Monday, December 22, 2008

Electronic Arts lays off 1000, MOVES Black Box in Vancouver

Don't have all the details yet, but more bad news for animators at Christmas. Here's the link.
Update: The Globe and Mail has some thorough coverage.
Reposted from

EA cuts jobs, moves Black Box studio


Vancouver's world-renowned video game development community is shrinking even more.

Electronic Arts Inc. dealt another blow to the game industry in British Columbia yesterday when it announced plans to shutter its famous Black Box development studio in downtown Vancouver and increase the number of layoffs as part of the company's global restructuring.

EA's Black Box studio operations and development teams will be relocated to its suburban Burnaby campus, which plays host to sister studio EA Canada.

The announcement comes just one week after the video game publisher, based in Redwood City, Calif., said it was shelving plans to open a new, 20,000-square-foot facility in Vancouver's trendy Yaletown district due to slow holiday sales in Europe and North America as a result of the sagging global economy.

Although EA said the studio consolidations and layoffs will produce annual savings of about $120-million (U.S.), analysts worry that it might not be enough to revitalize the sputtering game producer as it battles rising costs and skittish consumers. "EA needs to stop investing in things that are speculative and don't have a proven business model," said Michael Pachter, a financial analyst for Wedbush Morgan Securities who tracks the video game industry.

EA's heavy investment in what are known as mid-session games - titles the studio distributes free in the hope that players will purchase upgrades such as new levels and in-game items - and its burgeoning cellphone game business are distracting the company from its core business and pushing up costs, even as consumer spending is waning, he said.

"We have to look at ways of being more efficient, look at ways of trimming from our cost structure," said EA spokesman Colin Macrae. "It was a tough decision, but it's the right decision for the company and our employees."

Although B.C. was long considered to be the centre of Canadian video game production, the province has slowly ceded that title to Quebec, where game companies enjoy hefty tax breaks and wage incentives to set up shop in Montreal and Quebec City. EA's Montreal studio now houses about 600 employees.

"Vancouver, while it may have been in the past regarded as a lower-cost place to operate, that's really not the case any more," Mr. Macrae said.

Also yesterday, EA said it would increase the number of jobs it plans to trim in 2009. In October, the company said it was cutting 6 per cent of its employee base; yesterday, it raised that number to 10 per cent, or about 1,000 people. The company is also cutting the number of titles it plans to release in 2010, but didn't give further information.

EA said it expects the majority of the restructuring to be completed by the end of March, 2009.

The Black Box studio is responsible for the popular Need for Speed car racing games and EA's new Skate franchise.

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