Mass lay-offs reported at SEGA Studios Australia

souri's picture

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We've received multiple reports of massive layoffs at SEGA Studios Australia. The Brisbane based studio is known to be developing the multi-platform London 2012 - The Official Video Game of the Olympic Games .

Established as The Creative Assembly Australia in 2002 and more well known for their work on Medieval II: Total War, and its expansion, Medieval II: Total War Kingdoms, it's been reported that the studio has layed off 37 employees today.

Sega Studio Australia employees have expressed in the past the uncertainties of their employment during an interview with journalist, Andrew McMillan, for a Gamespot article in October last year on the state of the Australian games industry. From that feature...

"It's brutal. Absolutely brutal," says studio director Marcus Fielding of the job market. He held the same role at Krome at the time of its closure in late 2010. "I'm seeing people at the local gym who can't believe it's happened again. They're asking the question of me, 'Is Sega secure?' All I can do is work really hard to ensure that we are secure."

(Conte) It's scary. It puts you in a mindset where you don't know what's going to happen. I think we're pretty good here at Sega, but there's always that thought at the back of my mind now: 'What happens at the end of this game?' It'll be there probably for the rest of my career, now; once we get to wrap-up time, what's going to happen? Are we going to be able to do another project?"

NZGamer.com has some additional details on the reasons for the lay-offs...

The team, originally around 80 strong, has nearly halved - with most of the cuts coming from junior staff members. According to a source close to the team, initial feedback when the revised organization chart was unveiled was that it was top heavy, with most senior and management positions believed to be unaffected by the cuts.

Kotaku AU has received an official response from SEGA Studios Australia. The letter, quoted from Kotaku AU...

As SEGA Studios Australia nears completion of London 2012™ – The Official Video Game of the Olympic Games, it is essential to look to the future and take steps to ensure long-term growth and success. The rise of digital gaming provides an opportunity to align the studio with a rapidly growing market at a time when the games industry is undergoing a significant transition. To this end, we can confirm that SSA has signed a multi-product deal focussing across the digital marketplace. We have commenced development on these titles and will announce more details in the near future.

As part of this focus on digital avenues, there is a requirement to re-structure the studio resources accordingly and regrettably, we are announcing the loss of 37 staff. The decision to downsize was not taken lightly but this strategic re-structure will ensure we have a more effective and agile team that will enable us to quickly adapt to consumer needs and deliver strong content across multiple digital platforms. We thank those team members affected for their contributions and wish them well in their future endeavours. We are very confident that their efforts on London 2012™ will help us deliver the highest quality official Olympic video game to date.

Comments

NathanRunge's picture

Hopefully...

It's not entirely unexpected, but that doesn't make it any easier really. It's a shame to see this, and I just hope that those who have lost their jobs, if this proves correct as seems likely, will find gainful employment quickly or are equipped to pursue other dreams.

As for the company, I hope that this large number of lay-offs means that the company is re-structuring in order to continue over the long-run, rather than winding down.

souri's picture

Re-structuring

Yep, Kotaku AU have received confirmation of the lay-offs and SEGA OZ explains that this is a restructuring move (and thankfully not a shut-down) - I had placed the letter in the news post after you've posted, but it looks like they're going forward with digital games.

While it's certainly a downer for the 37 unemployed, I have to say Brisbane is still definitely kicking arse in mobile/DD games development. Halfbrick is of course the shining example, but the recent entries in the Unity Flash in Flash competition has shown that there's still some amazing stuff happening in Brisbane. There's also Defiant Development, Binary Mill, and more doing incredible work, and while I understand that it's definitely not easy to go out on your own, there's still a whole lot to be optimistic and enthused about.

Linds's picture

Optimism

I don't know about others, but the last 15 months (and the couple of years before that) have done a lot to knock the optimism out of me.
Enthusiasm is still there and a lot of bull-headedness to just keep swinging away.
Would love the Aussie dollar to tank a bit though. That'd really help.

Linds

Tejay's picture

I have to agree with you

I have to agree with you there, the only optimism I have left is I'm young and unattatched enough to take the leap over seas. Now if only I had the experience they all would like.

NathanRunge's picture

Optimism

I agree with you whole-heartedly, but have personally embraced the bull-headedness and taken the independent route. It's not for everyone and, at times, the optimism can prove very grating. That said, the opposite isn't always helpful.

Anonymous's picture

you're seriously delusion if

you're seriously delusion if you think the Brisbane Industry is healthy. Not everyone is a programmer.

