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Saturday, March 21, 2015

The slaughter of the development houses

EA kills another legendary name in game development:
In an a move to consolidate its studios Electronic Arts has announced that it will be closing down Maxis. One of the sad truths of the video game industry is that game studios close down and disappear all the time. That being the case, there are still moments when you see certain names coupled with the words "shut down" and can't help but feel a bit saddened.

Case in point, Electronic Arts has announced at GDC today that it will be closing down Maxis Emeryville in an effort to fold its staff and projects into other development houses under the Maxis brand. Recognizing that this consolidation will lead to many of the studio's staffers losing their jobs, EA stated that former Emeryville employees "will be given opportunities to explore other positions within the Maxis studios and throughout EA." The publisher also intends to work with employees leaving wholesale "to ensure the best possible transition with separation packages and career assistance."
What is that now, six or seven classic development houses that have been devoured by the EA monster? I was seriously concerned when they acquired Origin, and downright bummed out when it became obvious that they were going to kill both the Ultima and Wing Commander franchises. Chris Roberts even worked out a deal to try to revive the latter a few years ago, but wasn't able to find the funding, hence Star Citizen. One hopes that one day, he'll be able to buy back the IP that EA is never going to utilize.

I have fond memories of Maxis. Roger, one of their tech support guys, was my initial contact there in my Transdimensional Evangelist days, and we used to go into the city from time to time when I was in town. We had some unforgettable evenings, most notably the time another Maxis employee who had a jeep with the license plate "JAHARMY"  was driving and took us to DV8.

Well, at least they're keeping the brand name for now. I seriously wonder sometimes how EA even stays in business. They shut down a friend's studio last year that was highly profitable, just because the overall revenue was under the level dictated by their new corporate policy. They didn't sell it or anything, just shut it down and threw away literally millions of dollars in profit. So PopCap is next, after which it will presumably be Bioware's turn.

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57 Comments:

Anonymous trev006 March 21, 2015 11:58 AM  

I still haven't forgiven the gormless fuckers for shutting down Westwood. Honestly, the Command and Conquer series was practically a license to print money, until ridiculous decisions made the franchise crappier and crappier. I loved Red Alert 2, actually published under the Westwood brand, and Tiberium Wars was great, but after that it was a fast slide downhill. EA is one of the worst centralized conglomerates in the world, and I'm just astonished no one's tried to launch a takeover yet.

Blogger Brad Andrews March 21, 2015 11:58 AM  

This would be a bit surprising, but it has been going on for many years.

I do share your wonder at how they stay in business. I suspect some monopoly control (due to their huge influence over some older distribution channels) helped, along with a budget to push whatever they wanted.

I would tend to think they will face the same challenges as the traditional book publishers as the market continues to spread out.

How much control do they have with Steam, for example? Amazon?

Anonymous pseudotsuga March 21, 2015 12:01 PM  

Well, that's too bad. Maxis' Spore was a fun time, and now it looks like any continuation or further development (Spore + Minecraft = Sporecraft, anybody?!) is DOA.
So how does EA make any money? Does it poach smaller studios, squeeze out their profits and then discard the husks?

Blogger Noah B March 21, 2015 12:04 PM  

"So how does EA make any money?"

They're publicly traded so... buybacks?

Anonymous Ain March 21, 2015 12:06 PM  

EA has the reverse Midas Touch. Everything it touches turns to shit.

Anonymous Dirtnapninja March 21, 2015 12:06 PM  

/sigh

I remember when EA published games like One on One, Archon, MULE and Bards Tale.

Blogger swiftfoxmark2 March 21, 2015 12:08 PM  

EA stays in business because you guys go out and buy their sports games, which are repackaged garbage, instead of going out and actually playing the sport.

Also, they have produced a lot of freemium games which practically make you buy their premium currency. Or hack them.

Blogger Vox March 21, 2015 12:09 PM  

I quit buying Maddens years ago. Because the old ones are still better.

Anonymous Leonidas March 21, 2015 12:14 PM  

Speaking of Origen and Ultima, I've been following Richard Garriott's quest to revive Ultima-but-not-Ultima ("Shroud of the Avatar") with quite a bit of interest, since that's still my favorite game series of all time. Here's hoping it doesn't suck like U9 or some of his other, later projects.

