EA Fires 10% of work force, shutsdown 9 studios

[Schadenfroh]

Text

EA plans to narrow its product portfolio to focus on higher quality hit games with higher margin opportunities. EA stated in the press release the company remains committed to taking creative risks, investing in new games, leading the industry in the growing mobile and online businesses, and delivering high-quality games to consumers.

Shame that it has come to this, hopefully they will concentrate the remaining of their best and the brightest of their employees and give them the needed funds to finish great games.

 

[FuryofFive]

go go EA 🙂

 

[erwos]

Ever been in a company where they've laid off 10% of the workforce team-by-team? It's not the lamest and dumbest who are getting the axe. It's people who were in the wrong place at the wrong time, basically.

 

[bl4ckfl4g]

As long as Brutal Legend comes out I don't care.

 

[mugs]

Originally posted by: erwos
Ever been in a company where they've laid off 10% of the workforce team-by-team? It's not the lamest and dumbest who are getting the axe. It's people who were in the wrong place at the wrong time, basically.

Yeah, unfortunately. Particularly valuable employees may be saved if someone in management speaks up for them, but more than likely if your studio is shut down you're probably going to laid off.

 

[ViviTheMage]

That is a shame...is this one of the first company closing a few studios?

 

[Queasy]

Originally posted by: Schadenfroh
Text

EA plans to narrow its product portfolio to focus on higher quality hit games with higher margin opportunities. EA stated in the press release the company remains committed to taking creative risks, investing in new games, leading the industry in the growing mobile and online businesses, and delivering high-quality games to consumers.

Shame that it has come to this, hopefully they will concentrate the remaining of their best and the brightest of their employees and give them the needed funds to finish great games.

The problem for EA is concentrating on new and original IPs hasn't done much for their bottom line. Dead Space and Mirror's Edge didn't do very well despite getting above average to great reviews.

 

[Maximilian]

Well its about time EA showed some strain. It astounds me that they have remained in buisness for this long churning out complete trash.

 

[bl4ckfl4g]

Originally posted by: Maximilian
Well its about time EA showed some strain. It astounds me that they have remained in buisness for this long churning out complete trash.

Except that I think they were doing better financially when they actually were churning out trash. They certainly aren't just churning out trash these days. That award goes to Activision.

 

[PingSpike]

Originally posted by: bl4ckfl4g

Originally posted by: Maximilian
Well its about time EA showed some strain. It astounds me that they have remained in buisness for this long churning out complete trash.

Except that I think they were doing better financially when they actually were churning out trash. They certainly aren't just churning out trash these days. That award goes to Activision.

It takes time for perception to change. Maybe all their dumps in a box finally caught up with them.

 

[vi edit]

When I read "higher margin opportunities" I read...we're dumping anything creative and unique and just focusing on any game that ends in a year in it's title.

AKA - Sports games that we can rehash year after year and sucker people paying full price for something that we put about 20% of an effort into.

 

[bl4ckfl4g]

Originally posted by: PingSpike

Originally posted by: bl4ckfl4g

Originally posted by: Maximilian
Well its about time EA showed some strain. It astounds me that they have remained in buisness for this long churning out complete trash.

Except that I think they were doing better financially when they actually were churning out trash. They certainly aren't just churning out trash these days. That award goes to Activision.

It takes time for perception to change. Maybe all their dumps in a box finally caught up with them.

I think it is more that people like to cry for something new and not the constant retreads but when quality new stuff comes out, it is passed over for a shitty call of duty.

 

[FuryofFive]

Originally posted by: bl4ckfl4g

Originally posted by: PingSpike

Originally posted by: bl4ckfl4g

Originally posted by: Maximilian
Well its about time EA showed some strain. It astounds me that they have remained in buisness for this long churning out complete trash.

Except that I think they were doing better financially when they actually were churning out trash. They certainly aren't just churning out trash these days. That award goes to Activision.

It takes time for perception to change. Maybe all their dumps in a box finally caught up with them.

I think it is more that people like to cry for something new and not the constant retreads but when quality new stuff comes out, it is passed over for a shitty call of duty.

ill 2nd that.. i cant believe people buy the stuff, even after its made by somenoe else who isnt the original makers.

 

[Schadenfroh]

Originally posted by: vi edit
When I read "higher margin opportunities" I read...we're dumping anything creative and unique and just focusing on any game that ends in a year in it's title.

AKA - Sports games that we can rehash year after year and sucker people paying full price for something that we put about 20% of an effort into.

Take it in context with the "online businesses" statement, I am thinking MMOs in addition to sports games.

 

[erwos]

Originally posted by: Schadenfroh

Originally posted by: vi edit
When I read "higher margin opportunities" I read...we're dumping anything creative and unique and just focusing on any game that ends in a year in it's title.

AKA - Sports games that we can rehash year after year and sucker people paying full price for something that we put about 20% of an effort into.

Take it in context with the "online businesses" statement, I am thinking MMOs in addition to sports games.

EA desperately wants a huge success that involves long-term subscriptions. Blizzard has demonstrated that a single game, WoW, can generate _insane_ ROI at a significant scale. The same goes for microtransactions, perhaps to a slightly lesser extent. Any promising project that involves these concepts is going to be at the top of their list.

Once you get past that, they want games with high brand equity that they can franchise. You might bitch that the world didn't need CoD:WaW, but the fact is, CoD is a name that sells games. Ditto for Madden, ditto for "Sid Meier", ditto for Burnout, the list goes on. Why do you think they killed the Need For Speed studio? The brand equity for NFS was just gone after a series of average-to-bad games - say what you will about Madden, but the games tend to review fairly well.

