Video games, now game over is coming to the biggest studios
The layoffs in video games also affect Epic Games, which everyone knows for Fortnite, and Naugthy Dog forced to shelve the multiplayer of The Last of Us, which Neil Druckmann had defined as "the most ambitious project in the history of the studio"
The annus horribilis for the videogame sector, which began with the huge layoffs at Microsoft, seems to have no end. There is not only the need for labels to save given the lower revenues compared to the pandemic period (the restrictions had drugged the market) made even weaker by the decrease in sales caused by inflation, but also the advance of artificial intelligences that have pushed many publishers to streamline their studies in favor of these tireless algorithms . Now, however, the layoffs are starting to hit the largest and most famous software houses, responsible for some of the video game sagas most acclaimed by the public and critics.
THE LAST OF US, NOMEN OMEN?
Among the sensational cases of recent times, Naughty Dog stands out, responsible for the saga The Last of Us, also fresh from a television porting for Sky. According to some internal sources contacted by the specialized newspaperKotaku, it seems that at least 25 people have already been notified that October will be their last month of work, as part of an operation to downsize the team which last July had reached more than 400 people within the workforce.
The diet imposed on the artists behind The Last of Us at the moment would seem to concern the contract developers of the Californian headquarters of Santa Monica. Again according to press sources, those fired will not receive any severance pay and team members, whether involved or not, have been asked not to speak about the issue in public.
At the same time, the online newspaper always reports, The Last of Us: Factions , an ambitious multiplayer project in development for several years now, has been shelved. Not canceled but "put in the icebox", waiting for better times, perhaps. A hard blow for the software house if we consider that the title in question had been defined by the developer Neil Druckmann as "the most ambitious project in the history of the studio"
“Despite the great success of the TV adaptation of The Last of Us , the multiplayer project of the series seems to suffer from several production problems,” writes Kotaku , “last June, Bloomberg reported that Sony would have transferred resources to other projects following a negative rating of the game from Bungie, the studio behind Destiny 2 . Now, another source confirms that although the multiplayer game has not yet been canceled, it has currently been put on ice."
VIDEO GAME LAYOUTS AFFECT FORTNITE
In all likelihood, however, the loudest cuts are those within Epic Games, a software house also known to the layman for the success of Fortnite . In recent days, the studio also famous for its Unreal engine has announced that it is proceeding with the dismissal of approximately 830 employees, equal to 16% of its workforce, and with the sale of the online music platform Bandcamp.
“Although Fortnite is starting to grow again, the trend is primarily driven by creator content with significant revenue sharing, and this is a lower-margin business than we had when Fortnite Battle Royale took off,” said L CEO Tim Sweeney in an email to employees.
Sweeney also disclosed that about two-thirds of the layoffs were made outside of core development teams and that the cuts will help the company "get to the other side of profitability."
OTHER DISMISSALS AT UBISOFT
Just in the days of the release of Assassin's Creed Mirage it was made known that Ubisoft continues with staff cuts. Six members of the community and social media teams have been fired, as a spokesperson reported to Polygon and as one of them, community manager Paola Casetta , quickly confirmed on social media. “Unfortunately, I too have been affected by Ubisoft's recent layoffs,” Casetta wrote on LinkedIn. “I was lucky enough to work with the best team around and I will never forget the time I spent there and the amazing people I met.”
In recent weeks Ubisoft, in the sights of the software house Tencent for a long time, had closed the London studio leaving 54 people at home: the British team was working on the Hungry Shark series. In May, however, 60 employees in the customer service departments of the North Carolina and Newcastle offices in the United Kingdom were laid off. Finally, let's not forget the recent closure of the Ubisoft Italia offices (however, the Ubisoft Milan development team remained intact).
EVEN POKéMON CRY
Among the labels that announced huge staff cuts was also the one that developed Pokémon Go. Released in April 2016, Pokémon Go was able to exceed a billion dollars in the various virtual stores in which it appeared in one year, with stellar takings capable of totaling 18 million dollars a day in the most acute phase and, after twelve months, still amounting to 1.5/2.5 million dollars every 24 hours.
Unparalleled results but which did not protect its software house from the current crisis, also because the developers did not pocket the total proceeds, as the title is licensed by Nintendo.
THE STARTUP OF MIRACLES
Niantic Inc., an American software development company based in San Francisco, California, founded in 2010 by John Hanke as Niantic Labs, a startup within Google, before it was separated as an independent entity in 2015, a few months ago in fact announced the closure of its studios located in Los Angeles. This involves the simultaneous dismissal of 230 employees. Additionally, NBA All-World 's servers were shut down and another licensed title was canceled: Marvel: World of Heroes .
In an internal email reported by the industry newspaper Kotaku , Hanke explained that the decision was made because "expenses grew faster than revenue", therefore identifying the Los Angeles headquarters as an expense item to be cut to give breath to the company budget . Hanke assured that Pokémon Go will remain the game on which the US software house will continue to focus everything, with the long-term goal of keeping it "healthy and growing forever".
According to the founder, the revenue hangover during the Covid-19 pandemic would have led the company to lose touch with the real economic situation, while meanwhile the AR gaming market has become much more crowded since the launch of Pokémon Go in 2016 In addition to this, the Niantic founder also cites poor long-term player engagement for multiple of the studio's active games, which have not achieved their intended goals.
