Popcap announces layoffs closes Dublin office

http://www.joystiq.com/2012/08/21/report-popcap-hit-with-international-layoffs/

Sad to hear about Popcap but with EA in its current condition its not surprising.

This sucks. I feel like they never got a real chance to make use of the EA clout that they were suposed to gain from the buy-out.

Echoing the questions of joystiq commenters; why is George Broussard breaking this news through twitter?

I just saw on Team Meat's Twitter feed that George Fan, creator of Plants vs. Zombies, was laid off too. The day after Popcap announces PvZ2!?

If that's true, and if it was a layoff and not his choice, that would be pretty untoward.

EA poisons everything it touches. Everything.

LockAndLoad wrote:

I just saw on Team Meat's Twitter feed that George Fan, creator of Plants vs. Zombies, was laid off too. The day after Popcap announces PvZ2!?

If he didn't leave on his own and was indeed actually just laid off then this is pretty disgusting.

Malor wrote:

EA poisons everything it touches. Everything.

Your baseless hyperbole is getting quite tiring Malor. It would be appreciated if you could phrase things a little more thoughtfully and constructive before you hit the post button.

From the blog of one of the co-founders of Pop Cap (emphasis mine) which was linked in the above article, and Parallax references in his post :

John Vechey's Blog wrote:

One year ago, we decided to integrate PopCap with EA. I know I wouldn’t choose to be anywhere else right now. EA has provided a lot of resources for us to grow and allowed us to operate as an independent studio. I’ve seen speculation that EA is no longer letting PopCap run independently, and that’s simply not true. The founders, CEO, and executives who were in charge of PopCap still are. The decision to reorganize was 100 percent made by us, with no pressure from EA. EA has a diverse business with games on consoles, PCs and practically every other platform under the sun. We’re glad to have those resources supporting us when a lot of other independent studios are struggling. In addition, some of the people affected by the reorganization may be retrained and reassigned to other jobs in the EA studios. If we didn’t have EA behind us, the cuts would have been worse.

What I dont understand from that letter is how he says by the end of the year they will have the same number still with the company and they are expanding. How can you justify cutting so many jobs while saying you plan to expand?

mcdonis wrote:

How can you justify cutting so many jobs while saying you plan to expand?

Hire people who are willing to earn less money?

Or hiring people to do different jobs than were done by those you're letting go?

lostlobster wrote:

Or hiring people to do different jobs than were done by those you're letting go?

This. Programmers may not make good artists, if that's what they need more of.

Malor wrote:

EA poisons everything it touches. Everything.

While that was my gut reaction as well, I don't think EA's had their hands on Popcap long enough to have that degree of impact and these are harsh times to be a game studio.

From what I understand, EA's been pretty hands-off with PopCap, largely because they've been so immensely successful on their own up to this point. I'm still amazed that in his blog post, the CEO basically said that the usual reasons of "mobile and social are causing us trouble" are to blame for this transition. I would think of anyone, PopCap would have been and indeed was uniquely positioned to kick-ass in mobile. They were doing the "mobile time waster" thing before it was a thing.

The bigger question is why a washed up developer who's best known for bankrupting a studio in aid of one of the worst AAA titles in a decade has his tweets being considered a valid journalistic source. He apparently still knows a lot of people and gets some info before the press does but he's like an analyst in that he's often wrong too and as per usual, that's never pointed out.

I'm really surprised to see PopCap downsizing given that their games are largely unoriginal but have generally been regarded as money presses. But then again, Zynga's suffering in the same way (though it seems to be a much larger extent). The PopCap CEO said on their blog that the business has changed for them faster and more significantly than they thought and they have to do this to stay ahead of the times. He was very frank in not only saying this wasn't EA's fault but that if EA hadn't bought them out, the cuts would have been way worse. The candour is unusual and nice to see.

MannishBoy wrote:
lostlobster wrote:

Or hiring people to do different jobs than were done by those you're letting go?

This. Programmers may not make good artists, if that's what they need more of.

