China-Based Perfect World Entertainment Closings & Layoffs in Seattle: Runic Games & Motiga Hit By Cost-Cutting

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Perfect World Entertainment, a subsidiary of Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD), announced that it has closed Torchlight and Hob studio Runic Games in Seattle and is laying off staff at Gigantic developer Motiga Games. The China-based company isn’t closing Motiga, but it is facing layoffs, with only support staff being left to keep it up and running. Runic, on the other hand, is being shuttered.

Perfect World Lays Off Employees at Gigantic Developer Motiga

Perfect World Entertainment confirmed it laid off most of Motiga, the studio behind the hero-based shooting game Gigantic. The layoffs are part of the company’s efforts to move away from solo-focused games and shift more into online-connected titles.

Commenting on the mass layoffs at Motiga, Chris Chung, founder and CEO said, “Perfect World as a public company has a profitability goal and they decided to cut parts of the company that were not profitable. In short, Gigantic was not making enough revenue. Unfortunately, Motiga is not the only Perfect World studio being impacted by the decision.”

Roughly 50 people were employed by the video game maker. While the halls of Motiga are mostly empty, a small maintenance team will continue to work on Gigantic “until some time in the future when it doesn’t make sense anymore,” according to Chung.

Perfect World Closes Torchlight Developer Runic Games in Seattle

Less than 24 hours after learning that Motiga was facing mass layoffs, it was announced that Runic Games, another Seattle-based studio, was being shuttered. Chung said the closure and layoffs were a “budgetary decision at the highest level.”

Runic Games first came on the scene in 2008; its first game was the well-received Torchlight. In May 2010, Perfect World acquired a majority stake in Runic Games, releasing Torchlight II in 2012.

In a statement, Perfect World Entertainment said, “Perfect World Entertainment recently closed the Seattle office of Runic Games as part of the company’s continued strategy to focus on online games as a service. Runic Games will remain a part of Perfect World Entertainment’s portfolio of studios, and its games will continue to be available to players…”

Perfect World Entertainment maintains that the staff reduction at Motiga and closure and layoffs at Runic Games Seattle are unrelated. It might not be the last of the layoffs either, as Chung noted in his statement that Perfect World has not made an official statement yet on the closing of Runic Games Seattle or layoffs at Motiga.

Perfect World Entertainment also owns Cryptic Studios, the developer of Neverwinter.

Other Gaming Layoffs in 2017

Gaming might be a multi-billion dollar industry, but that doesn’t mean it’s immune to the same kind of economics that the rest of Wall Street is. In fact, 2017 has been a tough year for the gaming industry, with a number of studio reporting large numbers of layoffs.

In August, Glu Mobile Inc. (NASDAQ:GLUU) announced a restructuring plan that cost 46 developers their jobs. In a filing with the Securities and Exchange Commission, the developer of mobile games for smartphones said the restructuring was, “part of its efforts to streamline its operating expense structure in alignment with its business strategy.”

Of those game developers laid off, 22 were from its San Francisco headquarters and 24 were from its Car Town Racing team in Long Beach, California, which was also permanently shuttered.

This is not the first time Glu employees have faced unemployment in the face of restructuring. More than 100 lost their jobs back in January and more than 100 were laid off in 2016 after posting a big first-quarter loss.

Disruptor Beam, Inc., a Massachusetts-based game developer, announced it laid off around 10 employees in early October. Disruptor Beam is the name behind Star Trek Timelines, The Walking Dead: March To War, and Game of Thrones Ascent.

The studio said it is “right sizing” and “pulling back” from projects that do not have the same potential as Star Trek and The Walking Dead.

Also in October, Boston-based Harmonix announced another round of layoffs. The rhythm game developer behind Rock Band and DropMix handed pink slips to 14 employees to reduce overhead.

CCP Games announced plans to halt virtual reality game development, focusing its attention toward PC and mobile games. The Reykjavik, Iceland-based gaming company closed two facilities, one in Atlanta, Georgia, and the other, in Newcastle, U.K. CCP Games is left with three studios following these closures: its headquarters in Reykjavik, one studio in London, and one in Shanghai. 

Sources

Runic Games,” Runic Games Seattle, last accessed November 6, 2017.

Perfect World Has Shut Down Gigantic Developer Motiga,” Destructoid, November 2, 2017.

Perfect World shuts down Torchlight studio, cuts jobs at Gigantic’s developer,” Venture Beat, November 3, 2017.

About Us,” Perfect World Entertainment, November 6, 2017.

Form 8-K,” U.S. Securities and Exchange Commission, August 21, 2017.

Glu Reports First Quarter 2016 Financial Results,” Glu Mobile Inc., May 3, 2016.

Disruptor Beam lays off staff as part of ‘re-focusing’ effort,” Gamasutra, October 10, 2017.

Harmonix lays off 14 in bid to ‘reduce overhead’,” Gamasutra, October 19, 2017.

Eve Developer CCP Stops Making VR Games, Drops Two Studios,” Kotaku, October 30, 2017.

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