On Feb. 25 Zynga announced they will be shutting down its Baltimore studio and consolidating locations in three other cities, following up on their promist to be more cost efficient. It is estimated that about 1 percent of their workers, or around 30 people, will be left unemployed as a result of the move.
The Baltimore shutdown doesn’t come as a surprise to most. Brian Reynolds, the leader behind the Baltimore studio and former chief game designer for Zynga, recently resigned. Zynga also shut down CityVille 2, the game that Reynolds and the studio had made. The company is also consolidating studios they had acquired in locations that are close to each other. The two studios in Austin, along with the two in New York, have merged, and the McKinney studio is merging with a studio in Dallas. With these moves, Zynga will save on the cost of real estate, but will not be laying off large numbers of staff members in those areas.
In a statement for GamesBeat, chief operations officer David Ko stated, “While these decisions are always difficult, these steps will effect approximately 1 percent of our workforce and enable us to focus our resources on the most significant growth opportunities.”
These moves are consistent with comments that Ko had made in an interview with GamesBeat shortly after Zynga’s last quarterly earnings report, when the company announced they would be closing down CityVille 2 and of other poor performing titles. Ko said Zynga’s focus for 2013 is on emphasizing game franchises – such as FarmVille, while has developed a following and brand recognition – along with their network and profitability.To be more profitable, Ko told GamesBeat Zynga has set up controls that tell it when to shut down money-losing ventures.
This isn’t easy to do in a service-based game, where companies launch a title then update on a weekly basis to keep up with feedback from fans while drawing other players back into the game. When a game peaks and starts losing players, Zynga typically scales back its investments. Ko said the company will pay more attention to the signs of shutting down these unsuccessful games sooner, rather than later.
A Zynga spokesperson has said the company is trying to find jobs within Zynga for the 1 percent in Baltimore that will be losing their jobs. The moves impacting other locations are less severe. Texas employees are about an hour away from the Dallis location, and the Austin and New York locations are within a mile of each other.
In any case, these closures may lead to some turnover. Ko said the company would make tough decisions when the need arises. Both the McKinney and Baltimore studios had been left virtually leaderless. The Bettner brothers who had started Newtoy left last fall, and Paul Bettner started a new game startup to create consoles for Ouya, the Android-based console due out in June.