Make no mistake about it, social gaming giant Big Fish Games is a very healthy and a very strong company; one that is on its way to its 11th straight year of record revenue. But strong companies don't stay that way if they fall behind the times, and if they do not reevaluate their strategy from time to time. Complacency does not breed success.
And so, Big Fish will be undergoing a major reevaluation; one that will result in studio closings, layoffs and refocusing of strategy.
As per the restructuring, Big Fish will be realigning 70 of its workers, and letting go of 49 people from its main Seattle office, according to a memo from Paul Thelen, the company's founder and CEO, to employees on Wednesday. The memo was reproduced in a report from the Seattle Times.
In addition to the layoffs, Big Fish will also be be closing down its Vancouver office, and consolidating it into office in Seattle. The company is also considering closing down its office in Cork, Ireland, and has given it a 30 day evaluation.
But the changes that are being made to Big Fish are deeper than just layoffs and studio closings. What the news really comes down to is that Big Fish is refocusing on aspects of the businesses that are growing and turning a profit, and jettisoning those that aren't.
"The pace of change in our industry requires us to invest in the areas where we are growing and position
us for the future. We continue to embrace emerging new lines of business, many of which are enjoying success, particularly in free-to-play. Our casino business is just one example, with Big Fish Casino achieving an evergreen top 10 gross-sales ranking on the iPhone and iPad," Thelen wrote.
"However, along with good news there is sometimes a 'but,' and here is ours – to continue this momentum, we need to realign our resources by increasing investment in the areas that are growing or profitable and eliminating investment in areas that are not on a path to success."
And so Big Fish has decided to discontinue premium cloud delivery business.
"This service is not growing as fast as we had hoped it would and is not on a path to profitability. This decision reflects the reality that the costs to support streaming cloud delivery of premium games are too high, and the user adoption too low, for us to warrant continued investment," Thelen said.
The shuttering of the cloud delivery system is, to me, by far the most unexpected aspect of the news to come out today.
Back when I spoke to him in April, Thelen cited cloud delivery as one aspect of the business that the company was betting on to as the next innovation. It is very surprising that the company has so quickly abandoned.
I have reached out to Thelen to find out more of his thoughts regarding why he believes cloud delivery never caught on with the public, and why the company was so quick to give up on it. I will update if we hear anything further from him.
The company is also going to be putting the majority of its focus on its four largest languages: English, French, German and Japanese and :will evaluate what amount of new localized content we will provide for our other supported languages."
The memo also revealed that the company has named John Holland as President and Chief Operating Officer (COO) of Big Fish Games. Holland is taking over the role of President from Dave Stephenson, who will be leaving the company.
“As the founder of this company, it is painful for me to say goodbye to colleagues who have become our trusted partners, and in so many ways, close friends,” Thelen said. “Letting people go is not an easy decision, and we would not be making it if it weren’t absolutely necessary to secure the best possible future for us at Big Fish Games. There is never an easy or good way to do this, but we made every effort to be respectful and to do right by those who are departing wherever possible to minimize the impact this will have on their lives.”
(Image source: http://www.mobygames.com)