Majesco closes California dev studio, but closure will not impact any games

This comes from Majesco’s financial conference call…

Finally I would like to update you on our development studio in California, when we first launched the studio our objectives were twofold. First to lower our cost per title and drive additional operating efficiencies as we achieved sufficient scale and second, to generate IP and the development of our own creative talent.

Over the past several quarters we have seen a significant change in the dynamics of the gaming industry specifically in regards to the development market. The industry has seen a sizable increase in the amount of development capacity and more importantly, in the quality of developers looking for projects.

Given this change in the marketplace, we have taken an extensive look and objective look at our studio and made the decision to wind down its operation. We believe this is the best step at this time and will better position us to take advantage of the current opportunities in the development market.

As a result of this decision in the quarter we recorded all the expenses associated with the studio in research and development which accounted for the majority of the increase in second quarter R&D. In addition we would expect a minor charge in the third quarter as we wrap up the studio’s operations.

Keep in mind the studio represents a tiny portion of our overall portfolio so we will not see any effect on the planned product lines. We remain committed to building our IP portfolio. We believe we have a solid IP lineup with Boy and His Blob, My Hero, Flip’s Twisted World, and Go Play all internally controlled. – Jesse Sutton, Majesco CEO

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