What's Happening?
Avalanche Studios Group, known for developing games like Just Cause and Mad Max, has announced the closure of its UK studio in Liverpool. This decision comes as part of a broader restructuring effort in response to current business and industry challenges. The company has also confirmed layoffs at its Swedish studios in Malmö and Stockholm. The announcement follows the cancellation of the game Contraband, which was initially set to be developed by the Liverpool studio. Avalanche Studios has stated that the decision was made to ensure the long-term success of the company, and they are initiating a collective consultation process as required by UK law. The company is committed to supporting affected employees during this transition.
Why It's Important?
The closure of Avalanche Studios' UK branch and the associated layoffs highlight the ongoing difficulties faced by the video game industry. As the cost of developing large-scale games increases, companies are finding it challenging to compete with dominant titles like Fortnite and Call of Duty. This trend of layoffs and studio closures is becoming more common as developers struggle to maintain profitability in a highly competitive market. The impact of these changes is significant for the employees affected and reflects broader economic pressures within the gaming industry. The restructuring efforts by Avalanche Studios are indicative of the need for companies to adapt to changing market conditions to remain viable.
What's Next?
Avalanche Studios has indicated that their immediate focus is on providing support to the employees affected by the studio closure and layoffs. The company will undergo a collective consultation process in the UK, which is a legal requirement when making significant staffing changes. As the industry continues to evolve, other gaming companies may also need to reassess their strategies to address similar challenges. The future of the game Contraband remains uncertain, and it is unclear how these changes will affect Avalanche Studios' upcoming projects and overall business strategy.
