In September 2022, Virtuos Studios announced the launch of its “first full-service studio in North America” called Calypte. The studio which was located in the San Francisco Bay Area offered art, design, and engineering services. It came as a shock to many that Virtuos Studios has shut down Calypte after just over a year of its launch, and it is understandably so.
Kirsten Kennedy, a veteran video game producer who has worked on popular franchises including Grand Theft Auto, Sid Meier’s Civilization, and The Walking Dead was the studio director. During the launch of Calypte, Kennedy was in high spirits and praised the location of the studio.
“From the concentration of gaming studios in the region to the diverse pool of highly skilled and experienced gaming talent, the Bay Area is a fantastic place to grow our studio,” Kennedy said at that time.
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However, it appears that Virtuos Studios has now shut down Calypte. The news became evident through LinkedIn posts of former employees including senior game designer Mark Vernon and creative director Sean Ainsworth. Most of the other developers that previously worked at Calypte have now adjusted their availability to “open to work”.
In his post, Vernon pointed out that this was the “second time this year” that he would be made jobless by layoffs due to studio closure. This is another blow to the gaming industry which has been riddled in recent months with mass layoffs which have either been termed a necessary restructuring move or “right sizing”.
The shutdown of Calypte by Virtuos Studios is an isolated event
The shutdown of Calypte came as a surprise because Virtuos Studios has opened new studios and made major acquisitions and expansions in the past months. A month before Calypte was launched, Virtuos Studios opened a new office in Malaysia. It also acquired Glass Egg, a Vietnamese art production firm back in May 2022 and Volmi Games, a Ukrainian art studio, back in January of the same year.
Unlike other companies that have shut down, Virtuos Studios’s business model relies on B2B operations for revenue rather than on game sales. In other words, they work with other studios to produce games—and make money off game production. Poor game sales have been blamed for most of the studios that have been shut down.
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According to Game Developer analysis, the reason for the shutdown of Calypte is likely one of two factors:
- The high cost of employing developers in the Bay Area
- Virtuos Studios’ preference for talents in underrepresented parts of the world
The average annual salary of a software developer in the Bay Area is $133,000 according to data from GlassDoor. The studio’s spending would be further inflated by the costs of benefits, studio spaces, and taxes. In comparison, the average annual salary of a software developer in Dublin, Ireland—where the headquarters of Virtuos Studio’s subsidiary Black Shamrock is located— is €65,000 (approx. $68,000).
In an interview with Game Developer early this year, Jake DiGennaro, the studio’s chief revenue officer, said the company takes pride in cultivating “local talent” in underrepresented countries and helps to prevent “brain drain” which negatively impacts local economies. The shutdown of Calypte was confirmed by a spokesperson for Virtuos Studios.
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“Navigating the dynamic business environment requires different approaches while making corresponding adjustments, and this difficult decision was made on the basis of the business performance of Calypte,” said a Virtuos spokesperson. “This decision is isolated and will not impact other studios”.
To ease the burden of the sudden closure on the employees, the spokesperson said Virtuos Studios has offered some of the impacted developers a position in other studios run by the company. They are also working with others to “ensure a smooth and respectful transition”.
Available data shows that over 6,000 jobs have been lost in the games industry in this year alone. However, the figures may be significantly higher since most companies don’t disclose the exact number of roles terminated.
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