Yeah but the message you are sending staff is now even worse than just if you had done the layoffs and kept quiet about your plans for the future. Now the preception is you want cheeper staff, even if it really isnt true. If he had just waited and then later on said we are hiring again because of X he could gain back some of the morale. Now it all just kinda falls flat...

At least to me anyway...

Parallax Abstraction wrote:

the CEO basically said that the usual reasons of "mobile and social are causing us trouble" are to blame for this transition.

Can someone explain to me why this has taken off so suddenly? It almost feels like some in Wall Street feel this is the only gaming we are going to do in the future. Have mobile games really taken over that much?

Given Zynga's current problems I'm not sure I'm really willing to believe that. Maybe mobile/social was a big deal for a while but that bubble looks to have burst, or at least deflated.

One can only click so many cows a day.

mcdonis wrote:

Can someone explain to me why this has taken off so suddenly? It almost feels like some in Wall Street feel this is the only gaming we are going to do in the future. Have mobile games really taken over that much?

I usually get a lot of rolled eyes when I say this but it's what I believe: Mobile gaming is a fashion trend right now. It's new, it's sexy, it met with immediate success and when those things happen, a lot of people tend to think of it as "THE ONLY FUTURE!" A lot of people are backing this up by the fact that the AAA industry is doing very poorly right now. The things they always forget is that the world is still in a massive recession that's getting worse and that everyone knows new consoles are coming in a year which is why no one's buying anything right now. That's not to say mobile is going away because it's not. It's a new, proven way to make and sell video games and it's going to be around indefinitely, which I think is a great thing. I've never been the biggest mobile game guy like many others are but I have 20+ games on our iPad 2 at home and play several of them regularly. With regards to social, as Lobster already pointed out, that bubble's bursting in a spectacular way. I won't miss the Skinner Box titles like *Ville at all.

But look around recent articles and you'll see more and more developers talking about how mobile's become just as risky as the rest of the industry and in only a few years. The vast majority of mobile games don't make any real money at all and most of the ones that continue to succeed beyond a flash in the pan are the ones that are backed by big publishers or the cultural aberrations like Angry Birds and Fruit Ninja. Of course, the cost of trying a mobile game is a fraction of what it is to try a AAA game but with Apple, NVIDIA and others trying to push hardware forward at such a rapid clip, it's soon going to cost millions instead of tens of thousands to develop mobile games that will stand out. With those increased costs will come the need for more marketing, higher prices and then guess what? Mobile becomes just like AAA is now. That PopCap, makers of Bejeweled, Peggle and Plants vs. Zombies can't find a way to make money in this new paradigm shows you just how much of a problem it's becoming.

I may end up being totally wrong on this but I think mobile is without a doubt in a bubble right now and when it pops, it's going to settle into a good spot where it will continue to grow and do well but simply as another means of playing games. Everyone and their dog is playing Angry Birds right now but people are fickle and those who don't really take to gaming as a hobby will get bored and move on. I still think it's ridiculous to think that 30+ years of a strong PC and console gaming industry backed by some of the world's biggest and most successful companies will simply vanish overnight because mobile games exist. I will say this: If everything becomes Plants vs. Zombies, Angry Birds and Infinity Blade, I'll have to find another hobby.

Your baseless hyperbole is getting quite tiring Malor. It would be appreciated if you could phrase things a little more thoughtfully and constructive before you hit the post button.

Look, all I have to do is point at the string of studio corpses as justification, never mind the ongoing Bioware disaster, or the pile of steaming crap they're turning SimCity into. (they're selling you a toy, and then aggressively enforcing rules on exactly how you can play with your toy. Talk about completely misunderstanding the point of a SimCity game.)

They don't do anything well anymore. And I don't really buy the "Popcap is independent" argument. It's an awfully strange coincidence that yet another EA studio just happens to run short of cash and has to dump a bunch of developers.

I think that guy, in other words, is not telling you the truth.

