Hmmmm. Maybe this is exactly what EA needs.... Nexon is primarily free to play games... and if they have enough money to buy EA, they must be doing something right....
large artist layoffs and management restructuring. American artists are expensive. They will take more asset creation overseas and replace management with their people.
I'm going to personally hope this is false. Call it part American Nationalisim, part not knowing much about Nexon. Skankerzero's comment also has me concerned.
Nexon is known for being very community 'tight', and having a very 'free' pay model in their scheme of things, while EA is the total opposite of that.
Most likely, on work level, nothing will change, but in terms of Lead and Project Management, I don't know what will happen.
Hehe
I was refering mostly to how they differ in regard to the type of games they make.
Nexon seems to focus on creating a large number of F2P (or P2W as some say) MMO's made on a low budget. Meanwhile, EA focuses on making AAA games, that have massive budgets, high production values and a $60 pricetag.
I was refering mostly to how their differ in regard to the type of games they make.
Nexon seems to focus on creating a large number of F2P (or P2W as some say) MMO's made on a low budget. Meanwhile, EA focuses on making AAA games, that have massive budgets, high production values and a $60 pricetag.
This is what concerns me.
If this is true then I believe Nexon is only going after their ip portfolio and their overseas studios.
If this is true then I believe Nexon is only going after their ip portfolio and their overseas studios.
But then why even buy EA? They will be essentially be paying Premium for a company they will dismantle, and last I checked, assets from companies weren't metal your could smelt and resell at higher value.
But then why even buy EA? They will be essentially be paying Premium for a company they will dismantle, and last I checked, assets from companies weren't metal your could smelt and resell at higher value.
You should look back at every business purchase ever.
If this is true then I believe Nexon is only going after their ip portfolio and their overseas studios.
True, though I'm also worried that if Nexon indeed buys EA they might have their own ideas on what to do with their key franchises; adding an aggressive F2P model or by making MMO versions of them. It might be me, but I have this impression that people who buy EAs and Nexons games are completely different types of customers.
True, though I'm also worried that if Nexon indeed buys EA they might have their own ideas on what to do with their key franchises; adding an aggressive F2P model or by making MMO versions of them. It might be me, but I have this impression that people who buy EAs and Nexons games are completely different types of customers.
You can buy a massive company and still leave the power structure the same, look at Activision Blizzard, did the merge with Activision change how Blizzard manages itself as a studio? Not really, or at least not drastically. Nexon probably sees EA as profitable and there's some studios that they'd love to have control over, and some fat they see could be cut, but largely, they'll keep EA sports, and most of their other studios the same.
You can buy a massive company and still leave the power structure the same, look at Activision Blizzard, did the merge with Activision change how Blizzard manages itself as a studio? Not really, or at least not drastically. Nexon probably sees EA as profitable and there's some studios that they'd love to have control over, and some fat they see could be cut, but largely, they'll keep EA sports, and most of their other studios the same.
DA Sports is probably the only division that will stay the same from the most part. An Asian studio running American sports games is silly.
I don't mean to say that a buyout always means radical changes, but if you look at the stock charts of both companies, it's not too farfetched to think that Nexon might assume that their business model is superior.
EA had been losing money for a while (although they had managed to reduce their losses lately), so any potential buyers might be interested in restructuring.
Plus, Nexon is an Asian company and as far as I'm aware Asia has a totally different corporate culture than the western world. Not sure how it's like in the IT sector, as I'm assuming they might be more open to alternatives than Asian companies that had existed for decades. But regardless, the cultural differences might be enough to cause some odd decisions.
I think EA will do really well once the next wave of consoles come out, they have a lot of strong series that people get tired of, but when you get a console you have to restock up on those series, burnout, need for speed, sports games, skate, etc
Pretty crazy news. The rumor about the layoffs that were supposed to happen last week never happened (as far as I know), and this seems a lot more "rumor-y" than that. Not like this sort of thing is unheard of, but I would be genuinely suprised. It's really not a combination of companies that instantly makes sense. I guess time will tell.
Nexon's market cap is around $8 billion, and their CEO owns over 50% of the stock. Float is around $1.5 billion. If they did a stock-for-stock deal for EA at $20 (very unlikely that this would be the price), they would have to issue shares bringing their market cap to $14 billion (assuming they hold their price, also very unlikely), and the CEO's stake would drop to around 30% of the combined entity.