Linds's picture

Artists

Yeah, finding it especially difficult to find consistent artist work ATM and take care of the people who have taken care of us.

Linds

Anonymous's picture

Alot of the prop building

Alot of the prop building kind of art that we had teams for at krome is mostly outsourced to India and China nowadays.

Being a game artist and putting food on the table certainly aint easy.

Anonymous's picture

Any software based industry

Any software based industry is going to favour and put coders above everyone else. It matters little whether that's a smart call to make or not.

Still, you are going to still find that artists aren't that low on the scale. There is still going to be a need for artists, locally based for industries like game development.

Design on the other hand... I think the designers are the more likely bunch to find it "tough" to find work here in Oz ;)

Anonymous's picture

Maybe Australian game

Maybe Australian game companies should focus on making good games.
Why are American game companies doing so well? Maybe because they focus on making original games that are actually good.
Australian game companies seem to either just make whatever licensed rubbish they can get from overseas, or make some novelty crap for mobiles.

Anonymous's picture

The American games industry

The American games industry has more money. The major publishers in the US don't want to bother flying to Australia every time they want to sign new contracts and do due diligence when they can get a developer down the road to do the same thing but cheaper due to the exchange rate.

NathanRunge's picture

Sometimes

That's sometimes true, and sometimes false. I think in the case of SEGA Studios Australia it isn't really applicable, however. Speaking only from my own interpretation of events and no inside knowledge (Read: I may be very wrong), it seems likely that this downsizing has been planned for some time. Creative Assembly (Brisbane)'s prior role within the SEGA structure has been relocated to the UK. The studio was then re-branded and a short-term project assigned. I always expected that the studio would, at the very least, downsize at the completion of that project. To be honest, I expected it to close down and I am relieved to hear otherwise. This seems like a strategic decisions that I feel was unlikely to be significantly motivated by the studio's previous efforts.

Anonymous's picture

They are doing so well?

They are doing so well?

Maybe you should have a look at whats going on at THQ........

Anonymous's picture

To the naysayers

It reminds me of 2002ish when I got into the industry and there wasn't really an industry to join... there was EA on the Gold Coast and Auran... Krome only a handful of guys.

We couldn't just walk into cushy office jobs making games, we had to help build the industry ourselves.

If you've got your ear close to the ground there are lots of interesting things happening in Brisbane right now. Sure it sucks to be part of the status quo, but that's because what's happening is a revolution.

It's never been easier to make or market a game... it's an amazing time to be a dev.

In the wake of SOPA, why aim for a job in a lumbering "physical media record company" style business?

Get together with people... do stuff!

Scott.

NathanRunge's picture

Apples and Oranges

I have to point out the "never easier ot make or market a game" fallacy. While those statements are, strictly speaking, true, the same cannot be said about achieving a profit. It's often said that it's very easy to get a game to market these days, but you were more likely to make a profit a decade ago. This comes from a very flooded market.

I also think it's unreasonable ot make comparisons with the situation of new entrants today to those ten years ago. Certainly, no-one should be expected to have a job handed to them on the merits of their degree or simple interest, but one cannot understate the significance of full-time employment in comparison to precarious self-employment, especially in the light of my first paragraph.

Ten years ago I don't doubt it was challenging to enter the industry, which was much smaller than even today. The scope of the "problem" was also much smaller, however. This year we will have thousands of graduates from domestic game-development-focused degrees alone. Last year we had almost as many, and next year we will likely have more. The industry cannot accomodate these numbers, and nor can they all follow the independent route. There's legitimate cause for concern for many.

I'm curious as to what your meant about "physical media record company" style business comment, in reference to SOPA. Would you be able to elaborate?

As for your summary of "do stuff", I agree. There's little else that can be done. I would caution those just entering to consider their personal goals and circumstances before doing so, however.

Anonymous's picture

Hey Nathan. I've actually

Hey Nathan. I've actually been following your posts on tsumea for some time so it's a pleasure to finally reply to one.

I appreciate that I'm seeing things through a different lens than perhaps a graduating gamedev student, so I can see how my previous post seems heavy with platitudes. I don't mean to sound condescending.
I'll try not to get on my soapbox too much because a lot of people reading have just lost their jobs and don't much care what I think.

I myself have made plenty of apps that have bummed out, and have worked with X number of small startups that haven't been able to meet operational costs at the end of the day; I know the challenges. Conversely though, I'm lucky enough to be friends with a lot of the guys who've managed to turn their gamedev work into profitable businesses.

