AM I NEXT? NO LOVE AT BUNGIE

Bellevue, Washington-based Bungie, a video game company subsidiary of Sony Interactive Entertainment, has announced a 17% reduction in force to meet the challenges of "rising costs of development and industry shifts."

The reduction impacted approximately 220 employees, including several top executives as well as audio, narrative, and player support team members.

According to CEO Pete Parsons...

I’m sharing with all of you some of the most difficult changes we’ve ever had to make as a studio. Due to rising costs of development and industry shifts as well as enduring economic conditions, it has become clear that we need to make substantial changes to our cost structure and focus development efforts entirely on Destiny and Marathon. 

That means beginning today, 220 of our roles will be eliminated, representing roughly 17% of our studio’s workforce.  

These actions will affect every level of the company, including most of our executive and senior leader roles.   

Today is a difficult and painful day, especially for our departing colleagues, all of which have made important and valuable contributions to Bungie. Our goal is to support them with the utmost care and respect.

I realize all of this is hard news, especially following the success we have seen with The Final Shape. But as we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials.

We are committing to two other major changes today that we believe will support our focus, leverage Sony’s strengths, and create new opportunities for Bungie talent.

First, we are deepening our integration with Sony Interactive Entertainment, working to integrate 155 of our roles, roughly 12%, into SIE over the next few quarters. SIE has worked tirelessly with us to identify roles for as many of our people as possible, enabling us together to save a great deal of talent that would otherwise have been affected by the reduction in force.   

Second, we are working with PlayStation Studios leadership to spin out one of our incubation projects – an action game set in a brand-new science-fantasy universe – to form a new studio within PlayStation Studios to continue its promising development.  

Additionally, in 2023, our rapid expansion ran headlong into a broad economic slowdown, a sharp downturn in the games industry, our quality miss with Destiny 2: Lightfall, and the need to give both The Final Shape and Marathon the time needed to ensure both projects deliver at the quality our players expect and deserve. We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red.

After this new trajectory became clear, we knew we had to change our course and speed, and we did everything we could to avoid today’s outcome. Even with exhaustive efforts undertaken across our leadership and product teams to resolve our financial challenges, these steps were simply not enough.  

As a result, today we must say goodbye to incredible talent, colleagues, and friends.

This will be a challenging time at Bungie, and we’ll need to help our team navigate these changes in the weeks and months ahead. This will be a hard week, and we know that our team will need time to process, to ask questions, and to absorb this news. Today, and over the next several weeks, we will host team meetings and town halls, team breakout sessions, and private, individual sessions to ensure we are keeping our communication open and transparent. 

Bungie will continue to make great games. We still have over 850 team members building Destiny and Marathon, and we will continue to build amazing experiences that exceed our players’ expectations.   

There will be a time to talk about our goals and projects, but today is not that day. Today, our focus is on supporting our people.

-pete

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. While many employees can read the writing on the wall; why do most assume it’s targeted at someone else? Are you now wondering, Am I Next?

AM I NEXT? NO LOVE AT RIOT GAMES

Los Angeles, California-based Riot Games, a video game developer, publisher, and esports tournament organizer, announced an eleven-percent reduction in force.

The personnel realignment will impact 530 employees.

Chief Executive Dylan Jadeja noted...

Rioters,

Today, I’m sharing a decision we hoped we would never have to make at Riot. We’re changing some of the bets we’ve made and shifting how we work across the company to create focus and move us toward a more sustainable future. This decision means we’re eliminating about 530 roles globally, which represents around 11% of our workforce, with the biggest impact to teams outside of core development. This also sadly means we’ll be saying goodbye to many talented colleagues and friends across all areas of Riot.

I realize this is awful news to hear, and especially hard for those who will be leaving us. To all the Rioters who are being laid off, we are deeply sorry that it has come to this.

As CEO, I’m accountable for the changes we’re making and where we’re headed in the future. So, I think it’s important for me to share how we got here and how the next few days will work.

How we got here.