It's easy to blame EA for the lack of innovation in the industry, but consumers take fewer chances on new games from an unknown brand (eg, Valkyria Chronicles). It's not even about lower dev costs from having experienced teams with technology in place, or even putting out a game every year. When you're under the gun to perform every quarter and year, you want reliability in sales - and that means all of the stuff I just talked about.

 

[lupi]

I wonder if the resident AT EA schmuck is part of that 10% or will we still be graced with the schill factor.

 

[Kabob]

Originally posted by: Schadenfroh
EA plans to narrow its product portfolio to focus on higher quality hit games

Isn't that an oxymoron? I thought EA stopped putting high quality games out in the 90's...

(which is funny because I almost posted this having typed oxymororn...I'd have taken some flak for that 😛).

 

[nakedfrog]

Wow, it's a good thing they got rid of Ghostbusters.

 

[Train]

did any of these studios have the option to save themselves or get bought out by other investors?

Say a studio makes a game, may not be a huge profitable game, but if it at least makes ANY profit. Can the coders/managers of that studio buy thier studio from EA and go independent, or perhaps get some Venture Capital to stay alive?

Would be interesting to see if some of these studios took thier titles independent, and drove the development free from EA oversight, would push them into newer/better directions. I could see some of thier less prifitable titles taking off and then EA kicking themselves a few years down the road for letting it go.

 

[nismotigerwvu]

You reap what you sow....eat it EA

 

[Rage187]

expect a Madden RPG and FPS in the future.

dont forget Madden's Skateboarding

 

[tk149]

Originally posted by: Rage187
expect a Madden RPG and FPS in the future.

dont forget Madden's Skateboarding

Madden MMORPG...coming in 2010.

 

[blurredvision]

Originally posted by: tk149

Originally posted by: Rage187
expect a Madden RPG and FPS in the future.

dont forget Madden's Skateboarding

Madden MMORPG...coming in 2010.

From what I've heard about the EA Sports Hockey League in NHL 09, something like that would actually have promise if done right.

 

[erwos]

Originally posted by: Train
did any of these studios have the option to save themselves or get bought out by other investors?

Their opportunity to save themselves was "make games that sell a lot". As for selling them, if EA doesn't want them, why would anyone else, especially in this environment? Besides, retaining people in a sale like that is going to be hard. Read on...

Say a studio makes a game, may not be a huge profitable game, but if it at least makes ANY profit. Can the coders/managers of that studio buy thier studio from EA and go independent, or perhaps get some Venture Capital to stay alive?

What is there to buy, really? Most of the value in those studios are the people working in them. If those people want to make a new studio, they could (non-competes not-withstanding) - it's not a tremendously capital-intensive process. With regards to a venture capital investment, not a chance right now. The VC market is pretty much dry.

Just making a profit isn't good enough if there are places where EA can invest their money for a larger profit. And, if EA's making those profits, why not just invest straight into EA and avoid the risk in investing in a smaller studio?

Would be interesting to see if some of these studios took thier titles independent, and drove the development free from EA oversight, would push them into newer/better directions. I could see some of thier less prifitable titles taking off and then EA kicking themselves a few years down the road for letting it go.

Maybe. But, then again, if they're not all that successful right now, it's unlikely they're going to start anytime soon. For every Valve or Blizzard, a hundred more die on the vine.

I don't mean to be an ass, but it's pretty clear most of the people on this board have zero idea how business works. It's not some sort of fun venture where you just hand people money in the expectations that, someday, maybe, you'll see some of it back.

 

[Train]

Originally posted by: erwos

Originally posted by: Train
did any of these studios have the option to save themselves or get bought out by other investors?

Their opportunity to save themselves was "make games that sell a lot". As for selling them, if EA doesn't want them, why would anyone else, especially in this environment? Besides, retaining people in a sale like that is going to be hard. Read on...

Say a studio makes a game, may not be a huge profitable game, but if it at least makes ANY profit. Can the coders/managers of that studio buy thier studio from EA and go independent, or perhaps get some Venture Capital to stay alive?

What is there to buy, really? Most of the value in those studios are the people working in them. If those people want to make a new studio, they could (non-competes not-withstanding) - it's not a tremendously capital-intensive process. With regards to a venture capital investment, not a chance right now. The VC market is pretty much dry.

Just making a profit isn't good enough if there are places where EA can invest their money for a larger profit. And, if EA's making those profits, why not just invest straight into EA and avoid the risk in investing in a smaller studio?

Would be interesting to see if some of these studios took thier titles independent, and drove the development free from EA oversight, would push them into newer/better directions. I could see some of thier less prifitable titles taking off and then EA kicking themselves a few years down the road for letting it go.

Maybe. But, then again, if they're not all that successful right now, it's unlikely they're going to start anytime soon. For every Valve or Blizzard, a hundred more die on the vine.

I don't mean to be an ass, but it's pretty clear most of the people on this board have zero idea how business works. It's not some sort of fun venture where you just hand people money in the expectations that, someday, maybe, you'll see some of it back.

thats a pretty narrowminded view. EA makes BILLIONS a year, 99.9% of the busineses out there make way less than that. What one small studio may be profiting could be a nice ROI for most people. Even if its not churning out the incredible margins that something like Guitar Hero is.

And anyone who's ever worked on a programming team knows you dont just throw some developers together and have a yourself a profitable team. It takes WAY more investment to assemble a new team than it would be to rescue one from another company that is cutting an entire team.

I've seen a lot of startups use this strategy to save on startup costs... find a downsizing company, hire them as a group, they already know eachother, have worked together, etc. One of my early jobs as a programmer was with such a company.