Economic news here on the cusp of Christmas points to this being one of the worst holidays in memory for retailers. Yet the videogame industry continues to chant its mantra that games are recession-proof. NPD sales reports get cited most frequently as evidence of consumers taking the much ballyhooed "staycation" and spending their discretionary money on entertainment that can be enjoyed at home (as opposed to holiday vacations). Indeed, as we noted both in our overview of the November NPD numbers and detailed three-part analysis broken down by each of the major platforms (Nintendo, Microsoft, and Sony) the videogame business posted some impressive sales figures, particularly when viewed in the context of the generally gloomy economic climate. Little good those reports do for the many members of the development community hit by layoffs over the past few weeks. In an interview for an article appearing in the Economist Piers Harding-Rolls of the media analyst firm Screen Digest attributed these job loses to the regular cycle of the industry. Publishers, he says, "go all out for investment, trying to produce ideas, then at a certain stage in the cycle they pare down." While true that teams swell to finish projects and then contract after a release, the notion that publishers would be curtailing development in what should be the strongest part of this current generation flies in the face of common sense. If anything, with installed hardware numbers hitting critical mass, you expect publishers would be putting their foot on the gas to drive as much product as possible into the growing number of gamers’ hands. Instead we see an increasingly long list of layoffs and even closures that provide all the evidence you need that this time the recession absolutely hits the videogame industry as well. Aspyr confirmed its staff reduction, and it went deep enough to cause what they called, "the loss of some very talented, valuable team members and friends." Troubled publisher Midway, teetering on the brink of collapse, laid off 25 percent of its total staff, some 180 people, and shuttered its Austin studio which had done Area 51: Blacksite. Even Electronic Arts has felt the bite, first laying off 600 employees in what it called a "global reduction" in October, and then announcing a "restructuring plan" that includes another 1000 layoffs and consolidation that results in Need For Speed and Skate developer Black Box being absorbed into EA Vancouver.
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