Splash Damage begins consultation process for potential studio-wide redundancies

Splash Damage, a game development studio in Bromley, has begun a consultation process that could result in significant staff layoffs. Employees were told about the situation today, with the announcement later made public through a LinkedIn post.

The company issued a statement to GamesIndustry.biz explaining, "Today, Splash Damage announced the need for organizational changes across the business with all roles throughout the studio under consultation. This is an unfortunate but necessary step for the studio to stay nimble in a challenging and evolving market. Splash Damage is committed to minimizing the impact on staff as much as possible and will explore all available options to retain talent where possible and support those affected."

In September, Splash Damage was acquired by private equity investors, maintaining its existing leadership. Previously, it was owned by Tencent, a Chinese conglomerate which acquired it via a purchase of Leyou, a company known for poultry, in 2020. Leyou had bought Splash Damage from founder Paul Wedgewood in 2016.

Earlier this year, Splash Damage underwent layoffs after the online action game Transformers: Reactivate, announced in 2022, was canceled before being introduced to the public. The studio is currently developing an open-world survival game known as Project Astrid with renowned streamers Christopher "Sacriel" Ball and Michael "Shroud" Grzesiek.

The last game released by Splash Damage was the multiplayer shooter Outcasters in 2020, created for Google's platform, Stadia, which is now defunct.

This development adds to the challenges faced by London's gaming industry. It follows Square Enix's recent downsizing of its Western branches, threatening over 100 positions, and Sony's decision to shutter its London studio in 2024.

After being acquired by Tencent, CEO Richard Jolly expressed optimism about the company's future. However, in 2024, both Tencent and competitor NetEase reduced their Western expansion plans amid strategic reassessments, causing a series of asset sales and shutdowns. In the UK, Tencent-owned Sumo Group announced a 15% staff reduction in 2024, leading to further headcount cuts in January and the sale of Secret Mode in March.

In August, Yong-yi Zhu, VP and head of business operations at Tencent Games, indicated to GamesIndustry.biz that while there's no immediate plan to withdraw from Western studios, investment focus could shift due to industry dynamics.

Founded in 2001 from the Quake modding community, Splash Damage gained success with the free multiplayer game Wolfenstein: Enemy Territory. It later developed Enemy Territory: Quake Wars in 2007, Brink in 2011, and Dirty Bomb in 2014. Known for its expertise in multiplayer shooters, the studio worked with Microsoft on projects like Gears of War 5 and remastered versions of Gears of War and Halo, and produced Gears of War Tactics in 2020.