[UPDATE 3] Publisher slashes staff by 17 percent to save $100 million annually, to focus on higher-margin titles; reductions at Skate, Madden, and Dante's Inferno devs; over one-third Mythic reportedly pink-slipped.
[UPDATE 3] In a press release, EA has now officially confirmed that it is laying off 1,500 employees as part of a general restructuring. In a conference call with analysts, CEO John Riccitiello said that as of September 30, the company had 8,820 employees, meaning it is letting 17 percent of its global payroll go.
The reorg will also see the publisher "provide greater focus on titles with higher [profit] margin opportunities." As a result, Riccitiello said "over a dozen" games had been canceled, although he did not identify any specific titles.
"Anything that doesn't measure up to be in a very high profit contributor and unit seller got cut from this point going forward," said the CEO.
The reorganization, which is set to be complete by March 31, will result in the "closure of several facilities," although no specific studios were named. After taking restructuring charges of between $130 million and $150 million, the company expects to save $100 million per year as a result.
The layoffs come just nine months after EA cut its payroll by 11 percent, or 1,100 employees. Then, the company said it was also planning to "narrow its product portfolio," close a number of facilities, and eliminate certain other costs. As a result, EA Black Box's offices were closed, and the shrunken studio was relocated to EA Canada outside Vancouver.
[UPDATE 2] Mythic Entertainment was apparently particularly hard hit. Unconfirmed reports estimate that over one third of the EA-owned, Virginia-based shop was laid off following disappointing sales of its massively multiplayer online role-playing game Warhammer Online. The layoffs come just months after studio head Mark Jacobs departed following a reorganization of all of EA's RPG studios, which now report to BioWare cofounders Ray Muzyka and Greg Zeschuk.
[ORIGINAL STORY] This morning, Electronic Arts confirmed that it had bought social-game specialist Playfish for $275 million in cash and up to $125 million more in incentives. At the same time, the company has apparently begun reducing its internal costs by trimming its payroll.
Several sources close to EA have confirmed to GameSpot that the company began extensive layoffs this morning, with one saying the number was in the "hundreds." The layoffs are apparently "company-wide" and are affecting the publisher's internal studio structure, including such shops as EA Tiburon (Madden NFL) and the already downsized EA Black Box (the forthcoming Skate 3).
The company's Redwood Shores, California, headquarters is also being affected, including Dead Space and Dante's Inferno developer Visceral Games. The studio has had a rocky year, with its general manager and COO having defected to Activision's new San Francisco Bay Area studio in July. September figures from industry research firm the NPD Group also found that its Wii-exclusive shooter Dead Space Extraction had a poor debut.
As of press time, Electronic Arts had not responded to requests for comment. However, further comment is likely when the company releases its July-September earnings report this afternoon at 1:30 p.m. PDT. The former top third-party publisher has been struggling of late, reporting a $1 billion annual loss in May and a $234 million quarterly loss in August.
as Mythic goes, i recently renew my sub in WAR and the game had improved a lot and i'm planning to continue, i love it so far, whatever they have decided it made warhammer online better. I am expecting bigger things in SWTOR so i hope they are not affected by the layoffs. I guess crisis like this one should make everyone wiser and i hope EA learned their lessons financially.
I'm with most of you. EA just spent $275 million on stupid Facebook casual games and then turned around and dropped 17% of its employees in order to save $100 million? I don't even have to call them any names. That sentence sums it up nicely. As far as I care EA and Activision can keep it up and run themselves into the ground. The indie game scene is exploding with games made by 1-5 people that are far better than things the "big dogs" can put out. And thanks to improved distribution methods we can play those on PC or any number of consoles. :)
EA is not a company I would want to work for.They are focusing an games that would make them lots of money. So, expect to see a lot of new entries in game franchises they own. Don't expect to see EA innovating, taking risks, and making games that are totally new.
That's too bad about Mythic...I don't play Warhammer Online currently but I still like it. I played it a lot at launch. Can't be good news for fans of the game.
just contacted e.a.sport's uk - great new's for next year all is not as it seen's - 2011 - i have been doing some research and study - looking forward to april and next nfl/draft
it's been a while, the positive madden fan is back ,i only have one thing to say,we will see wot happen's next year with madden 2011 - just been playing ncaa football 2008 - awsome - bring it on - madden 2010 - this year was worth it - tell will tell for next year - no more madden for the pc - wot about the xbox 360 and ps3 version's - let's wait and see
Saw this coming. Can't blame EA though for wanting to keep a secure place near the top. At least DICE is in the clear.
Xaviersx, it does cost a lot of money to make a game (unless you are churning out simplified Nintendo-ized stuff) so I don't see your point there. EA is doing something that might come back to bite them in the future however, when these people are going to be 'resentful' and might not want to come back to work for EA.
Great if the let go employees could form so new venture that competed directly against the company that released them. Hopefully it could do great games and projects without the inflated R&D budget BS that EA buys into, and then that company or co-op could school EA on priorities.
