Japan’s Gree lays off 30% of Western staff [update]

Update 10:04 a.m. Pacific: Gree’s Andrew Sheppard has confirmed layoffs of 30 percent of the San Francisco staff.

Gree has laid off about 30 percent of its staff across its entire Western subsidiary, Gree International. That’s one of the consequences of the Japanese company failing to win the mobile gaming war, where the market size is expected to hit $30 billion this year but competition is always brutal.

In a statement regarding the layoffs that took place yesterday, Sheppard said, “Today we made the difficult decision to reduce the workforce of our Gree International Inc. business by 30 percent. This was done to better align operations with our development goals and business strategy. Several teams in San Francisco were impacted — we are working closely with each and every person to ensure the smoothest transition possible. Offices in other locations were not affected.”

Sheppard did not say how many people were laid off, just a percentage. We’re not sure how many work at Gree in San Francisco now. At the end of Gree’s third quarter, on April 28, the company said it had a total of 1,786 employees.

Earlier in the day, some people were saying on social media that two-thirds of the San Francisco office had been hit. On Facebook, several people have confirmed that they’ve been laid off, including community manager Donna Nicholson.

Gree previously shut down a studio in Vancouver, Canada, last month. At the time, Andrew Sheppard, head of Gree International (the company’s Western division for Europe and the U.S.), noted that the company evaluated market conditions and decided to focus on development and service for its biggest franchises. Overall, revenues were over $1 billion last year.

But mobile gaming is increasingly centered around a smaller group of winners, and Gree hasn’t had huge hits lately.

Sheppard previously noted that mobile gaming has changed since Gree rose to prominence about 10 years ago. Sheppard said it used to be that pretty much any developer had a fair shot at creating a hit game. But the industry has grown to become the second largest gaming category in terms of revenue, where development budgets climb for increasing expectations and top developers are spending up to $40 million a month on marketing campaigns. Other large companies such as Kabam are also restructuring to focus solely on its top money-making titles.

Thanks @serkantoto