In an extremely short and sweet announcement on the Funcom corporate site, the news was announced that the company will be eliminating 20 percent of their overall workforce with, “headcount reductions or forced leave, mostly in the Company’s Norwegian subsidiary.”
These layoffs are expected to delay the what once had great promise and potential subscription MMO, The Secret World. However, and perhaps a now demonstrated shift in company philosophy and business model, Funcom has stated the development of the company’s first free-to-play MMO will continue, with an expected limited beta release during Q4. Likewise, the company will continue to develop the Age of Conan expansion pack, as well as the title’s Korean release.
After starting with much fanfare, Funcom’s main bread-and-butter MMO age of Conan has seen a rocky road to say the least. With waning interest, the Norwegian developer was forced to close over half the AoC servers. However, back in late May of this year, Funcom released a financial report that indicated an increase in in-game activity, and that the new customers/month ratio was on the rise. On the other side of the coin, this same financial report was the first indication that Funcom was getting on board with the free-to-play model, to be supported through in-game advertising and/or microtransactions, or a hybrid of both, and pointed at different age segments. So what gives? Has Conan seen another dramatic dip in interest? So significant a dip that the company is now forced to trim 20 percent of the workforce?
The game developer currently employs 300 people, and is expected to shift a majority of the remaining workforce to Canada in order to take advantage of lower salaries. Specifically offered in Quebec, employers receive a 37.5 percent reimbursement incentive from the Canadian Government. This move could halve the company’s operating expenses. Those that will remain with Funcom and miss the layoff round have already received offers of relocation packages, encouraging skilled workers to make the move to Canada.
Funcom’s 2008 financials showed a loss of approximately $34 million, owing largely to the money pit that is becoming Age of Conan, while this year shows a $1.2 million operating loss, which seems to be roughly in-line with expectations.
Tags: Age of Conan, free to play, Funcom, layoff, microtransactions
