step 1: Spend $300 million on Facebook app developer.
Step 2: Cut jobs to save $100 million a year.
Step 3: Profit!
Tricky Ricci’s logic in this escapes me.
about 9 months ago
To be fair, that Facebook game developer apparently has revenue of $75 million per year.
about 9 months ago
I set my clock by EA layoffs. They should officially declare November 1 “Resume Day” for all EA employees.
about 9 months ago
Interestingly, EA is claiming that the product-level disruption of/behind the layoffs is “the bottom third” and easily dozens of titles: http://kotaku.com/5400822/ea-cuts-loose-bottom-third-of-its-game-lineup
Anyway Lum, I too know the ugly face of this current economy for those looking for jobs. I made the “mistake” of graduating with my Master’s degree in December 2008. I’ve had a manic time trying to guess the opportunity cost of my graduate schooling in having jobs available to me… This EA layoff is one more notch in a very cynical belt for me.
about 9 months ago
Matt: EA (and many other companies) are bound to a publicity cycle set forth by their Articles of Incorporations, and which are almost always quarterly reports with one such report being designated the most important annual report.
The interesting thing is not that you can set your calendar by such business rhythms, but that business have set so much stock in their own internal calendars and the reactions of “stockholders” when those documents are due… Mostly because at this point all of these big businesses now have side bets on the numbers contained in future reports. Lay-offs and acquisitions, it seems today, have just as much to do with gambling and divining rods as they do with actual business needs.
(My cynicism only continues to grow as to the nature of business in the current economy.)
about 9 months ago
I don’t believe there’s any logic to EA’s actions beyond shoring up their stock price this quarter. With some companies I’d attribute this to the economy, but there’s no evidence EA ever operated on any other principle even in better times.
about 9 months ago
I was really hoping we were done with these stories.
about 9 months ago
I was laid off from EA at the start of May. My old boss has been doing his best to find openings for those of us who got axed, and a couple people have gotten their jobs back. As of today, he’s being laid off. And for those upset about the timing of the Playfish announcement, that’s how big-time corporate America works. The layoffs were bad news–stock price goes down. So you announce your next merger with a SOCIAL GAME DEVELOPER (which is awfully exciting especially if you don’t understand what this means) and you can balance out the bad news.
about 9 months ago
Anyone figured out how Playfish can make $75m a year? Only thing I could find was ads revenue and if so, way to cut down on people doing real hard work for something that’s mostly vaporware and could totally collapse anyday.
about 9 months ago
Remember, kids, it wasn’t a studio merger (even when they’re firing 40% of the “other” studio)!
Anyone interested in starting a new game studio, feel free to get in touch. Perhaps it’s time to exploit some of those investor contacts I have and do something good for a change.
about 9 months ago
It’s not like everyone and their mother predicted layoffs when EA bought Mythic or anything. Just look at the comments on this blog when they were acquired.
about 9 months ago
It’s EA. What did people actually expect to happen?
I know their dealings back from 1995 when they bought about every major game distributor in Germany and started to enforce unified prices on their games (starting with Wing Commander IV).
We all know the debacles with Origin, Bullfrog, etc. and those studios actually made the killer games back then, not like Mythic with one lucky game which they eventually managed to kill by themselves too.
Warhammer was a failure in almost every aspect, the whole EA-Mythic-GOA-deal was. PC games market is drying up, a lot of veteran studios like Epic and id moved their focus to consoles, so either Scott’s MMOG prototypes will come from 3-men-teams and maybe some of them will start successfully with a nice niche game like EVE did or the majority of the planet will spend the time playing console games and/or ask for the next 10-milllion-subscriber-MMOG.
Lower your living expenses, start with your own vegetable garden and try to contribute to some indie project or start your own – maybe the only way to keep your vision, dignity and sanity intact.
about 9 months ago
I have to agree with Boanerges. It is so much easier to spit on EA because it is big and is not a human face.
EA provides jobs (even with some lay offs, they still provides benefits to other people more than any of us).
EA publishes games.
EA didn’t get government bail outs.
They might have made bad decisions, but no matter how much money they are wasting, that is their decision to make. I don’t want other people to tell me that I should not buy a new PC because it is expensive.