The reality for most is that there's no demand for the skills they've invested in, so they'll have to do something else to suppliment their income while they exercise those skills to build something up. Pull coffees, take on contract work etc.

The thing I don't like which I guess prompted my original post is the endemic attitude problem we seem to have.

One of my friends who's made his fortune from making apps and can choose to do whatever he likes from now on moved overseas a while ago... not to follow any work, but to escape the local small mindedness and meagre self-interested goals. Over here the end goal for most is "make enough money from games so that we don't need to work real jobs"; that's the definition of success. Where he's going, "make something new and interesting, change the way people think, make a difference in the world" is the general day-to-day attitude.

Can you blame him for leaving?

I guess that's what I had in mind when I was ranting about the desire to work in a "physical media record company" style business; that is, a larger studio labouring away for 12-24 months on something they can put in a box and sell. Another alternative is to work towards something new and interesting the world hasn't seen.

but I digress... and sorry for hijacking the thread!

Scott.

NathanRunge's picture

Excellent

No worries, and thanks for clarifying. I can really appreciate that approach to the medium and it actually makes me quite happy to read it. I wish you friend the best of luck in pursuing his goals.

designerwatts's picture

You bring up some great

You bring up some great points. I thought I would add my thoughts here. Your post just compelled me to write something. :)

In 3 years of experience of going from making a small indie iPhone game to trying to get another game off the ground to then getting government funding and developing a 5-man based developed game to release. I've come to the feeling that the success of many studios and developers is not so much based on their game as it's based on their team and how far that team as a collective is willing to ensure success.

If I think to the local independent success stories of indies in Australia they either strike one of two consistencies. They are either A) One developer who is creating 95% of the game by themselves. In this case the quality of the game is one mans responsibility. The promotion is one mans responsibility. And a cleaver developer who picks a good niche can make good money and success. Not everyone succeeds but a few do create a break-out hit.

The other is a team of devs who are all completely in. If you look to the Voxel Agents, you're looking at 3 developers who all saved the liquid capital beforehand so they could dedicate their time without everyday life running them down. Moved into an office and worked their collective assess off full-time. No weak links in the team.

Failures I've seen have come about when the team is unbalanced [Someone's working full time, Others working part time.] Teams who may of all been passionate and work together well, but disband after their first failure is common as well. It's hard to survive your first big hurdle in any venture and that's just a fact of life.

In regards to peoples mind-sets locally, Visiting San Francisco and GDC last year, it's true that the mind set of many of the American studios is "Lets build something great!" and indeed many do. But it needs to be considered that culture has been brought about by years and years of "Consider the Opportunity!" focused venture capital and investment. In San Francisco you can get good start-up funding with a group of senior devs, a small tech demo and a charming front-man. While in Australia it takes dozens of hours and dozens of pitches to get just enough money to do a project with any sort of sensible budget. The guys at Bubble Gum pitched over 150 times to get a total of 1.2 million. Consider how many hours and soul searching that would of taken. It's more work then most indies could do alone.

I've yet to met that many independents who are trying this as a get rich quick scheme. In all honesty the most common reason is that game devs who lost their jobs are so passionate that they continue to create games and content as a stepping stone either into business or their next studio gig. Which I would say is really the best thing you can do given the current circumstance.

We also don't take into account the many expensive failures of venture capital funding start-ups in the USA that allow people to developers to make their mistakes and try again. In some circles it feels like failure is often met with snark and "You dumb moron!" where as in the USA corporate sector it's met with "What did you learn? How can we use that lesson for next time?" This is something I would love to see more of.

In my mind. The scene in Australia will improve as long as developers can continue to come together to take chances on creating great long term dev-teams, have reasonable goals and expectations of their projects. Embrace failure as the best of all learning tool and try to survive the first hurdles. And finally when they do get funding, deliver on it! [Like what Bubble Gum and Media Saints are doing.]

I think it's an exciting time for the industry in terms of what the potential could be. But whether we can execute on that potential will depend on the ability on being able to form teams and studios that can survive their starting failures and keep a productive and happy team-culture running.

Anonymous's picture

They seem to be hiring a

They seem to be hiring a Senior Designer. And look- they will sponsor visas because there are no available designers in Brisbane or Australia.

Bravo.

Anonymous's picture

To get someone through

To get someone through immigration the applicant has to be bringing new skills or business practices that cannot be found locally.

NathanRunge's picture

Theoretically

That's theoretically true, but in actuality doesn't happen. To get someone through immigration, one really only needs to show that the person is bringing skills in a short-list of approved industries, which will generally include most media and IT occupations.