ReBurn
Gold Member
I'm just using what's on the Twitter profile. That's what they want, that's what they get.
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Playstation Laying Off 900 People - Multiple Studios Effected (Insomniac/Guerilla/Firesprite) - London Studio Shuts Down
- Thread starter adamsapple
- Start date
StreetsofBeige
Gold Member
I dont know if the numbers are true too, but I do remember on gaf people posting bar charts starting in 2016 I think where all the big tech companies started hiring like crazy and the employee count was like +30% on average. It was like places growing 20 or 40k employees kind of thing. So ok, the past 12-18 months have had various tech companies shaving off 5-10% of people. Hey it happens.
For you gaffers not understanding the interest rate part, the reason why it's important is because rates were ultra low for business loans (and for people's mortgages and car loans too). Rates were probably about 2-3% tops. My mortgage bottomed out at 1.2%.
So for business amping up on business loans and any other debt, it had super low rates. It was like free money. But starting in early 2022, rates jacked up fast everywhere as inflation was high and every government and bank lead were so startletd by covid nobody had the guts to smoothly increase rates because inflation already was like 10% in 2020 and 2021. But nobody moved an inch until Feb or March 2022. And because they panicked and had to act fast, suddenly 2022 had like 3-4% added to rates. And 2023 had a bit more too i think. By mid-2023, that 2% debt rate was around 6-7%. So anyone with a loan which has a variable rate that adjusts to whatever the rates are, or someone needing to renew a loan at the going rate now got interest rates to pay back that are about triple. Thats why companies like Embracer which went ape shit buying endless companies during covid for dirt cheap, put a full stop when 2023 started. They havent bought anything since, and in fact are now gutting employees and studios. They must be some shitty loan with terms refinancing at high rates because anyone able to lock in a super low rate for 5 or 10 years wouldnt give a shit whats going on. One of my buddies locked in a 10 year mortgage for like 2.2% or something in 2021. He doesn't give one stinky iota if rates skyrocket. He's sitting back chilling and laughing.
ChorizoPicozo
Member
well that's how started.
maybe that's another issue. video games are not Hollywood, there is not glamour to be in front of a computer 10+ hours a day making shit works.
Astray
Gold Member
Yep, basically this.
Anyone who thinks the mass acquisition spree of 2020-2022 will continue now (like Sony buying Arrowhead or Microsoft buying Sega) is truly deluded.
James Sawyer Ford
Member
It’s the same as Hollywood
ChorizoPicozo
Member
I'm taking about the people believing making games is glamorous just like making movies or tv shows.a very small fraction of people is going to have that kind of experience.
James Sawyer Ford
Member
The only glamorous ones in Hollywood are directors and actors
The rest? All those credits you see? Same situation as game devs
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gimmmick
Member
Companies over staffed their work force and actually have to balance the books. The horror!
Fake
Member
This is not Twitter. Lets not turn this place into Twitter.
Calverz
Member
Very disappointing news. I had always had a glimmer of hope they would make a getaway 3. It feels like PlayStation brand has more or less lost all of its British identity. PS1 was so synonymous with 90's pop culture in the UK. Its hard to put my finger on it, but it essentially got me into gaming in a big way. Truly the end of Psygnosis as well. Disappointing news for British computer game industry. Hopefully Playground games swoops up some of the talent and most of them get new jobs again.
ArtHands
Thinks buying more servers can fix a bad patch
veterangamerUK
Member
Posed for that photo with a shit-eating grin knowing what was about to happen
They weren’t the first to do that, Uncharted 4 and Lost Legacy were in the same year. Ditto for Infamous and Second Light.
You can get away with ‘put out a smaller version game with similar assets’ with a crazy popular IP like Spiderman, but that’s not a guarantee it’d translate well for other studios and other IP.
