Tobold's Blog
Thursday, February 05, 2009
Game company layoffs

Directly after the news of disappointing subscription numbers comes the new of a new round of layoffs at Mythic. And other game companies like THQ. Getting laid off can be a personal catastrophe, and I feel sorry for all those affected. Nevertheless I don't share Scott Jennings feeling of betrayal. Because I don't buy the line that all of the hundreds of people who worked on a game that failed are completely innocent and unaware of that failure, and that all the blame is due to high management.

Companies run on money, and that money belongs to people, and not all of these people have a surplus of it. Via pension funds and shares and other financial instruments people like you and me own tiny slices of various companies. If a company makes a good product, which is profitable, all the stakeholders, that is employees as well as shareholders, somehow get a slice of that profit. Wages, bonuses, dividends, share price increases. One can argue whether who gets what share of the profit is totally fair (it usually isn't), but normally everyone profits in some way. So if a company makes a bad product, which makes a loss, the pain has to be shared as well. You can't just say "let the shareholders take all the loss". Not only would that be not very fair, but also it is not a viable path into a better future. Layoffs and restructuring are painful, but they are less painful than the company going belly up. People are fired so the company shrinks to a size where the earnings match the expenditures, and the company can survive.

And yes, that is hard on those who get fired. And no, I don't claim that companies are very good at firing exactly those people who are most responsible for creating the bad product that made a loss. But if all of the employees in one of the game companies now firing people would have done their job perfectly, and created the perfect game, perfect game design, no bugs, perfect quality control, perfect customer service, and so on, the layoffs wouldn't be happening. Take just one example: How many players did Age of Conan lose due to the bug that female characters dealt less damage than male characters due to slower combat animation? Remember the huge outcry, people quitting in disgust, bad publicity? Does anyone really think that the CEO of Funcom or the game director of AoC planned that? That he purposely instructed his underlings to make a game with that bug? And in that case it was the game director who ended up being fired. There are certainly cases where somebody in high management decides to rush an unfinished game through the door. But quite often the fact that the game is unfinished is related to the performance of the people who worked on it. We don't live in a society any more where employees are just mindless working drones following orders, completely unaware about and innocent of the quality of the product they are helping to make. The responsability for a game that failed is shared to varying degrees amongst hundreds of people, and most of them were quite aware they failed long before the pink slip arrived. That may be a tragedy, but it isn't betrayal. I'm not telling anyone that it is his own fault for getting fired, but please don't tell me that none of those people could have seen this coming.
It does not matter to those who get fired who is to blame. You are stating the obvious, there are many people and many factors involved in the success or failure of a product. Game company layoffs are not different from other company layoffs in this regard.

For the gamer, it can mean that the ship is sinking. But there is always hope, but I want to point out that MMOs that start out weak usually never recover, even if they get significantly better, be it to bad press or word of mouth or whatever.

I am a bit deviating from the topic, but I wonder if the female player bug had any significant impact on the subscriptions of AoC. It was for sure part of it, there were many more issues and bugs. I see you had to pick an example. :)

It is quite interesting that especially large companies often have problems to see the whole. Most people working their specialize in their field, coordination and information is often an issue. I wonder how Blizzard's team coordination works.
A true capitalist til the end, Tobold!

Unfortunately for the employees, game companies are not like the American Auto industry who get paid by the government (and our tax dollars) for putting out an inferior product. Government bailouts let those auto workers keep their jobs even though the companies they work for are putting out Age of Conans compared to the cheaper, safer, higher mileage foreign vehicles.

Shades of Atlas Shrugged if you ask me.
Sometimes failure is caused by screw-ups at the top, sometimes failure is caused by screw-ups at the bottom and often enough failure is just down to sheer bad luck. Broken toys emotional rant blaming the higher ups for everything doesn't hold water. and yet he does make one insightful comment: "Corporate Loyalty is a LIE".

This is true. It is an inevitable consequence of current business models. A company's loyalty is owed to its shareholders and it's quarterly earnings reports. The Company owes no loyalty to employees and therefore employees owe no loyalty to their companies either.

A surprising number of people don't seem to understand this. Perhaps they are confused by the loyalty they feel towards the people they work with. That is a natural human emotion but it has nothing to do with loyalty to the company. Perhaps they are fooled by business school speak about "company culture" and "valuing employees". Whatever the reason I believe all sides would be better served if those folk just realised that companies owe no loyalty to their staff and staff owe no loyalty to their companies. Its a business transaction pure and simple.
Tobold, you made my day by finding Scott Jennings' post. That is a real gem, and I will enjoy tearing it into pieces (most probably will be published monday). You are my hero!
I think you and Scott Jennings' are commenting on two alike things, but not the same thing. Scott, I believe, was talking about the culture FROM WITHIN. You are talking about the bottom line FROM WITHOUT.

