Moves by Electronic Arts and online games startup WildTangent to cut staff should not turn heads in a sector less prone to the wider economic woes others face, an analyst said Monday.
Redwood City, California-based EA announced staff cuts in its earnings call last week amid persistent rumors that THQ has closed several studios. That comes as Redmond, Washington, WildTangent closed its internal development studio and let go of 20 people as Alex St. John stepped down as CEO.
But analysts say the cuts are an anomaly, not a trend, in an industry that often zigs to the economy's zag.
“The [layoffs] were unexpected,” said Richard Doherty, Research Director for Envisioneering Group. “We predict that game companies will lose fewer employees in the next year than any other type of company.”
The closing of WildTangent’s studio comes as the company struggles to reorganize.
“WildTangent has two flourishing businesses in ad sales and games publishing–we needed to focus our efforts on those rapidly growing businesses,” WildTangent representative Sean Sundwall said.
WildTangent offers nearly 1,000 games, of which less than 40 were developed by WildTangent over the past 10 years.
WildTangent offers casual and traditional games in free ad-supported sessions, pay-per-play sessions, or for purchase. The games come from a variety of developers ranging from PopCap and PlayFirst to Eidos and THQ, and include titles such as Assault Heroes, Bejeweled, and internally developed FATE Undiscovered Realms.
The company raised $20 million in debt funding last year and inked a deal with Lenovo in September to offer its Orb game console on select computers.