DaGwaphics
Member
In the 360 era they certainly would have released more full price games. Personally, I think the smaller in between games that are built on the previous full sized effort is a smart way to get more revenue in a way that seems fair to the player. The first game is what one would expect and the second is priced accordingly for being a large expansion on that. This approach is better to me than splitting the primary game in two pieces, unless each of those pieces is of equal size and scope to what would normal be considered a full game. Another option is just to release DLCs with a lot of content expansion, along with a re-release of the game. But that might not do as well as the standalone "Miles" type game.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
You are 100% right that they weren't he first. But Insomniac (from the hack) seems to be the first studio to make it a philosophy for their studio going forward. The other studios seem to have done it as a one-off and it worked. But it is going to be Insomniac pure way to make games over a 10-year period and it's smart.
And you're also right that other studios can't do it right now within Sony.......and so that's probably what they mean when they say they need to re-evaluate how they make their AAA SP games going forward. At least I "HOPE" that's what they mean.
bigdad2007
Member
Most commercial loans are floating rate or adjust at the slowest annually (and can normally be called by the bank at anytime if they are worried you might go bankrupt).
So yeah there are a ton of businesses that went on an acquisition binge when rates were almost 0% and the governments were essentially paying their payroll for them through stuff like Employee Retention Credit and PPP.
Now the debt they are carrying is suddenly costing way more. And this is what causes crashes/recessions. Because the key of the acquisition game isn’t to be the one left holding the bag of the zombie company you bought, it is to unload it to some other sucker after getting any value you can out of it.
The fact is any studio bought out is on borrowed time because at that point the owners/original talent will be gone because if they had an equity stake they got enough money to eventually retire/work gig jobs rather than put up with corporate overlords.
adamsapple
Or is it just one of Phil's balls in my throat?
Sony studio Firesprite has been shedding talent amidst accusations of toxic culture, staff say
Sony-acquired studio Firesprite has recently suffered high profile exits amid accusations of a toxic workplace culture,…
www.eurogamer.net
near
Gold Member
Sony studio Firesprite has been shedding talent amidst accusations of toxic culture, staff say
Sony-acquired studio Firesprite has recently suffered high profile exits amid accusations of a toxic workplace culture,…
I was just reading this, probably deserves its own thread.
"Most concerning are reports from sources that two senior leaders from Sony support studio XDev, brought in to help lead Firesprite, have since been accused of sexual discrimination and ageism. A subsequent internal investigation by Sony is said to have resulted in the claims being dismissed as a "misunderstanding"."
Unknown?
Member
Yes I am saying it has definitely always been manipulated to look better. Deficit spending hasn't been 100s of years straight though. A balanced budget used to be common but we have always had some debt(except when Andrew Jackson killed the second central bank and paid off all the debt). However, it has been a deficit straight since the 1950s. That's why the way of living today is worse, they spent our money to finance things in the 60s and beyond. Then they decoupled from gold and went pure fiat so they could create as much as they wanted.
You can see here is when things really went south.
WTF Happened In 1971?
"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop." - F.A. Hayek 1984
wtfhappenedin1971.com
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Yes I am saying it has definitely always been manipulated to look better. Deficit spending hasn't been 100s of years straight though. A balanced budget used to be common but we have always had some debt(except when Andrew Jackson killed the second central bank and paid off all the debt). However, it has been a deficit straight since the 1950s. That's why the way of living today is worse, they spent our money to finance things in the 60s and beyond. Then they decoupled from gold and went pure fiat so they could create as much as they wanted.
You can see here is when things really went south.
WTF Happened In 1971?
"I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop." - F.A. Hayek 1984
Gotcha. I take back what I said to you earlier in the thread. I still disagree with you, but you are being honest with your thoughts and that's cool. You seem more of a Ron Paul type who truly believes in no or little deficit spending and the gold standard so you're cool.
Again, I disagree but I'm glad you're not one of those flip-flopping "the data is only lying when my team isn't in office" types.