THE WINGEFORS CREATURE HAS LOST ITS WINGS
In Northern Europe, the Embracer Group is creaking, created by the Swedish CEO Lars Wingefors , known in the world above all for having opened his first company at the age of 13 and, with the money made by selling old comics purchased at flea markets by mail order (the last year before of the closure had totaled 300,000 crowns in annual turnover), having subsequently opened Nordic Games, which in essence constituted the Embrace Group today active in all sectors: from video games to cinema, capable of employing 17 thousand people who have their headquarters in a town that barely has 60 thousand.
EMBRACER ALSO BURNS TOMB RAIDER
The ax of cuts is not sparing any studio: 26 employees of Beamdog , the team that recently developed Mythforce , have been shown the door, but what is most surprising is the announcement, made by the senior brand manager of Crystal Dynamics , Nicholas Edwards , of having been fired together with nine other people, since that software house is the flagship of the Group.
At the end of 2022, Crystal Dynamics had in fact announced an agreement with Amazon Games for the publication of the next video game in the Tomb Raider franchise, a saga also known by the layman for the films with Angelina Jolie which has over 20 titles capable of selling, globally, more than 95 million copies since the debut of the first episode in 1996. And Crystal Dynamics should also take care of the reboot of Perfect Dark , another title that has become legendary.
These are layoffs that affect departments related to those that physically create the next video games, but which allow us to understand how the economic situation in Embracer is far from improving. “Crystal Dynamics has made the difficult decision to part ways with nine marketing/brand members and one IT employee as part of an internal restructuring to realign the studio with our current business needs. We are working closely with the staff involved to best support him" we read in a post on X (i.e. Twitter).
STUDIO CLOSURES AND POSSIBLE DISPOSALS
Crystal Dynamics should consider itself lucky, however. In fact, things went decidedly worse for Volition, the software house famous for having developed the light-hearted Saints Row saga, a particularly lively and at times even convincing GTA emulator.
A closure made even more painful by the fact that the studio had just crossed the finish line of its thirtieth year of activity. “Last June, Embracer Group announced a restructuring program to strengthen Embracer and maintain its leading position in the video game industry. As part of the program, they assessed strategic and operational objectives and made the difficult decision to close Volition with immediate effect."
“To help our team, we are working to provide employment assistance and support a smoother transition for our family members at Volition. We thank our users and fans around the world for all the love and support we have received over the years. You will always be in our hearts."
In recent days, rumors have circulated that Embracer could already get rid of Gearbox , acquired only in 2021 for 1.3 billion dollars. The software house is known for developing the Borderlands video game franchise.
DISMISSALS ALSO IN US VIDEO GAMES
On the other side of the ocean, the American video game giant Electronic Arts (EA) a few months ago communicated to the SEC, the body that supervises the markets in the United States, a layoff plan that will affect 6% of its employees, i.e. say around 800 people. It also revealed its intention to reduce work spaces.
The roundup of Big Tech in the throes of various optimizations therefore continues (not only in the video game sector, just think of the layoffs at Disney and Amazon's choice to fire 9 thousand people). According to data reported by CNBC , EA had almost 13 thousand employees in 2022. The first cuts had already occurred shortly after FIFA lost the license for the development of the well-known football game.
MICROSOFT'S TEN THOUSAND LAYOFFS
After all, 2023 began with the news of Microsoft's self-imposed slimming cure: 10,000 layoffs, which also affected the gaming division, including 343 Industries and the software house Bethesda Game Studios acquired just 2 years ago.
Numbers of a certain importance which have made it clear even to those who do not follow the market closely that if the ax of cuts has fallen on the studios responsible for first-rate titles, capable of selling millions of copies, such as Halo, Starfield, The Elder Scrolls (Skyrim, Oblivion…) Fallout and the very recent Starfield , the situation around Redmond must be particularly difficult .
SCISSORS IN RIOT AND TAKE-TWO
There were also layoffs at Riot Games, the studio responsible for one of the best-known titles even among newcomers: League of Legends . In this case not even fifty units as the software house itself has made official: “Riot Games has implemented strategic changes within some teams to sharpen our attention in a series of areas. With these shifts, some roles have been eliminated, impacting a total of 46 rioters . This is part of the normal course of our business: we periodically make changes to our structure and our teams based on what we believe will allow us to offer the best content and experiences for players. We never take these decisions lightly and will always start with the desire to retain rioters and keep them focused on our top priorities. Although this is not always possible, it is our main goal.”
Finally, more recently Take-Two (a group worth around 20 billion dollars: it is being talked about above all due to the rumor that Sony would like to acquire it ) officially confirmed that it would carry out a series of layoffs, which will involve the publisher Private Division and other parts of the company, which is the parent company of Rockstar Games ( GTA ), 2K and Zynga.
In this case, the employees discovered the cutback taking place in the worst possible way: a tweet from Jason Schreier , journalist for the Bloomberg portal, who spoke of staff cuts in particular for Private Division, the publisher of OlliOlli World, Kerbal Space Program 2 and The Outer Worlds. In short, 2023 seems destined to be remembered as the year of layoffs in the world of video games.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/videogiochi-licenziamenti-epic-games-naugthy-dog-ubisoft-embracer/ on Wed, 04 Oct 2023 08:59:52 +0000.