On Friday, news hit the Internet that NCSoft laid off a bulk of its workforce on the sci-fi/fantasy MMO Wildstar . A few months back the company transitioned the game from a monthly fee to a free-to-play model. If you're a fan of these types of games, a change in the subscription model sends shockwaves through a game's community as a signal of dire things to come. Leaders take a chance when they change pricing. The hope is that more people will flock to the game now that it doesn't cost anything to give it a chance. However, the unintended consequence is it can cause existing players to flee. Why spend more time investing in a game when it could simply close up shop in the near future?
Last week, the next shoe dropped with the announcement of layoffs. NCSoft claims these layoffs have to do with the game transitioning from a game in development to one in production. I think there's some truth to that statement; however, NCSoft also said some other things that makes these layoffs a bit more ominous. The company cancelled development for a China release, and the statement said these layoffs were also due in part to the game's overall performance since launching in 2014.
Overall performance?
Does anyone think if the game was performing admirably that layoffs of any kind would occur? I don't. I think the writing is on the wall for Wildstar and it's just a matter of time before the entire thing shuts down for good.
The gaming industry, particularly companies in the MMO space should change the way they approach these kinds of things. We know that layoffs send all sorts of negative emotions through the gaming community. But we also know that transitioning from development to production should occur. After all, it takes fewer resources to keep the lights on than it does to install those lights.
Managers at these MMO companies should stock their workforce with contractors. Take a page out of Hollywood where just about everyone who works on a film is a contractor. They may not possess that title, but that's essentially what they are. You never hear about a movie production company laying off staff after a movie is completed. Why? Because they're contractors.
NCSoft should have staffed its development teams with contractors supported with senior developers. If the time comes to "layoff" employees you just let contractors go. Contractors understand, from day 1, that their positions are temporary. Letting go contractors is easier on morale because contracts are just expiring. Managment still controls the revenue stream to keep the company solvent, but at least FTEs (full time employees) are shielded and don't immediately start sending out their resumes trying to jump ship before the final Sword of Damocles falls. Reducing a contract workforce doesn't send negative shock waves through the gaming community either.
Sure, this sounds like semantics and managing a PR management thing. But that's what management is about. It's about using resources to maximum potential, planning a long-term vision for an organization, and doing what's best for all involved stakeholders. Besides, if Wildstar had taken off and become bigger than World of Warcraft, nothing says NCSoft couldn't turn contractors into FTEs to ensure they stick around past their contract end dates, or the company just extends certain contracts.
These things happen outside the gaming industry. The gaming industry should learn from other leaders. It's only good for their bottom lines.