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Layoffs Hit Activision Studios, Radical, Luxoflux, Neversoft Affected
Layoffs Hit Activision Studios, Radical, Luxoflux, Neversoft Affected
February 11, 2010 | By Leigh Alexander

February 11, 2010 | By Leigh Alexander
More: Console/PC

Layoffs have apparently hit Activision studios today -- over 50 percent of the staff at Prototype creator Radical Entertainment has been let go, Guitar Hero developer Neversoft has seen an unspecified number of staff cuts, and licensed game studio Luxoflux is to close, our sources claim.

Gamasutra sources confirm reports at consumer weblog Kotaku that some 90 employees have been let go at Radical.

Twitter feeds purportedly from former employees confirm information from our sources suggesting Neversoft -- currently finishing Guitar Hero 6 -- is also affected, and Gamasutra sources also claim LA-area studio Luxoflux will close as part of the layoffs.

[UPDATE: Separate reports from multiple sources also confirm layoffs and claim potential closure at Bay Area-based Activision studio Underground Development, latterly the developer of titles such as Guitar Hero: Van Halen.]

Activision announced yesterday that sales for its third quarter fell 5 percent year over year to $1.56 billion, with losses widening to $286 million thanks to a soft casual market and the rapid decline of the music genre.

As to the latter, analysts say category sales fell 26 percent last year, and Activision says it plans far fewer music SKUs than in recent years.

Prototype, Vancouver-based Radical's most recent release, launched in June 2009 to strong critical reception and sales performance. It was acquired by Vivendi in 2005, and became one of Activision's studios when the publishers merged in 2007.

As for Neversoft, it's been owned by Activision for more than a decade. The studio is best known for producing Tony Hawk games -- however, the most recent Tony Hawk title, dubiously-received Ride, was developed by Robomodo. Neversoft has also developed major installments in the Guitar Hero franchise.

Luxoflux has recently concentrated on game tie ins for films like Shrek, Kung Fu Panda and Transformers: Revenge of the Fallen, all of which have apparently seen only modest critical reception and sales performance.

[UPDATE: Activision has released an official statement on the layoffs to multiple media outlets, reading as follows: "Activision Publishing continually evaluates its resources to ensure that they are properly matched against its product slate and strategic goals. In 2010, the company’s sku count will be smaller than in 2009 driven in part, by a decrease in the number of music-based games we will be releasing.

As we discussed on our earnings conference call yesterday, we are directing our resources against the largest and most profitable business segments, and as part of this initiative, we are realigning our resources to better reflect our slate and the market opportunities.

At the same time, we are increasing our digital/online capabilities as we expect that digital/online will continue to become a more meaningful part of our business model in the years ahead."

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Rey Samonte
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It's always sad to hear about studios closing down due to trimming the fat. I know it has to be done but I hope some of my friends will be able to find jobs soon. It's definitely a tough time to lose your job in the game industry.

Bob Bob
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HD consoles claim yet another victim. Studios are closing left and right. This industry doesn't learn.

Ron Alpert
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A lot of talented friends are joining the growing unemployed numbers. Best of luck to those affected, hopefully 2010 won't turn out to be another 2009.

Carlo Delallana
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I hate the term "trimming the fat". If the failure of a company to perform is strategic then maybe the trimming/changes should occur up top. It's sad to see people in production pay the price for poor choices made in the executive board room.

Alec Wasson
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Sorry to hear, and best of luck to those effected by the shake ups. There are some good opportunities still going on, which could be the silver lining here.

Ed Alexander
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Good luck, guys. =/

Sean Barton
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Best of luck to everyone involved. Hang tough. Video game developement can be a cruel mistress.

Tim Carter
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People, people, people...

When are you going to learn this is an entertainment industry.

It's not a stable industry, like mining, tire manufacturing or something, where you work with one company for 30 years, then get a golden retirement.

Entertainment is a hit-based industry.

In an entertainment industry, production personnel are only needed while a project is in production.

After that, they aren't needed. They can go their own way.

The only way to have stability is to become an outsourcer, to contract your services during project duration, and to line up projects beyond the one you're currently working on.

It isn't that companies are failing. It's just that projects are ending.

That's all. Projects are ending. So what?

Tomorrow, projects will start up again.

If that's the case, why on earth would you want to live in an industry as an employee instead of as a contractor with some control over your own destiny?

Carlo Delallana
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@Tim - Seriously? The only way to have stability is to be a contractor/outsourcer? I think you make it sound easier than it really is.

Simon Carless
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Tim, you're being super obnoxious. Again.

hieu tran
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Tim, if they(the company) actually did their job right. We wouldn't be in this situation at the first place. They should have the next project ready to be work on next, bub.

Josh Green
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ATVI's stock closed up 9.61% (97 cents to $11.07) on this news. ATVI did well enough for mention on NPR's Marketplace today.

Sion Williams
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@Tim. That was very cold of you. I actually think you are wrong, what company wouldn't want a steady flow of work? Your assumption that once a project is done, your done is rubbish.

