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Electronic Arts to lay off 10% of workforce

Electronic Arts Inc. announced it will lay off 10% of its work force in a restructuring plan that includes a consolidation of facilities operated by EA. The majority of the restructuring will be completed by March 31, 2009. This announcement is a four percent increase from the six percent work force reduction EA announced on October 30, 2008.

EA expects the restructuring plan will result in annual cost savings of approximately $120 million and will bear a restructuring charge of $55-65 million over the next several quarters.

The restructuring will result in the closure of at least nine studio and publishing locations. The Black Box Studio in Vancouver, British Columbia will be shut down and The Black Box development teams and associated game franchises will be moved to the nearby EA studio location in Burnaby, British Columbia.

EA plans to narrow its product portfolio to focus on higher quality hit games with higher margin opportunities. EA stated in the press release the company remains committed to taking creative risks, investing in new games, leading the industry in the growing mobile and online businesses, and delivering high-quality games to consumers.

One of the recent “creative risks” EA has taken was the evolution game Spore. Although the game has sold millions of copies, it did not live up to the hype and has the notorious distinction of being the most pirated game in history.

EA’s troubles may mean the game industry as a whole is being affected by the current recession, or it may mean EA’s latest games such as Spore are not selling as well as they like. Whatever the reason, the future looks to be a difficult one for Electronic Arts.

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Spore? Really?
By WhiteBoyFunk on 12/22/2008 9:22:55 AM , Rating: 2
Wow. Spore is a pretty sweet game, but I’m not sure it warrants the title of ‘the most pirated game ever.’ I bought a copy and enjoy it immensely, but it doesn’t stand up to my copy of Call of Duty 4 or Metal Gear Solid 4.

If I had to guess I’d place bets on Starcraft as the most pirated game.

Either way, it's a shame that the recession is taking it's toll on not only my hobby of sports cars, but it's bled into the world of videojuegos.

RE: Spore? Really?
By Aloonatic on 12/22/2008 10:01:19 AM , Rating: 3
I'm not going to say that the recession isn't to blame for some of these lay-offs but...

I think that there are a lot of companies taking the opportunity to act in a shabby manner towards their employees and get rid of people, using the "downturn" (as we are calling it in the UK still, the media, well BBC really, doesn't want to damage the reputation of The Party or our Glorious Leader Brown by saying recession) as a cover.

I've been in town shopping a few times and the Game shops are always busy with huge queues and that is whilst being about the only shops not finding themselves having to offer crazy 30%, 40%, 50% off offers on most of their stock.

The games industry seems to be handling the downturn pretty well, at least for the time being.

I'm not saying that companies like EA are the only people who are taking advantage of the situation either, if at all. One firm that my companies does a lot of work for are "downsizing" and looking at who is really needed all of a sudden, even though after having talked to some people pretty high up they actually say that the downturn/recession/whatever has increased the amount of business that they do.

It's a shame, and happens all the time of course, but it does seem that they opportunity to get rid of people is being taken by many businesses and i hope that it at least works out for them and it isn't because some bean counter somewhere is scared of losing their job so they try to save some money for a year by getting rid of people to show how valuable they are. The company I mention above is already being charged more for the work that we do for them as the people they got rid off liaised with us and now there is no one there to do it. False economies may be abound.

RE: Spore? Really?
By misuru on 12/22/2008 12:26:18 PM , Rating: 2
I agree with this completely. Historically, video game companies perform very well during "Economic Downturn". Besides that, EA lays off a lot of employees every few years. They are just using the economy as an excuse to get rid of more in this round.

RE: Spore? Really?
By wempa on 12/22/2008 1:04:07 PM , Rating: 2
I've been in town shopping a few times and the Game shops are always busy with huge queues and that is whilst being about the only shops not finding themselves having to offer crazy 30%, 40%, 50% off offers on most of their stock.

Not everybody in those game stores is buying the latest releases that demand $60 a game. A lot of those people are buying used games/accessories or cheaper titles that aren't giving the gaming companies the kind of money they want. Just look at how many of the less popular or sports titles from previous years that are available for $20. In general, I agree that the video game industry can withstand the recession better than a lot of other industries. However, discretionary spending in general goes down when the economy goes sour. So they aren't completely immune from the effects.

