Big Huge Games - RPG Failed Assessment

Edge Online spoke to THQ about the situation with Big Huge Games and was told their Big Huge RPG failed a February assessment:

THQ investor relations director Julie MacMedan said in a phone interview that the publisher evaluated the progress of the RPG in February, and decided not to go forward with the project. THQ is in the midst of a 24 percent workforce cut in an effort to realize $220 million in cost reductions. Eliminating support for the RPG was part of the cost reduction initiative.

More information.

AWw…. what a shame. Wonder what happened to Ken Rolston RPG team, is they been layoff?

Now that the numbers have surfaced, it's plain to see that THQ is in big trouble. How many jobs would THQ have to cut in order to save $220 million? If the average salary were $50,000, they would need to slash 4,400 jobs.

Unless it's a real loser, the last thing anyone ever wants to do is shut down a development project. So you really have to wonder if this isn't one of THQ's dying efforts.

50k is not enough. Don't forget the additional costs (insurances, etc.) and the costs for office, etc.

Assuming those costs are also average (no Rodeo Drive offices or anything like that), then $50,000 per-year salaries would dwarf all the other expenses. So counting salaries first is like counting dollars first.

The obvious exception would be if Big Huge Games has something valuable worth selling, of course. But that's just that, an exception.

The average "grunt" programmer in their area (in CA) cost around $95k overall (salary + etc.). Based on some work I did years ago the actual total cost including other stuff (power, equipment, building space, janitors, …) may then be close to $150k per employee. So $50k/employee may be off by 3x.

Originally Posted by BillSeurer
The average "grunt" programmer in their area (in CA) cost around $95k overall (salary + etc.). Based on some work I did years ago the actual total cost including other stuff (power, equipment, building space, janitors, …) may then be close to $150k per employee. So $50k/employee may be off by 3x.

I wonder why game dev. companies go to California, where everything is much more expensive. The same $95K employee there would be like $60K anywhere else (except NY). Same with rent cost for offices, taxes, etc.

California is attractive to businesses who need highly-talented employees, because it's a nice place to live, a lot of that due to the weather. It's cyclical though (we're not loving it right now, I can tell you that).

As soon as we start coming out of this recession there should be enormous business growth in California (assuming Obama's taxes on the wealthy don't discourage it). Home values are down, and some folks will see that as the opportunity they've been waiting for, and that's not lost on entrepreneurs who will locate their startups near those attractive areas.

When the economy is good the costs are high but so is the state of competition for everything. If you make the right moves, you can manage. But it isn't easy.

Originally Posted by Squeek
California is attractive to businesses who need highly-talented employees, because it's a nice place to live, a lot of that due to the weather. It's cyclical though (we're not loving it right now, I can tell you that).

As soon as we start coming out of this recession there should be enormous business growth in California (assuming Obama's taxes on the wealthy don't discourage it). Home values are down, and some folks will see that as the opportunity they've been waiting for, and that's not lost on entrepreneurs who will locate their startups near those attractive areas.

When the economy is good the costs are high but so is the state of competition for everything. If you make the right moves, you can manage. But it isn't easy.

I still don't think it's a good decision at all. You say the costs are 'down' now, yet, that 'down' is still probably at least 50% higher than in 90% of the country (and to verify my numbers, 70% of all statistics are made up).