EA, just like all other indy game developers, puts up with huge risks when they start up. Any indy game who are bold enough might raise up and became another EA. EA might make bad mistakes and went bankrupt too. You should not blame this bad economy on EA.
about 9 months ago
Yes, yes, EA is full of people trying to make a living like everyone else…
… but all of gamerkind may never truly forgive.
about 9 months ago
I wonder if this has anything to do with email I just got telling me my closed 10 day free trial of WAR just got turned into an open endless free trial.
about 9 months ago
300 million for a facebook game developer???? You just click buttons, its a damned browser interface..there’s no “game”
Ugh and it sucks for the people at Mythic, but who didn’t see this coming? Its what EA does a lot of the time, especially when they purchase companies that work in areas EA never dealt with before the purchase.
Ok so at this point how much of Mythic that started WAR is still there? Whats the point of buying a company..and then firing all the people you got with the purchase?
about 9 months ago
If the people at Mythic didn’t want to be fired they should have made less shitty of a game. Warhammer cost an enormous amount of money to develop, and was a completely miserable effort for an AAA MMO title. Poor engine, poor coding, poor just about everything.
about 9 months ago
This is why capitalism sucks.
T.
about 9 months ago
No Tem, This is why capitalism is successful. The studio who spend millions on shitty games close while those that do publish good games stills rolls in the cash.
Capitalism is heartless, yes, because we consumers are heartless when we choose how to spend our hard-earned money. That is a good thing, in the long run ressources, both human and material, are allocated to those who perform best. Mythic, was sadly not one of those.
about 9 months ago
If capitalism would be so successful there would be no need to declare some companies system relevant and bail them out with tax payer’s money.
I find hiring tons of people and firing them just stupid, it only shows that someone could not think a bit ahead.
about 9 months ago
@Random Poster
“300 million for a facebook game developer???? You just click buttons, its a damned browser interface..there’s no “game””
Wake up and smell the coffee sport. You might not think that Farm Town and Farmville are “games” but several millions of people disagree with you. Including my wife and trust me, you don’t want to get on her bad side
about 9 months ago
@EpicSquirt: bailing out big companies is not capitalism. In a true capitalism environment there is no “too big to fail”.
Taking money from successful business and use them to bail out failed business is socialism. The big banks/brokerage firms that spent money unwisely should not be bailed out, they should fail and replaced by efficient ones.
about 9 months ago
Congratulation wowpanda, you have understood what so many have yet to understand…
about 9 months ago
That’s a huge amount of jobs to axe. Real shame and I feel for everyone who’s been made redundant.
about 9 months ago
“This plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million.”
Can’t forget the yearly one-time restructuring charges. Note how every year’s “one-time” charges offset the “annual” savings.
Too bad for Pandemic– felt like they were always on the cusp.
about 9 months ago
“Too bad for Pandemic– felt like they were always on the cusp.”
I should clarify I’m just responding to the rumors. Sounds like they might be fine after all? I certainly hope so.
about 9 months ago
I’ve played shitty games. Warhammer wasn’t shitty. It just made the mistake of promising to be a WoW killer. Nobody’s truly produced a WoW killer yet… unless perhaps you count free to play games which play fairly similar, like Runes of Magic.
about 9 months ago
How’s that Hopenchange working out for you now?
Good thing The One passed that trillion dollar stimulus with a promise to keep unemployment under 8%.
Oh wait, unemployment is approaching 11% you say?
Well, look over here!!!! Michelle has a vegetable garden!!
about 9 months ago
Dude, you so did not blame EA’s yearly layoffs on Barack Obama.
about 9 months ago
Warhammer ‘had potential’. But, as a Beta Tester (Yeah, I do test and provide feedback) it was obvious to me the game was lacking.
My biggest concern was the lack of any kind of balancing for RvR.
If you want to develop an RvR game this should be the first thing your designers think about. You should not wait to the 11th hour to consider it and just hope it will all work itself out (which is what Mark Jacobs said)
I said this on MMORPG.com pre-release – so I am not being a 20/20 hindsight smartarse here.
As for Facebook apps and PC games.
What is an MMO? Look at Farmtown, Farmville and many of the others… what do you see?
I see one element of an MMO stripped down and made accessible to many.
Farmtown is crafting. I don’t think it is an MMO but it is part of an MMO.
In fact – Farmtown plays more like an MMO than a couple of the MMOs I have played.
Personally, I don’t find it very stimulating but I do see what it offers. To dismiss it or the way it is presented is a mistake.
Developers (particularly MMO devs) should be paying attention.
Farmtown (if reports are to be believed) is the WoW killer. More people play it than WoW.
That seems to disprove that the MMO market is saturated too?
And how are people getting on Facebook? With PCs?
