Tough Times: Layoffs At PopCap, THQ And Funcom

By John Walker on August 22nd, 2012 at 10:00 am.

Sniff.

As we know, random events segregate ‘non-randomly’, and things bunching together isn’t a trend. But it’s still pretty chilling to see so many lay-offs in the games industry all at once. So we express our sympathies and best wishes to those at Funcom, PopCap, and THQ who’ve found out their jobs are no longer in the last few hours.

First of all, PopCap has confirmed the rumours that fifty people from their Seattle offices have been let go, along with an unknown number – possibly all – soon to go from the Dublin HQ. Co-founder John Vechey took to their company blog to explain the bad news.

“Today’s news is something you expect periodically from a company in a fast-changing industry, but it sucks if you’re one of the people losing his or her job. These people are our friends and we don’t like doing this. We’ve made hard decisions before, even had cuts before – at this time in North America there are about 50 people who will no longer work at PopCap. We’ve hired aggressively this past year and PopCap is still growing. Even with the cuts we expect to end the year with roughly the same number of people we started with.”

He goes on to explain that the explosion of the free-to-play model has directly affected a company that has been comfortably charging $20 for its games for years. But he also stresses that this has nothing to do with their owners, EA, adding, “If we didn’t have EA behind us, the cuts would have been worse.” Quite how a company that has sold more copies of Bejeweled than there are atoms in the universe can be in this position I’m not sure, but then I don’t understand business.

Times are bad at Funcom too, with The Secret World having failed to make the money they were banking on. Numbers aren’t yet confirmed, but Polygon are saying it could be as many as half of the employees around the world (they have studios in Norway, Montreal and Hong Kong). Polygon received a confirmation from Funcom that lay-offs are happening, mentioning last week’s shocking drop in share value, but saying the process is ongoing and undecided. Which is usually business speak for “we haven’t told them yet”.

And lastly in today’s sad round-up, the cash-strapped THQ is to fire 20 non-development staff. An email leaked by 3D Realms’ George Broussard reveals that “restructuring” is taken place, with marketing and production jobs affected. He tells staff that he doesn’t anticipate this having any impact on games development. He also adds that Saints Row developer Volition is intending to add to its numbers by about 20 this year, and that both marketing and production escaped the job losses other parts of the company saw in January.

The irony for THQ is they’re the publisher who have been putting out the most consistently interesting products in recent months. But for whatever reason, they’re failing to turn this into success for themselves. Yet they keep making deeply bizarre decisions, like releasing Darksiders II a full week later in Europe than the US. Hopefully the “restructuring” will see some slightly more sensible choices being made by a company that is currently investing in the right development studios.

Clearly we wish our absolute best to those who have lost work, or are about to, and hope they quickly find new positions within the industry. It’s brutal to see the traditionally recession-resistant entertainment industry taking a hit.

__________________

« | »

, , , , .

76 Comments »

  1. Biscuitry says:

    It may not be a trend, but it is unfortunate timing. All these layoffs at once are going to make it that much harder for those who have lost their jobs to find new ones. My heart goes out them.

  2. Hoaxfish says:

    Bit suspicious of EA’s involvement in Popcap being a benefit… sure they may be putting money in, but I can’t help but wonder if they haven’t been also interfering in the company’s stability/mental health.

    Funcom seemed inevitable with The Secret World being a subscription MMO , when Conan tripped over when released… a single-player game probably would’ve garnered more success.

    THQ is hopefully just a continuation of whatever “bad slip” they’ve been having recently, rather than the continuation of a death spiral.

    I hope they recover either way.

    • Juan Carlo says:

      It’s even more confusing if this wikipedia factoid is true:

      “PopCap’s flagship title Bejeweled has sold more than 50 million units[3] across all major platforms and continues to sell another copy of itself every 4.3 seconds”

      That can’t be true, right?

      50 million units is insane. That’s more than the original supermario brothers.

      • mondomau says:

        It’s shipped on pretty much every format they can fit it on, so maybe. It’d be interesting to know how many of those sales are bundled though (i.e. with other games or as bloatware).

      • Trillby says:

        It seems to me that Popcap simply missed the miss the boat (or gravy train) once or twice too often. Peggle, Bejeweled, PvZ and Bookworm Adventures are all strong licenses and all would make a lot of money with even semi-regular updates. We’ve been waiting on sequels to these games for years now, when they should be in their third or fourth iterations already. There is being fresh and original, then there is being criminally business-unsavvy. I don’t think any of us would have begrudged them our ourselves another Peggle or Plants vs. Zombies…

        • Erithtotl says:

          Agreed the lack of sequels for their top titles is mystifying. How hard would it have been to put out a new PvZ with 30 new levels or whatever? It’s the only phone game I’ve ever bothered to finish and would have sold millions of copies.

