Via gonintendo.com:

http://ds-x2.com/news/Slash%2Band%2BBurn%2Bof%2BU.S.%2BVideogame%2BCompanies%2BContinues%2C12324,12324

Bloomberg news reports game publishers Electronic Arts and THQ will cut jobs and close multiple studios. Publisher Midway will cut 25 percent of their workforce.

While many analysts are spouting off about the utter solidity of the videogame market, the bottom seems to be falling out for U.S. videogame publishers. And as we just reported, Factor 5 and Free Radical have gone to the dustbin as well.

Electronic Arts Inc., the second biggest videogame publisher, will cut 10 percent of their workforce and close and/or consolidate nine studios. THQ Inc. will close five studios and cut 250 of their employees. Midway Games Inc. will eliminate 25 percent of their work force. What is clearly a trend is alarming, but the companies are already thinking of ways to adapt to the new marketplace.

The sure fire cure – produce less titles. Of course this could spell disaster if the fewer titles were not of high quality and didn't approach genres with equal care.

"EA, and indeed the entire industry, needs to rationalize their product line-ups," said Todd Mitchell, a New York-based analyst with Kaufman Bros. "There are just too many games. Not every publisher needs to be in every genre."

That's almost 15% of their employees. Geez...

I didn't expect this so early in the recession. Perhaps it's little to do with the recession anyway, more with the overdue consequences of publishers' bad choices. I'm glad I didn't get a job in the games industry (which I was looking for for some time).

Forgive my language, but FUCK!!! This is insane. Can publishers please start considering a new business model now, before they run themselves out of business entirely?

You know this actually could mean something good for the industry, give smaller newer developers a change (or at least make a little room for them). I already found the game industry to be a little bit stale, maybe all this will cause new and creative ideas, make the industry a little bit more fresh and exciting again. I'm studying game development and I'm still fairly positive on the outcome of this crisis (if you can call it that already).

What did THQ publish/make in the past 12 months?

Looks like the big titles this year were de blob, Saints Row 2, and SVR 09. SVR isn't selling too hot, and SR2 sold well, but THQ hasn't' had a bona-fide hit in a while, and the SVR franchis is going down the drain. With the glut of their casual games, it was bound to happen

Seems like companies that don't have hits and/or put out crap games are going to get hurt.

Funny just after you posted that EA made the most 8+ games.....

(pardon me if it wasn't you).

I think that although it seems bad, it might be good for the publishers to suffer the consequences so that they decide to make less games at once.  That means the quality of the average game would become higher due to developers paying more attention to polish.  The pubishers brought this upon themselves.  They are making to many high budget games at once and they are digging themselves in a deep hole.  It already seems to have gotten to Factor 5 and Free Radical.  However, it's not to late for EA and THQ.  This could be good for the industry in the long run as this incident could result in making publsihers to be more careful about how many high budget games they make at once.

I don't think the recession is directly to blame for this. We've all seen the great revenue numbers the industry has been pulling in. The problem is that only a few mega-publishers like Actiblizzard and Nintendo are running away with most of the cash, with everyone else having little to show for huge investments.

Where the economic conditions come in is cutting any lifeline these publishers might find to finance restructuring through market capitalization or borrowing. The markets are tanked and the banks aren't lending, so they have to slash jobs in a desperate attempt to stay viable. But if these guys didn't have a flawed business plan of competing too hard for a market which can't support them all, they wouldn't be in this precarious position.

Isn't this the THQ cutback news from two months ago? This isn't new(s) at all, is it?

Publishers bet heavily on the success of the PSP which resulted in large losses and a massive missed opportunity with the Nintendo DS ...

They then followed this up by betting heavily on the success of HD consoles which resulted in large losses and a massive missed opportunity with the Nintendo Wii ...

Personally, I'm getting a little tired of talking about all of the publishers who made bad decisions and are now paying for it ... I really am looking forward to discussions in the new year about companies like Majesco, who were forced to abandon big budget games because of a couple of high profile failures and have found success by heavily supporting the Nintendo DS and Wii.