@drenai2001 - that's a pretty good comparison with the days before the video game crash of the early 80s. The major difference is that video games have much more penetration into the social fabric than they did then, along with a multi-generational following. Still, look at the rhythm genre as the shape of the things to come. Of the major releases in the last two months, the industry and press counted among them: DJ Hero, Beatles Rock Band, Guitar Hero 5, Band Hero, and next month is Van Halen Guitar Hero. If EA's business philosophy wins out, that's how the industry would more or less look: variants of the same type. Also, @ some of you, thanks for the nods to my earlier post.
its deserved, my personal vendetta is with WAR which has some very awesome potential but is marred by morons whom seem to think slamming on two doors to take a keep is an awesome idea for sieges among many other complaints. i have high hopes that the company goes under and is forced to sell off all their patients so that companies like bioware can be free of them.
How in the hell can you need to save $100 mil a year if you just bought some other company for $275? Another 1500 people jobless so EA can own the most popular Facebook games? I'm glad EA ticked me off long ago, and I only enjoy their games used.
Hopefully EA will get rid of that idiot Ian Cummings from Madden. I love me some Madden but these kids they got running the show makes me wanna puke. I dont get EA handing the keys to their rolls royce to these idiots on the Madden team. How about hiring some people with FOOTBALL KNOWLEGE on the madden team EA....instead of these childish kids.
And for the comment that complained about the cost about the cost of games, you can't have your cake and eat it to. In order to have developers continue to make quality games, publishers need to pay them more than they would make working at Burger King. In order to cover the costs of the more and more frequent multimillion dollar flops (flops in this case meaning, they didn't perform like GTA and Halo), either prices need to stay the same or more and more shovelware and sequels need to be released to defray those costs. The other logical solution is paid DLC, but we all hate THAT so much too, don't we? Complainers can keep complaining. I'm going to continue supporting the games and devs that are trying to push the industry forward instead of being one in a herd of lemmings with night vision goggles on and MW2 tattoed to their foreheads.
Activision is the new EA. Gamers whined and complained about the lack of quality of EA games a few years ago, so EA took the initiative to give fans what they wanted: new IPs with unique premises or gameplay. And as usual (see also MadWorld, No More Heroes, etc), these (Dead Space, Mirror's Edge) fail to live up to expectations, sales-wise. Now EA is forced to be profit-driven, meaning rehash after rehash. Unfortunately, these few years spent nurturing new IPs (including the forthcoming (?) Dante's Inferno) caused them to fall behind Activision, who is currently doing exactly what people griped about EA for doing. Sadly, Activision is by FAR the worse offender (GH, CoD, Tony Hawk, etc), yet people still gobble this up by the millions. We gamers that actually care about gaming and the industry seem to be the very vocal minority, or we would see games like Demon's Souls, MadWorld, and Valkyria Chronicles at the top of the charts instead of rehash after sequel after cash-in after shovelware.
Dead Space: Extraction should be for the PS3, implementing the new motion controllers..i think it wouldof been a Huge it, if it came out during launch of the motion controllers also, is Mass Effect for the PS3 ttoo much to ask.. :P
It's hard to feel sorry for the laid off people at EA in Vancouver, with all the 4 hour lunch breaks going to the strip clubs... No wonder so many of the games are mediocre. Those people aren't hurting anyways. Most of them live in mom's basement. Cut the fat and start making less games, but higher quality rather than a lot of junk.
These two blurbs say it all: [The reorg will also see the publisher "provide greater focus on titles with higher [profit] margin opportunities."] ["Anything that doesn't measure up to be in a very high profit contributor and unit seller got cut from this point going forward," said the CEO.] Translation: Nothing but sequels. To a point we brought it upon ourselves. It didn't matter if they only added a button combo to change uniforms on the fly, it was the new Madden! Another FPS?! GIMMAH! Some people cried that they wanted something "different", and then whined when the "different" wasn't more like what they'd been buying over and over and over. Unless it's a save on Cooking Mama, you can't have your cake and eat it too.
Riccitiello's an idiot, plain and simple. He's running EA into the ground and if I were a shareholder I'd call for his head. His sole obsession is over profits, yet that's precisely what got EA into this mess! Cases in point: -Wii was a big sales success, so he demanded bringing franchises to it, including Dead Space, despite it being a BAD FIT on Wii. Lo and behold, bad sales, and a waste of time, money, and resources. -Skate was a marginally successful game at first that he green-lit to be MILKED into oblivion. That franchise should have been one and done to focus on more original titles. -Flat out COPYING Wii Fit in creating EA Workouts, on the same console no less, years after Fit was out. And he thinks it can duplicate its success??! It's clear this clown has no clue about videogames, let alone how to run one of the industry's largest companies. His actions will only lead to more unoriginality and doom for EA. He should be fired immediately
EA are jerks anyway for there region coding there games. thumbs up to all developers that don't region code there 360 games and a big thumbs down to ea for the region coding. to be fair ea have started to put out some good stuff lately i did not use to like there games before but these days they have put things like dead space out.