So the PCs are out there – and people willing to game on PCs are out there.
‘has potential’?
about 9 months ago
I think we all understand that if a corporation isn’t hitting its numbers, it will have to do something. Layoffs are a part of modern life now. Companies don’t value employees like they used to.
It’s just that EA often seems so short-sighted. WAR sold over a million copies, so a lot of people were interested, and yeah, a lot of people sampled and left. It was never a bad game though. There’s potential there for a good expansion title to sell well, I’m convinced. There’s potential for WAR to grow its subscription numbers just as EVE has done, provided there’s an investment in WAR and changing some things. Instead, it looks like EA is abandoning it.
The new EA, which looks to publish 30+ titles, down from 60+ last year, is an EA that would have never funded development of The Sims. Consider that.
(This kind of retrenchment is going on elsewhere, too. I read recently that funding for indie films is way down. Studios are much more risk averse.)
about 9 months ago
“The new EA, which looks to publish 30+ titles, down from 60+ last year, is an EA that would have never funded development of The Sims. Consider that.”
There’s no way to know that. This is like arguing that the 2009 Yankees wouldn’t have won the 1999 World Series, not with their current mentality.
about 9 months ago
Of course there’s no way to know it, but it stands to reason based on the market call EA made that they are more risk averse now than before. They are going to lean on established franchises and games that tie in with other media, most likely. They are not in the business of developing new I.P. now.
about 9 months ago
Warthammer: it had good intentions, some really good ideas, but the end game was just not fun. You had your choice of fighting a zerg or fighting NPCs, most of the time people just went for NPCs. Because the Tier 4 zones were spread out enough, you avoid the enemy with ease. The fort and city fights were annoying (at the time I played, quit a few months ago before they removed the fort fights) at best. Don’t expect War to last much longer.
DAOC will die the second it can’t pay for its upkeep. Since the server merger, the population is good with returning people, but there will be a decrease soon when the people that returned remember why they quit playing to begin with or switch to the new fotm game. I know it is all a business decision and nothing personal but it is kind of sad to see things go down this way.
about 9 months ago
Ouch. Although I despise EA because they just launch shitty title after shitty title it sucks that so many people got axed. Probably they were crunched for all their worth before the cut. Another reason to despise EA.
about 9 months ago
I recall some prominent guy who isn’t Scott Jennings claiming that the down turn in the economy wouldn’t effect gaming companies very much.
I’d just like to point out, that at the time I called him on that non-sense.
Things are going to get worse. Much worse. At my current site we had about 1400 employees. We have laid off 480 people this year.
We can’t maintain our product with this staffing level. I imagine it’s the same all over the country and across all industry.
about 9 months ago
But is the down turn due to the economy? Or the state of the games industry?
As a gamer, I would say the former.
I stopped buying games well before the recession just because I wasn’t happy with the product being offered.
I still have disposable income – but I am still not buying games because I am mostly still not happy.
Interesting thing is though that some companies are apparently doing quite well?
And gaming on Facebook is booming? So the gamers are still there. (Yeah it’s free on Facebook – but that is not the point.)
From what I am reading Dragon Age: Origins is also selling well?
But I am also hearing it is a high quality game?
Hmmmm…. maybe the quality matters more than the recession?
about 9 months ago
I’m sure that people out of work are not spending as much on games. Instead of a game a month, maybe they buy a game every three months. Or they find free games to play, play demos, replay older games, etc.
I don’t really think the recession hits MMOs as hard, though. MMOs are cheap to play. I think Warhammer’s problems with retention are due to other issues than the recession.
about 9 months ago
Would be better, perhaps, if certain people weren’t so quick to buy into the lies of insurance companies so we could move the focus past our atrocious health care situation and squarely onto employment.
In any case, you’re really in no position to complain seeing how it went from 3.7% to 8.5% when Bush Jr. was in charge. The same chart says we’re only up to 9.5% (granted, this is the national average, not how it might be in your particular county). It’s equally amusing where you seem to think our national debt comes from in griping over a 1 trillion dollar plan after the last guy was responsible for hundreds of trillions.