ArtHands
Thinks buying more servers can fix a bad patch
Hmm interestingSony studio Firesprite has been shedding talent amidst accusations of toxic culture, staff say
Sony-acquired studio Firesprite has recently suffered high profile exits amid accusations of a toxic workplace culture,…
Sushi_Combo
Member
It's now called "X" for excretion
StreetsofBeige
Gold Member
I forget who, but someone on gaf a month or so ago when the Embracer articles came out about layoffs said the same thing. Them gobbling up studios was more about a buy and sell thing than genuinely trying to be a massive publisher. I was thinking they were trying to be a big fish via buying tier 2 and 3 studios competing on sheer quantity of games studios. Guess I might be wrong.
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StreetsofBeige
Gold Member
Ruthless.
Let me take a picture of the people I am about to execute.
I see 16 other people. If the avg person makes about $150k in total comp, that pic alone is going to save $2,400,000. It'll increase Sony's annual gaming division profit from about $2,000,000,000/yr to $2,002,400,000. Profits just increased about 0.1%.
Good job Jim. Nothing better in life than seeing it with your own eyes!
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BobLeeSwagger
Member
It sucks yea. But… You have to think of studios as a business.
If you’re an AAA studio that employs 300 people, that’s around $40-$50M a year on costs.
If it takes three years to make a game, you’re down $120-$150M in the hole. If you’re selling a $70 game, minus the costs of selling the game, they’re probably getting around $40 per game sold so that means they need to sell 3M-3.75M copies just to break even. Then the rest is profit. But where is the guarantee that your game sells another 3M-3.75M copies @ $70 to pay your bills and fund your next project?
The whole point of running a business is paying for operations with the profit made from your product.
If the profit margins are less than what it is to pay the bills of your operations, then what do you do from there? You can take a loan, but if your profit margins are that small, that just means all the profit you’re making goes back to paying off debt and now you have to take on even more debt to fund the next thing. It is unsustainable.
That’s why the layoffs are happening. Game studios are way too expensive to operate for the profit margins you’re getting and costs need to go down somewhere and that somewhere is unfortunately staff, since they take up the most expenses.
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adamsapple
Or is it just one of Phil's balls in my throat?
Honestly, it feels like Sony (Totoki) are making Jim go to these places beforehand so the blame goes to him and his retirement is used as a positive point like "at least he's leaving" yada yada.
StreetsofBeige
Gold Member
And a few things too that kills profits too, which means the games sales you estimated need to go even higher.
1. Other costs such as building, lease, PC and software costs, mo-cap studios, actors hired for VA, marketing etc...
2. Your estimate assumes the copies sold are at a good price after the initial cut. Depending on how fast the game gets bargain binned, that $40 avg net sales revenue might actually sink to an avg of $35 or $30 etc...
The number of copies to break even might even be 5M. Who knows. I just a guess.
BobLeeSwagger
Member
It’s a guess I know.
I’m doing napkin math but hopefully it paints an idea for us to understand what the gaming industry is dealing with currently.
StreetsofBeige
Gold Member
I agree.
With these big budget games, the number of copies need to be sold just to breakeven is insane. And software isnt the type of industry companies are happy with if it squeaks out n 8% margin like selling staple products at stores. They want big margins.
But it's their own doing two fold.
1. It's their budget and responsibility. No gamer says every game has to be AAA budget games over 5 years. There's shit loads of games made cheaper and faster and sell great with good reviews.
2. If the $70 is too stodgy, then go $80 or $90. Every other industry has variable pricing. Gaming is I think the only one on Earth where all the key products are exactly priced the same at every store. It doesnt matter if it's GTA, COD or Big Bob's Grand Fishing Tour. That's not the stores colluding. That's the game companies selling them games at a certain cost so they reasonably mark it up to $70, and telling them the MSRP should be $70 as that's what every other store will be told the same.
Combine those two facts and it's a recipe for disaster unless game unit sales keep going up.
In other industries, prices are best as possible kept stable until they really need to hike it. In the meantime, the manufacturer will go through hoops doing shrinkflation with smaller bottles or adding more water to it. So their strategy is make a good product, but the size is smaller and the quality still hold up well where most people cant tell the difference. They know price is important and only so many units can be sold. They are trying to cut costs to sell while still selling a product.