Umm, which developers aren't dead or dying at this point? Studios come and go in pretty rapid waves, regardless of their interaction with EA. There are only a very few that have lasting power, like Blizzard (owned by Activision), Valve (buoyed by Steam $$) and Nintendo (buoyed by hardware sales). Other than that, companies decay and die, and new companies rise from their ashes; other than the potential loss of IPs, it's the way of the market, and only sad for the people who end up out of work.

Malor wrote:

They don't do anything well anymore. And I don't really buy the "Popcap is independent" argument. It's an awfully strange coincidence that yet another EA studio just happens to run short of cash and has to dump a bunch of developers.

I think that guy, in other words, is not telling you the truth.

So you don't want to believe that EA isn't solely responsible for this so the CEO is lying? I'm sorry but I don't buy that.

Are you saying that if someone not EA owned PopCap, this wouldn't be happening? Given that PopCap's been doing the same thing they always do since their acquisition (releasing the same games again on more platforms and trickling out new IPs and iterations), I don't see how this is a scenario that would have been different under anyone else's banner. And believe me, I am no fan of how EA does business and have no interest in defending them blindly. I think PopCap ruled the roost in casual games for a while and now that so many other people are in the arena, they're not standing out like they used to.

LobsterMobster wrote:

Given Zynga's current problems I'm not sure I'm really willing to believe that. Maybe mobile/social was a big deal for a while but that bubble looks to have burst, or at least deflated.

I think similar to the Facebook stock depletion, it's less that it's deflated and more that it was ridiculously overvalued from the beginning. I think PXA hit on the real problem which is just market saturation since it seems like the hot new thing for both studios and investors. Five years ago, PopCap and a few other contenders like BigFish were catering to a market that nobody else had any real interest in. People played Bejeweled on their phone or a hidden object game in a browser and little else. Since then both Facebook and smartphones have become a phenomenon. That may lead to a much larger market, but a lot of that market still only buys maybe 3 or 4 casual games a year, and now Popcap are competing with literally hundreds of developers that did not exist a few years ago.

kuddles wrote:

I think similar to the Facebook stock depletion, it's less that it's deflated and more that it was ridiculously overvalued from the beginning. I think PXA hit on the real problem which is just market saturation since it seemed like the hot new thing. Five years ago, PopCap and a few other contenders like BigFish were catering to a market that nobody else had any real interest in. People played Bejeweled on their phone or a hidden object game in a browser and little else. Since then both Facebook and smartphones have become a phenomenon and with it literally hundreds of game developers. That's a very short period to adjust to.

I agree PXA hit this head on. The gold rush is dying down finally and we're going to see a 1980's style bust due to the sheer volume of stuff in the mobile/social space. PopCap going ahead with layoffs is incredibly surprising since EA is currently shifting gears toward a F2P (mobile/social)/"software as a service" (hence why everything is getting Multiplayer + DLC pipeline) model for their properties.

George Fan departing is sad news, but I think he was originally absorbed by PopCap following the success of Insaniquarium which PopCap published. Incredibly unfortunate, but maybe he just wanted a change?

shoptroll wrote:

George Fan departing is sad news, but I think he was originally absorbed by PopCap following the success of Insaniquarium which PopCap published. Incredibly unfortunate, but maybe he just wanted a change?

I do think it's in poor taste to announce a sequel to the game he created the day before he's let go for sure. It may not have been intentional but someone should have noticed that. He probably made some nice bank from the PopCap buyout though so I'm sure his new indie studio will be announced within days.

shoptroll wrote:
Parallax Abstraction wrote:

I do think it's in poor taste to announce a sequel to the game he created the day before he's let go for sure. It may not have been intentional but someone should have noticed that. He probably made some nice bank from the PopCap buyout though so I'm sure his new indie studio will be announced within days.

Completely agree that's in poor taste. Then again, we don't yet know what level of involvement he has with PvZ 2, and it's certainly not like this doesn't happen on a somewhat regular basis in the industry.

I think at this point I can't expect EA to do anything in a non-hamfisted way.

To be honest I am suprised we don't hear of incidents like this more often.

