Friday, November 3, 2017

CCP's Reorganization And Move Away From VR: What We Know

On Monday, news emerged from Iceland that CCP, the maker of EVE Online and EVE: Valkyrie, planned to make a major change in direction. The news website Icelandic Monitor ( reported that CCP would suspend development of new virtual reality games as well as engage in a major restructuring of the company.
"The Icelandic vi­deo game comp­any CCP plans to launch virtual reality on the shelf for the next 2-3 ye­ars, close its Atlanta office and sell its Newcastle office. Overall, the comp­any's changes will af­fect about 100 empl­oyees of the comp­any by more than 370, of which about 30 in Ice­land. However, their compon­ents will be of­f­ered to move between offices. CCP empl­oyees were notified of the changes today."
CCP's CEO, Hilmar Veigar Pétursson, later on Monday issued the following statement:
"Today we have made tough, but important, changes to CCP in response to how we see the gaming market evolving in the coming years. We have been front and center in the second wave of VR and our belief in the long-term transformative power of the technology remains strong.

"Despite the success of the VR games we have released we will be shifting our focus to our PC and mobile initiatives, and will be centralizing those initiatives, along with the support of our existing VR games, to our offices in Reykjavík and London. We will continue to support our VR games but will not be making material VR investments until we see market conditions that justify further investments beyond what we have already made.

"I am very proud of our VR games and, more importantly, of the people here who made them.

"These changes in strategy come with some tough decisions relating to our overall structure as a company. CCP is in a strong position to make these changes, and we are taking great care to support our departing employees to the very best of our ability. We will be offering relocations to some to our London office where we will be building up our efforts in addition to our development activities in Reykjavík."
In the wake of the announcement, many outlets reported that CCP was cancelling all work on virtual reality games. But as the initial report from Icelandic Monitor indicated, CCP was only suspending work on new VR games for 2-3 years. In a correction, Polygon reported that CCP would continue to maintain both EVE: Valkyrie and Sparc out of its London studio. CCP also posted an update on the near term future of its Newcastle studio on the Valkyrie forums:
"As you may have heard, we announced today that we are working with another company to transition the ownership of CCP’s Newcastle studio into new hands.

"What does this mean for everyone’s favourite first-person spaceship shooter? Well, for starters we can confidently confirm that EVE: Valkyrie – Warzone is not going away. We love the game just as much as we love our players, so you can rest assured that we’ll continue to support the product into the future.

"The development team at the Newcastle studio will remain intact and complete work on the upcoming Winter Update for EVE: Valkyrie – Warzone. So don’t panic! You’ll still receive in-game support for custom matches, tournament tools and a spectator mode before the end of this year.

"Our CEO Hilmar Veigar Pétursson said, 'I couldn’t be more proud of our VR games and, more importantly, of the people here who made them.' This statement rings true for everyone at CCP.

"This is not the end of EVE: Valkyrie, not by a long shot. It’s the just the beginning of a new chapter.

"Welcome to the next life."

In addition to selling the Newcastle studio, CCP is shutting down the Atlanta office, the home of Sparc and CCP's VR Labs research unit. The Icelandic game company established a presence in Georgia by acquiring White Wolf Publishing in 2006. CCP attempted to create a game, World of Darkness, based White Wolf's Vampire: The Masquerade IP in Atlanta, only to shut down the effort in 2014. CCP eventually sold White Wolf to Paradox in October 2015, maintaining a small staff in Atlanta. Monday's announcement marks the end of CCP's presence in North America.

Of note, the announcement also marks the departure of the last former White Wolf employee from CCP. Ned "CCP Manifest" Coker, CCP's Senior PR and Social Media Lead, apparently chose not to relocate from Atlanta and will leave the company after 10 years.

UPDATE - 5 November 2017: I've received word that CCP Manifest was not offered to relocate outside the U.S.

The original announcement also seems to have caused confusion. While the BBC reported the number of layoffs at 30, gaming sites like PCGamer reported the number at approximately 100. I think the key word is "affected". Affected does not necessarily mean laid off. For example, the developers working in the Newcastle studio on EVE: Valkyrie weren't laid off. They will still work on EVE: Valkyrie until the sale of the studio is complete. But at the end of the day, those working in Newcastle will no longer receive paychecks from CCP. Whether they keep receiving paychecks or need to find new jobs depends on whoever purchases the Newcastle studio.

I think a lot of players thought that the changes would not affect EVE. Someone reading the post made by EVE's community manager, CCP Falcon, on the EVE Online forums may have assumed so:
"Just a quick follow up to this, given that there are questions about EVE, and the future.

"Obviously this is a really difficult day for CCP, and it’s been super tough to see a lot of our friends and colleagues end their journey with CCP.

"With regards to EVE, it’s kind of bittersweet that this puts us in a more solid position going forward, as a lot more focus is back on EVE Online, its services and all the technology and support around it.

"The EVE Online development team was not impacted at all by these changes, and remains the same size, working toward the same goals and features that have already been announced.

"We still have very big plans for EVE Online, and everything we’ve announced, plus more, is still going ahead, so there shouldn’t be any concerns from our pilots in that respect.

"There’ll be more information about other projects, studios and suchlike in the coming days, and there’s also communication going out soon to the Valkyrie community too that has further information." (emphasis mine)
But the statement did say that the changes would affect 30 people in Reykjavik, which probably meant 30 people would lose their jobs. While the development team emerged unscathed, the community team was hit hard. After the dust settled, the community team was cut down to two people, CCP Falcon and CCP Guard.

Another group in Reykjavik probably hit hard by layoffs was the group working on Project Nova. With the announcement at EVE Vegas that CCP was working with Sumo Digital to develop the game, some, if not most, of the developers working on the game probably became superfluous. This is just speculation as I did not see any proof of such layoffs on social media.

The last of CCP's studios, in Shanghai, did not receive much attention in the press. The Iceland Monitor article mentioned CCP is looking to work with Chinese companies to produce mobile games. Hilmar stated his belief that complex mobile games will become popular in the West in the next 3-5 years. The little we know about the changes in the Shanghai studio seem to confirm the shift away from game design. CCP Frame, a producer on both Gunjack and Gunjack 2, was one of the people let go on Monday.

I'm not sure exactly what happens moving forward. Speculation is running through some quarters that the venture capitalists who invested in CCP in 2015 are looking for a return on their money sooner rather than later. Others believe that the move to a free-to-play model failed to attract the anticipated revenue, thus requiring the restructuring. Of course, the skeptics of the current wave of virtual reality point to Monday's announcement as proof that VR is bad. All I do know is that the ramifications of the decisions made at CCP's headquarters are just beginning and we need to keep an eye on the news to see how the story ends.

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