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RPGWatch Forums » Games » General RPG » Report: EA About to Lay Off 500-1000 People

Default Report: EA About to Lay Off 500-1000 People

April 17th, 2012, 00:00
According to a report on Startup Grind, a site that normally deals with tech companies and their founders, publisher Electronic Arts will very soon lay off as many as 1000 employees.

Originally planned to take place last week, the lay offs have reportedly been slightly postponed, though may now take place " as soon as this week".

The report claims between 500-1000 employees will be affected. That's a lot of people, even for a company as big as Electronic Arts.

Startup Grind's report goes on to speculate the layoffs are a result of a disappointing 2011 in which a few hit games (like Battlefield 3) had their sales overshadowed by an overspend on marketing, expensive acquisitions and disappointing subscriber numbers for big-budget MMO Star Wars: Old Republic.

We've contacted EA for confirmation, and will update if we hear back.

UPDATE - EA has issued a statement on the matter, telling MCV "There are no lay-offs as such, we always have projects growing and morphing. At any given time there are new people coming in and others leaving. EA is growing and hiring and building teams to support the growing demand for digital games and services."
There you have it more trouble for EA. I'd say there not doing so great with the TOR losses and the ME3 debacle. Hell they were even given the golden shit award for the worst company.

I would take there pr announcement with a grain of salt. When there is a report of 500-1000 people possibly being fired. That's a big number even for EA.

What do you all think?

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April 17th, 2012, 00:22
ME3 is selling like hot cakes. SWTOR has sold 3M units so far, with subs slightly below 2M, meaning the game should be on track to become a solid money maker for the next couple of years. Not a mega-hit like WoW, but certainly no flop either.

Whatever their troubles are, these games don't play a major role in it.
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April 17th, 2012, 01:01
EA is not the worst company, not even close. Try Ubisoft, they make EA look like Bioware when Bioware was cool
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April 17th, 2012, 02:33
Originally Posted by Gorath View Post
ME3 is selling like hot cakes. SWTOR has sold 3M units so far, with subs slightly below 2M, meaning the game should be on track to become a solid money maker for the next couple of years. Not a mega-hit like WoW, but certainly no flop either.

Whatever their troubles are, these games don't play a major role in it.
Yeah their first 5-week numbers for ME3 were about 25% higher than their first 10 week numbers for ME2. This is probably not a disappointment for them; if it is it's not likely a huge one as it is outperforming the predecessor. Overspending in marketing though - that I can believe. Actually, I wouldn't be surprised (if these numbers are accurate) that it was the marketing department that was being downsized while development teams were still hiring. This would explain why their response mentioned the idea of shifting priorities and that projects were still staffing up.
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April 17th, 2012, 02:52
Originally Posted by Gorath View Post
ME3 is selling like hot cakes. SWTOR has sold 3M units so far, with subs slightly below 2M, meaning the game should be on track to become a solid money maker for the next couple of years. Not a mega-hit like WoW, but certainly no flop either.

Whatever their troubles are, these games don't play a major role in it.
The cost to make that game had to be the biggest spent on any game. Hell it was on par with some of the big budget movies. Almost 300 million if Forbes was correct.

That's not counting the huge budget allocated to advertisement. It was on every network,magazine, and all over the internet.

Subscriber numbers are steady but there is a percentage of players not even playing past the 30 days that comes with the game. Its not the WOW killer EA wanted. Give it a few more years and we will see were it's at.

At the end of the day companies only care about short term profits and not money earned years later. Try telling your investors and stockholders were in the red for the next year but we will make it back in the next 5. They will not be pleased.

EA is not the worst company, not even close. Try Ubisoft, they make EA look like Bioware when Bioware was cool
As for Ubisoft they deserve the award more I agree. They should just drop out of the pc market they seem to hate so much.


Warning pointless thought below!!!!!!!!———————————————————————

Now something I always think about when companies release games worldwide how can you call 3 million a success when there are billions of people. Just a thought the game was bought by maybe 1 percent of the population. Moving on now sorry about rambling.

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Last edited by Couchpotato; April 17th, 2012 at 12:55.
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April 17th, 2012, 04:27
The executives do not possibly deserve their bonuses unless they show significant leadership and ability to control the bottom line. What better way to show that they should be compensated at rates 100 times the lowest paid worker than to cut the biggest reoccurring cost and improve the bottom line.