Oh, that's wonderful. Just as EA actually starts funding some genuinely good, interesting/innovative games (see: Mirror's Edge, Dante's Inferno, Rock Band, Mass Effect, etc), they immediately swallow their foot and start cutting jobs. And all because people give unique games bad press. You think this is EA's fault? Haw haw, naw, they're a business, it's their job. It's the fault of all the gamers who said ZMG MIRROR'S EDGE SUCSK SO MUCH then ignore it while they continue playing their recycled bull****. Granted ME wasn't the best game ever but it was incredibly unique. But its sales sucked because people would rather buy the next Madden, the next Call of Duty, or chuck another month onto their WoW subscription. Good job guys. I can't even be mad at EA on this one, just the 3.9 million who bought Madden along with the rest of you rockheads.
This is what happens when you oversaturate the market with games. First off, many games are not worth the $60 price tag. I know they can find a way to make games cheaper so they can still make profit while still paying back production and advertising fees. If games were reduced in price, many gaming companies would see a profit and still be in business. But as it stands, games are expensive when you know you want more than just one game and people will only pay the big bucks for games they really want. If games were cheaper, I would have every damn game, but I am choosy, and most games that come out are granted a rental. EA should start a trend of cutting down gaming cost, and see how that works out, just don't fire hard good workers. With a poor economy, why sell expensive game to "less than ready" buyers. This is why the gaming industry is taking suck a hit. There is a way to balance cost and profit in such a way that benefits both parties, but greed is killing these companies.
How many downsizes is EA going to go through?? and all this after becoming one of the largest publisher/developers in the world....... If they keep this up along with some of the bad games that come from them they won't have anything left to sell..... What then? the big giant dies??? I hope not, I'd rather EA grow a brain, step up and show Activision to their grave......
@Zoomer30: how does EA love the 360? EA loves the Wii as they have an entire line dedicated to the Wii. What 360 EA exclusives are there? I honestly don't get some of the crap written here, but for the most part, there's not one gaming problem that couldn't be solved if these companies paid attention to some of the postings on this forum. Especially you Sony with the PSPGo.
I wonder if the flood of indie titles available via download on Steam, Xbox Live, etc. is eating into their profits. They cost a tiny amount in comparison to top tier EA stuff but they still eat up our time with some fun gaming on the cheap.
What you got to be joking me some company's can't efford to do this. i can name 2 good games realesed by EA that I like and own medal of honour n Fifa 10
Soo, they offer all these Dev groups an offer they cant refuse, rush them to develop a game with a good concept, and then get rid of them after sales drop.... Companies like EA and Activision suck! I understand that they want games that sell but when these dev. groups are making games that EA control they tend to be average games cloned from another. Unfortunately its harder for them to stay independent as big companies have what it takes to market.
Unfortunately, when times are bad video game sales go up. So its obvious that its EAs horrible "bottom line" practices and bloated nature. EA has brought this on themselves!
That's why game monopolies are bad for gamers, why do I need to get hit as a WAR player so that Madden gets more budget?
Well, I'm sure all that money will be made back when Dante's Inferno hits the stores next year. I mean, who doesn't want a generic hack-n-slash game loosely based on a 700 year old poem?
well this makes sense they bought more than they could pay for but it does sadden me a bit that dead space and dante's inferno or bioware because those games/developers are gems in a sea of black that is EA
Yep, they buy Playfish and then start firing people. It is about time EA got some bad press, they release almost nothing but garbage anymore. And they love the 360 to death (gonna be their death if they dont watch it)
how long before they put pressure on Bioware to pump out games faster, with less quality and they destroy that studio as well... EA certainly has a long history of buying up AAA quality developer studios and running them into the ground.
You know Video Games were huge the past 4 or 5 years and now with so many companys and companies like EA and Ubisoft buying out all the Indie companys they have to fill the void that these smaller great companies did. Results so many crappy games rushed out before their ready. its so sad that the market has 20 crappy games for every one great game. People start to see this and refuse to buy them. Its the early 80`s all over again. Games get huge, games sell, games start to get crappy, companys dont care, games rushed out and games DONT SELL. I know the economy doesnt help and itll be along time before it gets better but I feel its a matter of time before the Video Game Industry starts to crumble.Actually its starting to Die now like it did in the 80`s(sad) Its going to be atleast 4 more years before the New XBOX and PS system comes out, but by them its too late. Companys need to streamline and put out less games, sacrifice quantity for quality, we the consumers are owed this. Great titles =happy gamers =more sales and a long lasting franchise.
I also think that the strong survive and the weak are filtered through, if you're going to do the same thing over and over again and just try to milk the market you will eventually fall, hopefully this is motivation to push the envelope a little harder.
now we will see new studios of ex-EA employees open up and hopefully some really good games and no longer the same EA franchise episode 200th sequel.
I was thinking about getting into Game Art & Design, but forget that. The game industry is dying. EA, Midway, Nintendo...
maybe they'll start making better games, better games = more sales, sales = profit, profit = happy employees that keep their jobs, and finally happy employees = even better games
Their market analysts must be terrible. Any one of us could've told them a few of these projects were going to tank or be a money pit. And I used to love Mythic back when I played DAoC... bad things for everyone here, but none of it surprises me.
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