“Massive” Social Gaming Layoffs Predicted For 2012

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An executive at games-on-demand provider Exent says the online social gaming industry is overcrowded and will face “massive layoffs” in 2012.

The social gaming scene has always been kind of a mess. On one hand, you had Square Enix proclaiming that social gaming is the future; a few months later, PopCap declared that the golden era of social gaming is over. A little over a year ago, Scott Jon Siegel urged game designers to embrace the potential of the social arena to create “unanticipated golden poo,” but gamers complain that most of it is just, well, poo. In May, Silicon Knights boss Denis Dyack predicted that once all the hubbub died down and people actually started looking at the non-existent bottom lines, funding would dry up and the social gaming development scene would be brought back down to Earth with a resounding thud.

It’s a bit late to count as “joining the chorus” but Rick Marazzani, the head of content programming at games-on-demand provider Exent, recently echoed the sentiment with his own statement warning of deep cuts looming at all but the most deep-pocketed studios.

“With multiple hit games and big marketing budgets needed to stay afloat at the top of the Facebook game charts, many social publishers simply weathered 2011 waiting to see what Zynga’s IPO would foretell for their own futures,” he told Develop. “Faced with the reality that there are too many people working on too many games for the market to bear, social developers will be forced to place smarter and fewer bets as user acquisition cost and competition grows.”

Marzzani pointed out that Zoo World developer RockYou laid off 55 employees in November – 40 percent of its staff – and was also recently forced to sell the Playdemic studio, which it only acquired in January, back to its founders after profits took a sharp drop.

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