Gaming company CCP Games is laying off virtual reality (VR) game developers as the company shuts down its VR gaming business. CCP layoffs will affect its VR-focused Atlanta office, which is being permanently closed. The game developer is popularly known for the space-based, multiplayer game EVE Online and its virtual reality rendition EVE Valkyrie.
CCP Layoffs Hit Atlanta as VR Plans Are Shelved
Reykjavik, Iceland based-CCP Games has announced plans to halt virtual reality game development, at least for now. The company will be shifting its focus towards PC and mobile games where it sees a better opportunity for growth.
As part of the plan, the gaming company is closing two of its development studios—one in Atlanta, Georgia and the other in Newcastle, U.K. It is unclear as to how many employees will be affected following the closure of its U.S.-based office in Atlanta. Overall, however, about 100 employees will lose their jobs in the CCP layoffs that will follow these closures.
CCP will be left with three studios following these closures—its headquarters in Reykjavik, one studio in London, and one in Shanghai.
The company’s VR development plans are temporarily being shelved until the environment becomes lucrative for VR gaming. The company CEO said in a statement, “We‘ve been doing incredibly well (with VR), but now we‘re seeing a bit of a slowdown for the next 2-3 years. We‘re going to be focusing more on PC and mobile titles from now on.”
CCP Layoffs a Result of Failing VR Gaming Industry
CCP’s VR game EVE Valkyrie was an instant hit after it became a flagship title for Facebook’s “Oculus Rift” virtual reality headgear. Later, it also became available on the “HTC Vive” and Sony’s “PlayStation VR.”
However, VR gaming has failed to garner enough demand to become a standalone gaming industry—like PC gaming or mobile gaming. This has translated into underwhelming sales of VR headsets as hardcore gamers continue to prefer their high-functioning PC platforms, while occasional gamers carry on enjoying games on their smartphones.
Despite all its hype, a good reason why VR gaming hasn’t taken off as well as expected may be because of the expensive VR headgears.
Although manufacturers of popular VR headsets like Facebook and Sony have turned to price cuts to attract more buyers, these headsets still do not come at a bargain. High pricing has partly contributed towards their failure to achieve mass adoption.
Another stark reason is the dearth of good titles. Major game developers like Electronic Arts Inc. (NASDAQ:EA) and Activision Blizzard, Inc. (NASDAQ:ATVI) have largely stayed conservative in developing VR games. It is ironic that game developers are waiting for the VR industry to take off without investing much into developing quality titles.
As the CCP CEO mentioned in his statement, “We will continue to support our VR games but will not be making material VR investments until we see market conditions that justify further investments beyond what we have already made.”
CCP Layoffs Follow Other Gaming Industry Layoffs in 2017
CCP layoffs are preceded by a number of other gaming industry layoffs in 2017, which is shocking at a time when the gaming industry is supposedly growing. In fact, studies are showing that more and more Americans are leaving work to play video games.
In spite of that, stiff competition in the industry, particularly from gaming industry giants, is forcing smaller game developers to rethink their options. This month alone, at least two game developers other than CCP Games have resorted to job cuts in their downsizing moves.
Just two weeks ago, Boston-based game developer Harmonix cut loose about 14 game developers in a cost-cutting move. The company has also reportedly been working on VR titles, in addition to producing music-focused video games.
Likewise, earlier this month, Massachusetts-based Disruptor Beam laid off roughly 10 employees as it also turned to cost reductions. Back in August, famous mobile game developer Glu Mobile Inc. (NASDAQ:GLUU) also handed pink slips to about 46 employees at its headquarters in San Francisco, and its studio in Long Beach, California.
So CCP layoffs will only be making, although noteworthy, but a modest contribution to the growing gaming industry layoffs in 2017.
“Eve Developer CCP Stops Making VR Games, Drops Two Studios,” Kotaku, October 30, 2017.
“3 big reasons VR failed to revolutionize PC gaming,” CNET, June 13, 2017.
“Harmonix lays off 14 – Report,” GamesIndustry.biz, October 19, 2017.
“Disruptor Beam lays off staff,” GamesIndustry,biz, October 10, 2017.
“Glu Mobile lays off dozens,” GamesIndustry.biz, August 25, 2017.