EA local jobs safe... for now

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 10 Feb 2009

Electronic Arts in SA will not close down or cut jobs - at least for the time being. The video game developer's South African offices seem to be buffered from the international financial crisis, which has caused the parent company to axe more than 1 100 staff and close 12 facilities in the US.

EA SA marketing manager Pino Dibenedetto says it is business as usual for the distribution wing in SA. He says the proposed job cuts in the US would not have any effect on EA's involvement in this country.

“Yet business is business,” Dibenedetto adds. “And there is no guarantee what might happen in the next six months.”

Recent reports state EA would lay off more than 1 100 employees, or 11% of its workforce. As a part of its cost-cutting measures, 12 developing and distribution facilities would be closed down in order to save more than $500 million (R4.8 billion) in operating expenses by 2010.

Avalanche Studios and Microsoft Game Studios were two other US gaming companies rocked by the $1.27 billion (R16.4 billion) decline in annual gaming sales for 2008 and had to let go of more than 80 and 5 000 employees, respectively.

Resilient SA gaming

MFP group marketing director Ian Hepplwhite says the South African gaming industry is resilient in the face of an impeding recession. MFP is the holding company for MI Digital, which distributes Microsoft Xbox 360, Sony PlayStation, Nintendo Wii and PC games.

“If you look at the numbers last year, Xbox 360 grew its sales by 48%, making it the best-selling console over the holidays,” says Hepplwhite. “And if you combine this with the rise in flat screen TVs, it shows that a lot of families are investing in home entertainment.”

Microsoft Xbox/Games for Windows product manager John Press concurs with Hepplwhite and says family home entertainment is among the many theories which support the notion of a burgeoning gaming industry in SA.

“The numbers of sales that we are seeing seem to buck the trend globally,” he says. “Instead of a decline in sales, we are actually seeing the opposite.”

Low on stock?

Microsoft also quashed reports it had run out of stock of its Xbox consoles due to an impending price increase. Media reports stated shoppers were finding it difficult to locate consoles at retailers such as Musica, Look & Listen and Incredible Connection nationwide.

“The low levels of stock are due to an extremely good marketing campaign,” explains Press. “Of course, we are not happy with the situation, but more stock is on the way this week and we should see a replenishment of consoles.”

Press adds that the current economic climate has made it difficult to forecast the stock levels that should be kept. Microsoft says the local gaming market seems to be counter to the global market, where recent job cuts by developers such as EA have played down the belief in a recession-proof gaming market.