I hope there’s room for games after China buys us out.
about 9 months ago
I’m a long-time MMO addict who is totally hooked on Mafia Wars on Facebook, rather embarrassingly so. Something about the micromanagement has totally sucked me in. Interestingly, my sister, who claims she is not a game-player (she usually just plays match3 games), is downright hardcore about Mafia Wars. If I ever hooked her on an MMO I think she’d end up a raider….
about 9 months ago
I fail to see how anything related to Mafia Wars could be worth 300m USD.
about 9 months ago
@EpicSquirt
“Mafia Wars is available on Facebook, MySpace, Tagged, and Yahoo!.[3] On April 8, 2009, Zynga released a version of the game as a free downloadable iPhone App.[4]
On Facebook alone, as of October 2009, Mafia Wars has more than 25.9 million monthly active accounts;[5] many active clans run shell accounts for increased availability of the energy resource.[citation needed]”
cut & paste from the oracle of the internet….
I have no idea how someone monetizes these games but there’s a $hitload of people playing them.
@geldonyetich
don’t pick on the cognitively challenged
about 9 months ago
I come from a family of educators. Thus, in confronting one not particularly good at learning, I believe persistence may produce results.
But, to try to reroute things back to the topic at hand, corporate America is generally a muddled mess that needs to stop devaluing talent and instead putting it to work on something other than desperate flights of fancy.
about 9 months ago
Prominent guy who IS Scott Jennings:
http://brokentoys.org/2008/12/22/its-beginning-to-look-a-lot-like-pontification/
about 9 months ago
Yeesh, lousy timing. For what it’s worth, we’re looking to fill a few positions, so if any of you are keeping an eye out for work as a result, say hello.
about 9 months ago
Here is how they apparently monetize these games:
http://www.techcrunch.com/2009/10/31/scamville-the-social-gaming-ecosystem-of-hell/
Despicable, if accurate.
about 9 months ago
I don’t see how the recession is to blame for Warhammer being terrible. Barack Obama, nor George W Bush himself, did not cause Mythic to have to invent a new unit of time measurement to compensate for how unresponsive their game was to player input. How long is it going to be before people realize that Warhammer was fundamentally flawed to the core and that’s why it failed, and why Mythic has to be ‘restructured?’
The UI was less responsive than VB apps I wrote on my 486 back when I first learned to program.
about 9 months ago
http://www.idsoftware.com/business/jobs/index.php
ID just posted a lot of job listings for those that might be interested!
about 9 months ago
It is fascinating that given the current economic times are are living in people are still wondering why big companies let go of a good chunk of their staff and concentrate on the areas where there is potentially a shitload of money to be earned and that everything gets reviewed for profitability down to the last job.
What should EA do? Keep all their staff and continue as they did before? As sad as it is, and I say this as a subbed and enthusiastic WAR player, but some of the studios that got the axe now pay for the unmet expectations of their product. Or for the overhyped product that was not what it should have been, call it what you want.
It is a time of consolidation we live in and to think that the computer entertainment sector is not affected by it is downright stupid thinking.
about 9 months ago
Wasn’t shitty, but considering the amount of money spent on it? Nobody’s getting fired at Popcap, I don’t think.
about 9 months ago
This is the best time to *not* fire all your employees.
If you have the cash or cash flow, you transfer them to longer term projects so when we come out of the recession you are ready to hit the ground running while all the companies who slashed their budgets are facing a crises of aging infrastructure.
Of course, the real politik of the economic world is that if you are a public company, this is an impossible move, since your stock price will crash due to the concerns of short sighted investors and you’ll be raided for your cash and put out of business.
Strangely, the pro-capitalists think a system which forces companies to act in such inhumane and inefficient manner to be working-as-intended.
As was pointed out upthread, only stock holders seem to buy the illusion that a $130 million restructuring fee to save $100 million a year is a good idea. The rest of us know that that supposed yearly saving will not show up on future balance books.
about 9 months ago
I feel terrible for everyone that lost their job at EA. But honestly, that is part of what you sign up for when you join a behemoth like EA.
I’m biased, but how about taking a job for less pay at an indie, where you aren’t going to get laid off when the CEO sees something shinier than your project.
about 9 months ago
@Muckbeast: That’s amusing, because in some industries, being part of a big company give you *more* job security, not less. But on the other hand, big companies can percolate even greater asshats to their top positions.
about 9 months ago
Job security? What do you think this is, 1960?
about 9 months ago
It still exists, it’s just not as common…
about 9 months ago
Unless there exists jobs where your employer is contractually obligated not to fire you, I remain skeptical.
about 9 months ago
What industries are those, Guy? I noticed in December every single big company took their turn to summarily fire 10% of their staff. Funny how all these organizations had the exact same amount of fat to trim, no? Certainly not a case that panicked stock holders were demanding CEOs prove that they were “cutting back” and 10% being a nice round number to pass onto underlings as the proper amount to fire.
