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  Gambling with People's Jobs - Response to Raven and Maxis Layoffs
by Timothy Ryan on 08/27/09 02:20:00 pm   Expert Blogs   Featured Blogs
18 comments Share on Twitter Share on Facebook RSS
 
 
  Posted 08/27/09 02:20:00 pm
 

With all the layoffs over the course of the year, we've seen more people kicked to the curb than ever before.   It deeply saddens me, and I have also been personally impacted by it. 

It used to be that if you did a good job, did what you were told and occasionally exceeded expectations to make up for the times when you didn't, you could feel comfortable that you can keep your job.  Heck, if you were really good at what you did, you could have the personality and breath of a warthog and still keep your job.  But nowadays, you could do a great job, bust your ass in crunch mode, and still lose your job because your game just wasn't the hit people were expecting.

Companies have always made the "painful" but arguably necessary decisions to cut costs by tossing off their dead weight, their underperformers, when money is tight. Yet with soaring game budgets these days,  it seems that we're in a high-stakes game of poker, and our bosses have gone "all in".  If they don't walk away with a bigger stack of chips than  they came in with, they're going to make some deep cuts.  The whole team's jobs are at stake. 

It's these team-sized layoffs at Activision/Raven and EA/Maxis that illustrate my point.  Here are two teams that have worked at America's top 2 publishers.  The money is clearly there.  They may have lost a hand of poker, but they still have a big stack of chips. 

To a publisher its clear that some shake-up is necessary, as the project was well-funded, so some other factor in the recipe must be to blame.  But allow me to go out on a limb here and suggest that seldom are the people cheifly responsible for a game's failure held responsible.

It could be that the game license, original IP or technical gimmick the game was based on just didn't catch on.  Is that the fault of the team or the biz dev guy who bought the license or the marketing vice president or creative director who pitched the idea?

Maybe someone on the team is at fault.  Maybe the game suffered from a lack of vision.  Is that the rest of the team's fault or just the lead designer or producer's fault? Maybe it was poorly executed.   At that point, it could be anyone's fault but clearly not everyone's.

So if layoffs are a necessary evil in this business ... if it comes down to some people having to lose their jobs, I would hope companies do some real failure analysis and lay off the right people.  I can't imagine all those people at EA/Maxis and Activision/Raven were to blame, but the question remains whether the people they held onto will play a better hand of poker.

Tim Ryan (a fellow victim of layoff, Midway, Dec 08)

 

 
 
Comments

Sander van Rossen
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I think these layoffs are once again a clear sign of what's wrong with business (and society in general) these days: we only think short term.
The people who 'lead' businesses these days have targets they have to meet to get their obscene bonusses, and if they can't up the profit, they'll cut on costs over anyone's back, the future be damned.

Timur Anoshechkin
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I think two issues are mixed together here. The corporate culture and game production. First of all if this studios were independent and just financed by publisher on a given project, then they would still go through lay-off process, because publishers will be unwilling to finance their next game development if previous one lost money. 95% percent of independent developers think short term, because the need to pay now, not later. So the argument that if the studio is part of corporate entity, this entity should use profits from games made by other studios to support the studio which didn't perform in case they perform in the future is a stretch.
On other hand as we know most profits don't go back into development but here:
http://www.marketrap.com/article/view_article/91133/activision-executives-sell-m
illions-of-shares-while-company-buys-back-millions-of-shares
But it is a matter of corporate culture not game development.

Sander van Rossen
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"So the argument that if the studio is part of corporate entity, this entity should use profits from games made by other studios to support the studio which didn't perform in case they perform in the future is a stretch"
Sure, if you look at it that way it sure sounds like a stretch. But consider that the studios in question are part their respective publishers. The individual performances of these people (in general) wasn't the problem. It's not very constructive to just fire lots of people who didn't underperform individually, it doesn't fix the underlying problems. THOSE should be identified and fixed. Also, right now publishers are stopping lots of projects because of the bad economic circumstances -now-. And the result is that when the economy picks up, suddenly there's a 'shortage' of new games coming out.

Timur Anoshechkin
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Go and tell this to activison. They will tell you who needs new games. WOW, COD, MF and Guitar Hero is 95% of their profits. Every other game is just marginal at best, even if it is successful and well reviewed. They have SC2 coming out. Every other game in their portfolio is just to boost revenue not profits.

Also Raven studios was always in bad position. They don't have their own tech, they work on IP owned by other studio and they themselfes owned by publisher that is competing with that studio, which is owned now by another publisher. All of their other games are done using unreal.

