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Funcom shifts to smaller online games after The Secret World setbacks

Funcom shifts to smaller online games after  The Secret World  setbacks
August 28, 2012 | By Eric Caoili

Funcom is laying off employees and shifting its focus away from giant, expensive MMO projects, as it tries to recover from the recent disappointing launch for The Secret World.

Though over 500,000 users registered for the subscription title's beta, only 200,000 consumers have purchased The Secret World since the game launched two months ago, which the Norwegian developer admits is below its expectations.

After working on The Secret World on and off for a decade, Funcom says it now wants to make smaller games that require shorter development times and less upfront investments, starting with its upcoming free-to-play title based on LEGO's Minifigures toys (expected development time for the project is 18 months).

The company wants to create more focused gameplay- and player-driven games that are in line with today's market, citing examples like League of Legends, World of Tanks, Minecraft. It also wants to emphasize multi-platform engagement and flexible business models.

Along with this change in direction, Funcom is undergoing large cost reduction initiatives, which has so far included layoffs at its Oslo, Montreal, Durham, and Beijing locations, with around half of the developer's personnel affected. Its CEO and president Trond Arne also stepped down in July.

Funcom intends to continue development on The Secret World and launch several player acquisition initiatives. It's also looking to address the game's issues that annoyed players and reviewers -- the company says the game's 72 Metacritic score has impacted its sales significantly.

In its latest earnings report for the second quarter ending in June, Funcom's sales fell considerably due to declining Age of Conan revenues, from $3.1 million to $2.6 million. The Secret World's marketing and build-up costs also brought down its EBITDA (earnings before interest, taxes, depreciation, and amortization) to -$47.5 million from -$3.5 million.

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