Seriously can you ignore that Mythic said they laid off 60-120 people because they were temporary for the launch? Did those 60-120 people know they were temps?

You both have good thoughtful posts, but you are on different roads.
It's been my experience a lot of projects are unfinished because upper level managers keep butting in, interefering, and wanting changes. They play politics with our resources and that affects deadlines. Of course, it's the project manager's job to try to stop them and shoot straight, but all too often saying "no" to upper management gets you fired, and instead a yes-man is put in, who will do what they want but then the project gets delayed and cost goes up, until it's cancelled or released unfinished. then the developers get blamed. I've seen that happen so many times ... executives who think they are never wrong, and if you tell them they are wrong you are gone, and the projects just explode from mismanagement because the good managers leave.
"Did those 60-120 people know they were temps?"
I think so, since every game released follows that same pattern, unless it was their first job and they didn't know how it goes. At least I hope so, I know other non game companies that do this that go so far as to tell people "you are here for 2 years then most of you will be let go" which is the best way - just be upfront with people and manage expectations and you'll get the best performance out of them. A friend of mine worked at Abbot Labs and they told him straight up it was for only a few years, that's how they do all their projects.
I think this is an issue that affects more than the gaming market. The larger a company becomes the less able it is to react to change or manage it's resources well. Past a certain size a company is just a large rambling beast that stumbles about in confusion and rage.
I think these companies suffering is good. I want Mythic to fail, maybe even go under. I'm tired of seeing uncomplete games be released with the Developer mind set of "We can patch it later." 10 Years ago we wouldn't stand for it, but now, because it's a MMO it's okay. Just because we always know an expansion is on the horizon doesn't mean they can't finish the current content for a MMO. The saying "A MMO is never finished" is a crutch for poor game design.

I hope with AoC and WAR suffering so badly that furture designers of all Genre's take a look at their product before releasing it. Someone had to be an example for the gaming community.
I think you missed the point of Lum's post. The point wasn't that they didn't see something coming. They did. It wasn't a surprise. The point was that Mythic pitched themselves as a company that wasn't like the others, and the employees believed it. Furthermore, it wasn't with any sort of respect that these folks were let go, but that they were treated as temp workers (many weren't, some of them had been working at Mythic for over a decade) and scapegoats for the financial problems. That isn't respectful of their contributions to the team, and it's a betrayal of trust to the people who really believed them. A cynic would view this as 'just the way things are in the corporate world', but it still doesn't fix the sense of betrayal from an emotional standpoint any more than Tobold's "emotional" response to priests getting nerfed a while back.

Many of the mistakes in game development are made not because nobody was aware of it, but because they were told to do it anyway. I've been in that situation enough times to recognize the inevitable sigh and "Don't blame me, I'm just doing it because I was told to" attitude of the people involved. Most of the time it's been obvious that it's a mistake, but you do it anyway because the higher ups have told you to, and even though you disagree with them, you do what they say because it's your job. You do it because you're a professional.
"Does anyone really think that the CEO of Funcom or the game director of AoC planned that? That he purposely instructed his underlings to make a game with that bug?"
He may not have planned it, but it's his job as CEO to hire people and set up processes so that this kind of major foul-up doesn't happen. So he failed as a manager, because he either:
a) hired people who weren't able to do the job he asked them to do or
b) gave competent people unachievable goals (e.g. an unreachable combination of time cost and quality constraints).
Ultimately, then, the blame does lie with him. He may not be the only one at fault, but he's certainly not blame-free.
As i all ready said on one of "elder gamers" blogs, i dont buy all that "i did what they told me".
You have a choice. Allways.
If you decide to do what they told you, then do it till the end, end in the end they will say: Leave.
I don't know what magic fairy land has perfectly competent CEO's in charge of gaming, but I want to live there.
No company has perfectly competent CEOs in charge. But having a CEO who makes bad decisions is no excuse. If the boss forces his employees to ship a game they perfectly know it will fail in that state, the employees should have updated their CVs and headed for the hills. Sitting tight in hope for a job for life, because the people around are so nice, and then crying "betrayal" when the inevitable axe falls isn't a clever solution.
"But if all of the employees in one of the game companies now firing people would have done their job perfectly, and created the perfect game, perfect game design, no bugs, perfect quality control, perfect customer service, and so on, the layoffs wouldn't be happening."

