Game maker to close, Vegas losing 100 jobs

Grace Leong

Friday, Jan. 31, 2003 | 10:55 a.m.

Video game maker Electronic Arts will close Westwood Studios, its Las Vegas division, by March 31 as part of a plan to consolidate three southwestern regional operations into a large studio hub in Los Angeles.

The three studio operations are Westwood Studios, which was renamed EA Westwood after it was acquired by Electronic Arts in 1998, EA Pacific in Irvine Calif. and EA Los Angeles.

There are now more than 200 employees at all three studios. An unspecified number of employees will be relocated and temporarily placed in EA Los Angeles and another studio, EA Redwood Shores in the Bay area, until the new studio opens in late summer this year.

The Redwood City, Calif.-based company disclosed its plan Wednesday to more than 100 Las Vegas employees at its 50,000-square-foot office in the Las Vegas Tech Center at 2400 N. Tenaya Way. EA Westwood has more than 100 engineers, game designers, animators, lights and effects specialists, management and support staff working on two of the company's most successful PC CD-ROM games, "Command & Conquer" and "Earth & Beyond."

Jeff Brown, Electronic Arts' vice president of corporate communications, declined to specify how many Las Vegas workers are being laid off.

"For those who don't have assignments, they'll be given severance pay and outplacement services," he said. "For some of those workers, (today) will be their last day. For others, it'll be March 31."

"(The Electronic Arts' studios in) Las Vegas, Irvine and Los Angeles are relatively small operations. Irvine and Los Angeles each have about 50 workers. It's more efficient from a cost and creative standpoint to deliver content in a large studio environment rather than by teams isolated in satellite locations," Brown said.

"Resources and information flow better in a larger studio. It's much better for the creative process if they're working in the same space," he said. "EA Los Angeles has one team of 50 employees working on the 'Medal Of Honor' game. Some of the staff at EA Westwood, which makes 'Earth & Beyond,' have been offered positions at EA Redwood Shores to maintain that game."

Brown said Los Angeles was chosen as the site of the new studio because it's a "strong hub for that kind of talent."

"Not only are there lots of video game studios in Los Angeles, there's lots of talent in the entertainment and defense industry and the academic field," he said. "The tech expertise and imagination we need to create video games is readily available in Los Angeles."

"Nevada has provided a good environment for us over the past few years, based on the existing availability of talent that can be drawn from multiple industries," he said. "Nevada is a very good environment for technology and for someone starting a game development studio. But it makes sense for EA to consolidate in one location."

"People with traditional engineering backgrounds like those who typically make office software and other types of engineering software applications aren't the people we would choose to make video games," Brown said.

Mike Ballard, a board member of the Technology Business Alliance of Nevada, described EA Westwood's departure as a "significant setback for Southern Nevada's diversification efforts."

"That's a huge blow to the community because the state is losing 100 tech jobs, many of which are well-paying jobs. We're moving in the right direction by trying to help fund tech firms coming in, but we're not moving fast enough," he said.

"And with (Gov. Kenny Guinn's proposed business tax increase), that's a concern for companies wanting to move into Nevada. In the past, most of the firms came into Nevada because of our favorable tax situation. Now that's an uncertainty," he said.

Tom Thomas, managing partner of real estate development company Thomas & Mack Co., agreed.

"Westwood is a unique tenant in that we don't have many high-tech firms in the Las Vegas Valley, especially those offering an average salary as high as that of Westwood's. They hire highly talented and highly compensated computer animation experts," he said.

"The biggest impact is that we're losing a company that can offer a specific type of economic diversification like Westwood's and we're not likely to find an alternative tenant with a similar employment and salary base like Westwood's in the high-tech field," he said.

"Las Vegas doesn't have the human resource talent compared with Los Angeles and Salt Lake City that would attract high-tech companies," he said. "But we're attracting other types of companies like call centers and claims offices for insurance or credit card companies because of our 24-hour reputation and our competitive cost of living."

But Thomas also attributed the closure or downsizing of companies like Westwood and PurchasePro.com to a "serious decline in the high-tech market on the West Coast and a major consolidation or complete failure of the dot.com sector."

"So the fact that it's affecting Las Vegas isn't unusual at all," he said.

"Westwood and PurchasePro are both established by local entrepreneurs. Those companies didn't move here because of the intellectual talent residing in Las Vegas," he said. "The reason why they're here is because the founders and the genius behind the companies happened to be local."

"50,000 square feet of space coming online won't cause a ripple in office vacancy rates," Thomas said. "It might mean that the landlord has to break the space into smaller components to lease it. Westwood put a lot of money into designing that space for their use. There might be other companies involved in marketing and graphic arts that might find uses for that space."