A Week From Hell

Sour news abounded in the form of layoffs and closures, but the industry is poised to turn around, unless of course it doesn't.

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This week was one many would like to forget. While many gamers may be excited to lock themselves in for another weekend of Darksiders II or Counter Strike: Global Offensive, the industry surrounding those games is looking grim. This week brought bad news abounding, and served as a reminder that the video game industry, like any other entertainment industry, is a business. Tough decisions are made with serious implications. Jobs are cut. Lives are changed. But the industry presses on, ideally wiser for it.

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Nintendo Power is no more come December.

The bad news this week took many forms, the most serious and permanent of which were the closure of Sony Liverpool and the cancellation of Nintendo Power. Sony's Liverpool outfit (formerly known as Psygnosis) was responsible for creating the popular Wipeout series and was nearing its 30th birthday. It was one of the United Kingdom's oldest and most respected studios, and now it is no more. As for Nintendo Power magazine, it was a magazine some of us grew up with and have fond memories of. Who could forget its covers, which ranged from depicting claymation to showing then-shocking decapitation. Publisher Future US said affected staffers will be moved to its other gaming-focused publications like GamesRadar and PC Gamer, but it's hard to imagine some editors won't be out of a job completely after the 24-year ride ends in December. (The magazine was wonderfully eulogized by Gears of War design director Cliff Bleszinski over at Kotaku.)

In addition to closures, bad news this week came in the form of layoffs at three separate studios. PopCap followed up its exciting Monday announcement of Plants vs. Zombies 2 with news on Tuesday of 50 cut positions (potentially including senior game designer and Plants vs. Zombies creator George Fan), and a possible closure of the studio's Dublin outfit. Later that day, THQ confirmed cuts to non-development positions at its Agoura Hills, California, headquarters, the latest round layoffs enacted at the company this year. Even later that day, Secret World developer Funcom confirmed it had enacted a round of "temporary layoffs," rumored to total a whopping 50 percent of the firm's workforce. It was a heavy Tuesday.

This week was a perfect storm of tough news during an already brutal year for the industry.

This week was a perfect storm of tough news during an already brutal year for the industry. Monthly sales data from the NPD Group has been abysmal, and analysts do not expect a rebound for some time. Though closures and layoffs were front and center this week, they have been ongoing all year, striking developers like BioWare and Capcom, with 38 Studios and Zipper Interactive closing their doors entirely in the past few months. This week was conceivably the low point of the year, but there is reason to be (at least cautiously) optimistic looking forward.

Next week, Madden NFL 13 hits shelves, and with it comes new hope. The game is typically a barometer for the health of the industry, and if it can perform, then it may set the stage for continued improvement during the ever-important holiday season. Following on Madden's cleats comes a mystery Wii U event in September. It's widely believed the company will reveal the price and release date for the Wii U at this showing in New York City. If these details are provided, expect the industry to begin buzzing all over again.

Beyond that, this holiday season is stuffed with numerous AAA games, including a mighty five-week stretch that includes Medal of Honor: Warfighter (October 23), Assassin's Creed III (October 30), Halo 4 (November 6), Call of Duty: Black Ops II (November 13), and Hitman: Absolution (November 20). Not to mention Pokemon Black and White 2, Far Cry 3, Resident Evil 6, and Borderlands 2, all of which will be released in September or October.

Preorder data from GameStop, the largest specialty retailer in the business, reveals that reservation rates for all major games in Q3 and Q4 are up, and company CEO Paul Raines told us in July that "most of the sales year [is] ahead of us, and there's a lot of positive signs."

Of course, Madden could tank, the news from the Wii U event could be sour (for example, a delay out of 2012 or a $300-plus price point), and the season's blockbusters might not be the breakaway hits needed to lift the business out of its slump. While the turnaround is by no means assured, there is for the first time in months a reasonable hope that the industry has bottomed out and a return to sustained growth is on the horizon.

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