Muckbeast has it right. You either work for a big company that won’t go out of business, but will fire you for no reason one day, or work for a small company that may go out of business for no reason some day, but at least won’t fire you on a whim.
about 9 months ago
Or go sole proprietorship. Suffice to say, you tend to be a bit more forgiving over your employee when you’re your own boss.
about 9 months ago
“Unless there exists jobs where your employer is contractually obligated not to fire you, I remain skeptical.”
Or a job where demand for employees is vastly larger than supply due to government regulations mandating qualifications
about 9 months ago
If they clarified where such demand existed in this country, methinks the supply would not be lacking for long.
about 9 months ago
You define job security as your employer not being *able* to fire you? I don’t think that’s what job security used to mean when it was common. It just meant you could reliably make a lifetime career at one company. Although, come to think of it, unions would make it hard to lay people off, and unions used to be stronger, so there is that.
Interesting fact, though: in Germany, there *are* laws that make it less desirable to lay off workers, and encourages them to keep them on as part-time workers if they really need to save money. Companies in France are also far less likely to lay off workers. This has benefits to international divisions of certain European companies located in the US.
Industries where you are less likely to be fired due to the size of the organizations are typically industries that depend on large government contracts, such as aerospace, defense, and infrastructure. Infrastructure should do well now, since stimulus funding is easiest to justify for large government-funded infrastructure contracts, which are always useful (especially considering the US’s infrastructure, of any kind, be it roads, bridges, or electrical grids, are long overdue for overhauls). These fields are all far less volatile than, say, the gaming industry.
about 9 months ago
I didn’t mean to imply that you should be able to get away with murder, but rather that today’s corporate management policies are such that job security is an illusion.
So long as they are able to fire you without repercussions, what guarantee is there really that you would make a lifetime career at one company? You can find examples of people whose careers turned out that way, sure, but what proof do you have that you’re not simply nitpicking the lucky out of the unlucky?
Maybe I’m biased because, everywhere I turn, I’m being taught that the modern worker does not bank on keeping any job for long. I think a person who has been more fortunate in their job opportunities would hold a contrasting view.
about 9 months ago
Certainly people change jobs a lot more these days. Since there is less job security now, there’s less incentive to stick with a company if it’s not that great for you. I’m not arguing things aren’t worse, all I’m saying is there is still job security to be found in certain areas/companies/countries/whatever. It’s not nonexistent, but it’s not all like short-term software cycle development, which is what the gaming software industry is. Get into something more bureaucratic, and things move a lot slower.
And certainly luck plays a large part.
about 9 months ago
Is it heads, tails, or a coin?
about 9 months ago
Guy – not sure about the situation in Germany, but certainly in France all the laws restricting firing of staff have had an effect: companies are reluctant to hire people in the first place on anything other than short term contracts (which are exempt from said laws). Net result is that while older French workers have great job security, an awful lot of young people cannot get any kind of decent job at all, and this was a major cause of rioting a couple of years back.
Anglo-saxon model = moderate insecurity and suckage for everybody.
(continental) European model = good news for some and a royal screwing over for others.
Matter of personal preference which system you think is worse.
about 9 months ago
So, amongst those to get the axe from EA?
Pandemic Studios, apparently.
Makers of Battlezone 2, Star Wars: Battlefront, and the Mercenaries series.
about 9 months ago
@Tremayne: I do prefer a more flexible system, as long as there is credible opportunity for retraining should an entire industry’s labour pool suddenly become outdated.
Germany has managed to avoid the increasing unemployment that has hit the US, despite also being hit by the economic crisis, in part thanks to its pro-employment laws.
I’m well aware of the downsides in the French model, not just to those who get screwed by it, but also to the quality of the service provided by people who can’t be punished, or by the inflexibility of people who don’t want to cross lines at their employer that, being a life job, will screw them forever. (See, it’s even bad for those with lifetime jobs, and their customers… although less so than for those without good jobs.)
about 9 months ago
@geldo: Trust me, just aim for the bureaucratic industries. Which of course includes government (except those political appointment positions, those change with every election shift of course). Preferably federal government, it seems state government in the US seem to have the bad habit of screwing themselves by ratcheting up obligations while ratcheting down taxes…
about 9 months ago
I actually did try to find some civil service work not too long ago.
You know how they used to have a civil service exam you take to determine placement?
They replaced it with a monster.com-like job board.
It’s a pretty handy method to ignore the majority of their applicants.