NcSoft Austin Slashes Staff
Posted by jgaudiosi :: Online Gaming
The world of massively multiplayer online games (MMOGs) is a volatile business for even the largest companies. Korean game maker NcSoft has laid off approximately 70 of its 300 employees at its US headquarters in Austin, TX. The MMOG giant has not seen the type of sales from its latest game, "Auto Assault Online," as had been expected. One of the publisher's other big franchise, "City of Heroes/City of Villains," has sustained 150,000 subscribers over the past two years. "Guild Wars" has sold over 2 million units since last April. At the same time that these layoffs occurred outside of the development teams, the "Tabula Rising" game team is still hiring.
NcSoft released a statement regarding the restructuring of the company. It read: "The online games industry is one that is continually changing with the scaling up and down of business based on product launches and product development schedules. As the company continues to grow its live products and prepares its next set of major online game releases for later in 2006 and 2007, the company sees a slowdown in its launch pattern and the need to streamline its business."
It takes an average of four years to create an MMOG and costs can be anywhere from $20 million to $55 million. The rollout of MMOGs is often a slow process. "Auto Assault" was delayed several times as NcSoft worked to ensure the game would run smoothely at launch. "Tabula Rising," the new first-person shooter MMOG has been in development in Austin for at least four years. These types of delays mean that there are PR, marketing and other staff that don't have a lot to do during periods of time.
Although NcSoft's Korean shares have lost nearly one-third of their value since May 3, the company still has a huge following around the world with franchises like "Lineage" and "Guild Wars." And there were plenty of new games on display at its massive E3 booth last month.
When you look at the troubles of developing an MMOG even for the giants like NcSoft, it shows just how difficult it is to survive in this business. NcSoft isn't going away, and 70 people is a fraction of its global staff, but there are a lot of companies that look at Blizzard's "World of Warcraft" and believe that creating a successful MMOG and retaining that audience is an easy endeavor.