RE: Spore? Really?
By BillyAZ1983 on 12/22/2008 6:04:32 PM , Rating: 2
....but I’m not sure it warrants the title of ‘the most pirated game ever.

Actually, it does! There was an article a week or so ago here on daily tech that discussed this exact issue. The article also included nbumbers that show how much spore was downloaded over any other game and most people were actually suprised at how crappy the games on that list were.

Finally some good news
By the goat on 12/22/2008 10:16:53 AM , Rating: 1
I certainly feel sorry for everybody who is losing their job. But. . .

Anything that bad for EA is good for the video game industry. EA has bought up the best companies in the business and ruined their IP with horrible sequels, buggy software and joke worthy support. Honestly EA should cash out and close up shop. The world would be better without EA.

RE: Finally some good news
By mydogfarted on 12/22/2008 12:04:25 PM , Rating: 2
Absolutely. EA is doing what Microsoft used to do - buy a company making a good product and then drive it into the ground. The difference between Microsoft and EA is that Microsoft would do it to wipe out competing products - anyone remember FoxPro? Exactly.

RE: Finally some good news
By Pirks on 12/22/2008 12:05:38 PM , Rating: 2
Judging by Dead Space and Mirror's Edge - EA will be okay no matter what the goat bashers say.

RE: Finally some good news
By Regs on 12/22/2008 1:16:05 PM , Rating: 2
I agree. I think EA grown too big for its own good. Too many projects, too many middle men, too much red tape. Smaller design teams that grow successful make the better games in the long run (rock star, westwood...). They don't have to answer to any marketing juggernaut or any hot-shot arm chair politician on the board of directors.

RE: Finally some good news
By the goat on 12/22/2008 3:19:32 PM , Rating: 2
Smaller design teams that grow successful make the better games in the long run (rock star, westwood...).

EA bought Westwood in 1998. EA then proceed to drive all their game series into the ground.

RE: Finally some good news
By Regs on 12/23/2008 5:00:29 PM , Rating: 2

By EODetroit on 12/22/2008 9:51:36 AM , Rating: 2
Because I'm sure its a load of doo-doo, good only for making headlines.

By IceBreakerG on 12/22/2008 10:05:15 AM , Rating: 2
Clicking the link in the article when DT first reported about Spore being the most pirated would take you to a previous DT article with this link in the first sentence:

That's how they got their numbers.

By martinw on 12/22/2008 11:01:26 AM , Rating: 3
Woah, you are expecting readers to actually click on a link and read it before they flame off about it? That's just not the way things work around here...

I wonder..
By whirabomber on 12/22/2008 10:32:44 AM , Rating: 4
..if the folks who sued over unpaid over time will be the first to go. Remember the first rule of sweatshops is never talk about sweatshops.

A Bit off Topic
By bubbastrangelove on 12/22/2008 4:17:14 PM , Rating: 2
I think Valve’s system of game distribution may be the best solution to make both gamers and software producers happy. It’s certainly not perfect but it’s the least intrusive of the solutions we have to work with at the moment and it makes patches so very easy to track and install.

If Valve were to add a program where you were credited say 5% of the price of the game to your account when you purchased (or ‘leased I’ suppose is a better term) the software since we’re unable to re-sell when done I think both sides would have a winner.

RE: A Bit off Topic
By bubbastrangelove on 12/22/2008 4:18:46 PM , Rating: 2
Shamelessly quoting myself;

OK, 5% is a little low, how about 10%?

EA's troubles
By ajvitaly on 12/22/2008 10:05:00 AM , Rating: 2
I've yet to play Spore, but it is not the reason for their troubles. The game has sold over well over 2 million units and it'll likely pass 3 million after the holiday gift cards have been used up by gamers.

EA's recent entry of their catalog into Valve's Steam should help to increase sales, and has me interested in several of their titles now.

RE: EA's troubles
By Finnkc on 12/24/2008 12:57:25 PM , Rating: 1
Yea EA has done some shitty things to good IPs and has been a crappy squeal pumping publisher for many years now. (see Activision Blizzard for the new king) Everyone knows this, but honestly if you haven't notice a genuine shift to make better games and new IPs, then I would say take a look at what EA is publishing in the next few quarters. There is some solid stuff coming down the pipe.

It doesn't happen overnight, but in the next few years I think peoples opinion of EA will be different.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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