Anonymous Aeoli March 21, 2015 12:33 PM  

EA shares some common input/output characteristics with big names in other fields: increasing consolidation of capital, passable work (Ex. Call of Duty) with extremely high production value, increasingly monochrome aesthetics, and business practices so blindly evil one suspects "amoral" is no longer a predictive model.

To wit: they are growing into the development studio version of Google, Goldman Sachs/Fed, News Corp, Facebook, Monsanto etc. From this, I tentatively conclude they are playing the same game, for the same team, using the same strategies and formulas, for the same reasons.

That's off the top of my head, so please poke holes if you see them.

Anonymous Aeoli March 21, 2015 12:37 PM  

Like, for instance, EA apparently didn't make Call of Duty.

Anonymous Aeoli March 21, 2015 12:42 PM  

Battlefield. Whatever. Same thing.

EA:Activision::WaPo:NYT

Anonymous Jack Amok March 21, 2015 12:43 PM  

EA stays in business because you guys go out and buy their sports games, which are repackaged garbage, instead of going out and actually playing the sport.

I suspect that's it.

But I'm sanguine about acquired studios closing. From my perspective, it's a Good End for the studio because it means the folks who built the studio up probably got a decent payout when they were acquired, and whatever talent was still with the studio is now free to help start a new, fresh one.

The truth is few businesses retain their (good) character and direction for more than 20 years. If they've been successful enough to reach that point, some combination of prosperity and a sense of inevitable success (which is different than confidence) does them in. Agendas other than providing the customer a valuable product take over.

Game studios probalby have a shorter average productive life-span. If a great new studio comes along, seeing them bought by EA measn that studio is going into the dumpster, but the people who made it great just got a nice payout and have the money to start up another studio whenever they finish their contract.

Sure, it's sad to see beloved IP go by the wayside, but... maybe that's for the better too. Is the Halo universe getting better with each new release?

Anonymous Will Best March 21, 2015 12:45 PM  

So how does EA make any money?

EA operators on slumlord philosophy.

EA bought Bioware for $820 million (really $635 million). So as long as bioware returns 2 billion or so over the course of the decade it doesn't care what state it is end by the end of it. Studio gets condemned and it moves on to the next asset.

I quit buying Maddens years ago. Because the old ones are still better.

I play Madden 2002 still. Though I suppose I will have to buy a new one when my kids finally convince me to upgrade to the PS4/Xbox One as the game cube will end up getting retired.

Blogger jaericho March 21, 2015 12:45 PM  

Bummer. I liked the SimCity games. Tho' I haven't played the latest one because of the outright lying that was "it requires the online servers".

Anonymous Aeoli March 21, 2015 12:46 PM  

Make that WSJ:NYT

I give up now.

Blogger The Deuce March 21, 2015 12:51 PM  

Couldn't they do something right for a change, and put Bioware out of its misery first?

Blogger Nate March 21, 2015 12:57 PM  

" I seriously wonder sometimes how EA even stays in business. They shut down a friend's studio last year that was highly profitable, just because the overall revenue was under the level dictated by their new corporate policy."

Harvard Business School mentality. it is the most insidious evil in all of capitalism... and it is so easily disproven it amazes me that idiots still fall for it.

Few things would improve the world economy like simply outlawing the corporate hiring or promoting of anyone with a business degree from harvard.

Blogger Nate March 21, 2015 1:13 PM  

"I quit buying Maddens years ago. Because the old ones are still better."

Look... I know I should stop buying Maddens OK? I know I should. But I can't.

I JUST CAN'T OK???

Anonymous jack March 21, 2015 1:19 PM  

I don't suppose Vox/Castalia could buy up some stuff; hire some of the decent people that made it all happen? I know the treasury is not bottomless but, even not being a gamer [yet??], I can see the tragedy of it all.

Anonymous Jack Amok March 21, 2015 1:27 PM  

Harvard Business School mentality. it is the most insidious evil in all of capitalism... and it is so easily disproven it amazes me that idiots still fall for it.

Few things would improve the world economy like simply outlawing the corporate hiring or promoting of anyone with a business degree from harvard.


The Ivy League is the source of most of our disfunctions. I say we kill the whole thing.

Blogger Cataline Sergius March 21, 2015 1:28 PM  

Look... I know I should stop buying Maddens OK? I know I should. But I can't.

I JUST CAN'T OK???


The cycle of addiction can be broken, Nate. Just get clean and practice total abstinence. You're not in control here and you know it.

Blogger Vox March 21, 2015 1:28 PM  

I don't suppose Vox/Castalia could buy up some stuff; hire some of the decent people that made it all happen?

