Full memo: Big Fish CEO announces job cuts, cancellation of cloud games business and closure of Ireland and BC facilities

Big Fish Games CEO Paul Thelen at Casual Connect

Big Fish Games CEO Paul Thelen at Casual Connect in 2012 announcing the company’s cloud-based game platform, which is being shut down today.

It’s a bad day for Big Fish.

The Seattle casual game maker today announced that it is laying off 49 employees in Seattle, and closing its operations in Cork, Ireland and Vancouver, B.C. It is also pulling the plug on its cloud-based gaming business, a service that it launched to much fanfare at the Casual Connect conference in Seattle last summer.

The move comes amid record revenues for the company, but also a radically changing marketplace in which players are shifting to mobile and free-to-play games.

Big Fish employed 524 full-time employees in Seattle earlier this month, and so today’s reduction of 49 staffers accounts for about nine percent of the Seattle workforce. Jobs in Vancouver are being shifted to Seattle, and positions are being offered to those staffers, said a company spokeswoman.

As for the Cork, Ireland operation, the spokeswoman said that they must await for a 30-day employee consultation to be completed which will “dictate the next steps.” Worldwide Big Fish employed 670 prior to the cuts, including six in Vancouver and 89 in Cork. It also has a large office in Oakland with 51 staffers.

As part of the changes, President Dave Stephenson is leaving the company, and his role will be assumed by John Holland.

Big Fish CEO and founder Paul Thelen wrote in a memo to staffer this morning:

“We had to make some very hard choices about these business areas that are not growing or profitable. I want to stress that our decisions are not based on our company-wide performance or that of the people working on those initiatives – both of which are strong – but because of where the market is growing, and quite frankly, where it is not. The most significant decision we are making today is that we are discontinuing our 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.”

And here’s the full memo:

From: Paul Thelen

Sent: Wednesday, August 21, 2013 9:29 AM

To: Paul Thelen

Subject: Business Update

Since the founding of Big Fish more than a decade ago, we have continually evolved to meet the ever-changing landscape of casual gaming and the needs of our customers. Thanks to the incredible drive and dedication from all of you, our company remains healthy, with steady growth across multiple lines of business, and we have hugely popular games that are enjoyed by millions of paying customers. In fact, 2013 will be our 11th straight year of record revenue and we remain profitable with a positive cash flow. I am truly grateful and proud of what we have accomplished together and excited about the new opportunities ahead of us, which is why this message is especially hard for me to write.

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. 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.

We had to make some very hard choices about these business areas that are not growing or profitable. I want to stress that our decisions are not based on our company-wide performance or that of the people working on those initiatives – both of which are strong – but because of where the market is growing, and quite frankly, where it is not. The most significant decision we are making today is that we are discontinuing our 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.

Our free-to-play businesses, both casual and casino, will continue to be growth and leadership areas for us, and we are increasing our headcount and investment accordingly. On the premium casual business, we will continue to focus investment in our 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.

So what will this mean specifically? ​

First, we are realigning more than seventy employees to focus on those areas of the business that are growing and scaling; however 49 full-time employees in Seattle are being let go.

Second, Seattle is our HQ and will remain the hub for premium and free-to-play casual game production. As a result, we will be consolidating our Vancouver game development projects to Seattle and shutting down that office. Oakland will remain the hub for free-to-play casino game production.

Third, we are making some changes to our management team in support of this strategy and realignment. Effective today, I’m pleased to announce that John Holland has been appointed President and Chief Operating Officer (COO) of Big Fish Games, expanding the key roles John has already held in leading our global operations and content acquisition and development efforts. John will be taking over the President role from Dave Stephenson, who will be moving on to a new opportunity outside of Big Fish. Dave has been an extremely valuable member of the management team, and we wish him well. In addition, with John taking on additional responsibilities overseeing the functional areas within Big Fish, our four business line general managers who formerly reported to John and Dave will now report directly to me, allowing me greater focus on our growth businesses.

Finally, as part of our decision to focus our premium business on the four largest languages, we are proposing to close our facility in Cork, subject to a 30-day consultation that we are entering into with employees.

As the founder of this company, it is painful for me to say good-bye to colleagues who have become our trusted partners, and in so many ways, close friends. 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.

I know many of you will have questions about these changes. I encourage you to talk openly with your managers, and my door is always open to anyone who would like to talk one-on-one.

As hard as these changes are, I’m also excited about our future. We have expanded our vision and realigned our resources to fully embrace the growth areas within causal games. We are now positioned to maintain and grow our market leadership as the world’s largest producer of casual games, both premium and free-to-play, for PC, Mac and mobile devices.