          We complain about games churning out the same title with new levels every year, but there is a happy medium

          • SkittleDiddler says:

            What are you guys talking about? There are a bazillion versions of most of PopCap’s games, and that’s not counting the myriad platforms they develop for. Peggle 2, Peggle Nights, Bejeweled Plus. Bejeweled Twist, Bejeweled 3, Bejeweled Blitz, etc. etc. A simple trip to their official store page would verify this.

        • jamesgecko says:

          They are making Plants Vs. Zombies 2. It was announced the day before the layoff announcement.

  3. Lydia says:

    This could have been prevented if more people had wasted their time and money on The Secret World. Selfish bastards !

    • Tacroy says:

      I can barely justify $50/month for a cell phone plan that has data, much less $15/month for any game at all.

    • Phantoon says:

      That’s The Secret World’s fault for having such a boring intro. I tried it at someone else’s house, and honestly just wasn’t impressed. Like I was all ready to have a bunch of notes taken at my computer, but I got a bunch of repeatable fetch quests instead. And the quest limit is so low- which is completely asinine if I’m supposed to be investigating every clue I find.

      No, Funcom once again had a good idea they shot in the foot.

  4. frightlever says:

    Do Popcap have coders in Dublin or is their office there just a tax wheeze?

    If TSW had been a single player game, they wouldn’t have needed half those staff in the first place, surely.

    • vodka and cookies says:

      Yeah I’m surprised more companies don’t do that re-jigging an MMO as a single player, certainly what should be done with the KOTOR MMO.

      Mister Walker, things like Bejeweled sell for nothing, so you can claim a huge install base but the money it brings in is small, as Popcap admit themselves their higher priced games which bring in the big money are getting hit hard by FTP titles.

    • roryok says:

      There were 90 people working there, and it’s been confirmed that they’ve all lost their jobs. I’ve never been in there and seen them developing games, but it’s hard to believe they’d need 90 staff for a tax dodge office.

    • Lysaara says:

      They do have actual developers there. Or did, anyway.

  5. Alien426 says:

    Jeff Green (formerly 97.5 – The Brodeo) was not affected by the PopCap layoffs.

  6. Sheza says:

    The Secret World is crap, haha. It’s one of the worst games I’ve ever played that has had such high expectations. I still feel sorry for the developers that are let go, though.

    • Milky1985 says:

      Secret world was good it hough, issue for me was a full price game with a sub.

      Been burned by MMOs before, i had age of conan (cheaply) because my mates were going to play it, lasted a month before they stopped so i followed.

      Same for rift, KOTOR was a bti different i stopped playing because mates were playing at different levels, that and the mirroring of stuff for allience/sith (seriously why do both of them have a galatic hub with the same sodding layout?)

      Basically i didn’t want to get burned again, however if it was either GW style (pay once no sub) or sub but no up front fee iwould have been fine, as the investigation missions and atmosphere was great.

  7. RedViv says:

    Even better: They did “let go” the creator of Plants vs Zombies, George Fan. Same week that they praised PvZ in the press release.

    Yeah, well, berks. I would guess that this means that Laura Shigihara is out too.

  8. roryok says:

    that third pic in the article – the giant stone golem thing – is that from secret world?

  9. drewski says:

    Sign of the times, unfortunately.

  10. HisMastersVoice says:

    While it’s always hard for those affected, the layoffs in THQ do not really affect us, as gamers. In fact, less money spent on pointless marketing is probably a good thing. There is literally no point in trying to compete with Activision and EA in terms of mainstream commercial exposure, so might as well cut it down a bit and go a different route with marketing their products.

  11. x-jay says:

    This is a shame..

    1) Popcap is original, thrives off original IP’s, gets bought by EA, EA milks IP’s, IP’s run dry, EA gets outta dodge by laying off employees

    2) Funcom makes original MMO, MMO’s can’t thrive because the subscription market is strangleheld by Blizzard, and will sadly go F2P like all the rest (which sucks, because the secret world is good, and has a good setting)

    3) THQ… well I can’t judge THQ because I havent played Darksiders 2 yet. But I don’t know how they can’t make money with all the wrestling/MMA fanatics out there.

  12. Anaphiel says:

    Is there any industry more dysfunctional than the gaming industry? There’s all this talk about how gaming brings in more revenue than movies and music combined, but every time you turn around there’s some major developer folding or laying off employees en masse.

    Somebody’s gotta be making money, but it clearly isn’t the developers.

    • darkath says:

      There is a big mediatic bias when jobs market is concerned, in any industry. The job market is in flux. Jobs and positions are created on a very specific and unique basis. Because Company X need skill Y a time Z, in the house, they will create a position and headhunt someone to fill the ranks.