Gaming companies do the opposite. Budgets go sky high, games get bigger, it takes more time to make costly games and they stick to the same price. Their hope is unit sales keep rising as if sales automatically rise with game budget by pure wow factor and marketing pull. Good luck with that strategy longterm.
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BobLeeSwagger
Member
It’s going to be very interesting to see what happens now. Plenty of ways for the industry to pivot.
Will publishers/companies close down more studios or let them go independent and just work on making partnership deals with them?
Will innovations/efficiencies be made to reduce the time and costs to make AAA games?
Will studios focus on smaller scope games?
Will consumers be more willing to accept price increases on gaming consoles and games?
Will staff be willing to take pay cuts to sustain the gaming industry?
Now I’m not an expert on the gaming industry so I don’t even know if these are good ideas.
Just a finance person putting their two cents in on the situation.
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StreetsofBeige
Gold Member
Given the trend of tech and gaming, I don’t really see anything changing where companies will keep doing their thing gunning for big budgets. Cost savings will firing people like now. Like every company, employees will almost never accept a wage cut unless ordered and approved by a bankruptcy judge where a company is going down the tubes and management tries to cut wages and pensions with help from a judge looking over a case dealing with factory workers. I don’t see that happening with game companies. Employees would rather stick with full pay and risk being laid off and find another job with severance than hold hands and everyone keeps their job at a -10% pay cut, gamers are already fed up with $70 games. I don’t see them accepting $80. Although history shows gamers will concede if game makers hold firm where it becomes a norm.
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Bernkastel
Ask me about my fanboy energy!
Maybe relevant to this thread, as they were owned by SME.
RJMacready73
Simps for Amouranth
I remember playing Wipeout loads buzzed off our balls coming back from a club, music blasting through the stereo and people up dancing to it lol good times
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kiphalfton
Member
Very difficult indeed.
With prices on everything going full retard, even people with jobs may be just getting by.
Yet another reason to hate these companies; upper-level executives line their pockets, while trying to pinch pennies when it comes to giving raises or even retaining regular staff.
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adamsapple
Or is it just one of Phil's balls in my throat?
Looks like they might be doing a whole corporation wide cost cutting thing, not just playstation.
kiphalfton
Member
And why do you think they say psychopaths tend to be CEO's.
Heimdall_Xtreme
Jim Ryan Fanclub's #1 Member
The traitor betraying another traitor.
Heimdall_Xtreme
Jim Ryan Fanclub's #1 Member
Make a Meme that all Playstation news is bad news.
StreetsofBeige
Gold Member
From Sony's statement....
The last time they did lots of creative games and genres was PS3 which ended over 10 years ago.
What a load of shit that is. Most of their focus is big budget SP narratives few and far between and from the same big franchises.
The last time they did lots of creative games and genres was PS3 which ended over 10 years ago.
Woopah
Member
Having a big budget and being a single player game doesn't mean their is no experimentation.
Sometimes people experiment with things and those games come out, like Ghost of Tsushima or Horizon. Other times games get cancelled, like the Twisted Metal reboot.
This happens at every game company. Studios pitch and start work on multiple games that never come out.
ChorizoPicozo
Member
alucard0712_rus
Gold Member
Maybe now people will finally appreciate developers more.
Eotheod
Member
Thank you for providing one of the worst YouTube videos I have ever watched, full of utter shit that has no connection to the layoffs. That is some grifting like never before to connect dots to an event that literally has no "woke" discussion or causation behind it.
People are being fired due to budget constraints and the saturated labour pool caused from COVID mass employment. To think it is because of a cultural societal shift that you may not agree with is just some utter ignorance of actual facts for the sake of painting a particular picture. From the Insomniac leaks we can clearly see AAA budgets have blown way out of proportion, with no capable means of pulling those numbers back in without these cutthroat reductions.
ChorizoPicozo
Member
Woopah
Member
Apparently PS5, TLOU2 and Spiderman 2 are all failures based on.....nothing.
There's just no critical thinking there.