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According to an email sent to Gamasutra by a source who wished to remain anonymous, Hamburg-based Goodgame Studios, the company behind free-to-play titles such as Goodgame Empire and Big Farm, will begin laying off approximately 200 employees tomorrow afternoon.
This is the latest series of job losses at the German free-to-play company, which previously let go some 400 employees in late summer of 2016. According to our source, the layoffs include employees who were hired overseas, who aren’t sure if they’ll be offered relocation compensation.
In an e-mail to employees, obtained by Gamasutra, managing director Kai Wawrzinek writes the cuts are due to the difficulty of maintaining success in the free-to-play games sector.
“The market for free-to-play games is highly competitive and proves more and more challenging for all market players across the industry in Germany,” the e-mail states.
“The industry is fighting for market shares with rapidly increasing marketing budgets, the success of new games is increasingly difficult to predict. We are also affected by these developments. At the same time, our new developments have not yielded the desired success, yet.”
Goodgame previously came under fire when it laid off developers in 2015 supposedly on the grounds of preventing collective organization among its employees. This accusation was backed at the time by The United Services Union.
We've reached out to Goodgame Studios and will follow up with any further information.
UPDATE: Goodgame Studios has confirmed earlier reports of 200 impending layoffs in a press release shared today. The release used many of the same phrases cited above and additionally stated that this latest restructuring would ‘speed up’ efforts started by significant layoffs last summer to focus efforts on Goodgame's core business.
“The decision we took last summer, to concentrate more on our core brands – Goodgame Empire / Empire: Four Kingdoms and Big Farm – and to place our customers at the heart of our activities, is still the right thing to do,” said founder and CEO Kai Wawrzinek in a prepared statement.
“Moreover, we will invest some million euros in our HTML5 strategy and see further chances for growth there. With shorter decision-making processes, our new, clear focus and investments in the HTML5 strategy, the foundation for the long-term company success of Goodgame Studios is laid.”