Biz Daily: Why did GREE sack 30% of its SF office?

[Music] [Applause] [Music] hello and welcome to Biz daily I'm John Jordan so today the big news is that gree has laid off 30% of its San Francisco office so gree is one of the big Japanese Mobile gaming platforms that uh over the last couple of years has kind of spent a lot of the money that it was accumulating in the Japanese fut phone market um expanding West and San Francisco has been its kind of key International headquarters where it's had a lot of development staff and it's had a lot of um kind of sales and marketing and that kind of support stuff um so not quite sure they've not announced how many numbers of people have been been laid off but if it's a third of what has been a pretty big Studio it could be three into three figures obviously being laid off is not is not pleasant for anyone um and they apparently went through the proper um go to the small room being told you laid off walk back to your desk pick up your stuff and off you go um the only kind of

upside is under California nor you get kind of two months of uh of kind of salary so they've got kind of a bit of kind of uh money in hand to um kind of sort themselves out and the kind of other good thing is San Francisco is is the best place um in a sense to be laid off from a mobile gaming company because there's so many Mobile gaming companies in San Francisco you know everywhere on in the world when they have an international office and they have it in San Francisco so it's a kind of a boom area still whether whether you know up to 100 people can be absorbed in that way is difficult as always um kind of some people will kind of Imagine Le the industry um but maybe it's kind of interesting to look back at kind of kind of how G got yourself into this situation so um as we've said before um GRE was was very very successful in um in the Japanese feature phone market which was a bit more in between what we would call a smartphone and a feature phone um so kind of four or five years ago G was um was generating you know over a billion dollars a year very very profitable and they started using that money to expand so they bought some other um developers in Japan um and it

bought some companies in the US so um open fate was one of the companies it bought and then it also bought another company called funzio open fate was a more kind of social gaming platform company it wasn't a developer funzio was a developer of some of the early freet to-play iPhone games that were very successful and that's kind of how the San Francisco Studio came about um so that's kind of some of the kind of uh the people who've been kind of laid off today come from those teams um and equally um G has been going through um a a kind of a generally restructuring so over the last couple years it's lost quite a lot of teams in Japan um it kind of a couple years ago posted um over $50 million um kind of write down it cancel a whole bunch of games um just been trying to focus on proper smartphone games so so iPhone and Android games it's been very difficult for it because it's been so successful in the in the Japanese Market which is quite different to other kind of markets in terms of technology and in terms of kind of user and game and games at work and um kind of monetization so it's had

a kind of problem taking that kind of expertise and being successful globally there's a book called The innovators dilemma which is very good at kind of explaining why some companies that regular some things are not regular doing things that should they seems like they should be been good at um GRE unfortunately has been almost kind of in some ways disastrous in this expansion so it tried to set up a Sho in London um and that got I mean that got fairly big and that got shut down um without releasing a game um earlier this year in May it shut down its Vancouver development Studio and now it's lost a third of its San Francisco studio um I guess on the on the positive side um companies need to restructure they can't just kind of keep losing money and I guess that was probably for people working at G it's a company now that's um it's still a big company still probably have um sales of $800 million this year mainly from Japan but it's not um not profitable it's kind of borderline kind of loss making so it's very D dangerous when you're working for a company that's not doing very well in terms of profitability that always means restructures is likely to be on the cards um so I guess the good

sign for GRE is they've still got um 60% or 70% I suppose of the of of the studio at San Francisco um and some of those will be teams working on new games um and I guess it's kind of games is where it really matters for greed so it hasn't really had a big hit in the west um in the last couple of years really um so um the games are kind of still making money for it internationally have been the games from say company like funo which he bought a number of years ago had a game called Modern War and a few other games that have been that been successful for number of years but G's not had really had that kind of big breakout hit in recent years and I guess that's what they'll be looking to do so kind of focus down their teams kind of restructure um kind of concentrate the good skills it has um and and then kind of kind of reinvent itself and kind of rebound so I guess that's what we we'll be looking to see um in in the in the coming months um and towards the end of this year is how how this reorganization has kind of hopefully helped G as a company um kind of reinvigorate itself um so obviously never not not nice for the people who'

have been laid off um but um as we say hopefully um in a couple of months time everyone will feel a bit happier about the news that um currently today doesn't feel like very happy music at [Applause] all