Almost 12% of US Games Biz Laid Off

[kleinluka]

Source: http://www.gamebizblog.com/gamebizblog/ ... d-off.html

Nearly 8,500 games industry workers have lost their jobs since July 2008, says analyst Wanda Meloni. Let us once again reiterate: The games industry is not immune to the recession.

When times are tough, corporations start cutting their work force. When it comes to the bottom line, the games industry behaves no differently than any other. By M2 analyst Wanda Meloni's count, 8,450 game makers have been laid off since July 2008. An overwhelming 75 percent of job reductions happened in North America. In other words, 12 percent of the US games industry is out of work.

There have also been at least 13 studio closings, she notes in her latest briefing. Victims include the likes of 3D Realms, Ensemble, and Microsoft's ACES. Others are on life support.

The good news: There is a new spirit of entrepreneurialism is rising from the ashes of these former jobs and companies, notes Meloni.

Industry veterans are seizing upon new business models and new publishing platforms. Digital distribution has broken down publishing barriers, allowing creators to take risks that companies like Electronic Arts and Activision are incapable of taking. Now is the era of free-to-play browser games, server-based distribution, Facebook, and the iPhone. Now is the time for game makers to unleash their creativity.

After all, if Kyle Gabler and Ron Carmel can create the hit Wii game World of Goo with just two people, imagine what teams of industry veterans could accomplish when they strike out on their own.

[General Vivi]

yeah... it's a scary world out there. I hope none of us have to join it any time soon.

[Jetsetlemming]

Victims include the likes of 3D Realms

They don't count!

[Steppenwolf]

It really sucks. I hope this recession is over soon. Scary times.

75% of them in the US. Guess thats one of the downsides of getting paid so much better.

[AlexM]

lol I couldnt have picked a worse time to enter the games industry.. I think

[zaphod]

That also means a 12% rise in the opportunity to go indie!

[Warby]

i cant shake the feeling that the big boys like microsoft use the recession as an excuse to get rid of studios they dont like ...

also what is the comparison percentage of people being fired, quieting their job or jumping into a different business during a none recession year ?! wouldn't be surprise me if it was as high as 5% ...

[FrieChamp]

I agree with Warby, I have yet to see analysts linking layoffs with a decrease in sales caused by less buying power due to the recession. Maybe they are there, somewhere, but the examples in that article are pretty weak. I don't think that Microsoft closed down Ensemble because people (for example) suddenly started to buy less RTS games due to the recession or 3D Realms had to close down operations because of the economical crisis. Maybe Scott Miller just decided to not throw away his money anymore. Why did EA lay off so many people? Prove me wrong, but I think the biggest problem were structural problems unrelated to the recession. Are companies having a tougher time to find investors these days than before? No doubt, so of course the games industry is not immune to recession, but it needs a closer look at each case than this.

[Hourences]

I am also with Warby. However up to now we mostly heard about big devs like EA taking actions. I think the real danger can be at the smaller devs. And the worst may yet to come. I know several independent studios who are having trouble signing a new project. Most studios were working on a contract they acquired before this whole crisis thingy took off, and now that that contract is almost completed they may be facing difficult times as they can't easily get a new one.

On the other hand there is also a theory that it will actually improve, as publishers may realize that they will have a gap in their portfolio by 2010 and 2011, as so many projects were dumped, and that they need kickstart new projects very soon.

[Furyo]

Shareholders need to be pleased. When they demand 20% ROI year over year, and your titles sell less than anticipated, you either cut your losses (employees) right away, or you go all in the following year and try and catch back the loss. The publishers in the first category are known to everyone, and they're the ones that were also funding third party independent studios who eventually shut down. The second category is made of publishers who are still riding the wave with cash cows (CoD, Guitar Hero) or those who had enough cash reserves to sustain that hit and bet big on the year to come (Ubisoft)

[2d-chris]

Wait a second... why don't Americans look for work overseas where the situation is not so bad? Ok sure not everyone can do such a major change in their lifestyle but I find it hard to accept that all 12% are out of work. Not when so many develoeprs are hiring still.

Games, Movies and TV industry are familiar with moving aboard to work on projects, it's common practice.

[Skjalg]

Wait a second... why don't Americans look for work overseas where the situation is not so bad? Ok sure not everyone can do such a major change in their lifestyle but I find it hard to accept that all 12% are out of work. Not when so many develoeprs are hiring still.

Games, Movies and TV industry are familiar with moving aboard to work on projects, it's common practice.

Yeah I think you got a point there, but the article does mention the new entrepeneurism, which indicates that the 12% maybe did find themselves a new job after getting laid off.

[Jetsetlemming]

Wait a second... why don't Americans look for work overseas where the situation is not so bad? Ok sure not everyone can do such a major change in their lifestyle but I find it hard to accept that all 12% are out of work. Not when so many develoeprs are hiring still.

Games, Movies and TV industry are familiar with moving aboard to work on projects, it's common practice.

I'm under the impression that permanently or at least long-term moving to a different country is an extremely taxing process that takes just about forever. I know a few people that moved to Japan and getting through all the paperwork and government requirements was pretty much a new full-time job for a couple months worth of work and headache. It's apparently even worse if you've got family or a spouse.

[2d-chris]

Most developers make that process quite easy on the Individual, that being said you have to be good enough for all the effort. I know moving about in the EU is easy, not sure how it is for Americans wanting to work in EU. Judging from the amount we have here at Crytek, it can't be all that painful

[Furyo]

You guys are forgetting the most important aspect of it all, which is the cultural aspect. Americans for the vast majority speak only English, and even in the rare occurrence they do speak enough Spanish to get by, that opens very small job markets for them. Same for French, German etc etc.

Basically they'd be moving to the UK to get a job, where the situation isn't all that great right now with the weak pound.

Once the country as a whole embraces foreign cultures and languages and make those mandatory in school, maybe you'll see a change but for the time being the American Way of Life and American Dream is way too present, and the rest of the world still trying to make it there only reinforces that opinion.