6waves Lolapps has laid off the development staff at San Francisco-based Lolapps in order to focus on publishing games from outside developers. Development efforts on mobile titles at Escalation Studios, the Dallas-based company they acquired recently, will continue, as will mobile development efforts at their Smartron5 subsidiary in China.
6Waves Lolapps was formed by a merger about six months ago between Hong Kong-based 6waves and San Francisco-based Lolapps; the publisher had focused on social games and recently expanded into mobile games. Approximately 80% of the internal development team has been laid off.
6waves Lolapps recently closed a $35 million funding round from Korean game company Nexon and Insight Venture Partners, which would suggest that a cash flow crunch was not the impetus for the layoffs. Instead, it seems to be a significant strategy shift. "6waves Lolapps will now focus on working with independent developers to launch and grow their mobile and social games," said chief executive Rex Ng. "As a result, we have restructured the company to focus on key functions which include developer outreach, product advisory, user growth initiatives and our publishing platform."
6waves Lolapps was sued back in January by Spry Fox over alleged copyright and trademark infringement over Yeti Town. That game, developed by Escalation Studios and published by 6waves Lolapps after they purchased Escalation Studios, is alleged to infringe on Spry Fox's Triple Town game.
We can expect to see more such strategy changes as the mobile and social markets continue to mature.