Parallax Abstraction wrote:

I do think it's in poor taste to announce a sequel to the game he created the day before he's let go for sure. It may not have been intentional but someone should have noticed that. He probably made some nice bank from the PopCap buyout though so I'm sure his new indie studio will be announced within days.

Completely agree that's in poor taste. Then again, we don't yet know what level of involvement he has with PvZ 2, and it's certainly not like this doesn't happen on a somewhat regular basis in the industry.

I think at this point I can't expect EA to do anything in a non-hamfisted way.

EDIT: Other thing to consider too is that there has been an informal exodus of game developers from the UK region which led to the UK government considering tax breaks as an incentive to retain their businesses. I'm thinking these layoffs plus the Sony Liverpool closure might be somewhat related to that?

I'm also interested in what effect pricing models and price points have had on PopCap's business. They were able to sell Plants vs Zombies and Bejeweled 2 for $19.99 a pop but are now selling them in the iOS market for, I think, $1.99 and $0.99, respectively. Since they were, primarily, selling their games directly in the past, they're need to sell around 28 copies of Bejeweled 2 (taking into account Apple's 30% cut on all sales) to make that same $19.99. Even considering the popularity of the iOS market, it has to be difficult for any business to make 28 times as many sales to get to the same point.

ClockworkHouse wrote:

I'm also interested in what effect pricing models and price points have had on PopCap's business. They were able to sell Plants vs Zombies and Bejeweled 2 for $19.99 a pop but are now selling them in the iOS market for, I think, $1.99 and $0.99, respectively. Since they were, primarily, selling their games directly in the past, they're need to sell around 28 copies of Bejeweled 2 (taking into account Apple's 30% cut on all sales) to make that same $19.99. Even considering the popularity of the iOS market, it has to be difficult for any business to make 28 times as many sales to get to the same point.

They were also giving away Bejeweled in the form of Blitz on Facebook. I think there's some micro-transaction stuff backing that model but that requires a number of "whales" to make up for all the lost sales at $20 as you point out.

The guys in IRC are currently busy picking apart my argument here, so let me say that it's not air tight.

PopCap was able to charge more for Plants vs Zombies on iPad when it launched than they're currently charging, and the development costs are different when porting to iOS as opposed to the initial development on the PC. The cost to maintain a direct sale website and process credit card fees (which isn't necessary with the iOS store) would cut into that $19.99 sale. And PopCap sold a number of boxes at retail, as well, where the margins for them are smaller.

All the same, the smaller price point has almost certainly disrupted their business models.

Now that I think about it a little more, we're both disregarding the Steam Sale Effect. True, they need to sell more copies at $0.99 or like $2.99 (i'm just guessing here) for the HD/iPad version, but there might be significantly more consumer interest at the lower price point to offset the earnings/sale.

ClockworkHouse wrote:

I'm also interested in what effect pricing models and price points have had on PopCap's business. They were able to sell Plants vs Zombies and Bejeweled 2 for $19.99 a pop but are now selling them in the iOS market for, I think, $1.99 and $0.99, respectively. Since they were, primarily, selling their games directly in the past, they're need to sell around 28 copies of Bejeweled 2 (taking into account Apple's 30% cut on all sales) to make that same $19.99. Even considering the popularity of the iOS market, it has to be difficult for any business to make 28 times as many sales to get to the same point.

And you have to take account both the huge explosion of indie developers on the iPhone/Android markets and PopCap's design philosophy of taking a lot of time to polish their games. Not only do they have to lower their pricing significantly, there was probably an astonishing amount of Bejeweled clones on that app before their version was even released.

shoptroll wrote:

Now that I think about it a little more, we're both disregarding the Steam Sale Effect. True, they need to sell more copies at $0.99 or like $2.99 (i'm just guessing here) for the HD/iPad version, but there might be significantly more consumer interest at the lower price point to offset the earnings/sale.

That's actually what I'm saying: a sloppy, back-of-the-envelope calculation says it needs to be about 28 times as much interest. Maybe that's what they're pulling, maybe it isn't, but it seems like a pretty daunting thing to expect.