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All the work turmoil in the world of video games

1 year ago babelfish

All the work turmoil in the world of video games

The world of home entertainment is reeling. Several undisputed protagonists of the world of video games have given way to numerous layoffs. And there is Ubisoft which seems to be sliding towards the crisis

Even the world of video games licenses. That's not exactly new, given that in recent years we have seen the big cuts in EA and Activision and, sadly, also several prominent bankruptcies. But in the last period the turmoil for the entire sector seems to be increasing, with several software houses forced to lose weight to optimize expenses.

NUMEROUS LAYOUTS IN THE WORLD OF VIDEO GAMES

The most striking case obviously concerns the self-imposed slimming cure by Microsoft: 10,000 layoffs, which also involved the gaming division, including 343 Industries and the software house acquired just 2 years ago Bethesda Game Studios . In short, if the ax of the cuts has also hit the studios responsible for first-rate titles, capable of selling millions of copies, such as Halo, Starfield, The Elder Scrolls (Skyrim, Oblivion…) and Fallout , the situation around Redmond must be particularly heavy .

THE MAIL TO HALO EMPLOYEES

An email that Pierre Hintze , Head of Production for Halo Infinite, sent to the studio also proves it, explaining that the company “has made the difficult decision to restructure some elements of our team, which means that certain roles will be eliminated”. The well-known Joe Staten, creative director who joined 343 Industries in 2020 to contribute to the completion of the development of Halo Infinite, has also been moved to the role, the internal reorganization provides for the transfer to the Xbox publishing division.

But Microsoft, although it is the most striking case in terms of numbers, is not the only software house in the world of video games that is forwarding emails to its employees to notify them of upcoming layoffs: in the last few hours we also talked to you about what is happening between the team USA of Motorsport Games and some Russian employees who are not happy about being kicked out, going as far as threatening top management to publish the source codes of the videogames developed, and then there is Unity, a group that develops its eponymous graphics engine on which they base many video games, on the verge of giving the well served to 287 of its 8 thousand employees.

CEO John Riscitiello told the Wall Street Journal that some of the layoffs were triggered by unfavorable economic trends affecting the entire gaming industry, others were decided in response to the recent merger with IronSource in November 2022, which required to streamline the workforce. “We have reassessed our objectives, strategies, goals and priorities in light of the current economic conditions,” he specified. “While we remain focused on the same vision, we have decided that we need to be more selective in our investments to come out stronger as a company.”

Riccitiello said the company "was dealing very specifically with [personnel] overlaps and a handful of projects were scrapped." Thus suppressed the Sports and Live Entertainment division, a branch of Unity that was pioneering technology for watching live and recorded sports matches from any angle. In this regard, Riccitiello laconically commented that "it is not yet a good time" to bring this technology to the market.

WHAT'S HAPPENING AT UBISOFT?

There is no talk (yet) of layoffs but of a strike in sight for Ubisoft, the French giant that has been able to establish itself on the global market, to the point of attracting the attention of the Chinese Tencent . The union representing the workers of the Paris office, Solidaires Informatique , has announced that employees are ready to fold their arms on January 27, 2023 in protest against the words of the CEO Yves Guillemot commenting on the company's crisis, defined as catastrophic. In short, like good Frenchmen, they prefer to resort to a preventive strike, before we start talking about cuts.

And in fact, the French software house could take very strong countermeasures considering that two of its just-released blockbusters (including Mario + Rabbids: Sparks of Hope , in collaboration with Nintendo and developed by the Milanese team led by Davide Soliani ) did not satisfy the company's cash requirements: “Despite excellent ratings and player reception, as well as an ambitious marketing plan, we were surprised by the below-expected performance of Mario + Rabbids: Sparks of Hope in the final weeks of 2022 and at early January,” Ubisoft said.

The French publisher said it faced "major challenges" due to shrinking consumer spending and generally described sales during the holiday season as "markedly and surprisingly lower than expected". Titles such as Mario + Rabbids: Sparks of Hope and Just Dance 2023 would have suffered from the economic difficulties of the moment given by the geopolitical situation: the need to save, is the thesis of the French, has led gamers to buy only prominent titles.

“When there's more pressure, people go for the bigger brands and not the smaller ones,” said CEO Yves Guillemot . “What we have observed is that there has been some contraction in overall consumer spending due to the economic environment and rising inflation. This has resulted in the biggest mega-brands and live services grabbing a larger share of the market, leaving less consumer spending available for other products. This is the clear conclusion we have come to. We have seen that there are other high-quality games that underperformed."

Ubisoft, which has long been looking for partners for an acquisition or merger, so far without success (the few holding companies with the strength to face such an operation would have refused to buy the transalpine publisher due to its enormous size, given that it has offices located all over the world), is carrying out a spending review with outlines that are still undefined.

We only know that to the three titles canceled in the past months even before their announcement, Ubisoft has decided to add Ghost Recon Frontline, Splinter Cell VR and two other undefined games as well. Skull & Bones further postponed: it will not be released in March but at the beginning of the next fiscal year (April 1, 2023/March 31, 2024), probably with the dual objective of deferring marketing and publication expenses to the next fiscal year and finding the most suitable.

The immense size of Ubisoft and the numerous studios open to the four corners of the globe would have then exploded the expenses if we think of the rumors according to which the publisher had a dozen battle royale in development, now almost totally cancelled. Since the genre has quickly inflated, employees go on strike to highlight the wrong strategic choices made by the management that would have led Ubisoft to the current crisis.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/tutte-le-turbolenze-lavorative-nel-mondo-dei-videogiochi/ on Thu, 19 Jan 2023 10:19:21 +0000.