recession posts (Subscribe to this feed)

Sony: PS3 price cut not due to 'market conditions,' more social networking features on the way

by Griffin McElroy { Aug 24th 2009 at 3:30PM }

Though the world economy is crumbling faster than a three-year-old sugar cookie lying on the floor of a jam-packed mosh pit, the recent cheapening of the PS3 shouldn't be attributed to current market conditions. Don't believe us? Perhaps you'll pay heed to the words of SCEE president Andrew House, who explained, "We are aware that consumers are watching their euros and pounds more carefully than before," but later added, "it would not be fair to say [the PS3 price cut] is a reaction to current market conditions." See? We told you.

This quote came in the middle of an interview with Financial Times -- an interview in which House would later mention that Sony is planning on implementing additional "social networking features" into the platform. Financial Times' write-up mentions a possible "tie-up with popular sites such as Facebook," but heck -- we'd be content with just being able to, y'know, talk to each other regardless of what games we're playing.

[Via Edge Online]

Atomic Games unable to secure funding for Six Days in Fallujah, reduces staff

by Ben Gilbert { Aug 6th 2009 at 3:27PM }

(click to embiggen)

Citing a lack of "full-scale funding" for controversial game Six Days in Fallujah, Atomic Games is reporting today that it's trimming staff. According to Atomic, the 75 employees of the studio remained until this week when an undisclosed amount were let go.

Though the developer assures the "dozens of Marine veterans" who have spent "hundreds of hours in this project" that it will "fight on," we worry that this is just one more sign of a likely to-be-canceled game. After Konami dropped out as the game's publisher back in April, Six Days in Fallujah's fate has been up in the air. It probably doesn't help that rumors circulated yesterday about the studio's creative lead hitting the road for (presumably) greener pastures. We've reached out to Atomic for further information about those let who were let go and will update this post as we hear more.

Gallery: Six Days in Fallujah

Disney Interactive posts 20 percent losses in third quarter, citing bad economy

by Ben Gilbert { Jul 31st 2009 at 6:15PM }

Businesses don't adhere to the same rules we silly humans do; the cycle of the Earth around the sun, for instance. Disney Interactive Media Group is no exception, posting its quarter three financial results -- the quarter that ends in June, folks -- just this week. According to Gamasutra, revenue dropped by $29 million year over year, which company CEO Robert A. Iger said during a conference call was due to "adverse economic conditions."

Though Iger didn't specifically spell it out, we would imagine that investing in the development of multiple major titles in Split/Second and, um ... whatever it is that Warren Spector's working on at Junction Point isn't helping with the money intake either. The CEO is positive about the future, but remains worried about the current economy, saying, "We do see signs of economic stabilization, but the pace and strength of recovery remain uncertain and we are managing accordingly." We're guessing it's a bad time to ask for those free passes to Epcot?

Gameloft still enjoying lofty sales despite continuing recession

by JC Fletcher { Jul 29th 2009 at 7:30AM }

Gameloft, which happily announced increased sales in Q1 of 2009 despite the fact that it was, you know, Q1 of 2009, after announcing increased sales in 2008, has released its results for the first half of 2009. Guess what?

"Gameloft achieved consolidated sales of EUR60.1 million for the first half of 2009," the statement reads, "up by 20% from the previous year." 95 percent of Gameloft's sales for this period came from mobile games, a business that grew thanks to the increasing popularity of the iPhone App Store. Clearly, releasing the same soccer and brick-breaking games on every platform ever is a business model that more publishers should be looking into.

Amazon stock drops citing 'an industry slowdown in video games and consoles'

by Ben Gilbert { Jul 26th 2009 at 1:30PM }

The global economic recession is finally hitting home, folks. That's right -- the Internet. Major online retailer Amazon.com is citing, "video games and consoles" as one of the primary culprits causing the company's financial hardship. According to the Wall Street Journal, though the company posted 14% increased profit margins in its last financial quarter, sales of "media" in the US (books, movies, video games) have nearly stopped.

While we can't speak for the other two forms of "media," we'd like to point out to Amazon that, comparatively with spring of 2008, sales of video games in spring of 2009 have been predicted to decrease for some time now. It probably doesn't help that, you know, it's summer. Still, with the flood of great games coming out later this year, we're betting the lean times (in terms of video game sales, at least) won't last for long.