That's what we'll do in 3-4 years if we get sufficient support, followed by sufficient success, with First Sword and 3DV.

Anonymous paradox March 21, 2015 1:33 PM  

No kidding you could make anything into an awesome C&C game. I hated the movie Avatar, but I would by a RTS where you genocide those blue devil aliens.

Damn, Star Wars Battlefront is gonna suck.

Blogger hank.jim March 21, 2015 1:37 PM  

No one has to sell to EA. You sell, EA consolidates. People get laid off. Then another start-up might someday be bigger than EA and buy it out.

Anonymous RMR March 21, 2015 1:49 PM  

"I seriously wonder sometimes how EA even stays in business. They shut down a friend's studio last year that was highly profitable, just because the overall revenue was under the level dictated by their new corporate policy. They didn't sell it or anything, just shut it down and threw away literally millions of dollars in profit."

Revenue? Not profit, not cash flow, just revenue? That's it? That's so insanely idiotic that I'm genuinely curious how this kind of thing could possibly happen. These guys did take Finance 101, right?

Perhaps they could run an NFL team, and release every player who doesn't score enough touchdowns per year. "I'm sorry, Richard Sherman, but I'm afraid you're just not adding enough value to the team."

Blogger Cataline Sergius March 21, 2015 1:52 PM  

EA is actually worse than Pfizer and that's saying something.

How much stupidity does EA inflict on it's devs? Bioware games didn't suck until after EA bought them up. Mass Effect 3 bad enough but then came Dragon Age Inquisition. DAI was aptly named since it is torture to play. But they threw in some Lesbian elves which guaranteed it good reviews.

How many good franchises have they ruined that I can recall off the top of my head?

Undying, Technically not a franchise but it should have been
Wing Commander. At least they are giving it away.
Ultima
Crusader
Magic Carpet
Dungeon Keeper
System Shock
Command and Conquer
Mass Effect
Dead Space
Dragon Age
Spore
...

This is too depressing to keep doing.

So is Star Citizen supposed to Wing Commander without the Kilrathi?

You know what? I don't care. I'll be happy if it's only half as awesome as it's trailer.

Blogger Vox March 21, 2015 2:24 PM  

Revenue? Not profit, not cash flow, just revenue? That's it?

Yes. They decided to shut down every studio with less than $25 million revenue. Profit irrelevant.

Anonymous Jack Amok March 21, 2015 2:28 PM  

So is Star Citizen supposed to Wing Commander without the Kilrathi?

Wing Commander meets Privateer meets the MMO, I think.

It looks great. I'm a bit skeptical about Robert's pricing model, but it is an interesting way of doing differential pricing. And I love the name he picked for the company.

Blogger maniacprovost March 21, 2015 2:30 PM  

I'm not gonna lie, 25 million in revenue is not that much, but it sounds like a lack of management. Either quantity or quality. Not that they're too stupid to understand profit is good, but that they simply don't have the ability to manage a bunch of small studios.

Anonymous wEz March 21, 2015 2:34 PM  

Vox, do play fifa? Love fifa 13, still play it as my go to when looking for a seasons online match. I'm in division 2. I hated fifa 14, and 15 isn't much better.

Blogger Emmanuel Mateo-Morales March 21, 2015 2:35 PM  

"How much stupidity does EA inflict on it's devs? Bioware games didn't suck until after EA bought them up. Mass Effect 3 bad enough but then came Dragon Age Inquisition. DAI was aptly named since it is torture to play. But they threw in some Lesbian elves which guaranteed it good reviews."

As much as I HATE EA... have you EVER played Jade Empire? Or the original KOTOR? Sorry buddy, but the truth is, when it came to actual gameplay, you can could count on Bioware being hit or miss even before EA bought them all out. You could also count on THEIR business practices being completely dumb without EA's intervention and them being complete SJW's without EA's intervention.

Anonymous kh123 March 21, 2015 2:48 PM  

So EA's new franchise is essentially At Close Range. Good enough reason to hire back Klepacki to provide the brooding synth soundtrack.

Anonymous Jack Amok March 21, 2015 2:51 PM  

Not that they're too stupid to understand profit is good, but that they simply don't have the ability to manage a bunch of small studios.

Who says you have to manage them? If they're turning a profit, odds are they already have a GM in place who's able to handle things. Put a year's worth of operating capital in a designated account and let 'em go. As long as their account stays positive, don't worry about them. Or, spin 'em off in to a wholly-owned sub.