It is like EA asking Activision to work on next Battlefield using one of their internal studios and using Dice's tech. Not good.

Also who said that economy is going to pick up??? That is a bold statement.

Chris Crowell
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I don't have a link, but I believe it has been proven that the cost of recruiting a new replacement is greater than keeping the current employee on board. I was at EA & Maxis for 10 yrs and I saw this cycle happen time and again. A few years ago a very good friend who is one of the best AI programmers in the industry was laid off because he was between projects FOR ONE WEEK when the order came down to reduce headcount. He had been a loyal employee for 13 years and had created vital elements for a number of EA games. But he was a big number on a spreadsheet and he was gone in an instant.
The good news for devs is that there are other development companies that are hungry for experienced game developers. The industry is expanding into new niches and genres, I am sure the people with the Maxis pedigree will be snapped up quickly and treasured like the rare resource they are.
Good luck guys!

Wombat

Joseph Maris
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I think this underscores the need for all industry employees to see themselves as free agents. Our industry's love of layoffs has rendered the concept of loyalty as quaint at best and a sucker's bet at worst.

When negotiating for salary with a large corporation with a love of layoffs, I think it's important to exact a premium from them in order to manage your risk to layoffs. It's a little like layoff insurance. If things go south, you will have a little extra cushion, and who knows, maybe if a company discovers that its reputation is making recruitment and / or salary negotiation difficult, it will start taking the long view on these things.

But I kinda doubt it :).

Best of luck to the Maxis peeps. It's hard to find a more skilled group of folks. I hope they get snatched up quickly.

Timothy Ryan
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My "insurance" is traditionally the weeks of vacation pay that I never claimed during a project. I was only at Midway 2 months when they shut us down. Thankfully Midway was bound by law to give 60 days, but on the last week of the final paycheck in which they would have paid the vacation pay they declared bankruptcy instead.

I hope everyone who was let go yesterday had a better severance package and gets a job quickly. Good luck.

jeremy bryant
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I was at Atomic. They layed off about 65 people earlier this month. Like you said, it wasn't the people who failed that were let go. It was the guys that busted ass for years to do a better job than they were paid for. Severance?? Almost 9 years got me 3 weeks of severance, and no vacation pay was refunded either. The bar is getting pretty low around here...

jeremy bryant
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The 60 day notice was skirted because it wasn't 60 people at a single site. We had a 3 hour notice to pack our stuff and get out.

Maurício Gomes
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I got laid off in a iPhone company... The ironic, is that when I got hired, I warned the owner that what he was doing was a gamble...

I told him: "Hey, I know that you want to be one of these guys that make a single game sell millions, this one game that sell millions, are one game in the middle of 13.000, so, this is a gamble."

His awnsers was: "I know that, but that is the purpose! I don't wanna receive a little money all the time, I want receive a good amount of money, even if it is risky!"

Well, he lost the gamble, and I lost the job (altough he lost more than me... Much more, he bought lots of stuff, and now he has several idling Mac workstations priced 3000 USD each... And idling engine licenses...)

Benjamin Quintero
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Joseph makes a strong point. Developers and publishers are taking on the structure commonly seen in Hollywood, where writers and actors pack their things at the end of a season and they MIGHT get called back if the show wasn't canceled. The difference is that they often receive higher wages, lifetime royalties, and other perks that most salaried developers do not. Another major difference is that it's an agreement that is made between the writers, actors, and the producer of the show; a season contract.

Those Hollywood writers are not being hired as full time employees, and given the formal tour; they are full-time contractors. There is an awkward middle ground that game developers are stuck into where they are treated like they are here to stay and then dropped at the end of the project; that is simply immoral. It wouldn't be so bad if these laid-off developers were knowingly on an 18 month contract with benefits, but that didn't appear to be the case. It never does.

Timur Anoshechkin
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@Benjamin
I think what you talking about will happen, but it is up to industry leaders on dev side to push for it.
But generally they don't have any incentive, because they are extremely well compensated.

JB Vorderkunz
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The Screen Actors Guild, Writers Guild of America, Directors Guild of America, and American Society of Cinematographers are collectively responsible for the remunerative structure of Hollywood. I'm curious, as someone working towards entering Videogame development, are there equivalent guilds within gaming?

For those who don't know, the Hollywood guilds require credits/hours earned in a given position to enter and advance within the respective guilds. Becoming a member of the DGA, for example, is no easy feat!

