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Vivendi slashes gaming division
Media company lays off 350, shutters studios, cancels line of Hoyle games
June 21, 2004: 5:29 PM EDT
By Chris Morris, CNN/Money staff writer

NEW YORK (CNN/Money) – The ongoing restructuring at Vivendi Universal Games has claimed the jobs of 350 employees – nearly 40 percent of its U.S. workforce - as the French media company shut down its third division in two months.

The company on Monday informed workers at its Bellevue, Wash. studios that the office would close within two months. In addition to the layoffs, the shutdown will result in the cancellation of card and puzzle video games based on the Hoyle license, one unannounced title and the "Print Artist" line of card, banner and stationary creation software.

Blizzard Entertainment, VU Games' top earning developer, was not affected by the restructuring. Separately, however, the developer did announce plans to delay its upcoming console title "Starcraft: Ghost". Though no specific date was given, it is unlikely "Ghost" will be released in 2004.

The job cuts follow the May shutdown of a pair of longtime development studios. Papyrus Studios (makers of the company's "NASCAR" games for years) and Impressions Games (makers of strategy titles, such as "Zeus", "Cleopatra" and "Lords of the Realm III") both had solid track records in the industry but were closed last month because they had not been living up to corporate expectations. The job cuts associated with those closings were folded into Monday's number, said a VU Games spokesperson.

The Hoyle games, while often scorned by gaming enthusiasts, were quite popular with the casual audience. The franchise moved beyond traditional and casino card games to include puzzle, table and chess titles.

For the past year, the gaming division has been somewhat up in the air, with Vivendi (V: Research, Estimates) actively looking for a buyer. It recently decided to retain the division, making dramatic senior management changes. Still, VU Games lost $250 million in 2003, chiefly due to what president Phil O'Neil referred to as "low-quality products."

The closing of the Bellevue offices mark the end of an era in the gaming world. In the early 90s, those offices were the home to one of the industry's pioneering publishers. Going under the name Sierra, developers in Bellevue created and sold top-selling franchises, such as "Kings Quest" and "Leisure Suit Larry". In 1996, the company was sold to CUC International, the first of a string of owners.

Despite the closing, VU Games still plans to use the Sierra name, much like Infogrames Entertainment changed its name to Atari (ATAR: Research, Estimates) in 2003 to capitalize on its name recognition value. Top of page

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