Week in Review, 12/21/08

The mood of the past week was, in a word, gloomy. With the end of the year coming, many companies sought to get their financial houses in order, and that meant a bloodbath of layoffsl

The game industry was the hardest-hit, with the biggest news of the week, arguably, being the layoffs at Midway, which eliminated a quarter of its total workforce in what may be the beginning of the end for the troubled company. Free Radical closed up shop, Turbine laid off 36 employees, and Aspyr Media said it might eliminate a third of its staff.

And then, there were three companies, formerly benchmarks of success in the industry, who had a particularly bleak time of it: Sony, Take Two and Electronic Arts. Sony's Playstation 3 was called a holiday season sales dog, with CNN saying that the system is dying on the shelves amid reports that it has fallen twice as far behind the Xbox in sales since the latter system's debut, while major analysts lowered their earnings estimates. Plus, Sony and Xbox both took a hit from a Bloomberg report that said Nintendo's sales figures might be making the industry as a whole look healthier than it is.

Take Two, meanwhile, lost $11 million due to the failed takeover bid by EA, which ended up cutting and restructuring itself even further, its total layoffs now at 10%. Perhaps looking to refocus itself, the company headed in a curiously highbrow direction, saying it was canceling one of its racing games and developing one based on Dante's Inferno.

Even gaming and tech companies that seemed to be doing well one moment could announce bad news the next. Within days of Gaia Online trumpeting the success of its zOMG MORPG, the company laid off 36 employees. BitTorrent found out its initial funding round might be reduced, Joost discontinued its software application and social networking micro-apps struggled to find a financial direction: Digg announced it isn't doing so hot financially and Twitter seems to be making more money for other people than for itself – although it is seeking a project manager to remedy that. 

Tech titan Apple faced questions about its future when it ended its association with Macworld Expo, leading people to wonder if it's preparing for life without Steve Jobs, whose health has been called into question again. The company's computers are also facing a slowdown in sales, probably due to the fact that their laptops are pricier than their PC counterparts.

Publishing continued to struggle with a financial and identity crisis, with financial publication The Deal cutting ten percent of its staff and Macmillan Publishing eliminating 64 positions. However, there are signs this may be more of a metamorphosis than a collapse, as the Macmillan announcement was coupled with news that they were launching a children's division, and the Detroit Media Partnership announced they would make sweeping changes based on digital delivery. This industry will seem to be wobbly and in flux for awhile, but will ultimately land on its feet – although possibly in a radically different form.

The bedrock of all this may be the pessimistic economic news that came out this week, with CFOs of major companies saying the recession will last another year and the National Venture Capital Association saying that venture capitalists can't expect to raise significant money until 2010. While none of it comes as a surprise given the current climate, it's still disheartening to see.

So, was there any holiday cheer in the geek world at all? Well, cell phone gaming seems to be catching fire and growing hotter, with Apple touting the iPhone as a gaming console and 505 Games saying it will include handhelds in its line of sports games being developed in conjunction with Olympic swimmer Michael Phelps. Core gamers seem to be keeping the industry alive, and video for consoles continued to be an up-and-coming thing, with video-on-demand coming to the Wii in Japan (meaning we may see in on these shores soon).

But, perhaps, the best thing of all is the realization that with the end of the year, the tide of layoffs may stem a little, and people can get on with the business with working toward a digital-lifestyle future. (Look for Fan to Pro's predictions for the coming year in the next week!)
- Bonnie
Bonnie Walling Bonnie Walling (927 Posts)