EA lays off 1.500

[FrieChamp]

Some of these decissions make no sense to me. Why Maxis? Didn't Spore get good scores and a lot of sales? And why don't they sell a studio instead of more or less closing it? To avoidd competition? This company still seems to lack a social awareness towards their employees.

Spore's production was insanely long and expensive. Vgchartz lacks sales numbers but apart from the fact that it broke the 1 million sales barrier quickly I'm not so sure that it met EA's expectations for lifetime sales. Also keep in mind that the brain of Maxis Will Wright has left EA.

On EA's recent cuts and transformation process as a whole I think they made some tough but good calls. When you compare how their strongest brands and new IP have been performing against competitors over the past 2 years, it makes sense to shrink but also to take a leap forward (keyword: social gaming). In a negative light this looks like EA is getting pushed out of their core market (maybe that's why EA stocks dropped after the announcement). For gamers this means that only the least risky titles to develop will see the light of day...

[2d-chris]

In a negative light this looks like EA is getting pushed out of their core market (maybe that's why EA stocks dropped after the announcement). For gamers this means that only the least risky titles to develop will see the light of day...

I don't think your average gamer will be partifucally upset by that, infact I'm sure thats what they want? Sure risky project are going to have a hard time, not just because of the current economic state but the very fact a risky project will and should alway be risky? Where there is risk there will be uncertainty.

[Sindwiller]

In a negative light this looks like EA is getting pushed out of their core market (maybe that's why EA stocks dropped after the announcement). For gamers this means that only the least risky titles to develop will see the light of day...

I don't think your average gamer will be partifucally upset by that, infact I'm sure thats what they want? Sure risky project are going to have a hard time, not just because of the current economic state but the very fact a risky project will and should alway be risky? Where there is risk there will be uncertainty.

This isn't a real justification though :-| EA is betting all on the markets that will surely expand or even just stagnate, not on what is possibly going to fail. It's not in favour of many developer teams who deserve support, but it seems just right for the company.

[Taylor]

I don't think your average gamer will be partifucally upset by that, infact I'm sure thats what they want? Sure risky project are going to have a hard time, not just because of the current economic state but the very fact a risky project will and should alway be risky? Where there is risk there will be uncertainty.

Games actually do quite well in a recession because people prefer to stay in buy entertainment that will last a relatively longer time. But yes, you’re right, but if everyone makes games for the lowest common denominator because it’s the only way to not haemorrhage money and get fired, it’s going to be pretty boring.

[Skjalg]

I don't think your average gamer will be partifucally upset by that, infact I'm sure thats what they want? Sure risky project are going to have a hard time, not just because of the current economic state but the very fact a risky project will and should alway be risky? Where there is risk there will be uncertainty.

Games actually do quite well in a recession because people prefer to stay in buy entertainment that will last a relatively longer time. But yes, you’re right, but if everyone makes games for the lowest common denominator because it’s the only way to not haemorrhage money and get fired, it’s going to be pretty boring.

I actually tried to make the same point when the economical crisis was hitting Europe the hardest, that surely studios like Grin would easily survive and thrive on the crisis.

But PC games are expensive, in fact, so expensive that it's one of the first things people cut down on when they are running out of cash.

[FrieChamp]

I don't think your average gamer will be partifucally upset by that, infact I'm sure thats what they want? Sure risky project are going to have a hard time, not just because of the current economic state but the very fact a risky project will and should alway be risky? Where there is risk there will be uncertainty.

Games actually do quite well in a recession because people prefer to stay in buy entertainment that will last a relatively longer time. But yes, you’re right, but if everyone makes games for the lowest common denominator because it’s the only way to not haemorrhage money and get fired, it’s going to be pretty boring.

I actually tried to make the same point when the economical crisis was hitting Europe the hardest, that surely studios like Grin would easily survive and thrive on the crisis.

But PC games are expensive, in fact, so expensive that it's one of the first things people cut down on when they are running out of cash.

Well one could argue that people have less money and thus buy only one Call of Duty game during the season instead of 3, but are games really that expensive? More expensive than a car? Going on holidays? What Taylor described is also called "cocooning effect" and I believe that games or the entertainment industry as a whole doesn't suffer nearly as much as other industries. I haven't heard any TV manufacturers complain for instance. With advertisement dependent business models it's a different story...

