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Windy City to lose EA studio


EA cites the closing as a difficult decision

During a quarterly earnings call last week John Riccitiello stated that EA would undergo another round of studio closings and layoffs. The axe fell today on Electronic Art’s Chicago studio that was best known from its work on the Fight Night and Def Jam titles. The Windy City studio had been working on a new Marvel fighting game, as well as a secret fighting title based on a new intellectual property license. Recently, development of the Fight Night franchise had been moved to the EA Sports studio. No information regarding the fate of the other titles in development at the Chicago studio was announced.

The EA Chicago studio has struggled to be profitable, according to reports. The current situation at the studio didn’t see them turning a profit until at least fiscal year 2011, or perhaps even later, which, of course, spells doom in a competitive environment such as EA’s model; this model requires each studio to stand on its own profitability based on the revenue from titles it produces. EA Chicago had grown in recent years from having only 49 employees in 2004 to 146 current employees in its downtown location.

Some of the 146 employees will be offered or will be able to apply for positions in other EA studios within Electronic Arts’ organization. Those that are not able to find or relocate to other studios within EA will be offered a severance package and outplacement assistance. With the development costs of titles skyrocketing to heights that seemed impossible only a few years ago, the closing of studios continues to be an alarming trend within the entertainment software industry. All it takes it a mediocre title or sagging sales of a title sequel, and a studio that was once profitable can be in trouble quite quickly.

Last modified on 07 November 2007
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