Confirmed: EA guts Pandemic

 Update: A Shacknews report confirms that EA has cut a large potion of the workforce at Pandemic, but says that it  is not getting rid of the studio, - it is  consolidating it into a “core team” and moving it to EALA. Here’s what EA said officially:

“Pandemic Studios and its franchises will be relocated to the EALA facility in nearby Playa Vista,” a rep for the company told Shacknews. “This move has resulted in a reduction in the work force at Pandemic…That said, the Pandemic brand and franchises will continue to live on. A core team of Pandemic developers will move to EALA and continue development on Pandemic games with a focus on quality, cost management and schedule integrity.”

Original Story: Is the other shoe about to drop for Panedemic’s L.A. studio? According to this Kotaku report, citing reliable sources close to the situation, EA will lay off most of Pandemic’s Los Angeles studio at 11 AM PST. The Saboteur, the current project being developed by Pandemic will  be shifted to Army of Two developer EA Montreal - also according to the Kotaku report.

Pandemic’s Brisbane studio, which was developing a game adaption of the latest Batman film, The Dark Knight, was cut loose from the EA family in January of this year. Pandemic is best known for developing such franchises as Full Spectrum Warrior, Mercenaries, Star Wars: Battlefront and Destroy All Humans.

If this rumor is true it means that most of the 200 people that work at Pandemic L.A. will be out of work right before the holidays, which is absolutly horrible, but a typical move by corporations in the fourth quarter. Earlier in the month EA laid off a large number of employees from its Maxis studio. No doubt EA will be making cuts across the board as it tries to hit the restructuring number of 1500 before the next fiscal quarter in March 2010.

We’ll have more on this story as it develops and hopefully an official confirmation or denial from EA soon.

Microsoft Cuts 100 Employees

According to multiple source including VenuteBeat and Gamasutra, Microsoft has laid off 100 employees from Massive, the in-game advertising company in bought in 2006. This is a continuation of the workforce reduction it announced earlier this year. In January the company announced that it would be cutting 5,000 jobs in the next 18 months. Microsoft had already cut 1,500 of those 5, 000 jobs prior to today’s news, closing Microsoft Flight Simulator developers ACES studios in the process and finally closing Ensemble Studios

“As part of the plan we announced in January to reduce costs and increase efficiencies, today we are eliminating additional positions across several areas of the company,” a Microsoft spokesperson told Gamasutra. “Microsoft is not breaking out layoff figures by divisions.”

“While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn,” the rep told Gamasutra in a separate statement.

THQ Post Q4, FY 2009 Results

THQ’s financial results for the fourth quarter and fiscal year ending March 31, 2009 are nothing to be excited about. For the full year that ended on March 31, the company posted net sales of $830.0 million down from almost $1.03 billion a year ago. On a non-GAAP basis net sales were $812.6 million, compared with $1.061 billion in the prior year. The company also reported a wider net loss than last year: $431.1 million ($6.45 per share) compared to $35.3 million ($0.53 per share). non-GAAP net loss was $101.8 million, ($1.52 per share), compared to $13.6 million ($0.20 per share). Not pretty.

Fourth Quarter FY 2009 weren’t any better. For the fourth quarter of fiscal 2009, THQ reported net sales of $170.3 million, compared with $187.0 million for the same period a year ago. On a non-GAAP basis, the company reported net sales of $154.3 million, compared with $217.6 million for the same period a year ago.

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March Hardware Sales Weak

While the Wii continued to sell well in North America during the month of March, it was the Xbox 360 that was up from March 2008 numbers, according to NPD Group. The Wii sold 601,000 units in March followed by the DS (563K), Xbox 360 (330K), PS3 (218K), PSP (168K), and PS2 (112K). The numbers aren’t all that shocking considering when East fell this year and take into account that the Wii had Mario Kart Wii driving sales in the same period last year. In general the entire business was down in march - from hardware to software and all stops in between.

1. Wii 601K
2. Nintendo DS 563K
3. Xbox 360 330K
4. PlayStation 3 218K
5. PSP 168K
6. PlayStation 2 112K

Video game hardware sales were $552.04 Million USD - down by 18 percent, while accessories sales were $217.55 million down by about 15 percent.

While it would be easy for some watching the game space to be concerned about this, NPD Group says that this is do more to timing, availability of killer software and other factors than it is about the economy or consumer spending. It will be interesting to see how these numbers compare to April.

Sony Hit Hard in Economic Climate

It’s no secret that we’re living in a rough economic state right now, and no company is immune … not even a powerhouse like Sony. Recently, the company was forced to revise its financial forecast downwards from previous expectations. As a result, stockholders were informed that year-end payouts for their investments would have to be cut 35 percent, down to $0.13 per share from a previously expected $0.20 per share. Despite the news, shares in the company ended yesterday up slightly, trading at $20.20 per share.

Stockholders weren’t the only ones hit with bad news, though. Employees at Sony will also share in the burden of stopping the hemorrhage of losses from the company. The company announced that, starting next month, it will freeze its employees’ salaries for twelve months in an attempt to improve the company’s profitability. Bonuses for employees will also be lowered to four months’ pay, down from the expected six months, and annual compensation for managers will be dropped by anywhere from 10 to 20 percent through wage cuts and another 35 to 40 percent through bonus reductions.

All of these cuts come hot on the heels of Sony’s announcement at the first of the year that it expected major losses for the financial year, its first yearly loss in 14 years. With Sony pulling out all the stops to try and hold on to as much money as possible, maybe the company’s decision not to cut the PS3’s price point has a little more to do with pinching pennies than Sony Computer Entertainment America’s marketing VP, Peter Dille’s infamous “selling razor blades” theory.

Sony Under Pressure to Cut PS3 Price

Okay, okay … so we know that the console wars will never end, and as long as there are video games, there will be people staunchly defending their console of choice. Still, in business, the bottom line is all about the numbers, and Sony is starting to feel the heat as its numbers continue to drop … at least as far as video game publishers are concerned. In an article on Bloomberg, Sony is being pressured to cut the price of the PlayStation 3 in an effort to build the consoles install base with consumers. The former leader of the console market has been hit hard with its current generation of hardware, with the PS3 consistently placing a solid third in sales behind the Wii and Xbox 360. Making matters worse, U.S. sales of the PS3 have steadily declined for three months straight.

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Majesco Posts Huge Jump in Profits

Okay Majesco. Apparently someone forgot to send you the memo, but the world economy has gone to pot and no one is supposed to be actually making any money. How could you buck the trend and not only turn a profit last quarter, but boast a 75.8 percent jump in revenue?

All kidding aside, it was a great day for Majesco investors yesterday. The same day the market saw Take-Two post $50 million in losses, Majesco filed its numbers for the first 2009 quarter, laying claim to a 75.8 percent increase in revenue over the same time last year,

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