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Silicon Knights confirms layoffs

Tue 01 Nov 2011 8:01am GMT / 4:01am EDT / 1:01am PDT
Development

Canadian developer cuts workforce following cancelled project

Silicon Knights

Silicon Knights® is a guild of talented individuals dedicated to creating groundbreaking video games....

siliconknights.com

UPDATE

Too Human developer Silicon Knights has confirmed it has drastically cut headcount, letting 45 members of staff go.

The Canadian developer blamed a cancelled project for the redundancies, which it said had been shelved "at the final second."

"We just finished a project with [Activision Blizzard] that got completed," Mike Mayes, CFO, told The Financial Post.

"We had another project lined up that had been in the works for months, which had been green-lit and at the final second, at the high corporate level, the project got cancelled. We don't know why. Probably something to do with the publisher on their side, but that resulted in us having too many people so we had to do a layoff."

Yesterday unconfirmed reports suggested that up to 75 members of staff had been let go at the studio.

Original story

Canadian developer Silicon Knights has laid off 75 per cent of staff, according to a new report.

Two separate sources have told 1UP that only 25 staff remain at the Too Human developer, which most recently completed work on X-Men: Destiny for publisher Activision.

The company has received multiple handouts from the local government in the region, and most recently secured CAD $3 million in funding to kick off a self-publishing drive and recruit a further 80 members of staff.

GamesIndustry.biz has contacted Silicon Knights for further comment.

30 Comments

Harrison Smith Studying Games and Graphics Programming, Royal Melbourne Institute of Technology

75 4 0.1
Someone is taking those grants and running, I think the Canadian government should get onto who ever is at Silicon knights and find that money before its gone. I have a feeling that its probably in a Swiss or Bermuda bank account by now.

Posted:3 years ago

#1
sounds suspekt doesnt it!

Posted:3 years ago

#2

Martyn Brown Managing Director, Insight For Hire

141 55 0.4
Thats £1.5m, how quickly do you think that got burned through with all those staff, plus studio costs? If anyone has run anyway with anything, it's more likely debt. With 100+ staff, that $3m CAD wouldn't last long enough to support the studio's likely downtime between projects.Right now is not a great time to have a massive, expensive console team in a quickly transitioning industry - even in Canada and the land of the grants and tax-comforts.

Posted:3 years ago

#3
Small is beautiful indeed. With a 20 sized team + outsourcing, I'm sure a good product could have been had..but sufficient to produce new IP between developments

Posted:3 years ago

#4
Support Martyn's comment above here. Some publishers expect you to have a massive production machinery ready, whilst doing a cost-effective pre-production. Such efforts drains the working capital reserves.

The utopia of a small core unit + outsourcing is still not there (as in functional) yet. If it were, you'd have people yelling on 'abusing' contractors and temporary project members vs. permanent staff.

Posted:3 years ago

#5

Nick McCrea Gentleman, Pocket Starship

215 441 2.1
RTW got a $21m investment in Jan 2010, and was bust by August, with several million dollars of debt. Granted, we nearly 300 strong by then and were all sitting around on golden thrones and sleeping in duvets lined by $100 bills, but it goes to show how expensive running a big studio can be.

Posted:3 years ago

#6
One wonders what the projected burn through rate per month is for EA, Ubisoft and Square in Canada....

Posted:3 years ago

#7

Tommy Thompson Studying Artificial Intelligence (PhD), University of Strathclyde

110 0 0.0
Then again, you also have to consider the success of recent releases and how revenue will counter their recent government grants. Too Human didn't perform well, and by the looks of things neither will X-Men: Destiny. Do they have anything else in their portfolio?

Posted:3 years ago

#8

Phil Elliott Project Leader, Collective; Head of Community (Live Team), Square Enix

163 29 0.2
Best of luck to all those affected.

Posted:3 years ago

#9

Pete Leonard , Amiqus

35 8 0.2
Silicon Knights up until recently had a good reputation fro developing solid titles that were critically acclaimed. Eternal Darkness and The MGS remake were considered pretty decent. Too human is what has effectively put them back a few steps and they don't seem to have found their stride again.

That team was getting on for 150 people at it's peak before Too Human came out and they made some redundancies after that. You burn through that kind of money in less than 2 months with that sized team.

Question is - how much money/publisher support did they get from MGS and Activision and how much was self suported for this new project? It could be that something is amiss or it could also be another example of the current generation bleeding you dry if you don't get 2+ million sales.

Been a difficult generation to develop for due to these costs. High end AAA XBLAPSN games are the future for a lot of developers I think - Chair sure did well out of it (and that was before Epic bought them), and Housemarque in Finland have done well with Super stardust and Outland.

I would be very interested to know how Crysis is selling now that it is available for download....

Best of luck to all those that lost their jobs. It's a shame - I loved their earlier titles - I still remember thinking my gamecube ate my ED save game:)

Posted:3 years ago

#10

Lee Burton Studying BSc Games Development, Southampton Solent University

6 0 0.0
I like the fact that no-one has forgotten about that grant money, I'm not sure Silicon Knights like that though.

I wish the best to all the affected staff. I'm certain they'll find similar jobs soon enough.

