Irvine-based Foundation 9 Entertainment Inc., a holding company for a group of independent video game developers, is restructuring amid an industry-wide slump, according to reports.
Foundation 9 is closing and merging some of its studios, according to a report on video game industry Web site gamasutra.com.
The company cut jobs at Irvine’s Double Helix Games, which makes games for PCs, Sony Corp.’s PlayStation, handheld device PlayStation Portable, Microsoft Corp.’s Xbox and Nintendo Co.’s Wii.
Double Helix was created in 2007 when two local video game companies, Newport Beach-based The Collective Inc. and Laguna Beach’s Shiny Entertainment Studios, were bought by Foundation 9.
It not clear how many local jobs were cut. A spokesperson for Foundation 9 wasn’t immediately available.
Last year, Double Helix counted some 160 workers.
Foundation 9 confirmed that it also merged two Kirkland, Wash.-based studios, Griptonite and Amaze. Griptonite developed games for handheld devices and Amaze did both handheld and console titles, the report showed.
“Having separate console and handheld studios under the same roof simply didn’t make sense in light of the convergence in capabilities of modern game hardware,” the company said in a statement on gamasutra.com.
The company also closed its Austin, Tex.-based studio Fizz Factor. Griptonite and Fizz Factor were part of F9’s 2006 acquisition of the Amaze Entertainment Inc. group of studios.
Foundation 9 was created in early 2005 when Collective combined with Bay Area-based Backbone Entertainment Inc.
The studios owned by Foundation 9 pick their projects and develop games independently. They report financials separately and have to meet certain revenue goals.
Foundation 9 handles all of the deal-making and administrative stuff, allowing the creative-types to focus on their work.
In 2006, Foundation 9 landed about $150 million in funding from San Francisco-based private equity firm Francisco Partners LP.
It used the funds to buy up half a dozen independent game developers across the country.
The company is still working on a slew of games, including titles tied to upcoming movies “Where the Wild Things Are” and “G.I. Joe,” among many more.
The recession is beginning to hit home in video games, an area that was previously thought to be a safe haven from plummeting consumer spending.
The industry continued to see declines in sales of both games and consoles, according to June data from market tracker NPD Group Inc.
Some $1.7 billion worth of video games were sold in June, down 31% from the same period a year earlier.
For the year through June, the industry saw a 12% decline to $8.3 billion in video game sales, the data showed.
Consoles, handhelds and other game-related hardware took an even bigger hit,sales are off 38% for the month and 13% for the year through June.
NPD’s findings mark the fourth consecutive month of year-over-year declines.