Reasons this won't happen:
1) The CEO will not give up control
2) EA shareholders won't take Nexon shares, because they would likely drop a ton when the float goes from $1.5 billion to $8 billion
3) EA management would recommend against an offer below $25 (where stock traded in October in a weaker market) and likely would reject an offer below $30
4) Nexon would be the acquirer, and would attempt to run a company with $6 billion in revenues that is in mobile, social, MMO and packaged goods, all things Nexon has never done before, at a size 4x their current size
5) EA management would NOT be in control, so the potential for a loss of key employees is huge
6) There are few, if any synergies, and no reason to believe that Nexon could run EA's assets more efficiently. Nexon shareholders would own a completely different company than what they bought in the December IPO
4) Nexon would be the acquirer, and would attempt to run a company with $6 billion in revenues that is in mobile, social, MMO and packaged goods, all things Nexon has never done before, at a size 4x their current size
ummm, isn't ALL of Nexon mmo's?? f2p, but still mmo's...
large artist layoffs and management restructuring. American artists are expensive. They will take more asset creation overseas and replace management with their people.
Ah, ya I just read that after I posted. That's too bad for the Montreal people. It's possible there have been layoffs in other studios as well that were just never reported. There have been fairly large layoffs/reorganizations here in Van (50+ people affected) that have gone unnoticed, so it's hard to know exactly what's going on.
Srsly though, I think the IP acquisitions alone would be totally worth it. Everything else barring sports would be restructured horrendously in favor of Asian markets and developers. EA has some pretty damn good RPG's and plenty of games that could be uhh, MMO-ified for foreign markets, not to mention all of their other shelved IP's at their disposal. I even excluded their current line up of MMO's as well, since those can be ported over into more accessible F2P models, again for overseas markets. The brands are well known and a lot of the foot work for stories, gameplay and situations has been figured out. The door will be there for anyone [everyone] else not needed to sustain those IP's or aid in the transition over to other markets. Sorry guys, lol
What I REALLY think happened though is that there was indeed interest in a takeover and calling it out immediately would naturally raise EA's stock price, making it more difficult to buy out with markedly higher valuations. It's EA's way of saving its own ass.
India and Russia and some spots in China are the new hot spots for outsourcing game art.
Maybe now, but last I heard, China was catching up in that area, and Russia can be hardly considered cheap anymore...maybe you do save some cash, but when you're barely saving more then what it take you to air a TV-ad during Super Bowl, things stop having their advantage at this rate, it becomes chump-change for big companies
In about a couple of years, outsourcing will lose it's 'cheapness', especially for games, not sure about India, but if everyone starts throwing their weight over there, then people won't have an option but to keep in in-house, which honestly, is better for quality.
Now 'Outsource Programming'...there is something that should keep things interesting if anyone every goes for it.
I'm not sure about the cheapness period of India and China is going to be short.We're talking about almost 1/3 population of the world.It would be way more harder to become less cheaper in the long run compared to Korea that is a developed country with only 50million population.In the next couple years there might some real huge changes in the industry,thought.I mean you know what happened when China started to use their cheap labor force power and drastic changes in industrialized western world.3d art is more specific branch but it seems they're now getting better on it maybe?
In my (very limited) experience, outsourcing was mainly used as a way to avoid staffing-up and then staffing-down during a project. Instead of hiring a bunch of people, having them crank out work for 6 months, then letting them all go, we just outsourced all that stuff. At one point we had around 100 people working on our project in outsourcing studios for about 2-3 months. It would be insane to hire that many people and let them go afterwards.
So yeah, I don't know what other people's experience has been with outsourcing, but for me it's been as a way to get around staffing issues rather than save money. When it comes to money, I always heard it said that you get what you pay for. So they actually preferred to pay more and get higher-quality stuff.
DA Sports is probably the only division that will stay the same from the most part. An Asian studio running American sports games is silly.
well, tons of the fifa, nba & co assets are already made there. made in USA with parts made in China
Now 'Outsource Programming'...there is something that should keep things interesting if anyone every goes for it.
already happening.
Outsourcing game design - already happening aswell. We do it for AAA titles and our US/Canadian clients are happy. The players were too with the last title where we designed levels. There was even a thread on PC (Not sure if the client wants to mention they used outsourcers, so I won't drop names). And the stuff we're working on now? You'll be happy once next gen consoles are there, trust me!
