Volition to lay off 16 employees

CHAMPAIGN -- Video game producer Volition has notified 16 employees they'll be laid off April 12.

After the layoffs, the downtown Champaign studio will still have about 220 full-time employees, Volition President Mike Kulas said Friday.

Kulas said it's the first time in eight years that Volition has eliminated positions. He said "no further layoffs are on the horizon."

Through the years, Volition has typically increased the head count for video game projects, with recent games involving about 100 people each. But it's expected Volition will need "slightly fewer people on projects in the future," Kulas said.

One factor is that the studio doesn't have to adapt for a new generation of game systems. Microsoft's Xbox 360 and Sony's PlayStation 3 systems have been around five to six years, and no new generation of game system is expected to displace them soon, Kulas said.

Plus, it's been a hard time for the game industry, with the user base not growing as fast as game budgets, he said.

"Certain things we thought would happen did not happen, in terms of taking on additional projects," he added.

The layoffs weren't connected to the completion of particular games, and planning for the cuts began months ago, he said.

"For a variety of reasons, this was the right time to do it," Kulas said. "We didn't want to pull the trigger quickly. We kept people employed as long as we reasonably could."

Kulas said the layoffs are "pretty broad-based," affecting artist, designer, programmer and associate producer positions among others. One person affected has worked there seven years, he said.

It's conceivable those losing their jobs could be hired back, but only if there's turnover and they're qualified for the open positions, Kulas said.

"We don't have plans to increase head count," he added.

But affected employees will be informed of job opportunities that Volition's parent company, THQ Inc., has in other cities.

Volition plans to release its newest game, "Red Faction Armageddon," on May 31. The newest installment of Volition's Saints Row franchise, "Saints Row: The Third," is expected to be out in time for the holidays.

THQ Inc., mentioned both games in its annual report in February, saying the coming year will be driven by "the strongest core games lineup in our history."

THQ also noted it has signed a multiyear agreement with film director Guillermo del Toro to create inSANE, an original trilogy of "Triple-A" titles to be developed by Volition. Del Toro wrote and directed "Hellboy" and "Pan's Labyrinth," among other films.

Del Toro visited Champaign last fall and spoke to Volition's staff, Kulas said. The director has also participated in brainstorming design meetings.

"He plays games. He understands games. He realizes that games and films are not the same thing," Kulas said.

The arrangement has been "a real collaboration, not someone sticking their name on a game," he added. "He (del Toro) reviews materials and has ideas at the same time he's making movies."

Most work with del Toro so far has been geared to the first game in the inSANE trilogy, but the collaborators have also discussed ideas for the second and third games.

THQ hasn't disclosed any projected release for the trilogy.

"Our games historically take two to four years to develop," Kulas said.

The next release "Red Faction Armageddon" is the fourth in the Red Faction series, following "Red Faction," "Red Faction II" and "Red Faction: Guerrilla."

This time game play takes place underground on Mars, "fighting a different kind of enemy aliens indigenous to Mars," Kulas said.

"No one knows what's underground on Mars, so we had creative license to do what we wanted there," he said. "Visually, it's stunning with beautiful locales in which to fight aliens."

As for Volition's parent company, THQ reported a drop in earnings and net income for the quarter that ended Dec. 31, 2010.

The company had a net loss of $14.9 million in that quarter, down from net income of $542,000 in the same quarter a year earlier.

For the first nine months of the fiscal year, the company had a net loss of $92 million, compared with net income of $1.38 million for the same nine months the previous year.

Net sales amounted to $314.6 million during the quarter that ended Dec. 31, compared with $356.7 million during the same quarter a year earlier.

The year also saw a dramatic swing toward domestic sales. An estimated 74.4 percent of THQ's revenue came from domestic sales, while 25.6 percent came from foreign sales.

A year earlier, domestic sales accounted for 63.5 percent and foreign sales for 36.5 percent.

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