Storm8 lays off about 130 from its social mobile gaming studio

Social mobile game publisher Storm8 laid off a large number of its employees this week.

By one account, the San Mateo, California-based company cut about 130 jobs, going down from 240 people to 110.The move shows just how hard it is to compete in the $40 billion mobile gaming business, where the ranks of developers are splitting into the haves and have-nots.

“If you look at their lineup in the past two years, it’s pretty easy to connect the dots,” said one employee affected by the layoffs. The employee asked not to be identified.

Storm8 was particularly vulnerable because it makes casual mobile games, a sector that has fickle followers and a lot of competitors. Storm8 had hits that generated tens of millions of downloads, but the content wasn’t particularly memorable, and it never rose to the top of the charts akin to games like Candy Crush Saga. Storm8’s games include Candy Blast Mania, Bubble Mania, Dragon Story, and Dream City: Metropolis.

Perry Tam and other former Facebook employees founded the company as a social game publisher in 2009. They adapted to mobile games with the rise of mobile, and grew to hundreds of employees. Tam broke the news to employees yesterday in an emotional meeting.

In a statement, Tam said, “The mobile gaming industry has continued to rapidly evolve.  We believe having a leaner organization with sharper focus is essential to win in the growing $40-plus billion mobile games market. As such, we’ve made the very difficult decision to realign resources and part ways with approximately 130 talented colleagues. We truly appreciate everyone’s hard work and dedication to Storm8 over the years. Moving forward, a more streamlined Storm8 will build off a strong foundation, be better positioned to support our existing games and successfully bring new games to market. We remain very excited for the future of mobile games and being well-positioned for sustained profitable growth.”

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