Seattle-based Big Fish Games on Tuesday said it was laying off 250 employees, telling staffers in a company memo the move is being made from a position of “financial strength” and that saving money was not a primary driver behind the cuts.
The memo was signed by Big Fish co-presidents Andrew Pedersen and Jason Willig and sent to The Seattle Times by a person wishing to remain anonymous. It made no mention of a Monday court ruling granting preliminary approval to financial settlements totaling $155 million from two class-action lawsuits filed since 2015 against the company, which offers social and casual mobile gaming.
“The scale that Big Fish developed over many years as a multi-platform publisher has made it difficult to successfully lead in mobile, which requires greater agility and different operating and creative capabilities,” the memo states. “By pivoting how we operate and sharpening focus, we will gain increased flexibility to engage players more effectively today and invest more for the future.”
The majority of the layoffs will be in the Seattle area and affect more than a third of the company’s roughly 600 employees.
Founded in 2002, Big Fish, which also has an office in Oakland, California, was one of the region’s largest independent gaming companies before being sold to Churchill Downs in 2014. Churchill Downs, owner of the famed Kentucky Derby racetrack, in turn sold Big Fish for $990 million in 2017 to Australian-based Aristocrat Technologies, which operates online games and sells gaming equipment.
The following year, Big Fish laid off 75 employees and announced it would focus on social casino games and casual games.
The class-action lawsuits alleged the company’s free-to-play Big Fish Casino game violated Washington state gambling laws because it forced users to keep making in-app purchases of gaming chips to continue playing. When their spending patterns became addictive, plaintiffs said, Big Fish did nothing to cut them off as would a regular casino.
One plaintiff estimated spending more than $300,000 on such chips.
Online gambling is illegal in the state.
The settlement would see Big Fish parent company Aristocrat pay $31 million while former owner Churchill Downs would cover $124 million.
The mobile market for casual gaming has skyrocketed during the COVID-19 pandemic. A report last month by App Annie, which tracks analytics and data on mobile applications, said U.S. consumers increased the number of games played each month by 13% since January compared to the same period in 2019. In April alone, game downloads outpaced app downloads by 35%.
The memo to Big Fish employees Tuesday said those remaining with the company will receive further explanation about the reasoning behind the layoffs in meetings this week. It said the separation package given to departing employees will be “above the minimum” to help support them.
“While difficult to face today,” the memo said, “these moves reinforce a commitment to players and our mission to become a truly great games company.”