We're getting outsourcing jobs from about 10 of the 14 biggest publishers, mostly US/EU based, everything from A to AAA. So you can guess which names would be on that list.
We also do stuff for movies nowadays - go see Avengers! ..or Battleship. And I hope you guys have seen Mission Impossible 4 or Rango.
Outsourcing is happening a lot, but if you're not involved in it directly in your studio, you probably don't know about the scope of it. Let me say, it's not just boxes and crates any more.
In my (very limited) experience, outsourcing was mainly used as a way to avoid staffing-up and then staffing-down during a project. Instead of hiring a bunch of people, having them crank out work for 6 months, then letting them all go, we just outsourced all that stuff. At one point we had around 100 people working on our project in outsourcing studios for about 2-3 months. It would be insane to hire that many people and let them go afterwards.
So yeah, I don't know what other people's experience has been with outsourcing, but for me it's been as a way to get around staffing issues rather than save money. When it comes to money, I always heard it said that you get what you pay for. So they actually preferred to pay more and get higher-quality stuff.
It's much cheaper when you take into consideration that you don't have to pay benefits to those employees.
On Star Wars: Kinect (my most recent exp with outsourcing), almost all the vehicles were outsourced to India and came back at excellent quality. When looking at how much they cost, it was easly 1/4th than what most artist salaries were here.
And they produced them faster.
The issue that people run into with outsourching is that they usually send them the wrong things. You should never send outsourcers anything that is overly technical, engine or gameplay specific, or art that needs daily art direction (ex: likenesses). Especially if it's a non native tongue speaking studio.
You send them the grunt work and things that are off in the background.
Of course, in the exact same example I stated above, they sent them the vehicles that were overly complex and had very engine specific requirements. So who was left to fix them all? Me of course, but the initial models were really high quality.
Don't get me wrong, I've had my fair share of run ins with shitty outsource art too, but if it's planned out properly and kept track of (ex: skype desktop sharing), it's a great resource.
You should never send outsourcers anything that is overly technical, engine or gameplay specific, or art that needs daily art direction (ex: likenesses). Especially if it's a non native tongue speaking studio.
That's exactly what we're doing for our clients. We're like an in-sourcer to them. We access their Engines, their Perforce, we do have daily art briefs and ongoing communication.
Just as you would talk daily with your own in-sourcing studio you should talk with the outsourcer. If you treat your outsourcer as "fire and forget" solution you're doing it wrong. Then it's also no surprise why you get the feeling you cannot give them anything serious. Just think about it. You talk to your local artists once a week or every 2 weeks and you'll get crap too.
I think some management people see outsourcing through the rose colored goggles. Outsourcing is not a fire and forget solution where everything gets magically taken care of.
Instead you must work WITH your outsourcer - that's where you get the most bang for the buck of this relationship. It's really just like freelance. If you're the client that goes "I dunno, just make something cool!" then you shouldn't wonder if you're not exactly getting what you're asking for. So if the assets of your outsourcers suck, maybe the problem ain't the outsourcer but your studio and how you communicate and utilize the services you're paying for.
Fortunately our clients know better. We have some western people here, but we also have a lot of Chinese and communication with our clients is a top priority here, so we know we're on the right track. To some clients we talk daily and to others every few days. Some clients even visit us so we can work together and make sure we follow all their QA steps and workflows. That's how I think it should be. If your outsourcer does it differently, you might want to change that.
That's exactly what we're doing for our clients. We're like an in-sourcer to them. We access their Engines, their Perforce, we do have daily art briefs and ongoing communication.
Just as you would talk daily with your own in-sourcing studio you should talk with the outsourcer. If you treat your outsourcer as "fire and forget" solution you're doing it wrong. Then it's also no surprise why you get the feeling you cannot give them anything serious. Just think about it. You talk to your local artists once a week or every 2 weeks and you'll get crap too.
i agree with you. Most studios don't put forth the effort.
I was pretty much the character lead and character outsource manager on Ghostbusters, and that pipeline was very smooth. Of course I put in the extra effort to be at the studio when the Chinese studio was working. That meant many long nights on Skype giving feedback.
Most studios don't want to put that type of effort forward though. They just like to complain about outsourcing.