We are making these adjustments from a position of strength, not weakness, and I am confident that our best days are ahead.

– Paul

  • SeattleMike5

    It’s no wonder these companies are struggling; So many casual games suck, or are blatant copies of every other gaming companies’ games. You can hardly find any game that has similar playability or complexity as console games or PC games.

    • Krumpet

      You are comparing apples to oranges. Casual games do not attempt to offer the playability or complexity of console or PC games. Just because two products are different, one doesn’t have to “suck”.

      • SeattleMike5

        Casual games are a dime a dozen and they’ve all become pale imitations of each other. There are opportunities for web-based games to be more interesting, but all these companies seem to care about is having a game that’s an exact copy of some other game, in order to compete in the same “space”. Meanwhile there are a legion of PC-style game experiences (not 3D first person shooters) that casual gaming companies are ignoring. And every freaking game doesn’t need to be a “social” game. Everyone on Facebook hates and ignores those ridiculous game invitations anyway. It’s time for casual gaming companies to wake up and start moving on to the next phase.

        • http://troyjmorris.blogspot.com Troy Morris

          Please, expand on the “legion of PC-style game experiences that casual gaming companies are ignoring”, understanding that a causal game company has a very different demographic than other categories of game companies.

          At this point, your comment is equivalent to saying that Romcoms are ignoring Sci-Fi plot and character development devices.

          If you expand on what these experiences casual game companies could explore to enhance their offering, it would go a long way in validating your statement.

          • FunPolice

            Internet fighting! LOUD NOISES! Casual games are purchased and enjoyed by casual game fans. If you are not a fan, do not shop casual games. Regardless of this discussion, 49 nice folks lost their job today. Commenting on the article about the layoff to bash a genre? Cool your jets, trolls.

          • Guest

            Such a great response. Real drama (loss of job) vs. first world problems )”casual games suck”) drama.

          • SeattleMike5

            Yes, some people lost jobs. We’re discussing the state of the industry, and perhaps why some of the people lost their jobs. This isn’t a discussion about famine in Africa, so please spare me the overused cliché about “first world problems”.

          • SeattleMike5

            God forbid someone might actually want to discuss the state of the industry from which these poor souls are losing their jobs.

          • Kieran Colfer

            150 people lost their jobs. 49 went in seattle, 12 in Vancouver, the rest in Ireland. That “subject to a 30-day consultation” thing is a legal nicety that they have to abide by in Irish law, doesn’t change the eventual outcome.

  • http://twitter.com/josephke11y Joe Kelly

    I left the company in August 2011 to move back home and I wish them all the best. They are a great employer and a solid anchor in the Seattle tech scene.

    While many knock against casual games, BF had some very vocal fans for their games, most notably the Hidden Object Games (Mystery Case Files, etc.). These games are mostly enjoyed by older women, who definitely don’t fit into the demographic of hardcore gamers.

    I grew up a gamer, and most of my co-workers there were gamers and we didn’t really enjoy the mainstream releases, but they still offered fun games that gamers of all backgrounds could enjoy. Some that come to mind are Plants vs. Zombies and Bejeweled. Of course, you could purchase these from a multitude of vendors, not only BF.

    My best guess is that the cloud streaming service was not fit for their target audience, mostly comprised of women over 35 when I was on the team.

    I wish them all the best and I’ll keep those that lost their jobs in my thoughts.

    • Sharie Plewa

      being one of thier target and a member since 05,till august 2013 i can tell you,,thier decisions in the past month,, closing chitchat (where many of us talked about upcoming games and got new people to try different genre) with 24 hours notice, putting the casino link on the gms,,,then taking it off,, just to put it right back on, not to mention some of the obscene user names and avatars in the casino (not a prude but a b utt in a thong is not what i consider a family friendly site) closing the cloud with no notice to the subscribers who still expect new games there,,(all the while still taking the subscription from the cloud players, closing live chat, with cs,,when that is a member perk,,leaving no where to go for help….
      this company better hope they get the young mobile playing crowd,,,cause i guareentee they have lost many many of thier core customers

  • lardosardo

    Sometimes man, you jsut have to roll with it. Wow.

    http://www.Anon-Prime.tk

  • paul

    Unfortunate. The Team in Ireland is / was great to work with on projects as well any Ops issues. They will be missed as they helped raise the bar which was / is needed.

    If you know the history of some the BFG departures then this link is enough said http://www.geekwire.com/2013/chaching-double-posts-big-profits-expands-social-casino-global/

  • http://www.timesheetreporter.com/ Thomas

    Tough calls. Wish the best for the people working there.

    BR, Thomas
    http://www.timesheetreporter.com
    http://www.contest.dk