Two Midway studios facing possible closure in two weeks

by Griffin McElroy { Jun 16th 2009 at 3:10PM }

If you've got an extra few million bucks lying around, we can think of a couple of video game development studios that could really use it. According to a recent report from Guardian.uk, Midway's Newcastle and San Diego studios are facing closure if they can't find buyers by the end of June. For those whose extended WoW sessions have left them chronologically unaware, that's just two weeks from today.

The Guardian's article focuses on the Newcastle studio -- creators of the recently released Diesel-fest Wheelman -- which is trying to stave off death by finding investors for its unannounced open-world action game. We're far from financial experts, but perhaps keeping said project under wraps isn't the best way to attract suitors in such a brief timeframe. Just, you know, a suggestion.

[Via CVG]

Empire's remaining stockpile to be sold off this week

by Majed Athab { Jun 9th 2009 at 3:00AM }

Zoo Publishing may already own the rights to Empire Interactive's IP (having bought the fallen company's catalog last month), but it doesn't own any of the company's current physical stock. This means there's a warehouse somewhere in Birmingham, England filled with the defunct company's retail software (212,000 boxes, to be exact) just sitting idly, collecting dust. KPMG is looking to liquidate these former Empire assets, hoping to sell everything altogether for a 15% premium this week and finally let Empire fade into history.

Of course, only those with pockets lined with gold and don't mind swimming in multiple copies of Pipemania, could afford to take up the offer. As MCV sadly notes, none of the proceeds will go to the 40 ex-Empire staff who were laid off and unpaid for their final eight weeks at the company.

Ruffian Games expands team by 15, 'itching' to reveal first project

by Griffin McElroy { May 22nd 2009 at 2:45PM }

While many other development studios are withering beneath the sweltering heat of the recession, it seems at least one studio is blossoming -- Ruffian Games, founded earlier this year by a number of former Fable II, Crackdown and GTA devs, recently announced that it had bolstered its staff with 15 new recruits.

This is great news for the unorthodoxly expanding studio (and for the recently employed developers), but we still don't know what Ruffian is working on. Apparently, this fact bothers them as much as it bothers us -- studio head Gaz Liddon said, "Now we're in full production, we're itching to share the fantastic work these guys have been producing," adding that he hoped said sharing "won't be too far away." We hope so too, as our attention span is pretty limited as far as -- Hey, a butterfly! Neat!

Sony cutting suppliers by half to save $5.3 billion

by Majed Athab { May 21st 2009 at 8:15PM }

In a move undoubtedly aimed at preventing any further losses, Sony corp. plans to cut its manufacturing suppliers by more than half. MCVUK reports the company will be whittling down its 2,500-strong suppliers list to just 1,200 by or before 2011. The restructuring will cut costs by around ¥500 billion ($5.3 billion).

While this is a big change for the company as a whole, it's uncertain how Sony's Computer Entertainment division will be affected. In what ways could this whole business of slimming down impact SCEA, or the PS3 for that matter?

Used game sales balloon GameStop Q1 2009 numbers

by Ben Gilbert { May 21st 2009 at 2:30PM }

Now here's a real economic indicator: during the fiscal quarter ending May 2 of this year, used game sales at GameStop increased by 31.9 percent, while new game sales decreased by 2.8 percent. Game sales in the US aren't declining, new game sales are -- to the tune of 548.5 million dollars in Q1 2009 alone, just over a quarter of GameStop's entire earnings during the period.

Sure, the Nintendo DSi release and a handful of blockbuster titles from Capcom earlier this year helped to keep new games and hardware from dropping off too much -- new hardware numbers actually increased from last year. But that isn't to say that the 114 new stores opened by the company recently due to "the downward pressure of rents" is a good idea. While GameStop predicts even better sales over the next half of the year, it'd be wise to carefully plan around the "brittle global economy."

