Yesterday’s announcements of layoffs at NCsoft (both in USA and Europe) caught many people by surprise, judging from the number of emails and conversations I’ve had where people have brought it up. I think it’s interesting to try to understand why this is happening, and given Scott’s point that this is really not the right way to do layoffs (bits and pieces at different times), then to look at how it could in this situation be done better (if it could; that may not be possible).
But in terms of the surpise? No. I find there is no surprise here. There’s IMHO two major things going on.
1. Clean up the mess created last summer in Europe
From yesterday’s announcement:
“The European office is transitioning to have a stronger focus in marketing and sales”
Last Summer, they made redundant the entire Development division of NCsoft Europe. Traditionally, in games, you have Development and Publishing. In online games you have a third major wing: Operations/Support.
Publishing and Ops have to be / should be local to the country(ies) where they are being sold – it makes things much cheaper, and it makes things more successful, as the staff are actually immersed in the culture and timezone of the people they’re selling to or serving.
I was a little surprised when the Dev division was cut that it wasn’t done cleanly. As Scott points out “Hey, management? You’re doing it wrong”. If you get rid of Dev, then certain other things HAVE to happen:
- Get rid of all Dev-sub-depts in their entirety – including things like QA, that “can” have a foothold on the side of both Ops and to a lesser extent Publishing. If you’re actively *cutting* dev, then that QA dept (as an example) is an abandoned outpost that will get left to rot, politically speaking, and you can guarantee it will be starved and eventually killed (or die of hunger)
- Get rid of a large chunk of Publishing and Ops that are *not* part of Dev, but are co-supporting of them. If you had a Dev division, you would have built up extra resource in those areas; that resource is now under-utilized. If you’ve had to do something as brutal as destroying your Dev division, you clearly are desperate enough that you need to be making those cuts as well
NCsoft Europe did *some* of the above – but clearly not all. I’m not expecting you to tell from the headcounts (that would take some effort with LinkedIn, or buying beers for a few people after work) – there’s an easier way: look at what “departments” still had staff. Once the redundancies had completed, there should have been *no-one left* in a bunch of departments that – in fact – were left with a handful of lost, abandoned, individuals.
Going back to that press release, what it really meant was:
“The European office has finally implemented the strategic plan from last Summer, so is transitioning toeffecting immediately have a strongerpure focus in marketing and sales”
Cutting Development in 2008 meant one thing: NCsoft Europe was now purely an off-shore Publishing division (coincidentally, back to its historic roots). In the games industry that means you are (in decreasing order of importance): Sales, Marketing, Localization. You’ll be lucky to keep anything in teams like QA because there’s no need for QA to work hand in hand with sales teams – they could be located anywhere (unlike QA + dev, which really need to be colocated). In some companies, with the number of people remaining relatively small, the CEO’s would have left the abandoned people to sit in their jobs not being very useful, while the management got on with bigger issues of trying to do whatever the strategic plan was that they were doing. But that couldn’t happen for NCsoft, for reason 2 (see below).
PS: I like to believe that the reason it took so long for this week’s cuts (in Europe) to happen is largely that the exec team in Brighton were trying hard to keep as many good people within the company as possible. I don’t know Geoff Heath (the CEO) well, but he’s always come across as genuine and proactive in his concern for his staff. The rest of the exec team also – whatever their faults and failings – have tended to put a lot of effort into “looking after” their people, whether or not it’s worked.
2. Convert the overall company to “how it should have been run back in 2001”
Last summer’s re-organization in NCsoft America was all about giving total control of the non-Asian subsidiaries to ArenaNet. Reading news articles etc, I do occasionally wonder how many people grokked what had happened. A quick summary…
All this waffle about becoming “a unified organization under NC West”, and the reporting by bloggers and journalists that this was “consolidating” the subsidiaries and offices (they were already consolidated, you know) … what a load of crap. Follow the money, guys: who has the power now, and what unites those people? And if the answer is “nothing”, then ask yourself: who stands to benefit from an exec team comprised of individuals that are likely to be in conflict?
Look at the Directors of NC West:
- Jeff Strain – Co-founder of Arena.Net, Director of Arena.net
- Chris Chung – Director of Arena.Net
- Pat Wyatt – Co-founder of Arena.Net, Director of Arena.net
- David Reid – only started working at NCsoft 2 months ago
Notice a pattern?
