Dan O'Leary, founder of Florida-based Nintendo Wii and DS developer n-Space has written an impassioned blog post
following reports of layoffs at the studio last week.
"After supporting 70-90 employees for several months without funding," he wrote, "Friday's layoffs were unavoidable. I will be back in the office next week, along with our core team, to firm up a few of the many deals we are negotiating. If all goes as planned, we’ll be calling people back before the end of the week."
The studio, whose recent developments include Marvel: Ultimate Alliance 2
on Wii, DS and PlayStation 2, Call of Duty: Black Ops
and Toy Story 3: The Video Game
on DS, has been struggling this year due to problems in the economy and disruption caused by Apple's App Store, according to O'Leary.
"The games industry is, frankly, a mess," he wrote. "The economy has robbed customers of disposable income, reducing the number of titles that purchased per year. Huge-budget titles have to sell massive numbers to return a profit and the App Store has disrupted our industry in the same way iTunes changed consumer expectations for music."
"People that used to buy many games every year now buy a few AAA titles, supplementing their need with games that are free or cost less than a pack of gum," he continued. "Anything in the 'middle' is struggling. The Wii and DS markets have nearly collapsed and 3DS is a brave new world the publishers are excited about but also very cautious to enter. Even for an extremely successful Wii/DS developer like n-Space, with a long history of delivering quality titles on time and on budget, this creates a very challenging business environment."
N-Space is shipping seven titles this year, according to O'Leary, in addition to an iOS game set for announcement this week. Despite this success, a "last-minute change of heart" from one publisher placed the company in a position where layoffs were unavoidable.
"We’ve worked tirelessly to secure work," wrote O'Leary, "preparing literally dozens of concepts and proposals this year alone, built two impressive demos since E3 and even delivered, in good faith, the first milestone of one of the projects we are pursuing."
"Last week it looked as though all that hard work would finally pay off, with one deal 'done' and several more soon to follow. Then, with a last minute change of heart from the licensor, that deal was dead. When the week ended without commitments from other publishers to offset this setback, I was forced to take drastic action."
Finally O'Leary praised the hard work and professionalism of his "talented" and "creative" staff saying that he "looks forward to sharing their future accomplishments with you."