[Image credit]

Brain drain hurting UK's game development industry, government to rethink subsidies

by Majed Athab { May 19th 2009 at 4:01AM }

[Image credit: ZDNet]

The UK is not only looking to remedy its ailing game development scene by rallying against outsourcing, but is also in need of finding a better solution to the bigger, and arguably more pressing, issue of brain drain. Professionals in the British game industry are leaving their native land for places like Canada and France, where game developers receive tax breaks and other incentives not offered in the UK. Tax breaks are among the most sought after subsidies for British devs, and if they're not getting it, they're obviously going to have to look elsewhere. And, look elsewhere they have -- on record, there are at least 30,000 British expats in BC, Canada alone.

The Guardian reports that communications minister, Lord Stephen Carter, is currently weighing out the best options of support to combat shrinkage, though it's not certain if and when these incentives will come into effect. The British developer landscape has become quite barren; dev studios and projects have been axed in recent times, while others have been sold to foreign companies. Of course, consumers in Britain are unaware of the state its development industry is in; they're too busy buying the latest fitness thingamabobs from Japan.

Time editorial (sort of) explains why video games are a good economic indicator

by Ben Gilbert { May 15th 2009 at 9:00PM }

Time Magazine thinks that video games are a good economic indicator -- as in, if the gaming industry is doing poorly (it's not), that speaks volumes about the national economic situation. And Time's reasoning is sound, more or less: "When people cannot spend $300 on a console or $50 on a game which can be used for hours and played over and over again, the money for discretionary spending has dried up."

The piece references declines in sales of the Nintendo Wii (selling "only" 340k units in April) as well as the recent loss report by Sony on its PlayStation division. Problem is, it makes no mention whatsoever of the repeated analyst reports citing year-over-year declines being forced by AAA-games being released in the traditionally dormant late-Winter/early-Spring months, during 2008. And furthermore, the author worries about the sales of the PS3 in April, not making any mention of the relatively robust PS2 and PSP sales during the same time period.

Then again, the Time website has Jim Cramer divvying out economic tips just three inches to the right of this piece, so, ya know, there's that trustworthy source of financial information.

Factor 5 shuts down US operations

by Alexander Sliwinski { May 14th 2009 at 1:15PM }

Factor 5 officially announced the closure of its US operations recently, concluding a story that feels like it's been just out of reach for half a year. The developer had been having some rough times since the poignant failure of Lair. Following that, there was its falling out with Brash Entertainment (which led to layoffs), leaks of the Superman and Kid Icarus games, and, obviously, the closure of the studio.

The bright side on this really dark tale is that Achim Moller, CEO of Factor 5 Germany, states the company has "partnered with both old and new friends in the industry who will reveal our upcoming projects over the next months." With E3 visible in the smog-filled distance, perhaps we'll learn what the German-based developer is up to soon.

[Via Kotaku, Siliconera]

Analyst calculates layoff totals, the belief in a 'Gaming Renaissance Movement'

by Alexander Sliwinski { May 12th 2009 at 8:45AM }

M2 Research market analyst Wanda Meloni estimates that 8,450 game industry employees have been let go since July 2008. North America had approximately 6,300 layoffs (75 percent), which represents 12 percent of the region's workforce -- her piece was published on Gamasutra last Friday, so it likely doesn't take into account the Massive and 3D Realms hits.

Meloni's "glass half full" view of the layoffs is that these folks will start small development studios and form part of what she's calling the "Gaming Renaissance Movement." She feels that these start-ups -- many self-funded through severance packages -- have the "creativity, vision and sheer grit" (not to mention: no other choice) to do their best to make it.

The majority of Meloni's post goes into detail about what tools, funding and partners these start-ups have at their disposal. As for us, we're just looking to give the "layoffs" tag a rest.

[Via Edge]

[Image]

Disney Interactive revenue down citing lack of console games

by Ben Gilbert { May 7th 2009 at 3:15PM }

Disney Interactive has been having a pretty rough year. The company kicked off 2009 with a handful of layoffs, and now, according to reports at Gamasutra, it's also facing a near 20 percent drop in year-over-year revenue. Big surprise? Not exactly, considering the publisher only internally published a handful of games last year (including critically acclaimed Pure and not so critically acclaimed Turok).

Also not a big surprise, Disney Interactive prez and CEO Bob Iger cites "the weak economy and other factors" when explaining his company's less than fantastic financial situation. Let's just hope Warren Spector's "epic" Mickey Mouse game can help to bolster Disney's 2009 lineup.