Just in case your curious Lawrence F. Probst III (Chairman of the board) makes $5.6 M/yr. I'm probably even assuming that $56K at lowest paid is too high as they are probably really cheap skates. Its crazy to think that laying off 5 executives at EA is nearly the same as laying off 500 employees.
Last edited by figment; April 17th, 2012 at 04:41.
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April 17th, 2012, 09:48
Well, I'm surprised they don't have to layoff more. They've degraded the entire gaming industry.
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April 17th, 2012, 10:13
I still refuse to believe TORtanic has 1.7M subscribers at this point. There's just no way that's possible with that game.
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April 17th, 2012, 12:39
Considering the lengths they have gone to in an effort to artificially boost Toro's active sub numbers (taking down their website for an "upgrade" prior to billing day, free 30 days for all subs not logged in for a week etc) im guessing the number of active players is quite abit lower then they want to admit.
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April 17th, 2012, 15:10
Layoffs after a major release are normal practice for the industry. EA and co wring the life out their devs with 85 hour weeks for months on end, and then as a "special thank you", they get security to escort these devs out of the building after the games go gold.

And the layoff numbers do not include contract workers who are simply not asked to come back. It's little wonder than people who go through a couple of these cycles (or the "lucky" ones who get to keep their 85 hour indentured servitude for a few more months) produce such soulless, uninnovative and flawed games that are good to look but otherwise forgettable and unreplayable.
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April 17th, 2012, 17:22
Originally Posted by wolfing View Post
EA is not the worst company, not even close. Try Ubisoft, they make EA look like Bioware when Bioware was cool
Latest statistics from Linkedin:
Before Electronic Arts employees worked at…
Microsoft (94)
Ubisoft (83)

After Electronic Arts employees went to…
Microsoft (246)
Zynga (207)
Ubisoft (200)
They seem to be recycling!

Some golden nuggets, also from their Linkedin page:
EA Values
  • Be Bold
  • Think Consumers First
  • Create Quality and Innovation
  • Act with Integrity
  • Be Accountable
  • Learn and Grow
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April 17th, 2012, 17:43
I'm unsure what to say on this. Instead of showing the door to creative staff, they should fire their imbecillic managers.
As someone said above, EA is not really the worst gaming company out there, but it's pretty close to deserve that title.
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April 17th, 2012, 20:03
Originally Posted by figment View Post
The executives do not possibly deserve their bonuses unless they show significant leadership and ability to control the bottom line. What better way to show that they should be compensated at rates 100 times the lowest paid worker than to cut the biggest reoccurring cost and improve the bottom line.

Just in case your curious Lawrence F. Probst III (Chairman of the board) makes $5.6 M/yr.
Hey, if I was in charge of my own salary at a company that rakes in 100's of millions how much would I pay myself - especially if I didn't know if I was going to be there next year.

I'm probably even assuming that $56K at lowest paid is too high as they are probably really cheap skates. Its crazy to think that laying off 5 executives at EA is nearly the same as laying off 500 employees.
as I tell my students who are all amped about wanting to work at a Video Game company - I didnt' come back to school to take a salary cut. I think on average these guys make about $40k. And as the 2k guy told us in his presentation, developers don't get a cut of the profits - unless you're Sid Meier - you are not going to get rich writing game software. The big reason is there's too much competition in the gaming job market (he took a job as a game tester for example - $12 an hour was what my brother was offered at EA Vancouver. He turned it down). In software you can make quite a bit more that writing business applications.

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April 18th, 2012, 09:41
Originally Posted by Couchpotato View Post
The cost to make that game had to be the biggest spent on any game. Hell it was on par with some of the big budget movies. Almost 300 million if Forbes was correct.
It's been reported as almost 200 million. And EA said they only needed 500 000 subscribers to turn a profit… granted they never said how long these people needed to subscribe for (probably for the term of their natural lives) but TOR will probably have that many people playing for a long time to come.

Originally Posted by Couchpotato View Post
Its not the WOW killer EA wanted. Give it a few more years and we will see were it's at.
It was never going to get anywhere near WOW straight from the box, it took WOW many years to build up their huge subscription base. Whether TOR will be a success or not will depend on how Bioware supports the game from here on out. It's far too early to say one way or the other.
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April 20th, 2012, 13:35
Here is a new article on EA.

Analyst: EA losing Star Wars Old Republic users
by Rob Crossley

Analyst: EA losing Star Wars Old Republic users

User base projected to fall to 1.25 million by March 2013

One of Electronic Arts’ most expensive gambles in its thirty-year history is no longer producing growth in subscriber numbers, according to new analyst data.

Cowen and Company analyst Doug Creutz claims that Star Wars MMO subscription numbers “peaked” in February – at about 1.7 million members. He projects that the number will fall to about 1.25 million subscribers by the end of the current financial year, March 2013.