What world do you live in? No one is perfect. No one does everything perfectly.

And, you can't prove that even if everything *was* done perfectly, they wouldn't still be discarding employees now that they could get by with fewer resources.

And all those people now out of work file for unemployment, which our tax dollars pay, and the economy sinks even lower.
3. create a culture of listening and testing
QA is always last on anyone's list, always only a few QA people, and yes even I as a developer get sick of QA butting in slowing me down. But when testing is incorporated from the ground up, for instance using Agile instead of using Waterfall methodology, it actually gets done. But I've almost never ever seen anyone use Agile in any large firm, always Waterfall, I suppose it's because waterfall pretends it can make predictions and the higher ups and bean counters love predicatability.
'But if all of the employees in one of the game companies now firing people would have done their job perfectly, and created the perfect game, perfect game design, no bugs, perfect quality control, perfect customer service, and so on, the layoffs wouldn't be happening.'

A bit sweeping, Tobold to be fair. Just because those factors are present doesn't mean that a company wont make some of its employees redundant. Last year, 2008, the company I work for had its best ever year for profit & good customer experience etc. This year? 50 employees made redundant because the company wants to maintain its profit margin through the downturn in orders. Greed is a reason, just as much as bad practice is, for letting 'good' workers go.
Bojan: Both choices you outlined result in the same thing: Loss of job. I don't know about you, but I am not so idealistic that I can afford to quit my job (or face reprimands. possible demotion, or firing) that I'd say no. The circumstances are different on a case-by-case basis. It's never a simple question of "Will this make the game suck?", because it's typically a straw that breaks the camel's back sort of thing. Look at Warhammer. It's not a bad game. There's a bunch of stuff in there that's really good. Is there any single thing that could have been done to "fix" it by a single person? It isn't that easy. Most of the time, when you're put in a situation like that, you lower your head, polish your resume, and do what you're told because at least then you don't have as much culpability.

Tobold: You're still missing the point. The point isn't that the CEO made a bunch of bad calls. It isn't the employees sitting around being idealistic. They weren't. They knew something was coming, and many of them were already polishing the CVs long before the axe fell. The problem is the lack of respect that they received from the company after the axe fell. Being called "temp" workers and "redundant" when many of them had put a ton of hard work into the projects they pushed to succeed is just bad form. It's a really hard position, because the CEO and the company want the shareholders to be hopeful, and you really can't say that when you're trying to tell them that you just laid off several of the major players that made your products good. But it's also incredibly frustrating to those who know it was their blood, sweat and tears that got the company to where they are today, only to be told that they were the fat that could have been trimmed, and that the stockholders can rest easy knowing that they got rid of the under-performers and the company will go into the next fiscal year as a lean, mean, money-making machine.
Private companies run on money. Public corporations run on shareholder value. Although they are often intertwined, they are not the same.

That difference has a lot to do with the feelings of betrayal.
Tobold: do you really think the job market is so good, especially right now, that everybody at a company that looks like under-performing can afford to simply quit? You're essentially talking about the hypothetical benefits of a 'free market' where employees flow from one company to another to reward good companies and good employees. But in the real world, that doesn't and cannot happen. There aren't infinite jobs and infinite people, there are significant costs (financial and personal) incurred in transition, and most of all there are bills to be paid which mean you can't just up and leave when it suits you.
But if you value job security that much, why would you want to work in the game industry in the first place? All I'm saying is that getting fired after the game your company produced flops shouldn't really come as a surprise and "betrayal" to anyone. It's the obvious risk you take if you work in an industry where a single hit or fail determines the future.
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" All I'm saying is that getting fired after the game your company produced flops shouldn't really come as a surprise and "betrayal" to anyone."

And yet, you're still completely missing the point.

This isn't an issue of the laid off employees feeling betrayed BECAUSE they were laid off, it was the MANNER in which they were laid off.

Here's an example:

I was laid off from my job as a systems administrator this febuary. My boss, and another director at his level both sat in at the meeting where I got told that today was my last day of work, and they both wanted to do anything they could to help get me back on my feet, (which wound up being a months' severence pay and 2 GLOWING professional references)

Had they announced to anyone in the building that they were "eliminating some redundant and temporary job positions" I would NOT have been ok with it.

Even if I was hired strictly as a temporary hire, and knew that my job wasn't likely to last, being dismissed in a manner that downplays my contributions and achievements is hardly something I'm going to be HAPPY with them about.

on the other hand if the company gave a "we're sad to see him go, and are thankfull for his contributions that helped keep this company running smoothly" announcements to take the sting out of it would be an entirely different ballpark.
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