Replies
Are you serious! 5 billion Cap and Nexon is able to bid ontop of that?!
Err...yeah...I will take it with a pinch of salt, on the overall scheme of things, I must say, I'm amazed. I knew EA was doing bad, but THIS bad?
New management usually always leads to layoffs.
It would be interesting if this follows through.
probably can do it!
It seems that their business models are polar opposites.
Still, that would be one of the biggest things to happen to the industry in a while.
large artist layoffs and management restructuring. American artists are expensive. They will take more asset creation overseas and replace management with their people.
Nexon is known for being very community 'tight', and having a very 'free' pay model in their scheme of things, while EA is the total opposite of that.
Most likely, on work level, nothing will change, but in terms of Lead and Project Management, I don't know what will happen.
But I guess we'll have to wait and see.
Hehe
I was refering mostly to how they differ in regard to the type of games they make.
Nexon seems to focus on creating a large number of F2P (or P2W as some say) MMO's made on a low budget. Meanwhile, EA focuses on making AAA games, that have massive budgets, high production values and a $60 pricetag.
http://www.polycount.com/forum/showpost.php?p=1574245&postcount=113
This is what concerns me.
If this is true then I believe Nexon is only going after their ip portfolio and their overseas studios.
You should look back at every business purchase ever.
True, though I'm also worried that if Nexon indeed buys EA they might have their own ideas on what to do with their key franchises; adding an aggressive F2P model or by making MMO versions of them. It might be me, but I have this impression that people who buy EAs and Nexons games are completely different types of customers.
You can buy a massive company and still leave the power structure the same, look at Activision Blizzard, did the merge with Activision change how Blizzard manages itself as a studio? Not really, or at least not drastically. Nexon probably sees EA as profitable and there's some studios that they'd love to have control over, and some fat they see could be cut, but largely, they'll keep EA sports, and most of their other studios the same.
DA Sports is probably the only division that will stay the same from the most part. An Asian studio running American sports games is silly.
I don't mean to say that a buyout always means radical changes, but if you look at the stock charts of both companies, it's not too farfetched to think that Nexon might assume that their business model is superior.
http://in.reuters.com/finance/stocks/chart?symbol=3659.T
http://in.reuters.com/finance/stocks/chart?symbol=EA.OQ
(edit: Look at the 5-year long period)
EA had been losing money for a while (although they had managed to reduce their losses lately), so any potential buyers might be interested in restructuring.
Plus, Nexon is an Asian company and as far as I'm aware Asia has a totally different corporate culture than the western world. Not sure how it's like in the IT sector, as I'm assuming they might be more open to alternatives than Asian companies that had existed for decades. But regardless, the cultural differences might be enough to cause some odd decisions.
they're only starting
http://www.polycount.com/forum/showpost.php?p=1574245&postcount=113
change it to F2P.
http://www.gamesindustry.biz/articles/2012-04-26-ea-to-be-bought-by-nexon-why-the-deal-cannot-happen-according-to-pachter
ummm, isn't ALL of Nexon mmo's?? f2p, but still mmo's...
Korean artists aren't cheap anymore.
They're ridiculously good though.
Remember that time when they were invited to Dominance War 3, and placed as 8 of the top 10 concept finalists.
http://www.gameartisans.org/dominancewar/3/index.php
The Simpsons are also no longer animated in Korea due to high production costs.
India and Russia and some spots in China are the new hot spots for outsourcing game art.
Ah, ya I just read that after I posted. That's too bad for the Montreal people. It's possible there have been layoffs in other studios as well that were just never reported. There have been fairly large layoffs/reorganizations here in Van (50+ people affected) that have gone unnoticed, so it's hard to know exactly what's going on.
Srsly though, I think the IP acquisitions alone would be totally worth it. Everything else barring sports would be restructured horrendously in favor of Asian markets and developers. EA has some pretty damn good RPG's and plenty of games that could be uhh, MMO-ified for foreign markets, not to mention all of their other shelved IP's at their disposal. I even excluded their current line up of MMO's as well, since those can be ported over into more accessible F2P models, again for overseas markets. The brands are well known and a lot of the foot work for stories, gameplay and situations has been figured out. The door will be there for anyone [everyone] else not needed to sustain those IP's or aid in the transition over to other markets. Sorry guys, lol
What I REALLY think happened though is that there was indeed interest in a takeover and calling it out immediately would naturally raise EA's stock price, making it more difficult to buy out with markedly higher valuations. It's EA's way of saving its own ass.