Andrew Kim
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Welcome to the club guys, and since I was an earlier layoff, that makes me president of the club. Now have a seat on this nice comfy couch here and let's watch some Tyra and Oprah together.

Tim Carter
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It's funny, when you try to tell people they can have agency and power you get told that you are obnoxious.

Methinks there are some huge blinders here.

Bostjan Troha
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If it helps guys:

ZootFly is hiring all positions for the development of a Triple-A title on PS3, Xbox360 and PC. Please send your CVs to

Samuel Fiunte Matarredona
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@ Bong: I'm not going to go into any valoration of Tim's words, but yours about the "desperate wannabes trying to crack in the industry" are both insulting and totally shallow....are you frightened of that wannabes? or just want to keep the industry as an elite for the people that it's already in? Not that I'm one of these, because I even don't have a "homebrew design document"and I'm working in the industry (more or less!!), but mate, it might be that the document is not that important, but what it's contained in it, you know?

Grant Stanton
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Tim carter Wrote: People, people, people...When are you going to learn this is an entertainment industry.

It's not a stable industry, like mining, tire manufacturing or something, where you work with one company for 30 years, then get a golden retirement.

Hi Tim.

First off ...Tire manufacturing? Stable? Golden retirement? The auto industry? really? I think Goodyear laid off something like 9000 people since the fall of 08. what you love to do. If it is making tires then that's cool. Ditto if it is making games. Life is short. Do what you love.. in good times and in bad.

The principle concern I have with these types of "strategic decisions" is that the games industry is not the auto industry.

Hasty layoffs to maintain quarterly financials appear to me to be short term thinking.

If you open an auto plant in Detroit, how long will it take to staff 100 workers? 500? My guess is you could do it in less than a month, at most two.

When the games industry rebounds in full and the big dev/pubs want to ramp up to capitalize on renewed demand...

How long will it take them to fully staff a next gen development team capable of AAA development?

How many of the good talents would view that company favorably when it comes time to staff up again?

How many of the talents they chose to keep will become disillusioned with the company after seeing their friends let go and leave in the next few months?

There are significant long-term strategic costs there that aren't readily apparent on a quarterly P&L statement. Building great development teams is very, very hard. Will they be able to capitalize on the rebound?

"Muscle" not "fat" by the way...08 and early 09 saw many non-critical roles eliminated...lately though it looks to be a lot of muscle and it is very difficult to put "muscle" back on quickly once it is lost.

Just my 2 cents.

Joshua Sterns
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Good luck to all my old co-workers at Luxoflux.

Sean Parton
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Best wishes to those affected.

Maybe some of you guys can start some indie studios?..

Tim Huntsman
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Good luck to everyone affected--hang in there.

But haven't we seen this cycle for the umpteenth time? In 6 to 12 months as things normalize again, Activision's going to be scrambling to get product back in the pipe. And, hopefully, we'll see some new indy studios crop up, build a great game and, in 2 or 3 years, get 'acquired' by a company like Activision...

Matt Mihaly
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@Tim: You're ignoring the fact that many games companies these days are engaged in the service business, not the product business. Arguably the biggest recent success in the industry - Zynga - for instance, does not 'end projects' when they initially ship any more than Blizzard stopped working on WoW when it shipped.

The service business is the future for a good portion of the games industry, and that boom/bust mentality that necessarily drives the fire-and-forget games traditional to the industry has already changed at the companies that have moved to a service model.

robert toone
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I wish everyone the best of luck and i sincerely hope you all find jobs soon. I know a few peolpe affected by this, and i feel for them (as it happend to me just over a year ago as well).

Fred Marcoux
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best of luck to everyone, it's never an easy time for people affected.

We are currently hiring at our Gameloft Montreal studio for games on iPhone and consoles.

For those wishing to stay in the USA, our NYC studio is also hiring.

I hope this can help a few bounce back!

Jason Hughes
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Sadly, these folks are out of jobs. We're hiring in Austin. For what it's worth, during this "snowpocalypse", Dallas got a foot of snow--we got flurries once. Austin's the place to be. :-)

@Tim: I agree with some of what you're trying to say, but I think you ruffled some feathers with the delivery. We, ourselves, have had great success providing talent to studios in a pinch. There's down-time between contracts (when we get to work on our own stuff), but then we tend to get called back frequently. What I think is missing in a lot of businesses (and yes, the games industry is first and foremost a business) is the ability to suffer one or more failed sales projection. The cost of AAA games is out of control, so a major failure (and certainly two) is a studio killer. This isn't new, it's just more devastating as studios are larger than ever and the stakes are higher. I've long been of the opinion that publisher/developers should not be publicly traded--the pressure to meet quarterly projections is intense, and it seems to me that the best way to run a business involves both short and long term planning. Shuttering studios is throwing away several very long term investments. I hope Activision knows what it's doing.

Best of luck landing on your feet, everyone. And seriously, send me your info if you are interested in a central Texas lifestyle change. We have room for one or two more.

Dan Lupton
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