Since 2019, we’ve made a number of big bets across the company with the goal of making it better to be a player. We jumped headfirst into creating new experiences and broadening our portfolio, and grew quickly as we became a multi-game, multi-experience company — expanding our global footprint, changing our operating model, bringing in new talent to match our ambitions, and ultimately doubling the size of Riot in just a few years.

Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway. Some of the significant investments we’ve made aren’t paying off the way we expected them to. Our costs have grown to the point where they’re unsustainable, and we’ve left ourselves with no room for experimentation or failure – which is vital to a creative company like ours. All of this puts the core of our business at risk.

Over the past several months, we’ve tried to alter our trajectory in many different ways. We asked leaders to make tradeoffs in the things their teams are working on. We rolled out hiring slowdowns, and in some cases hiring freezes. We put an emphasis on controlling costs while strengthening our revenue growth. All of which has without a doubt been tough for our teams.

But as I’ve dug in with leaders across Riot, it’s become clear to all of us that these changes aren’t enough. We have to do more to focus our business and center our efforts on the things that drive the most player value – the things that are truly worth players’ time. Unfortunately, this involves making changes in the area where we invest the most — our headcount.

I want to be super clear about something: this is absolutely the last thing we ever wanted to do. A decision like this has a massive impact on people’s lives and on the culture of Riot. We’re not doing this to appease shareholders or to hit some quarterly earnings number – we’ve made this decision because it’s a necessity. It's what we need to do in order to maintain a long-term focus for players.

How this will work.

There is no perfect way to do a layoff, but our guiding principle is to do our very best to make sure we’re treating Rioters with respect and grace. We want those who are leaving us to feel supported in this difficult moment. This starts with limiting the time they spend in ambiguity about their role and future with Riot, wherever possible.

We’re not expecting this to be a normal, “business as usual” week for us. We’re asking everyone to cancel meetings and rituals over the next few days where possible as we move through these changes together. Also, if you’re at one of our US offices now, we ask that you head home for the rest of the day and work remotely through Wednesday. If you need to come into the office on those days, please respect those who may be having difficult conversations and give them space to process.

The path forward.

There’s no way around the fact that this is an extremely sad moment. For those who are leaving… I want to reiterate, we are deeply sorry for the impact this has on you and your family. I can’t thank you enough for everything you’ve done for Riot, and for your dedication to players. We’re committed to doing our best to support you in this moment and through this transition.

For those who are staying, I know this is a difficult time for you too. You’re not only losing coworkers and friends, but you may also feel uncertain about the road ahead. I want to assure you that our vision for the future remains ambitious – we will not lose our desire to dream for players, and as hard as this moment may be, we will emerge from it in a stronger place. I’m confident that by creating focus together, thinking long-term and operating as One Riot, we’ll be able to truly make it better to be a player.

While we’d love for this news to remain within our virtual walls, we know that’s not realistic; there are many members of our global community who care deeply about the people who make and support their favorite games. With that in mind, I’m going to share this email publicly on riotgames.com in the hopes that it answers most of their questions so you don’t have to.

We’re going to hold a Riot WW Town Hall on Thursday to give more context into this moment as well as portfolio changes we’ve made. Until then, I’d like to reiterate my deep gratitude to all the Rioters who are leaving. Your passion and commitment has been felt by the people around you and the millions of players we serve.

Dylan

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

AM I NEXT? NO LOVE AT NIANTIC LABS

San Francisco, California-based Niantic Labs, a software game development company, announced an organizational realignment that will see the company focusing on its Pokémon Go game while deprecating its NBA and Marvel games.

The realignment will impact 230 employees and result in the closure of the company's design studio in Los Angeles where most of the laid-off workers are located.

According to CEO John Hanke...

I have some news to share with you about steps we’re taking to set Niantic up for the future. They mean some difficult changes for our organization, but I believe they are important if we are to weather the current challenges in the market and take advantage of the long term opportunity in front of us.