In about a couple of years, outsourcing will lose it's 'cheapness', especially for games, not sure about India, but if everyone starts throwing their weight over there, then people won't have an option but to keep in in-house, which honestly, is better for quality.
Now 'Outsource Programming'...there is something that should keep things interesting if anyone every goes for it.
Theme Hospital!?
So yeah, I don't know what other people's experience has been with outsourcing, but for me it's been as a way to get around staffing issues rather than save money. When it comes to money, I always heard it said that you get what you pay for. So they actually preferred to pay more and get higher-quality stuff.
Nexon has stated an interest in buying mobile developers: Bloomberg link
Would they really buy EA just to get Popcap and Playfish?
well, tons of the fifa, nba & co assets are already made there. made in USA with parts made in China
already happening.
Outsourcing game design - already happening aswell. We do it for AAA titles and our US/Canadian clients are happy. The players were too with the last title where we designed levels. There was even a thread on PC (Not sure if the client wants to mention they used outsourcers, so I won't drop names). And the stuff we're working on now? You'll be happy once next gen consoles are there, trust me!
We're getting outsourcing jobs from about 10 of the 14 biggest publishers, mostly US/EU based, everything from A to AAA. So you can guess which names would be on that list.
We also do stuff for movies nowadays - go see Avengers! ..or Battleship. And I hope you guys have seen Mission Impossible 4 or Rango.
Outsourcing is happening a lot, but if you're not involved in it directly in your studio, you probably don't know about the scope of it. Let me say, it's not just boxes and crates any more.
It's much cheaper when you take into consideration that you don't have to pay benefits to those employees.
On Star Wars: Kinect (my most recent exp with outsourcing), almost all the vehicles were outsourced to India and came back at excellent quality. When looking at how much they cost, it was easly 1/4th than what most artist salaries were here.
And they produced them faster.
The issue that people run into with outsourching is that they usually send them the wrong things. You should never send outsourcers anything that is overly technical, engine or gameplay specific, or art that needs daily art direction (ex: likenesses). Especially if it's a non native tongue speaking studio.
You send them the grunt work and things that are off in the background.
Of course, in the exact same example I stated above, they sent them the vehicles that were overly complex and had very engine specific requirements. So who was left to fix them all? Me of course, but the initial models were really high quality.
Don't get me wrong, I've had my fair share of run ins with shitty outsource art too, but if it's planned out properly and kept track of (ex: skype desktop sharing), it's a great resource.
man anyone play Kart Rider or bubblepop (i think it was called)
I spend sooooooooo much time on those games haha
That's exactly what we're doing for our clients. We're like an in-sourcer to them. We access their Engines, their Perforce, we do have daily art briefs and ongoing communication.
Just as you would talk daily with your own in-sourcing studio you should talk with the outsourcer. If you treat your outsourcer as "fire and forget" solution you're doing it wrong. Then it's also no surprise why you get the feeling you cannot give them anything serious. Just think about it. You talk to your local artists once a week or every 2 weeks and you'll get crap too.
I think some management people see outsourcing through the rose colored goggles. Outsourcing is not a fire and forget solution where everything gets magically taken care of.
Instead you must work WITH your outsourcer - that's where you get the most bang for the buck of this relationship. It's really just like freelance. If you're the client that goes "I dunno, just make something cool!" then you shouldn't wonder if you're not exactly getting what you're asking for. So if the assets of your outsourcers suck, maybe the problem ain't the outsourcer but your studio and how you communicate and utilize the services you're paying for.
Fortunately our clients know better. We have some western people here, but we also have a lot of Chinese and communication with our clients is a top priority here, so we know we're on the right track. To some clients we talk daily and to others every few days. Some clients even visit us so we can work together and make sure we follow all their QA steps and workflows. That's how I think it should be. If your outsourcer does it differently, you might want to change that.
i agree with you. Most studios don't put forth the effort.
I was pretty much the character lead and character outsource manager on Ghostbusters, and that pipeline was very smooth. Of course I put in the extra effort to be at the studio when the Chinese studio was working. That meant many long nights on Skype giving feedback.
Most studios don't want to put that type of effort forward though. They just like to complain about outsourcing.