Anonymous Red Comet March 21, 2015 2:56 PM  

The usual process of events in EA acquisitions is they buy the company, then they reduce budgets and strip features to get games out faster, and then this drives the talent away, and finally the studio is shuttered once a franchise entry does worse than the one before it.

This is why Origin was canned after Ultima IX failed, why Maxis just got shuttered after the incredible failure of the last SimCity, why DreamWorks/Danger Close was closed after failing to revive Medal of Honor as a Call of Duty competitor, etc, etc.

Right now it's usually 6-7 years after acquisition that the talent leaves. From there it's about 5-6 years until the studio closes. The average lifespan of these studios is a little over 10 years.

Bioware's big names took off between 2012-2014. I expect it will be closed by 2017 or 2018, likely after the failure of a future Dragon Age game.

Blogger Nate March 21, 2015 2:57 PM  

"The cycle of addiction can be broken, Nate. Just get clean and practice total abstinence. You're not in control here and you know it. "

SHUT IT! I WILL BUY MADDENS!! I WILL KEEP BUYING MADDENS!!!! YOU CAN'T TAKE THE MADDENS!!!!

Anonymous Rolf March 21, 2015 3:16 PM  

Yeah, I never understood that "profitable, but not profitable enough, so kill it" logic. One of the best products ever by MS died that way, the Windows Home Server. The mightiest tree starts as a seedling, but these morons only want the old growth forests, so they kill the saplings. Bizarre.
Do they not understand the company will survive strong and hale if their biggest competition comes from various internal organizations, so they shouldn't kill internal products that compete with their "flagship" products, because if they don't develop its successor, someone else will.

Blogger hank.jim March 21, 2015 3:49 PM  

Its about the cost of money. Businesses are not run to breakeven or lose money. Not profitable enough means a company is deemed a money loser and the investor will decide to put their money in better investments. EA is just protecting itself and is trying to ensure decent shareholder returns.

Blogger bob k. mando March 21, 2015 3:52 PM  

Nate March 21, 2015 1:13 PM
Look... I know I should stop buying Maddens OK? I know I should. But I can't.
I JUST CAN'T OK???



in the EA development pipeline?

SEC Foosball. because the rest of the NCAA doesn't matter.

and you know Nate would buy it.

Anonymous Jack Amok March 21, 2015 3:53 PM  


SHUT IT! I WILL BUY MADDENS!! I WILL KEEP BUYING MADDENS!!!! YOU CAN'T TAKE THE MADDENS!!!!


The only thing that can save Nate is aversion therapy. We need to link all future Madden references with the phrase "9mm Glock."

Blogger Bogey March 21, 2015 4:17 PM  

They shut down a friend's studio last year that was highly profitable, just because the overall revenue was under the level dictated by their new corporate policy. They didn't sell it or anything, just shut it down and threw away literally millions of dollars in profit.

The same thing NCSOFT did to one of the great and original MMOs, City of Heroes.

Anonymous Will Best March 21, 2015 4:19 PM  

Yeah, I never understood that "profitable, but not profitable enough, so kill it" logic.

Its simple. I could put $100 million into 5 subsidiary studios and make $125 million, or I can buy a new studio for $500 million and make $200 million.

In some sense EA is to be thanked though. There are probably a lot of games that are getting made that never would have been made because the guys making them would be making the 9th installment of something or other.

Blogger Nate March 21, 2015 5:47 PM  

"Yeah, I never understood that "profitable, but not profitable enough, so kill it" logic."

Don't you realize? If it isn't growing its dying. Harvard says so.

Blogger Remo March 21, 2015 6:25 PM  

Robosport - one of the seldom played unsung heroes of Maxis and if you got rid rid of the missiles a tactically engrossing game for two players. Difficult to find now as it only seems to work on Win3.1 and virtual machines for this aren't good enough to simulate it Would love to play this one again.

Blogger bob k. mando March 21, 2015 6:33 PM  

Nate March 21, 2015 5:47 PM
Don't you realize? If it isn't growing its dying. Harvard says so.



Harvard Econ == intellectual shit hole

Blogger Zimri March 21, 2015 7:30 PM  

"EA is one of the worst centralized conglomerates in the world"

They've won awards for that. Yes, plural: back-to-back "golden poo".

Anonymous kawaika March 21, 2015 7:35 PM  

"EA has the reverse Midas Touch. Everything it touches turns to shit."