Electronic Arts has not validated the data, which was estimated via readings of server statistics.

Though estimates on the game’s budget vary wildly, the consensus is that the project cost at least $100 million to develop, promote and publish. It is not known if it is yet yielding a profit, or whether the current subscriber base will bring it out of the red in the current fiscal year.

"We believe that the apparent decline in subscribers is most likely due to a lack of 'end-game' content for the title, meaning that players who hit the level cap have few compelling options in terms of ongoing game play," said Creutz.
Article continues below

"While the game got off to a good start, the relatively light amount of end-game content does appear to be taking a toll."

Electronic Arts and developer Bioware has the capacity to implement such upgrades to the title.

"We believe EA is attempting to address the end-game content issue, including a recent major game update, but momentum appears to have stalled and we believe it is prudent to adopt a more conservative forecast on subscribers at this time,” the Cowen and Company analyst added.

Electronic Arts is performing above industry averages, Creutz added.

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April 23rd, 2012, 16:18
For those interested, here are a couple of articles from Ars Technica on the current state of SWTOR: Analyst suggests The Old Republic is already losing subscribers; and Is The Old Republic becoming an old ghost town? OpenForum gamers debate.

The articles generally support a conclusion that the number of active players, (and recurring subscribers) is declining. Many of the first wave of players have topped out the max game levels and have finished the story, and some have lost interest. Other players report a continuing interest. It appears that many of the SWTOR servers currently have low population levels.

The original SWTOR story was reported to be quite good, and was applauded across the board in the various reviews I read. A story/game expansion might rekindle the interest of some of the original players, but that probably won't happen this year, as I understand. Its worth noting that Drew Karpyshyn, the lead writer for SWTOR, recently left BioWare. Only the future will tell whether the current SWTOR team will be able to match Karpyshyn's considerable story telling and writing skills.

There's an Asian opening/expansion scheduled later this year.

As best I can tell, no subscriber "crash" is expected at this point, although decreases in recurring subscribers (and profits) are expected.

__
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April 23rd, 2012, 17:09
Originally Posted by RPGFool View Post
The articles generally support a conclusion that the number of active players, (and recurring subscribers) is declining. Many of the first wave of players have topped out the max game levels and have finished the story, and some have lost interest.
I'm one of those that didn't finish the game. Tried to like it but I just couldn't handle another city area!
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April 23rd, 2012, 18:19
Originally Posted by RPGFool View Post
For those interested, here are a couple of articles from Ars Technica on the current state of SWTOR: Analyst suggests The Old Republic is already losing subscribers; and Is The Old Republic becoming an old ghost town? OpenForum gamers debate.

The articles generally support a conclusion that the number of active players, (and recurring subscribers) is declining. Many of the first wave of players have topped out the max game levels and have finished the story, and some have lost interest. Other players report a continuing interest. It appears that many of the SWTOR servers currently have low population levels.

The original SWTOR story was reported to be quite good, and was applauded across the board in the various reviews I read. A story/game expansion might rekindle the interest of some of the original players, but that probably won't happen this year, as I understand. Its worth noting that Drew Karpyshyn, the lead writer for SWTOR, recently left BioWare. Only the future will tell whether the current SWTOR team will be able to match Karpyshyn's considerable story telling and writing skills.

There's an Asian opening/expansion scheduled later this year.

As best I can tell, no subscriber "crash" is expected at this point, although decreases in recurring subscribers (and profits) are expected.

__
Interesting article. I imagine drops in the subscriber base have something to do with so many MMO and F2P games available these days.

Considering TOR requires a monthly subscriber fee, if one feels like trying other games it would seem to be prudent to unsubscribe. (I only tried the beta version of TOR and have never played any other MMOs so this is a very uneducated guess.)

EDIT: apparently 38% of the US population is currently playing some kind of free-to-play game
Last edited by CountChocula; April 23rd, 2012 at 20:33.
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April 24th, 2012, 00:15
Originally Posted by CountChocula View Post
EDIT: apparently 38% of the US population is currently playing some kind of free-to-play game
I honestly assume those numbers are very misleading - the majority of the 38% are probably playing Facebook games like Farmville. I don't like such gimmicky games being considered when discussing gaming stats, as it's possible for them to have 50 million players or more. It completely messes up the stats.
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April 24th, 2012, 00:29
Originally Posted by CountChocula View Post
EDIT: apparently 38% of the US population is currently playing some kind of free-to-play game
Free to play… so like Solitaire ?
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