So NCWest was simply a handing over of the reins of power from the OSI Mafia (ex-Origin people such as: Robert Garriott, Richard Garriott, Peter Jarvis, Starr Long, etc) to the Arena.Net Directors (the only one who stayed behind was Mike O’Brien, who now runs Arena.Net).
Remember that Korea acquired not one but two studios early on in North America: the first was Destination Games, which developed the tragically failed Tabula Rasa, and the second was Arena.Net, which quickly (note) developed Guild Wars, then a bunch of expansions, and is now well on the way to shipping Guild Wars 2.
This is “acquire experienced and skilled American game-developer Directors, and get them to run our non-Asia subsidiaries … attempt 2”.
Which should also point out something pretty obvious (to me at least): Chris Chung has a heck of a lot riding on the success of the revamped NCWest. ArenaNet’s top team has to show that it can do what the Origin team failed to do. They’ve been waiting in the wings all this time, implicitly saying “we could do better than that”, and now they have to prove it.
He’s / they’re re-arranging the entire company to fit with “how we would have done it in the first place if we’d been given the chance” (or something like that).
Doing it Better
I have two criticisms of what’s going on, and neither seems to be shared by the general press. Which either suggests I’m very wrong, or I’m very right. Your choice. Guess which one I’m going for :).
1. Too slow
If you’re reforming a company, do it lightning fast. If you’ve been at that company, playing the politics, for 5 years, you ought to have a battle plan in mind well in advance of being “officially” given the reins. There are always reasons that you “cannot”, from the operational to the legal.
But I’m sure that’s what they said to Lou Gerstner at IBM, and he proved wrong, when he fired the entire middle management, worldwide. I bring up this piece of history regularly, because it’s an excellent reference point: if one of the biggest, most bureaucratic companies in the world can do “the unthinkable” then what excuse does everyone else have left for not going far enough themselves? The redundancy pay-outs cost IBM so much money they booked a sudden loss that year greater than the GDP of entire nations. But they did it.
The “what would we do if could break the rules…?” game was one I played at NCsoft quite a bit; I needed to second-guess what would happen, given the long lead times of any development, organizational, and tech issues, if/when failing teams, projects, and managers got cancelled (as they did). Lots of other people were playing it too. It’s much scarier to actually have to put your thoughts into practice and risk being wrong, so some “more serious” prep may be needed when push comes to shove, and some paralysis is understandable (but still not acceptable). But with all the time we had, the extra due diligence shouldn’t have been necessary. Courage of convictions and all that. I’ve become a fan of moving as fast as possible (although even at NCsoft I still had crises of confidence and over-analysed some of the risky situations, and was fortunate to work with better people who simply said “stop worrying, run with what you’ve got, it’s planned more than well enough already”).
2. NC Europe is screwed
NCsoft had the opportunity to create a giant of the MMO publishing world in Europe; Europe is screaming out for it and just needs a banner to rally behind – and a visionary exec team to say “we’re going to turn Europe into an online gaming powerhouse”.
Europe is a bigger market than the USA (by some 30% or more).
Europe has no multi-title successful MMO developer or publisher.
The UK alone has a lesser but comparable level of mainstream game developers and output of titles to the US (UK currently 4th in the world behind Canada).
So … the development industry is here, less so the publishing industry (although there’s a lot of mid-sized publishers spread through Europe), but there’s a gaping hole in the MMO sphere. For someone bold enough to step into that hole, you could “own” Europe’s online gaming industry for the next decade.
Missed opportunity? Hell yeah.
At the end of the day, I eventually realised that NCsoft won’t do it for one simple reason: Korea still probably doesn’t quite understand how they managed to go so badly wrong with the Garriott brothers as the founders and owners of NCsoft North America, and wouldn’t dare risk another, independent, self-managing, ambitious subsidiary *anywhere* in the world. The Asian subsidiaries are all kept on a very short leash and get practically no independence from the Mothership (in Seoul) at all – the whole western conceptualization of subsidiaries is already anathema to the Koreans.
If anyone out there is interested in taking over Europe like this, drop me a line. I’d love to join in.
22 replies on “NCWest: Stage 1 complete; Farewell, European MMO Industry!”
