Following up on its promise to be more cost efficient, Zynga is shutting down its Baltimore studio today and consolidating locations in three other cities. About 1 percent of the work force, or maybe 30 people, will be out of work as a result.
The Baltimore shutdown isn’t a surprise since its leader, Brian Reynolds, former chief game designer at Zynga, recently resigned. Zynga also shut down the game that Reynolds and the studio made: CityVille 2 (pictured above). Zynga is also consolidating studios that it acquired in locations that are near each other. So the two Austin studios will be combined, two studios in New York will be merged, and the McKinney, Texas, studio will be moved to Dallas. In all of those moves, Zynga will save on real-estate costs, but it is not laying off large numbers of staffers in those areas.
The move is consistent with comments made by David Ko, chief operations officer, in an interview with GamesBeat just after Zynga’s last quarterly earnings report, when Zynga announced the CityVille 2 shutdown and closures of other non-performing games. Ko said that Zynga’s focus for 2013 will be to emphasize game franchises — or titles like FarmVille that are developing more loyal followings and brand recognition — as well as Zynga’s network and profitability. To be more profitable, Ko said Zynga has set up “guard rails,” or controls that tell it when to shut money-losing ventures.
In a statement for GamesBeat today, Ko said, “While these decisions are always difficult, these steps will affect approximately 1 percent of our workforce and enable us to focus our resources on the most significant growth opportunities.”
The latter isn’t easy to do in a service-based game, where companies launch a title and then continuously update it on a weekly basis to keep up with fan feedback and to draw players back into the game. When a game peaks and starts to lose players, Zynga has typically scaled back its investments or doubled down on them. Ko said that the company will pay more attention to the signs for shutting unsuccessful games down earlier.
A Zynga spokesperson said that the company is trying to find jobs within Zynga for the Baltimore employees. The moves impacting the other locations aren’t as severe. Zynga’s McKinney, Texas employees (acquired with the Words With Friends developer Newtoy) are about an hour from the Dallas location. And the two offices in Austin, Texas, are just about a mile apart. The same is true for the New York locations.
In any event, those offices closures may lead to some turnover. Ko had said that the company would make tough decisions when it need to do so. Both the McKinney and Baltimore studios were essentially leaderless. The Bettner brothers who started Newtoy left last fall, and Paul Bettner started a new game startup to create titles for the Android-based Ouya game console.
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