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.
#1 by Jeff G. on November 9th, 2009
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.
#2 by TPRJones on November 9th, 2009
Could be a good time to start a development house, though. Plenty of talent will be available. And desperate.
#3 by Jemre on November 9th, 2009
@TPRJones – probably not many investors though – you’d need sizable startup capital, and getting people to front up for an MMO in this market…?
#4 by Boanerges on November 9th, 2009
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 $300M? Chump change for EA and they might make it all back.
That having been said, I don’t like EA any more than I did before. Sadly, resistance is still futile.
#5 by Flimgoblin on November 9th, 2009
#6 by Green Armadillo on November 9th, 2009
There’s a certain sick irony in the very real possibility that there’s no one left to put out the obligatory “we didn’t need those guys anyway” press release.
#7 by geldonyetich on November 9th, 2009
Bittersweet.
On down side, all these people are no longer working.
On the up side, all these people are no longer working for EA.
#8 by mike on November 9th, 2009
The reason i support indy developers. Big company’s such as EA are starting to abandon the pc platform and make direct ports to pc with higher costs to the consumers. I hope fellow gamers wake up and start talking to the game developers with our money or lack of money i should say. The gamers are getting treated bad the employs worse. I can only hope these people can find more work. Maybe some of these people will start there own company and treat there pc gamers well. If you treat your costumers well they will give you money, just look at unknown worlds. I personally have gave them over 100$ between donations and preordering natural selection 2. Why? because I believe Charlie wont bend us pc gamers over for a quick buck.
#9 by Stormwaltz on November 9th, 2009
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.
#10 by Alex on November 9th, 2009
To be fair, that Facebook game developer apparently has revenue of $75 million per year.
#11 by Matt on November 9th, 2009
I set my clock by EA layoffs. They should officially declare November 1 “Resume Day” for all EA employees.
#12 by Max Battcher on November 9th, 2009
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.
#13 by Max Battcher on November 10th, 2009
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.)
#14 by Aufero on November 10th, 2009
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.
#15 by Nerd Rage on November 10th, 2009
I was really hoping we were done with these stories.
#16 by Ghando on November 10th, 2009
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.
#17 by Kemor on November 10th, 2009
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.
#18 by Brian 'Psychochild' Green on November 10th, 2009
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.
#19 by mike on November 10th, 2009
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.
#20 by EpicSquirt on November 10th, 2009
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.
#21 by wowpanda on November 10th, 2009
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.
#22 by geldonyetich on November 10th, 2009
Yes, yes, EA is full of people trying to make a living like everyone else…
… but all of gamerkind may never truly forgive.
#23 by Drey on November 10th, 2009
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.
#24 by Random Poster on November 10th, 2009
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?
#25 by Mist on November 10th, 2009
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.
#26 by Tem on November 10th, 2009
This is why capitalism sucks.
T.
#27 by Grinless on November 10th, 2009
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.
#28 by EpicSquirt on November 10th, 2009
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.
#29 by JuJutsu on November 10th, 2009
@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
#30 by wowpanda on November 10th, 2009
@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.
#31 by Grinless on November 10th, 2009
Congratulation wowpanda, you have understood what so many have yet to understand…
#32 by We Fly Spitfires on November 10th, 2009
That’s a huge amount of jobs to axe. Real shame and I feel for everyone who’s been made redundant.
#33 by Matt on November 10th, 2009
“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.
#34 by Matt on November 10th, 2009
“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.
#35 by geldonyetich on November 10th, 2009
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.
#36 by Not Richard Garriot on November 10th, 2009
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!!
#37 by Scott Jennings on November 10th, 2009
Dude, you so did not blame EA’s yearly layoffs on Barack Obama.
#38 by gyrus on November 10th, 2009
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’?
#39 by Mark Asher on November 10th, 2009
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.)
#40 by Nerd Rage on November 11th, 2009
“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.
#41 by Mark Asher on November 11th, 2009
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.
#42 by Ajediday on November 11th, 2009
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.
#43 by Gx1080 on November 11th, 2009
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.
#44 by D-0ne on November 11th, 2009
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.
#45 by gyrus on November 11th, 2009
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?
#46 by Mark Asher on November 11th, 2009
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.
#47 by geldonyetich on November 11th, 2009
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.
#48 by Loredena on November 11th, 2009
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….
#49 by EpicSquirt on November 11th, 2009
I fail to see how anything related to Mafia Wars could be worth 300m USD.
#50 by JuJutsu on November 11th, 2009
@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