“Korea still probably doesn’t quite understand how they managed to go so badly wrong with the Garriott brothers as the founders and owners of NCsoft North America, and wouldn’t dare risk another, independent, self-managing, ambitious subsidiary *anywhere* in the world”
… And obviously the guys at ArenaNet have no interest in helping them understand and keep the european branch running : it’s more investment and staff towards them.
I see what you’re saying, but I think that the either/or thing doesn’t hold sway here: if you do the European strategy properly, it’s not as a zero-sum game with the other non-Asian subsidiaries. If you do end up with a zero-sum analysis, then I’d say is one of the first signs that someone senior – somewhere – has screwed up.
In this *particular* context, IMHO to decide what to invest in Europe, you need to look at Europe, independent of what you need to do in US.
Either some of the people driving it have misunderstood their task / don’t know enough how to do it, or some of the stakeholders have been allowed to retain their misconceptions (which the people driving it should have forced out before starting).
NCSoft US/Europe(Now West).. failed miserably in:
Not taking care and listening to the community..
Almost no advertising
Looking at numbers instead of player satisfaction
Invested too much on a game that almost everyone could see that it would fail(Tabula Rasa).
Didn’t invest enough in titles like Lineage / Guild Wars.
Possible way to solve what will remain:
More “gamers” are needed in the ranks of the company.. not only “show-off” directors.
Listen to what your paying customers say.
Effectively fight RMT and automated play
Don’t launch new titles while current ones are in urgent need of attention.
Hire proactive staff
Keep customers, clients, partners, stock holders informed.
These are the basics.. everything else will come slowly.. because NCSoft’s name was burnt by everyone.. not only Korea.. Korea is only the usual scapegoat.
Since I begun playing NCSoft titles.. I grew tired of asking for a division between EU and US. Even in support tickets.. you have to wait until the Americans wake up, to get a reply.
American’s only know how to advertise war, coke and movies… they should’ve left the rest to somebody that could do it. The division is extremely necessary.. but when and if they do it.. NC at the US will go bankrupt.. because they even pay less attention to the satisfaction/profit duo.
I don’t think that Arena.net will do anything big for NCWest.. they are possibly camping and waiting for a division.. before they can zerg… You know.. like an Hostile takeover.
Maybe the reinvented Atari would be filling that void… Time will tell.
@Andre – bear in mind that the AN guys would have had little or no direct control over most of the issues you cite, so there is the potential, at least, for things to change drastically under the new regime. For good or ill.
As a side note, I rate them all very highly. I can’t say how well they’ll run a big multi-discipline multi-studio multi-national (apart from Chris, IIRC they’ve all been pure development not publishing to date, and they’ve all been single-studio focussed) – but I certainly have high hopes for them.
Maybe their approaches won’t be appropriate, but they DO know how to run development, and run studios, and make highly-acclaimed, successful games in a very recent market (the Origin folks, for whatever reason, hadn’t shipped an in-house game in a decade – the AN guys have had much much more recent experience). Who knows? But there’s hope.
If anyone can/should take over Europe, it is Jagex. But, as you say Adam, its a great opportunity and I’d be happy to sign up!
[…] Martin breaks down the (not very) hidden subtext behind the recent NCsoft ‘restructurings’. All this waffle about becoming “a unified organization under NC West”, and the reporting by […]
> American’s only know how to advertise war, coke and movies
To be fair, we Americans are also quite excellent at bashing reflexively socialist, anti-entrepreneurial Europeans.
I still find it hard to believe that anyone in NC Europe or Austin didn’t see this coming. It was pretty obvious to me, back in May/June even, that chances were pretty good that Arena.Net was going to be calling all the shots, and the reason that entire departments weren’t slashed immediately was to maintain service continuity until they could build redundant service departments in Seattle.
Obviously they couldn’t hide that kind of hiring within their existing GW2 and “other project” budgets, so they needed to push for NC West to happen.
For better or worse, the feeling I’ve always gotten from ArenaNet is that they would prefer to build everything themselves, in house, and that they are pretty sure they can do it better. I won’t comment on the veracity of that position, but as they say, it’s only arrogance if you can’t back it up with action. When you can, it’s bravado.
