BUSINESS

Big Fish Games cuts a fifth of its workforce; GigaMedia profit halved

TAGs: big fish casino, big fish games, GigaMedia, social gaming

big-fish-games-gigamediaSeattle-based social game outfit Big Fish Games handed out reams of pink slips this week, announcing layoffs and the closure of development studios in Vancouver and Cork, Ireland. All told, about a fifth of the company’s 670-member global workforce is being let go. President Dave Stephenson is also leaving the company, and John Holland has been elevated to the role of president/COO. Some 89 staffers in Cork are facing the axe subject to a 30-day consultation, while the six employees at the Vancouver office will be offered work across the border in Seattle, where 49 less fortunate staffers are also being laid off.

Unlike Zynga’s payroll-slashing, the Big Fish cuts come despite the company being highly profitable. In fact, 2013 represented the company’s 11th straight year of record revenue and its Big Fish Casino app continues to rank in the top-10 gross-sales charts for both iPhone and iPad. Much of the rejigging is the result of the company closing down its year-old cloud-based Big Fish Unlimited subscription gaming service, which cost a lot to build but only accounted for around 1% of total Big Fish revenue. The company is also reducing the number of languages its games offer, choosing to focus on English, French, German and Japanese versions.

Big Fish founder Paul Thelen says 70 more Seattle team members are being ‘realigned’ to “focus on those areas of the business that are growing and scaling.” It’s worth noting that the company’s Oakland office, where its social casino games are developed, went untouched in the upheaval. Big Fish made headlines a year ago this month by becoming the first social game firm to offer real-money gambling in the UK via a tie-up with ‘disruptive’ bolt-on backend firm Betable.

GIGAMEDIA PINS HOPES ON SOCIAL CASINO AS PROFITS PLUNGE
Taiwan-based online gamers GigaMedia are hoping the social casino sector will save their bacon after reporting Q2 revenue and gross profit half that of Q2 2012. Revenue came in at $3.65m, down 13% sequentially and 49% year-on-year, while gross profit was $1.92m, down 17% sequentially and 50% year-on-year. Peak concurrent users remained steady at 23k but average monthly revenue per user fell 6%. GigaMedia has struggled for a number of years during which it underwent a massive restructuring – including the sale of its former stake in Everest Gaming – and CEO Collin Hwang said it was “going to take time to correct the mistakes of the past.”

Focusing on the positives, Hwang noted that operating expenses hit a record low during the quarter and the FunTown subsidiary’s popular MMO first-person-shooter game A.V.A. saw revenue rise 19%. Without going into detail, Hwang said GigaMedia was “actively reviewing several strategic transactions” to “accelerate the transformation of our games business.” In June, Hwang announced GigaMedia was beta-testing social slots, poker and dice games at 200 internet cafes in Taiwan, but the late-July rollout target came and went. Hwang now says the mobile/browser game rollout is likely to be operational “near year-end.”

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