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THQ Closes Multiple Studios, Lays Off Staff
by Chris Remo
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November 4, 2008
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Publisher THQ is making significant staff cuts to its internal development studios, according to information obtained by Gamasutra and another media site, with Paradigm Entertainment reportedly being closed and Juice Games seeing a workforce reduction of about a third.
Dallas-based Paradigm Entertainment was acquired from Atari in 2006; since becoming part of THQ it has released only one game, last year's Stuntman: Ignition under the THQ brand. Gamasutra's sources claim that the layoffs, affecting the entire studio, were instituted today.
UK publication Develop also claims that UK-based studio Juice Games, developer of the Juiced racing game franchise, is seeing notable cuts -- though the studio will remain in operation.
With THQ's quarterly financial report set to release this Wednesday, it is likely that the cuts -- potentially along with additional ones at the publisher's other studios -- will be confirmed in a matter of days, although the publisher declined to address the reports today.
"Right now that's a rumor. We have no comment on that," said a THQ representative when contacted by Gamasutra regarding the matter.
[UPDATE: Gamasutra has also learned that Los Angeles-area THQ studio Mass Media has been completely closed. The developer had not had an announced title since being acquired by THQ in early 2007, although CEO Brian Farrell noted at the time that the company was particularly keen on utilizing Mass Media's "platform development tools".
In addition, weblog Kotaku has noted that the company's interactive studio map also now lacks Helixe, the Burlington, MA-based studio that specialized in Nintendo handheld work and last shipped the DS version of De Blob.
Also now closed, as confirmed by an internal THQ email seen by Gamasutra, are Santa Clara, CA-based Locomotive Games, which was most recently notable for Destroy All Humans! Big Willy Unleashed on the Wii, and Seattle-based Sandblast Games, which has just completed work on Destroy All Humans! Path of the Furon. In addition, Phoenix, Arizona-based Rainbow Studios has seen unspecified amounts of layoffs.]
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It's never a good thing to see this happen. My hope is that it wasn't done just to have a stronger quarterly report, but that is more often than not for these larger companies. =(
It may, in fact, be this series of closings, or re-administering of resources, that brings the games industry to the final, global solution people have been discussing for years: a majority pool of contractors versus teams upon teams of in-house employees. No, I do not believe the long-and-quietly-debated workers union does not arise from this. Sure, contractors make more immediate money without the specter of benefits and monthly tax withholding, but employers "benefit through no benefits".
In any event, it will be interesting to see how much longer even the large publishers wish to continue starting new studios, realizing the results of 1-3 projects, shutting down those studios, and, then, starting up more studios to take place of those which have been originally shut down.
It would probably be unwise for anyone to fool themselves into thinking the timing of these closures is exclusive to the lousy state of the U.S. economy, nor the global economy for that matter.
These types of "seemingly major" shutdowns have been happening, in smaller doses, over the past decade, at least. And this is just in regards to the closings that are made public, versus many of the internal R&D studios that support gaming hardware, such as Microsoft's Xbox 360, Sony's PS3, and Nintendo's Wii. These hardware manufacturers would not dare close down their R&D teams? Maybe not, but downsizing and keeping certain key personnel is never out of the question. Again, as General Motors would be quick to remind everyone, employee benefits can quickly become the enemy, whether or not you have been attempting to sell garbage products for decades or not.
This THQ story, however, is still part of a cyclical process, no matter the poor timing for employees, or the true depth of the financial over-leveraging that may have started the ball rolling downhill in the first place (and, in this case, a studio closure is to an unemployed game developer as a rolling stone is to moss, and the moss is gathering with increasing speed).
The day may be coming, using a little imagination, when many studios, even the well-known operations, no matter how successful, are shuttered when even one project, whether during pre-production, full-production, or QA, goes in the wrong direction (e.g. suffers from average-to-poor sales, major management and personnel issues, blown deadlines, QA disasters, marketing disasters, manufacturing mishaps, and everything in between).
If there is anything "chilling" about this story, it is that the majority of game development projects, both blockbusters and small potatoes alike, run into these problems every day, and no single project is in danger of running baby-soft smoothly anytime soon.
It is this lack of serious standard operating procedure, fairly rampant in the games industry, that, incredibly, allows some rare, super-successful game products to be so unique. Once you regulate, or insist on applying SOP to a project or development studio, you need to know beforehand that your developers are mature and capable enough to work well and succeed within a solid infrastructure, with all of the little governmental / interdisciplinary checks-and-balances that go with SOP.
At some point, even relatively disconnected shareholders who are invested in any business or industry, learn how involved the production process can be for the commodities their investment monies support. Does this information send a chill up their spine? Does it make them pause for a moment and ponder if-and-when the next studio needs to be shuttered? Will investors start clamoring for a one-and-done approach to game development products . . . just like the film industry to which so many in the game development community want to compare themselves? The same film industry that relies almost exclusively on contractors who generally are given one opportunity to "get it right" for a given film (or "You will never work in this industry again")?
We should all continue to be watchful and wary of the machine that functions behind the highly publicized game development sales. We should all be careful of the "glamorous associations" for which we have been wishing. We just might get it right between the eyes, and we will all truly be competing with a global workforce, objectively speaking, of course.
I don't think that this is proof that the current economic crisis is weighing in on the games industry, just the publishers who were poorly managed.
Yes we will probably see some hits in our industry, but don't attribute THQ's or EA's situation to anything but using our current state of economy as an excuse to clean up a mess they had already created.
Since the current economic downturn is certainly greater in magnitude than we have seen in our short industry history we will have to see what happens but I for one am expecting EA sales to pick up and their stock to rebound significantly over the next year and have invested significantly in ERTS on that belief. I'm not nearly as optimistic about THQI or the company behind them but I expect they will experience a slower rebound with the rest of the industry and the greater economy.
http://www.bls.gov/news.release/metro.nr0.htm
and it has risen enough to drive home the notion to buyers that they should be savers instead, there is going to be a drop in sales of videogames, especially since the market is saturated with similar titles. Just as a company will downsize redundant positions, the customer will downsize redundant titles.
mia.burgess@mtvstaff.com