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Spring redundancy roundup – games industry job losses in 2010

By on May 4, 2010

I’ve been flat out all year on consultancy projects (which is great – do contact me via nicholas at gamesbrief.com if you want to discuss how I can help you with self-publishing or building a long term games strategy).

But it means that I have neglected the Job Loss Tracker.

To catch up, here are nine job loss events in the games industry which I missed. Sorry to give you so much bad news in one go.

All have been added to the Job Loss Tracker.

Game Crazy closes

3rd May, 2010

US games retailer Movie Gallery is to close with the loss of 19,000 jobs, according to a Wall Street Journal article (thanks to Joystiq for telling me what’s behind the paywall).

The company operates 2,165 Movie Gallery and Hollywood Video outlets and 250 Game Crazy stores.

Movie Gallery filed for bankruptcy in February 2010 for the second time in two years.

Since Game Crazy stores represent about 12% of the total stores, I estimate game industry job losses from this closure at 2,200.

Icarus makes three quarters of staff redundant

30th April, 2010

Developer Icarus has seen substantial layoffs, with headcount falling from 110 to 28.

Initial rumours suggested that the whole studio closed, although these were denied by Icarus, which told the Escapist Magazine that 28 staff remained.

Developer Krome sees second round of redundancies

21st April, 2010

Australia’s largest developer, Krome, has seen further layoffs in its second round of redundancies in the last six months.

IGN puts the number of layoffs at 30; AusGamers puts the redundancies at 50.

The company has confirmed that there were layoffs to G4TV, but not how many staff were laid off.

German games publisher CDV goes into administration

April 12th, 2010

A Frankfurt court has appointed an administrator to run CDV Software Entertainment AG. CDV told Edge Online that “it’s working with the administrator on solutions to restructure the company and that discussions with investors and potential purchasers are ongoing.”

I am no expert on German insolvency law but that sounds similar to the American Chapter 11 system, allowing companies to keep trading while also protecting them from their creditors.

CDV recently won a $3.1 million settlement against Southpeak, although the administration appears to have been driven by non-payment of this settlement.

The administration does not, so far, appear to affect the US or UK subsidiaries of CDV.

Monumental makes 23 staff redundant

April 6th, 2010

MMO developer and publisher Monumental Games has closed its Manchester studio with the loss of 23 jobs.

The company told Develop that a grant of £140,000 fell through after the Monumental failed to hire the additional 22 people that would trigger the grant.

Denki layoffs as company refocuses

April 5th, 2010

Denki has announced a major restructuring to reduce the company to a skeleton team. Blaming “an old business model”, Denki bemoans the fact that the industry doesn’t “value good games… instead it values low risk games.”

Denki has reduced from 25 to six staff, according to Develop Online.

While I can see Denki’s point, I think that bemoaning publishers just doing their job is a challenging response; on the other hand, cutting their business back so they can refocus on self-publishing is a sensible response to a changing market.

They give some solid advice to all developers:

If you’re an Independent Developer, and you’re not selling games directly to customers yet, start worrying, because this industry is changing beyond all recognition.

I wholeheartedly agree.

Sega closes its San Francisco Studio

April 2nd, 2010

Sega Studios San Francisco has been closed. The studio was formerly known as Secret Level and was acquired by Sega in 2006.

Sega has subsequently announced a further 73 job cuts in San Francisco and London as it restructures its activities. London will focus entirely on boxed products while San Francisco will exclusively on online games.

Rebellion shuts Core Design, reduces headcount at the Oxford studio

 March 17th, 2010

Rebellion has confirmed that it has closed Core Design, the Tomb Raider studio that it bought from Eidos in 2006.

It has also made a number of junior positions redundant at its Oxford studio, although fewer than the 20 that were initially estimated.

IGN faces job cuts

March 16th, 2010

IGN has seen job losses across its entire portfolio of sites. I understand the games business was a relatively small division (I’m not certain about this) and if the rumoured 20% cuts across the board were true, that’s about 6 staff made redundant.

Universomo job losses, and likely closure

March 2nd, 2010

THQ has confirmed the closure of Finnish mobile studio Universomo.

Layoffs hit Take Two

February 3rd, 2010

MCV reported that Take Two is to make as many as 400 staff redundant.

The company has subsequently denied this report and said that no cuts were taking place at the studio level. In its SEC filing on 3rd March 2010 it confirmed that it was reducing corporate headcount by 15%.

In December, 2009, the company had 2,263 employees globally, according to the Take Two 10K, of whom 1,633 worked in Research & Development.

I therefore estimate that Take Two is reducing 15% of 630 people, or 95 layoffs.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com