Sony's MMO Makers Close Three Studios, Lay Off One-Third of Workforce

Illustration for article titled Sony's MMO Makers Close Three Studios, Lay Off One-Third of Workforce

Sony Online Entertainment, makers of D.C. Universe Online and Free Realms, closed three studios and will lay off nearly a third of its workforce, Kotaku has learned.

Word began spreading when George Broussard, best known as the co-creator of Duke Nukem Forever, tweeted earlier this evening that SOE was seeing layoffs and "studio closure is possible." Kotaku has confirmed through a source familiar with the matter that the closures affect SOE's studios in Seattle, Tucson, Ariz. and Denver. Half of the workforce at SOE offices in Austin, Texas were pink slipped along with a sizeable portion of San Diego. In sum, it accounts for nearly one-third of SOE's manpower before today.

Kotaku has reached out to Sony Online Entertainment for official comment. Any statement will be updated here.

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Seattle, Tuscon, and Denver are all relatively small studios. Seattle is The Agency, Tuscon is Pox Nora, and Denver handles all the TCGs. They could, quite easily, be consolidated back into San Diego or Austin studios.

While DCUO has been *moderately* successful, it hasn't been anywhere near as successful as the budget planned for. SOE expected DCUO to pull sustained subs in the millions and it has seen a sharp drop in subs down to just a few hundred thousand. Granted, a few hundred thousand is *superb* numbers for a non-WoW MMO, but the budget and corporate had their eyes on something better. So, it isn't that DCUO wasn't successful - it wasn't successful *enough*.

The Agency has been on the verge of being canned for years. Free Realms bombed pretty hard despite what SOE keeps claiming (yes, you have millions of registered users, but it's a F2P game and your retention rate is < 1%, do the math), especially since they invested well over $100 million in its development. They probably still haven't even broken even on it. And everything else except EQ2 has been limping on, barely covering operational costs and squeezing out minimal profits - just enough to warrant keeping the game online (Clones Wars, Pox Nora, SWG, Vanguard, Pirates, Planetside, etc.).

It shouldn't be a surprise to anyone familiar with the company, including the employees who have (to my knowledge) been expecting a wave of layoffs in the near future. However, I don't think they expected them today or at the level rumored to be.

If they do indeed do layoffs today, it would be an super-douche move by SOE. Benefits reset the first of the month, and last for a full month. If they lay off employees on the 31st, SOE doesn't have to pay out April's health insurance premiums for these employees and these employees lose their health insurance starting *tomorrow* instead of the end of April.

Anything to save a dime, eh Smed?