Elite Dangerous studio Frontier Developments announce layoffs and "organisational review"
Following "a period of disappointing financial performance"
Frontier Developments have announced that they'll be undertaking an "organisationl review" of the company after "disappointing financial performance and more challenging industry conditions". The news came yesterday in a note to investors, signalling yet another wave of industry layoffs.
It's not yet clear how many employees will be affected at Frontier, but the studio say that their goal of reducing annual operating costs by up to 20% will be "achieved through a recruitment freeze, spending cuts and, unfortunately, redundancies, subject to consultation".
The review is intended to "reshape Frontier to deliver on that updated strategic plan more efficiently, return the Company to profit, and create a sustainable foundation for the future." It's expected to be completed by early 2024.
In their most recent FY23 financial report from 13th September 2023, Frontier stated they'd had "lower than expected initial sales" of F1 Manager 2023, and also confirmed the closure of their third-party publishing arm, Frontier Foundry "following the completion of a strategic review". Just this year, Frontier Foundry were responsible for publishing the likes of space adventure Deliver Us Mars, sci-fi survival 'em up Stranded Alien Dawn and WW1 RTS The Great War: Western Front, and their successful collaboration with Complex Games on the excellent Warhammer 40K: Chaos Gate - Daemonhunters eventually led Frontier to acquire the studio in November 2022.
All this comes ahead of the release of Frontier's upcoming Warhammer RTS Age Of Sigmar: Realms Of Ruin, which releases on November 17th next month. They seem optimistic(-ish) about it in their note to investors, and add that their existing portfolio "continues to perform in line with expectations".
Still, with this kind of review hanging over it, you can't help but feel like there's just a smidge of extra pressure on it to be successful, especially given it's their only major new release that currently seems to be in the pipeline. I'm no business analyst, but given how much games cost to make these days (see Paradox's recent writing off of $22m just to cover the disappointing performance of The Lamplighters League), I worry what a similarly-sized flop would mean for Frontier's future.
It's been a pretty grim couple of weeks (months? Entire year?) for the video games industry between the recently announced layoffs at Creative Assembly, Team17, Epic Games, and the Epic-owned Bandcamp - and that's to say nothing of all the other major layoffs and closures announced at other studios from earlier in the year. CD Projekt staff recently formed a union in the wake of some of these larger layoffs, and have encouraged devs across the industry to do the same.