The thing that bothers me the most about the way things have gone down with this is that it feels like the failure of TR on the development side was a stone unfairly tossed around the neck of NC Austin on the publishing side, and they didn’t deserve it. From my experience, the ops and support organization in Austin was very good at what they did. I think the baby was thrown out with the bathwater here, and it’s not hard to connect the dots and see why, either.
Excellent point about Europe needing a strong game publisher. Also agree that NCSoft missed the boat. Isn’t Britain the #2 gaming market in the world now, supplanting Japan (can’t find the link right now, but I read that a few days ago)?
jinstevens – I think you’re thinking of this -> http://www.mcvuk.com/news/33184/UK-industry-off-to-a-flyer-in-2009
Speaking as a CoH EU player, I’ve found this to be something of a disaster. Our last community rep has lost his job, there haven’t been French or German reps for months, and now there’s NO-ONE left to mod the EU CoH forums.
One of the things that’s disappointed the players the most is the lack of statements to them regarding what’s going to happen with the EU servers, forums and characters. Will things continue as before with new reps working in the USA now, will we be merged into the USA servers, or will everything go the way of Tabula Rasa? Nobody knows, and it seems NC is still deciding.
We understand that these things can’t be decided immediately. A lot of NC Europe’s staff have been offered new positions in the USA and they won’t be able to make any decisions until they know what staff they retain. But the fact that nobody has been able to set the players minds at rest with just a vague statement makes this look, to some of us, like a rush job and a snap decision. Had this been planned more throughly, there would have been prepared statements to keep the fans content, but instead its caught a lot of NC staff by surprise and we players feel forgotten in the chaos. But hey, I’ve never worked at a MMO company, so what do I know…
Of course, any inconvenience the fans feel is going to pale in comparison to the staff who just lost their jobs. My condolences if you’re reading this.
Having been peripherally involved with NCSoft for about 4 years, I have to say it’s about time. Of course, moving slowly was always what NC West was best at, so it’s not particularly SURPRISING it took this long to reorganize. I’m very curious to see how the Arena.net team does at this.
It disappoints me to see NCSoft’s portfolio shrink even further; it means there’s a lot more pressure on their remaining studios and employees to deliver faster and more reliably. I worry that this means we won’t be seeing as much innovation in their individual titles because they have less of an opportunity to let ‘safe’ titles like a Lineage sequel carry the bottom line while they try new things.
Having the management team be a group of people with common backgrounds and viewpoints seems like a good idea, and the ANet leadership have a pretty solid track record, but it’s kind of disappointing that they decided to take one leadership monoculture and replace it with what is essentially another leadership monoculture.
If they make all the right decisions, it probably won’t matter – but it seems pointless to throw out all of the previous leadership experience and expertise that they had on board in the past, on what seems to be the basis of a single failure (TR). Seeing NetDevil and Cryptic Studios move on makes me worry that they’ve given up entirely on having a wide set of varied studios, though I can’t really speculate as to what went on behind closed doors in either case.
I have infinitely more faith in the ArenaNet alumni, than I do in previous leaders of NCSoft.
I wonder if ANet will oen day develop and re expand the portfolio to include console/multi plat games. It would be nice if GW2 was a multi plat product indeed seeing as most game development is going that way. A Multi plat MMO which is seamless could be exciting indeed.
[…] “All this waffle about becoming a unified organisation under NC West, and the reporting by bloggers and journalists that this was consolidating the subsidiaries and offices (they were already consolidated, you know) … what a load of crap,” he commented on his blog. […]
To the NCsoft Europe employee who took the time to rate this post as “1/5 stars”, it might be more helpful if you actually commented here with whatever your issue was ;).
[…] the end of my commentary on the formation of NC West, I added almost as an afterthought a little comment about Europe and the MMO industry: there’s a […]
[…] from T=Machine wrote a good article about the latest NCSoft/NCWest re-structurs: NCWest: Stage 1 complete; Farewell, European MMO Industry! After reading it you can rather easily predict the future and (failing the way to) success for […]
[…] back through lay-offs and retrenchments, with up to 60 coming out of Europe. Some described it at the end of NCsoft MMO development in Europe. Ex-Origin heads of NCsoft West (the Garriot brothers, Peter Jarvis) were forced out in favour of […]
[…] high profile for it to survive a mediocre launch. Further, there seems to be some ever enjoyable political reasons for the game's demise; the new guard often wants to clean out any reminder of the old […]