      Most lay offs are the same. Someone is not needed anymore, or he fills a resignation, or he find a better oppurtinity.

      But companies that faces restructurations are often forced to restructure in one go. Meaning they would destroy 50 positions in one move, even if they plan to create 50 new one during the following months. No one will talk about the 50 jobs Popcap plans to create or how the marketing within THQ will be restructured. No one will post press release, and no one will hear about it, it will happen nonetheless.

      You won’t find either news about all the jobs created in one year versus all the layoffs in an industry except if you go purchase the industry’s specific magazines with all the figures and charts and tables. In the game industry i’m pretty sure the ratio is positive by a good margin, because the industry is growing tremendously.

      Press release about big one time layoffs are mandatory if you don’t want to get bad press and rumors running about around your company, and it makes good sansationalistic headlines in the papers. While no one would care about a press release on how X company hire so many people this year.

      • drewski says:

        Bingo. Popcap, right here in this story:

        “Even with the cuts we expect to end the year with roughly the same number of people we started with.”

        Yet the headline is 50 jobs lost, not Popcap add 50 staff throughout year. Both are true. Which is a story?

  13. Desmolas says:

    The region-specific release dates make absolutely no sense from a business or marketing point of view.

    Its Darksiders 2 release day in the US. All the reviews are coming out at the same time, people are talking about it on social media sites. The average European/Australian gamer might see all this and go “Hrm, Darksiders 2 is looking good, ill have to check that out.” But they can’t physically buy it on steam or elsewhere so then they do one of two things. Ignore it, forget about it and don’t bother buying it. Or pirate it.

    Publishers are causing themselves hurt sometimes. I don’t understand where the business logic is in having separate rlease dates.

    • Bhazor says:

      Except that Steam, Gamersgate and Amazon all allow you to preorder the game often with some discount or free DLC as an incentive. You could also see it as extending word of mouth, people are talking about it in America today and will be talking about in france next week. But yeah regional restrictions for downloads is really frickin dumb.

      Off topic; you can’t threaten a developer with loss of sales through piracy and then later claim that piracy doesn’t affect sales. It’s a piece of double think that I keep seeing on RPS and it bugs me everytime.

    • RogerMellie says:

      I’m a great believer in there usually being a good reason for things that seem odd at first but I’m having trouble with the staggered release dates too. Does anyone have a semi decent explanation?

      The best I can come up with is production/localisation things… not convinced though…

      • Hoaxfish says:

        The only ones I’ve heard are
        1. Different regions have different “new release” days. Like retail in the USA has an industry-wide schedule that says new products come on Thursday, while the UK shops do it on Monday.
        2. Europe has a mess of languages, and different (age) certification processes, so it’s all “oh, we need time to get them all in” or something, even if the UK speaks English just like the USA

  14. Bhazor says:

    Popcap shrivelling AND marketing people being fired? I’m sorry is that supposed to be sad news.

    Funcom losing half its staff is sad though. Unfortunately, I can’t sympathise in that I think most people agree Secret World should never have been an MMO. There must be a huge discrepency between the cost of producing and maintaining a full MMO compared to the costs of releasing a half dozen smaller single player/co op games. The truth is the MMO elements ended up adding very little, to what is in truth an excellent game, and it meant Funcom had to go much longer without a payday. Sad. Sad but still dumb.

    It also means Funcom are now running TWO underperforming MMORPGs.

  15. Rudel says:

    I’m really wondering where all the money went, especially in the case of PopCap. They sold so many units of their popular IPs, what did they do with all that cash? Even with 100+ employees and some office space to rent, running costs etc you cannot burn through 100′s of millions of dollars so easily. Damn shareholder values I guess…

  16. Worcanna says:

    It feels like gaming in general suddenly hit a very like bump and a lot of damage was done. It feels a little easy for me of late to feel like Chicken Little but il be good. I wish Funcom would get more dues for the game that clearly is a labor of love.

    • Grygus says:

      Love doesn’t matter. Quality doesn’t matter. Track record only slightly matters. All that matters are short-term profits. We learned this lesson years ago with Troika and Looking Glass.

  17. Radiant says:

    Damn shame all of this.

    Please be responsible when you hire people; creative success is not related to the number of employees.

    Also Darksiders 2 is a bit boring.

    • CptPlanet says:

      Darksiders 2 is…probably the best action game of the last few years.

      • Radiant says:

        I gave it a go for a couple of hours and it was all very rudimentary albeit with a really lovely art aesthetic.

        I left it in the makers [Scottish giant dwarf style hub] and didn’t really want to play the level up game.