Jay Simmons
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I see the problem also being that when a project fails or underperforms due to poor design, cost overruns or poor management the people who get laid off are rarely the ones responsible for the projects failure. When a pro sports team looses consitantly they don't fire the whole team they cut the underperformers and fire the coaching staff and genreal managers.

Not so in the game industry. Bad leadership is the norm, wheather it be in large game factories where the deadweight simpley gets moved from department to department or the boutique developers where a small group manage to secure funding then start awarding themselves titles and positions they are grossly unqualified for. These people are rarely held responsible for a companies failure until the whole thing goes under.

Timothy Ryan
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Every now and then this talk of Hollywood style guild/union comes up. It certainly might make it better in the short run for game developers, but I would imagine it would drive more jobs overseas - like all the TV/film jobs that go to Canada and animation that goes to Southeast Asia. IMHO, it's the U.S. locations more than anything that keeps film production jobs here in America. Given that our locations are all virtual, I think we'd be screwed.

Glenn Storm
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Tim's article makes an argument familiar to me, having heard it countless times from the talent pool within the feature animation industry. Then Joseph and Benjamin zeroed in on the realities of the situation, also mirrored by the animation industry and live action film. And Stephen completed the thought by bringing up the responsive effort by the talent pools from those industries: guilds and unions.

My contribution to this discussion is another reality check viewpoint. When these industries, using the specialized collaborative creative talents of many individuals for entertainment production, are small and in their infancy, it's the Wild West: a frontier with endless possibilities but lots of risk of the unknown and little agency by those willing to pioneer the field. When those pioneers just happen to strike gold, there is a Gold Rush: a flood of interest, bringing with it talent, investment and (if I can stretch this analogy) families. The explosion of rewards from this new frontier allows further agency, further exploration, further investment and some further rewards: a Boom. Inevitably, the frontier becomes saturated with agency (cheap dev tools) and pioneers (talented individuals) in relation to the rewards. At that point, investment is less about taking a huge risk on an unknown reward in that frontier, it's no longer about the early adopters cashing in on the current wave, and much more about honing efficiency, cutting expense and looking for the next frontier. This is the tipping point, where available talent outweighs available investment: a Bust. This is when the folks who pioneered the field, or who followed the Gold Rush, wonder why business doesn't consider the plight of their families, as the investment dries up and the Wild West becomes dotted with Ghost Towns. (enter next pioneer, next frontier)

Business will not be charitable to talent, ever. It is a contractual agreement that by compensating for work done, the business will reap rewards greater than said compensation. So, the notion that a studio would keep talent around without the next contractual agreement (literal or implied), is a fallacy; one that the studios are more than happy to perpetuate to keep the talent docile. Further, the notion that business would try to discern which individuals among the talent pool and outside it deserve blame for failure or credit for success, is irrelevant outside the scope of that contractual agreement. Some studios will in fact think longer term, maintain current contractual agreements with their talent pools and try to maintain a consistent talent pool as a way to offer a semblance of stability in contrast to others, but this is a risk that is simply unfathomable to most investors; it's a tough sell to define that strategy as anything but charity or folly.

Unfortunately, I do not think we can look to the film or animation talent's response for salvation. Guilds and unions do a fair job at maintaining compensation over the long term (or at least holding it together for longer than without them), but to the ire and detriment of the business. Not only will business fight unions and guilds in any way possible, and at all times, but eventually this tension applies pressure against the business model itself, making investment less attractive. So if the entertainment we present falls (even slightly) out of favor and causes a dip in reward, as it now has for TV/Film/Animation in relation to Games, the momentum heads in the direction of the Bust.

Sorry, that was quite a downer comment, but I feel its something important to contribute to this discussion, as I watch history repeat itself.

Eric Scharf
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Well-stated, Glenn. The latest incarnation of this subject was kick-started by Mr. Ryan, but it continues to repeat itself, as you said, and we, the developers, continue to empower this repetition, as Stephen indicated.

I wrote an article back in December of last year touching upon many of themes wrapped up in this subject, entitled "Transforming the Games Industry into a Well-Oiled Machine," and it is located at http://www.emscharf.com/blogosphere/genuinearticle/genuinearticle_2008/genuinear
ticle_2008_0005_01.htm.

Human nature, unfortunately, always seems to demolish even the most common sense approaches to the operational procedures that would help but not cure Wild West component of the games industry.

I have a few more thoughts to share, but I must catch myself and first dump them into another blog entry.

Cordero W
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A Game Makers guild would be pretty neat. I can easily say that Gamasutra is considered an unofficial guild of sorts, if I got that perception right.


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