Posted:3 years ago

#11

Alan Wilson Vice President, Tripwire Interactive

30 52 1.7
VERY rough math usually allows up to $10K per employee per month, which puts their monthly burn rate at something like $1m per month, so it doesn't take long to burn through $3m. On the other hand, if that $3m was just to kick-start self-publishing, then someone should have done a little more due diligence. We bought the IP for Killing Floor, finished the development, self-published the game digitally and in stores globally for less than $3m all up - and we've sold approaching 1m units on PC. Never mind the prior $4m I see they got from the government...

And weren't these the guys trying to sue Epic a while back, or is my memory astray again?

Posted:3 years ago

#12

Thomas Luecking

69 13 0.2
This comes at no surprise for everybody who can do the math... a shame for all the highly skilled people, especially (for me as an outsider) as this seems to be a result of poor project management and underdeveloped business skills...

Posted:3 years ago

#13

Sandy Lobban Founder and Creative Director, Noise Me Up

315 208 0.7
In my own personal opinion.....

65% metacritic review score for too human, isnt going to translate into big sales and pay the bills unfortunately. I would say its more to do with that than any wrong doing with government grants.

Good luck to everyone affected.

Posted:3 years ago

#14
Most likely because of how lame X-Men Destiny ended up being. Very little original thought on that one and sub 50s on Metacritic. They deserve to be dismantled and let the creative go on to better things I think. Maybe the CA gov needs to start putting clauses in their grants "If you are not doing what the money was earmarked for in a year, we're coming to repossess everything" heh.

Posted:3 years ago

#15
Wait till the CA govt becomes like Italy :)

Posted:3 years ago

#16

Patrick Frost QA Project Monitor

407 205 0.5
Silicon Knights have been a high risk style business for a long time. They spend years upon years developing just one game at a time with the hope that it will pay off.

You can't work a business with such an unpredictable market. Even good games sell badly, they should know that.... they made Eternal Darkness.

Posted:3 years ago

#17

Ian Brown IT Developer / IT Infrastructure

107 26 0.2
Well my best go to those who are now unemployed and hope they find new work soon.

Posted:3 years ago

#18
Those laid off: you're talented people, start your own company, regional and national level should get you some grants for starters.

Posted:3 years ago

#19
Martyn, John, glad you came in with those comments. Too many people do not understand how much it costs to run a studio these days and the between project cash burn is huge. And yes publishers expect a full team there when they start but wont commit for months. So the model of keeping the core team always and building a team for the production phase is in reality the way to go because that allows you to preserve profitability and therefore long term jobs and stability. Sucks for the affected people though but unfortunately without a 'sugar daddy' is the way a sensible business has to run.

Posted:3 years ago

#20

Tim Carter Designer - Writer - Producer

582 322 0.6
Now they are all stuck out in St Catherines. What good is that?

If they lived in Toronto, say, some could seriouslycontemplate starting up a new studio in Toronto, or working for another company (if more were to cluster in Toronto).

Southern Ontario needs to get its act together. Either it wants a serious game indsutry or not. If it does, it needs to move in to Toronto.

Posted:3 years ago

#21
Thanks Mark, glad to see you share a similar view.

To various; I don't think Silicon Knights are 'stupid'. They've outlived the average lifespan of most studios already. What's really a shame is that the industry has yet to find a liveable mechanic between professional, dynamic contractors and permanent staff. Movies (not further comparisons please..) did this half a century ago.

Posted:3 years ago

#22
The movie model is NO way a feasible way to make a game product work. its pretty inhumane as well.

Posted:3 years ago

#23
Dr. Chee Ming Wong: Whether it's inhumane it's eye of the beholder I guess... A mid-range production resource will invoice £30k for 2-3 months work on a focused movie production, ready to move on to the next project or even have couple of weeks holiday (god forbid)... On a game many will slowly 'sweat' ditto a year as employees - many times through ineffective waiting caused through crunch.

I'm not saying there would be a massive difference on total money spent, but the mood of the project and the spirit of its resources is very different between the two alternatives...

Posted:3 years ago

#24

Fyzard Brown Sales Associate, VideoGameAdvantage

39 6 0.2
They still owe MS two more Too Human games

Posted:3 years ago

#25

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
I'm not sure MS are too bothered, based on the reception of the first.

I'm confused, they got a grant to help to move to self publishing, but have to make layoffs due to a work for hire cancellation. I'm guessing the self publishing isn't far along?

Posted:3 years ago

#26
I think they dont have the goods for self publishing yet. Looks like its still work for hire or hire us to produce our own work that we think will be awesome. its a high risk gamble indeed

Posted:3 years ago

#27

Liam Stockley Studying Computer Science, Nottingham Trent University

24 0 0.0
What on Earth were they doing with such a high number of staff in the first place?! They haven't put out a truly commercially successful game in YEARS, and with their long development cycles... I just don't even know...

Posted:3 years ago

#28

Neil Alphonso Lead Designer, Splash Damage Ltd

48 17 0.4
Agreed Andreas, I think a 65% MC is quite harsh on Too Human... but that often happens with games that try to be different, and doubly so for those that have a highly publicized and troubled development time.

Alan, as far as I know the Epic litigation is still alive.

Posted:3 years ago

#29
Legal - its one sure way to have too much baggage for game companies...

Posted:3 years ago

#30

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