        Re-installed World in Conflict and found that much more engaging.

        I’ve got it installed still so I may give DS2 another bash.

        • Pucho says:

          I kinda feel the same way. It got so much praise for “borrowing” a bunch of formulas and putting them to good use. Not bashing it, but that seems uninspired to me.

          The overall impression I got was a supremely loud *meh*.

  18. Zeewolf says:

    Also worth noting that Sony’s Studio Liverpool was closed today. It may not be entirely relevant for today’s PC gamers, but considering the studio started out as Psygnosis, a hugely important developer and publisher in the 80s and 90s, I think it deserves a mention here. They did some nice PC-stuff too.

  19. Moraven says:

    So, another developer EA has bought and killed?

  20. Jenks says:

    I don’t say this out of mean spiritedness, I say it out of self interest:

    It’s nice to see the casual side of the game industry struggling.

    • Shuck says:

      Hardly – it’s the “casual” (as in free-to-play, social) game section that’s doing well right now (or at least are hiring). Retail games are suffering. Those former PopCap people (and likely everyone else who was laid off) will end up doing Facebook games if they continue working in the game industry.

  21. Pucho says:

    Someone please help me understand this sentence:

    “at this time in North America there are about 50 people who will no longer work at PopCap. We’ve hired aggressively this past year and PopCap is still growing. Even with the cuts we expect to end the year with roughly the same number of people we started with.”

    So let me get this straight. We are laying off 50 people. We have hired like crazy up until just now. We will continue hiring, probably another 50 people so we’ll level out.

    This makes ZERO sense to me. Why would you hire so aggressively to just get rid of people a few months later?!? Further, Why would you then go to say that you’ll continue hiring AFTER you get rid of people. Am I missing something here?

    I’m honestly sick of Corporate America treating employees like any other resource. You don’t just adjust the in and out flow of PEOPLE at every little fluctuation of the market. Companies used to employ people for life, for crying out loud. What ever happened to job security and building a carrer??

    • drewski says:

      It died in the 80s.

      Maybe they’re letting go testers and marketers because their product lineup is further back in the pipeline. Maybe they’re letting go artists and hiring QA and distribution because they’ve got a big ramp up in production about to hit. Who knows? Just because a person designs levels well doesn’t mean he can run a warehouse. Popcap, like all companies, would constantly review their staffing depending on need – you can’t expect a company which is trying to make money to pay 50 people to do nothing because they don’t have the work any more.

      • Pucho says:

        Ok, fair enough.

        It still irks me though, that companies nowadays feel this imperative need to optimize EVERYTHING. EA, for example, buys, shuts down, then buys some more the next day. I understand that adjusting positively or negatively to need and demand minimizes costs, but human capital is different. It’s not office supplies, or milligrams of mayo on your Whopper we’re talking about, but actual people.

        Fuck this over-industrialized world we live in.

  22. Beelzebud says:

    George Broussard (Duke Nukem Forever) is one sad dude. He blames THQ for his miserable failure, so now his hobby seems to be talking trash about them, and leaking internal documents.

  23. MadTinkerer says:

    Well it’s about time! How long ago did EA buy Popcap?

    Man, EA are really slacking off in their buy-a-company-then-carve-out-it’s-innards-and-name-our-download-service-after-it policy. Maybe their next purchase will last an entire year!

  24. tuluse says:

    Dear Funcom: please do a kickstarter for another sequel to The Longest Journey. I will donate 2 months gaming budget for such a game (ok so that’s only like $50, but still).

  25. SkittleDiddler says:

    THQ needs to go down in flames. There, I said it.

    It sucks that people are losing their jobs because of management and marketing short-sightedness, but their current sales scheme is untenable for everyone involved. You can’t charge $60 for a new game, leave out content, and then expect consumers to spend three times as much on that missing content when it’s all released as overpriced DLC packs. It’s a horrid little trend that’s reshaping the industry for the worse.

    Fuck THQ. Let ‘em burn.

    • Kadayi says:

      THQ are in trouble over Udraw. Their general game sales like Saints Row have been what’s kept then afloat.

      • SkittleDiddler says:

        That may be the case at the moment, but their current sales plan is going to backfire eventually. I’m putting money on the table that THQ goes bankrupt before the middle of next year.

  26. hamburger_cheesedoodle says:

    It always blows my mind when I see “Saint Row the Third developer Volition Inc.” I always think of them as “Freespace developer Volition Inc.”

  27. Kadayi says:

    Surely this can’t be. I was only just now assured by Hypernetic on the forums that everything is completely peachy in the games industry.

  28. Nick says:

    Aren’t THQ suffering because of the huge financial ballsup that was Udraw?

Comment on this story

XHTML: Allowed code: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>