Dead Space 3 made me do an Isaac Clarke facepalm.

Blogger Vox March 21, 2015 7:45 PM  

I was offered a job as a lead designer at an NCsoft studio. Fortunately, I turned it down, because a month later the studio was shut down.

Anonymous Jack Amok March 21, 2015 8:28 PM  

I was offered a job as a lead designer at an NCsoft studio. Fortunately, I turned it down, because a month later the studio was shut down.

When we got big enough to need an office, we got our office furniture 2nd hand from an NCSoft studio being shut down. Well, technically I think it was a marketing department, not a full fledged studio, but they had nice desks.

Come to think of it, must have been a marketing operation. The desks were way too nice for anyone who did real work.

Anonymous Statists are so dull March 22, 2015 3:02 AM  

I never understood that "profitable, but not profitable enough, so kill it" logic.

Basically, if Mr executive sees Dept A making 100K doing activity x while Dept B makes 50K doing y, he'll pressure the guys in B to do the same as A (no logic here I know, but its what they do). If they don't they'll start to move resources/personnel from B to A since (in their mind) A is more profitable than B.

Any roles duplicating any of the bloated "corporate" functions (purchasing/legal/marketing) can be let go. Reduced headcount = greater profit (in their minds)

So, why do B when you can do more A, right?

Anonymous p-dawg March 22, 2015 8:25 AM  

I am behind Star Citizen. For one, screw EA for saying that no one wanted to play a Privateer-style MMO. Secondly, Chris Roberts is a proven dev - Strike Commander, Wing Commander, Privateer - the man knows how to make a flying combat game. The pricing model doesn't really bother me, as the ships won't be for sale once the game goes live (except on the secondary market, like eBay, etc). I'm holding several ships as pseudo-investments. As with anything, there's risk. But if the game continues to develop as well as the playable flight module indicates, it's going to be a very profitable bet. Once "Space Marine" (the first-person shooter module) launches, we'll know if he's going to be able to integrate spaceflight/combat with land combat as well as CIG is promising. If so, then I believe it will be a success, and a huge success. Excellent space combat + zero-g-to-high-g FPS + a creative in-game economy + exploration + resource-gathering + corporate management = something I really want to play, and I'm not alone. I hope Star Citizen outsells Minecraft and I hope EA chokes on it. If anyone's still reading, and planning to play SC when it comes out, I will be accepting recruits for my corp. I won't be running it per Harvard rules. If you produce, you will be compensated. If you produce more than the average, you will be compensated at a higher-than-average rate. Also, I believe they will allow some form of profit-sharing, which I support. If profit-sharing ends up not being implemented in-game, I intend to implement it outside the game. I'll post details next year, prior to launch.

Anonymous p-dawg March 22, 2015 8:26 AM  

"Star Marine" it should be, above - i'm still on my first cup of coffee.

Anonymous p-dawg March 22, 2015 8:49 AM  

Eh, I guess the original post got eaten, but the correction survived. I wrote a long post about how awesome Star Citizen is, but it's gone now. So, Star Citizen is awesome.

Anonymous AndrewV March 22, 2015 10:02 AM  

EA is primarily in business due to Madden and the exclusive deal with the NFL (which EA secured after NFL 2k5 cleaned their clocks). Madden generally sells around 4 - 5 million copies a year. Further, the largest revenue segment for EA right now is "Extra Content", which spikes up at the same Madden comes out. Many Madden gamers are spending double or triple the sticker price of the game on this content.

If the exclusivity deal ever goes away or the NFL drives up the price (only $50 million, NFL?) EA is in for some major hard times.

Anonymous AndrewV March 22, 2015 12:04 PM  

Also, since we are talking about EA, Syndicate is free on Origin right now.

Anonymous Athor Pel March 22, 2015 3:07 PM  

" Bogey March 21, 2015 4:17 PM

They shut down a friend's studio last year that was highly profitable, just because the overall revenue was under the level dictated by their new corporate policy. They didn't sell it or anything, just shut it down and threw away literally millions of dollars in profit.

The same thing NCSOFT did to one of the great and original MMOs, City of Heroes.
"



If somebody didn't mention this I was going to.

It's the same damned mindset.

Blogger George guy March 23, 2015 3:55 AM  

I have to wonder if it's the MBAs, or the rhythm imposed by the regulatory fixation on quarterly performance, driving this short-term thinking.

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