EA’s Chicago Studio Gets KO’d

Kotaku just got the exclusive reveal that EA’s Chicago Studio, which has been known for its fighting game franchises such as the Fight Night series and Def Jam Fighting games, has officially been axed from EA’s agenda and shut down for good.

A leaked memo from President of EA, Frank Gibeau cites the liquidation of the studio due to the fact that EA Chicago’s franchises have failed to reach the profitability and standards set that is expected (i.e. they were creating original games and taking chances instead of whoring themselves out like the rest of the EA studios).

As a huge fan of the Fight Night series, and as a gamer, it’s always a bummer to see a unique studio get shut down against their will. Here’s hoping the now former GM Kudo Tsunoda and the rest of the gang can get settled elsewhere.

Memo

FROM FRANK GIBEAU Today we are announcing the closure of our studio in Chicago. This is a difficult decision but we are convinced it’s the right thing to do for the future of the Games Label and EA.

Within the EA Games Label, we are committed to running each franchise and facility as a city/state, teams with unique creative identities as well as responsibility for product quality, ship dates and profitability. We recognize that games require large investments and extended development cycles. We’re willing to take risks, make long-term investments, and to support teams and individuals between launches. But each team is responsible for staying on a reasonable path to profitability. Sticking to that strategy is what gives us the financial resources and flexibility to take risks on new projects.

Unfortunately, EA Chicago hasn’t been able to meet that standard. The location has grown dramatically in the past three years while revenue from the games developed there has not. The number of employees has grown from 49 in 2004 to 146 people currently in the new facility in downtown Chicago. As it stands, EA Chicago has no expectation of hitting our profitability targets until FY2011 or later.

Closing EA Chicago is the toughest decision I’ve made in my career - one that in no way reflects on the talent and dedication of the people who work there. I’ve enjoyed their games and consider GM Kudo Tsunoda to be one of the best creative minds in our industry. The people impacted by this decision will be treated fairly - we’re offering relocation opportunities to many and there will be outplacement assistance and severance for all eligible employees.

I know this decision will be unsettling to many beyond those who work in Chicago. It’s important that you understand that we are willing to take creative risks and make long-term investments in people and projects. But the city/state philosophy demands that every project be committed to delivering a reasonable expectation of profitability. It’s a performance commitment that binds us together and ensures we have the resources we need to invest back into our people and creative output.

Finally, when EA announced our quarterly earnings last week, John and Warren referenced facility closures. We had planned to include Chicago in that communication but a personal tragedy in the studio - the death of a colleague - resulted in our delaying the announcement out of respect for his family and friends. I apologize for any confusion or concern that caused.

I think you’ll find that in addition to tackling some serious challenges, we are making great progress on our business. Consumers have responded well to our new IP and quality scores are tracking up. We are proud of our recent hits, such as Skate and the success we have made in making a solid game with The Simpsons. And we’re looking forward to breakout hits like Need For Speed Pro Street, Rockband, Burnout Paradise, Battlefield Bad Company, Army of Two, Crysis, and more in the future with Mass Effect and Mercenaries 2 World in Flames.

We’re definitely headed in the right direction.

Frank