[Zacker]

Yes, game sales are not hurt badly during a recession. Venture capital and willing banks however are. Game production is a risky business which highly relies on those two things and is thereby hurt anyway.

[Algor]

Yes, game sales are not hurt badly during a recession. Venture capital and willing banks however are. Game production is a risky business which highly relies on those two things and is thereby hurt anyway.

http://www.1up.com/do/newsStory?cId=3176925

[Mazy]

Yes, game sales are not hurt badly during a recession. Venture capital and willing banks however are. Game production is a risky business which highly relies on those two things and is thereby hurt anyway.

http://www.1up.com/do/newsStory?cId=3176925

Heh yeah, you know things are really bad when your first 2 quarters of the year are the most profitable :/

[Zacker]

Yes, game sales are not hurt badly during a recession. Venture capital and willing banks however are. Game production is a risky business which highly relies on those two things and is thereby hurt anyway.

http://www.1up.com/do/newsStory?cId=3176925

I will eat first part of my comment again Certainly looks worse than I expected and also most certainly goes against traditional economic theory. Ohh well, this just means that the games industry is fucked in possible way then.

[FrieChamp]

Yes, game sales are not hurt badly during a recession. Venture capital and willing banks however are. Game production is a risky business which highly relies on those two things and is thereby hurt anyway.

http://www.1up.com/do/newsStory?cId=3176925

I will eat first part of my comment again Certainly looks worse than I expected and also most certainly goes against traditional economic theory. Ohh well, this just means that the games industry is fucked in possible way then.

Yes, Midway closed down because of the economic crisis. So did Factor 5 and Free Radical because they have all been so succesful lately. The "crisis" is also completely to blame for EA's poor performance and the layoffs don't tie in some bigger restructuring plan, they are a direct result. Excuse the sarcasm, but blaming a decline in HW and SW sales solely on the recession is about as clever as calling the games business "recession proof".

I rather listen to Satoru Iwata explaining to me reasons for stalling Wii sales than listening to more bad excuses.

[2d-chris]

There does become a point when all industries dry out, meaning you reach the "supply" for the demand and unless the demand constantly increases something is going to give. I'm not suggesting we've hit that point yet but the raw amount of games being developed these days is absolutely insane. It's going to take another generation at least before we see allot more demand for main stream games IMO. The same happened for Cinemar, at one point it was booming then in the last 5 years it's been on a slow decline for one reason or another.

Things change and good companies adapt to surivive.

[FrieChamp]

You mean what Nintendo did this generation?

[2d-chris]

yeah but even with nintendo's market share of people from the "less likely individual group" it only really works for family orientated games, all be it a big chunk of the market. Family films have always been successful at drawing in everyone but they are not going to be the core of the industry as a whole - just a part of it.

[Izuno]

One thing to keep in mind is that for the traditional console/handheld retail games market, the majority of growth in 2007 and 2008 came from Nintendo hardware sales and music category of games. Guess what happened in 2009? Market saturation + global recession. So after huge double digit growth in topline sales the last 2 years, some air is getting let out of the bubble. This is a good thing in the long run and it had to happen. Growth of gaming (and consumer spending on it) does have a limit and a pullback was bound to happen.

A somewhat interesting comparison is to the US housing market. After wanking absurd growth from 2002 to 2007, the bubble burst. What did we expect? Real estate values to go up by 25% per year forever? Talking to a real estate agent in Southern California in 2007 was completely absurd. They'd say "Oh yeah, YOU HAVE TO BUY NOW because the market is going to REALLY grow in 2008...like 20 to 30%. Look where it's grown already!!!"

...so back to games...there is only so much revenue growth available in the plastic guitar controllers business. How many times are core guitar games fans going to buy yet another bundle? A higher % opted for the DVD only SKUs at retail, and that contributed to the chilling effect on growth we're seeing this year. And as for Nintendo HW, Wii sales sagged and a price break was long overdue, not to mention good games for both Nintendo core fans (Mario, Zelda, etc) and all the Wii Fit etc crowd. (What, you're still reading this spewage?)

On the plus side for Nintendo right now, New Super Mario Bros is awesome. My wife LOVES it and she never plays the Wii anymore. I think that should certainly help Nintendo.