I have made the decision to narrow our focus for mobile game investments, concentrating on first party games that most strongly embody our core values of location and local social communities. The mobile gaming market is very mature and only the best and most differentiated titles have a chance to succeed. We also want to increase our focus on building for the emerging class of MR devices and future AR glasses.

Specifically, this means we will be closing our LA studio, reducing our game platform team and making additional reductions across the company. As a result, we will be sunsetting NBA All-World and stopping production on Marvel: World of Heroes. This means we are laying off around 230 Niantics.

Why are we making this change?

The answer is straightforward – we have allowed our expenses to grow faster than revenue. In the wake of the revenue surge we saw during Covid, we grew our headcount and related expenses in order to pursue growth more aggressively, expanding existing game teams, our AR platform work, new game projects and roles that support our products and our employees. Post Covid, our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments. This change will bring expenses and revenue back into line while preserving our core assets and long term upside.

Why did this happen?

There are both internal and external factors. We are operating in a tough market environment due to the overall global macroeconomic slowdown, as well as unique challenges in the mobile gaming and AR markets. In the years since Pokémon GO’s launch, the mobile market has become crowded and changes to the app store and the mobile advertising landscape have made it increasingly hard to launch new mobile games at scale. We also face an AR market that is developing more slowly than anticipated, because of technology challenges and because larger players are slowing down their investments in light of the macro environment.

We also bear responsibility for our own performance. Today’s highly competitive mobile gaming market requires dazzling quality and innovation. It also requires strong monetization and a social core which can drive viral growth and long term engagement. Teams need platform tools that are force multipliers, enabling them to build at the highest quality with powerful engagement features quickly and efficiently. Our AR map and platform must deliver the features that developers want in a robust and reliable way. We have not met our goals in all of these areas.

What does this mean for Niantic moving forward?

We remain long term believers in augmented reality as the future form factor for computing.

We believe that we can build key content and platform services that will help realize the promise of this technological shift.

The rise of MR (video pass-through devices such as the Meta Quest Pro and Apple Vision Pro) validates the long-term importance of AR, but this class of device is only an intermediate stepping stone to true outdoor AR devices.

So we have to adjust our strategy and investment accordingly:

The top priority is to keep Pokémon GO healthy and growing as a forever game. While we made some adjustments to the Pokémon GO team, our investment in the product and team continues to grow.

We will also focus on making our recently launched games a success, in terms of user retention, revenue and profitability. I am confident about the prospects for Pikmin Bloom, Peridot and Monster Hunter Now, but we have a lot of work to do.

We are reducing and focusing our platform team in line with the reduced number of games we are building, with the goal to do less, better.

We will continue to invest in our AR map and AR platform to enable developers to build, grow and monetize their own AR experiences. Our highest priority in this area is building an ecosystem of developers who create cross-platform, web (using 8th Wall) and Unity-based AR experiences. In the upcoming world of headsets, we expect much fragmentation and we believe, as was the case in mobile, that content creators will demand cross-platform solutions that enable them to leverage their content investment across the greatest number of devices and users. Our Visual Positioning System and human-centric AR map will provide them with the industry’s best tools for creating entirely new ways for people to see and explore the world.

In terms of how the company is run, expect a more direct and results-based culture. The leadership team and I are committed to cutting out unnecessary processes, duplicate lines of authority, and unclear decision making. You have already seen some of that with our move to a business unit structure, each with a clear leader (DRI). You will also see that as it relates to personnel decisions. We are committed to supporting and rewarding high performing Niantics who are committed to the company and its mission and are working tirelessly to succeed.

While you will see changes in the culture as we evolve into our newest form, our mission remains unchanged. We remain committed to building products and technology with a purpose, that leave the world better off than it was before, that serve both our needs as a company and the needs of our community of developers and Niantic Explorers in a way that is healthy and positive.

I am sure that the Niantics who are leaving will go on to make their own mark in the world in different places. I am proud to have worked with them, grateful for everything they have done, and sad to say goodbye. That painful step is in the interest of adjusting to new conditions and evolving the company so it can succeed. To those who are staying, I look forward to working with all of you on the next phase of our journey."

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?