I think we should have a thread to document the business troubles of the industry... hopefully with time we can see how the industry is progressing through this generation, for better or for worse.
I'll try to write a timeline of closings, mergers and layoffs of game developers and publishers. When possible, an official quote is included.
Any contributions are welcome to make this more accurate and complete!
December 2, 2007 - Vivendi and Activision merge to form Activision Blizzard. Source
April 30, 2008 - Infogrames and Atari (publishers) merge. Source
The agreement:
— brings to a close a period of financial underperformance for Atari;
— strengthens Atari under Infogrames' new management team;
— delivers a platform for future growth in the US; and
— offers Atari shareholders an all cash exit.
October 24, 2008 - Avalanche studios lays off 77 employees, or 50%. Source
Has the global financial situation affected for this situation?
- Absolutely. One publisher was very conservative in its product portfolio and decided to spend more on licensing games of children in nature. The other publisher is broke, there is no money left.
October 30, 2008 - EA (publisher) announces 540 layoffs, or 6% of their staff. Source
By EA's own estimates, the layoffs announced today will save it more than $50 million annually--money the company sorely needs. Today, EA announced a greater-than-expected $310 million loss, or 97 cents per share, during the July-September quarter.
November 13, 2008 - Brash Entertainment (publisher) shuts down. Source
In a nutshell, the few games it managed to put out sold poorly, it wasted money on some ill conceived ideas, and talented executives fled as they saw how things were going.
November 18, 2008 - Koei and Tecmo (publishers) merge. Source
The holding firm is expected to generate over ¥70 billion ($727 million) in sales and reach a ¥16 billion ($166.2 million) operating profit in the year ending March 2012, according to a report from Reuters.
To compare, in the business year ending March 2008 for Koei and December 2007 for Tecmo, the two companies' combined revenue totaled to ¥41.2 billion ($427.9 million), with a combined operating profit of ¥8.5 billion ($88.3 million).
December 19, 2008 - EA announces extension of layoffs to 10% from 6%. Source
EA is implementing a plan to narrow its product portfolio to focus on hit games with higher margin opportunities.
January 21, 2009 - Sega lays off 30 employees. Source
"at this time of economic recession, harsh retail landscape, and the reality of business challenges to profitability, we must take steps to reduce our cost structure and ensure long-term success."
February 4, 2009 - THQ (publisher) announces 600 layoffs after posting loss. Source
The video game publisher also announced that it would lay off about 24% of its workforce - 600 people in all - in an effort to bring its costs under control.
"Our focus for next fiscal year is to return to profitability and to generate cash," CEO Brian Farrell said in a statement. "Our fiscal 2010 plan will reflect the benefits of our focused product strategy and strong actions on costs."
February 12, 2009 - Midway (publisher) files for bankruptcy. Source
"This was a difficult but necessary decision," Midway chairman, president, and CEO Matt Booty said in a statement. "We have been focused on realigning our operations and improving our execution, and this filing will relieve the immediate pressure from our creditors and provide us time for an orderly exploration of our strategic alternatives. This Chapter 11 filing is the next logical step in an ongoing process to address our capital structure."
March 27, 2009 - Eidos Interactive gets bought by Square Enix (publishers). Source
Japanese-based Square Enix announced its intentions to buy Eidos for about $120 million back in February. Eidos, which has been dealing with severe financial problems for some time, jumped on the chance to be acquired by the successful publisher.
April 1, 2009 - THQ's Big Huge Games (developer) does major layoffs. Source
May 6, 2009 - 3D Realms (developer) lays off the Duke Nukem Forever team. Source
Due to lack of funding, however, we are saddened to confirm that we let the Duke Nukem Forever (DNF) development team go on May 6th, while we regroup as a company. While 3DR is a much smaller studio now, we will continue to operate as a company and continue to licence and co-create games based upon the Duke Nukem franchise.
May 14, 2009 - Factor 5 (studio) shuts down. Source
We are sorry to announce the closure of the San Rafael-based Factor 5 Inc. studio, but the obstacles created by the sudden bankruptcy of Brash Entertainment for the continuation of operations have turned out too great to overcome in the current economic climate.
May 19, 2009 - Avalanche Studios lays off a further 20 employees. Source
"As any other company we need to manage risks and sometimes that unfortunately means that we have to give notice and lay off staff. It's not more complicated than that," added Sundberg.
May 27, 2009 - Big Huge Games (developer), previously with THQ, gets bought by 38 studios (publishers). Source
The financial terms weren't disclosed, but 38 Studios calls the move "a critical step" in its strategy to build entertainment properties around its original fantasy IP, Copernicus. The remaining Big Huge Games team -- which had already gone through more than one round of layoffs under THQ -- will remain in its Timonium, Maryland home, but will be integrated into 38 studios.
June 24, 2009 - iD Software (developer) bought by Zenimax (publisher). Source
"We're really getting kind of tired competing with our own publishers in terms of how our titles will be featured," Carmack said. "And we've really gotten more IPs than we've been able to take advantage of. And working with other companies hasn't been working out as spectacularly as it could. So the idea of actually becoming a publisher and merging Bethesda and ZeniMax on there [is ideal.] It would be hard to imagine a more complementary relationship. They are triple A, top-of-the-line in what they do in the RPGs. And they have no overlap with all the things we do in the FPSes."
August 6, 2009 - Atomic (developer) does layoffs after failing to find a publisher for Fallujah. Source
Atomic, which also cites "low video game sales this summer" as a reason for its current challenges, notes that its staff of 75 has remained intact until the reductions this week. It called this a "testament" to their commitment to the project in the face of challenges.
August 12, 2009 - GRIN (developer) shuts down. Source
"Too many publishers have been delaying their payments, causing an unbearable cashflow situation," said the company's co-founders on GRIN's official site.
August 26, 2009 - Maxis (developer) suffers "a couple dozen" in layoffs by parent company EA. Source
at least a couple dozen employees of EA's Maxis studio were laid off today. EA confirmed that the publisher had reduced the workforce, telling Joystiq in a prepared statement, "EA has taken action to reduce the workforce at Maxis as we focus the business and focus Maxis."
November 9, 2009 - EA (publisher) plans to layoff a further 1,500 employees (17% of the workforce) after posting a quarterly loss of $391 million. Also, it purchases "social gaming" company Playfish Inc. Source
On Monday, EA posted a net loss of $391 million, or $1.21 a share, in the fiscal second quarter, wider than the loss of $310 million, or 97 cents per share, a year earlier.
The company behind games such as "Madden NFL 10" and "The Beatles: Rock Band" reported net sales of $788 million in the July-September period, down 12 percent from the same time a year earlier.
