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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

August 21, 2012 at 1:23 PM

PopCap lays off 50, mostly in Seattle

PopCap Games is laying off 50 employees, mostly at its Seattle headquarters.

That’s nearly 10 percent of the company, which was acquired a year ago by game giant Electronic Arts.

After the layoffs – which happened today – PopCap employs about 550, including about 300 in Belltown.

The majority of the layoffs were in Seattle but jobs were also cut at PopCap’s Vancouver, B.C., studio. There may be additional layoffs later at its office in Dublin, Ireland.

It’s a jarring move for a flagship of Seattle’s cluster of video game companies but the industry as a whole has struggled with declining sales, particularly the plunge in sales of packaged games.

In March the 86-person Redmond studio Zipper Interactive – creator of the hit “SOCOM” action games – was abruptly closed by Sony, which bought the studio in 2006.

Yet other studios are simultaneously expanding. Seattle’s Double Down Interactive, an online casino games studio that sold in January for $250 million, pounced on the PopCap news with a spokesman noting that it has more than 50 open positions.

PopCap co-founder John Vechey explained the move on the PopCap blog, saying the company is responding to the broad shift toward free-to-play and social games. PopCap is adjusting its business “to stay healthy and viable,” he wrote.

There’s also an economic component to the reorganization. To stay in business, we need to manage costs, improve efficiency and maintain a profit. We’ve been able to invest in creative new games like Peggle and Plants vs. Zombies because we had a high profit business. That business is challenged, and if we don’t adapt, we won’t be able to invest in new IP. That sounds harsh — but if we don’t stay in business, no more plants, zombies, jewels, frogs or worms.

Vechey said the company has also begun an “exploratory consultation” to decide whether to close its office in Dublin.

“‘Exploratory consultation’ means we’re talking to our Dublin team about the future of that office and whether we can find a path to improve our profitability in Europe without having to close the operation,” he wrote.

The announcement comes a day after the company announced that it’s preparing a sequel to its hit “Plants vs. Zombies” that will go on sale next spring.

Vechey said the company is simultaneously hiring in different areas, and “we expect to end the year with roughly the same number of people we started with.”

EA and PopCap executives last year said that the merger would lead to additional investment and growth at PopCap.

Today Vechey said that being part of EA lessened the blow:

“We’re glad to have those resources supporting us when a lot of other independent studios are struggling. In addition, some of the people affected by the reorganization may be retrained and reassigned to other jobs in the EA studios. If we didn’t have EA behind us, the cuts would have been worse.”

Comments | More in | Topics: EA, Games & entertainment, layoffs

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