For Developers, Social Gaming Is The Place to Be

The console game business has been called “recession proof,”and thus one of the most stable sectors to work in. But it’s under pressure from social media and mobile gaming, and that’s taking a toll on its workforce.

Farmville Screen ShotMore and more, consumers would rather play social and mobile games instead of shelling out a couple of hundred dollars for consoles. So Activision laid off about 500 people after axing Guitar Hero. The company’s now focusing on its core games Call of Duty and World of Warcraft.

Meanwhile, Disney Interactive laid off more than 200 employees when it closed Propaganda Games, creators of the disappointing Tron. Disney also cancelled a new Pirates of the Caribbean game, putting 170 more out of work. THQ laid off thirty workers from its 1,200-person product development workforce, though Julie MacMedan, VP of corporate communications, says the move simply reflects regular fluctuations in the development cycle.

Maybe. But sales of console games for the likes of Playstation 3 and Xbox 360 have been weak over the past year. Like other companies, Disney’s responding by shifting focus to social games, where sales have been growing more quickly and the profit potential is greater. Last year, Disney acquired social game company Playdom for an unprecedented $763 million.

While all this sets up a lousy dynamic for console folks, it’s good news for those working in the social and mobile space. Zynga, producer of immensely popular Mafia Wars and Farmville, plans to double its 1,500-person workforce this year.