Lots of Bad News.....

Axe drops at Warhammer dev as subs sink to 300K

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With MMORPG's subscriber base shrinking rapidly, Mark Jacobs confirms his studio is "resizing"; rumors put cuts at up to 130.

As part of its grim earnings report yesterday, Electronic Arts announced that it lost $641 million during the October-December quarter of last year. One reason behind the shortfall was the declining subscriber base of the Mythic Entertainment-developed Warhammer Online: Age of Reckoning. Though the game hit 750,000 subscribers three weeks after the game's launch in September, EA said yesterday that the North American and European base had fallen to just 300,000.

Now, it appears as if Warhammer Online's dwindling user base is having an adverse effect on its developer. In a post to Warhammer Online's official Web site, Mythic studio GM Mark Jacobs confirmed that his studio is undergoing a measure of downsizing, maintaining that the head-count reduction is a product of the game's life cycle.

"Mythic has always been committed to maintaining a high level of development and customer service to our MMO players," said Jacobs. "Though we are resizing the team to move from a prelaunch to a postlaunch size, we remain fully committed to creating and delivering the best WAR experience."

Jacobs went on to say that staff reductions in the customer service, quality assurance, and play-testing departments were a result of decreased demand, now that players have become acclimated to the massively multiplayer online game. "Staffing numbers will always map to consumer needs--it goes up when we launch new products and expand popular ones, and comes back down as players become familiar with the game," said Jacobs.

The Mythic GM did not specifically say how much lighter his studio is running. However, game blog Joystiq asserts that the total layoffs ranged between 60 and 130, with a number of senior designers among those served their walking papers.

EA expects to drop head count across its many studios by 1,100 in the coming months. The publisher has already enacted a number of these cuts, with such studios as Skate 2 and Need for Speed developer Black Box and Madden NFL office EA Tiburon both having confirmed layoffs in the past month.


24% of THQ staff cut after $192 million Q4 loss

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More than 600 workers pink-slipped after 30% revenue decline; Saints Row 2 ships more than 2.6 million, WWE SmackDown vs. Raw 2009 tops 4 million.

Anyone hoping that the Bataan Death March of gloomy game-publisher earning reports would end soon saw their prayers go unheeded this week. The day after Electronic Arts reported a $641 million loss for the quarter ended December 31, 2008, THQ turned in its financial numbers for the same period.


The three months saw the Saints Row 2 publisher suffer a net loss of $191.8 million ($2.86 per share), way down from the $15.5 million profit ($0.23 cents per share) that it reported during the same period in 2007. Overall, THQ's October-December revenue fell 30 percent year-on-year from $509.6 million (2007) to $357.3 million (2008).

As a result of its financial shortfall, THQ plans to lay off 24 percent of its worldwide workforce, or 600 people. The announcement comes three months after THQ closed five internal studios and streamlined another two. Just 10 days later, it announced that it was trimming back its release schedule to just one or two games for the hardcore market each year.

"We delivered high-quality games to market this holiday season, but fell short of our revenue and profit targets in this challenging environment," said Farrell in a statement. "We are taking highly targeted actions with the objective of investing in games with the highest franchise potential and returning to profitability. We have executed on our previously announced plan to reduce our cost structure by $120 million. Given continued economic weakness, we plan to reduce costs by an additional $100 million."

THQ's losses came despite what looked like solid numbers for some of the holiday releases to which Farrell referred. The decently received WWE SmackDown vs. Raw 2009 shipped--not sold--more than 4 million units, followed by the better-regarded Saints Row 2 with 2.6 million units. The critically praised de Blob shipped some 700,000 units.


And Some Good......

Metal Gear Solid 4 hits 4.5 million, Konami posts $195 million profit

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Solid Snake continues to inject liquid currency into Japanese publisher, which saw sales rise to $2.56 billion for last nine months of 2008; full-year outlook lowered, however.

Solid Snake continues to get it done for Konami. Today, the Japanese game maker reported its results for the April-December period, saying that total revenues for the first nine months of its 2009 fiscal year grew 5.1 percent to ¥234 billion ($2.56 billion). Konami's profit margins also continued to outpace the year-ago period, given that net income rose 17.3 percent to ¥17.8 billion ($195 million).

Konami's Metal Gear Solid 4: Guns of the Patriots, which was released exclusively for the PlayStation 3 in June, continued to be one of the company's top performers. The top-rated action adventure sold more than 4.5 million units in 2008, shifting approximately 500,000 additional copies in the October-December quarter.

For the first nine months of its current fiscal year, which runs from April 1, 2008 to March 31, 2009, Konami has sold 22.35 million software units across its various franchises. In addition to Metal Gear's gains, the publisher has been bolstered by the success of its Pro Evolution Soccer franchise, which has sold more than 7.41 million units during the nine-month period. Other top performers for the game company include Castlevania: Order of Ecclesia for the Nintendo DS, as well as installments in its perennial Dance Dance Revolution rhythm franchise.

Despite Konami's positive growth during the period, the publisher provided a warning to investors that the global economic downturn will have a negative impact on its full-year returns. Citing slower consumer spending and a strengthening of the yen, Konami revised its full-year revenue and profit outlook downward. The publisher now expects revenues to rise 3.2 percent to ¥307 billion ($3.36 billion) during the year, with profits now projected to grow a mere .3 percent to ¥18.5 billion ($203 million).


Stardock opening new studio

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Sins of a Solar Empire publisher expands Michigan operations thanks to state tax incentive; reveals new RPG in development.

Yesterday, EA announced that it would be extending its head-count reduction to include 1,100 positions, thanks to mounting losses that tallied $681 million during its October-December quarter. Today, THQ followed up that news with word that 24 percent of its workforce--or 600 staffers--were on the outs due to a 30 percent slip in revenue. So, isn't it high time somebody announced some good news?

Today, Sins of a Solar Empire publisher Stardock Entertainment said that it plans to open a second studio in Michigan and in the process hire up to 50 new employees. The game maker's new studio will focus on creating an unannounced role-playing game, which Stardock plans to self-publish. The new studio was made possible thanks to tax incentives and communication-infrastructure upgrades approved by the Michigan Economic Growth Authority.

"We're very pleased with the support we've received from Wayne County and the state of Michigan," said Stardock president and CEO Brad Wardell in a statement. "We think Michigan is well placed to become a hub for technology companies thanks to new programs from the state to make Michigan more competitive to do business in. We look forward to continuing our strong growth with additional development projects over the next couple of years."

Stardock is currently at work on a number of projects. The independent game maker is signed on to publish Gas Powered Games' role-playing/real-time strategy hybrid Demigod this spring. In November 2008, Stardock announced its fantasy RTS Elemental: War of Magic for the PC, which is currently slated to be released in February 2010. Though long under the radar, Stardock is also building the massively multiplayer real-time strategy game Society, which was first announced in 2005.

Beyond the game spectrum, Stardock also hosts the digital delivery platform Impulse and creates a range of Windows custom-interface software utilities