California, digital games affected Pandemic closing

A few weeks ago EA made the closing of Pandemic Studios official, less than a month before the release of the developer’s WWII open-world adventure The Saboteur, citing cost management as one of the reasons. CEO John Riccitello has now clarified on the whole thing a bit, explaining that operating both EALA and Pandemic Studios in California was just too expensive and that something had to give.

In a chat with Kotaku, Riccitiello said that doing business in California costs two to three times as much for them as it does in Montreal, UK, Eastern Europe, or China (where other EA studios are located) and that the proximity of Pandemic to EA’s Los Angeles offices wasn’t exactly helping matters. Having two operations within ten miles of each other in an expensive business environment is not very efficient, especially considering the recent regulation adjustments in California that Riccitiello said have made things harder for the entire entertainment industry.

Besides the whole west coast thing, Riccitiello says that the rapid movement towards digital gaming — he expects downloadable titles/content, iPhone/Facebook/browser games etc to make up half of the industry’s revenues as soon as next year — also affected the decision. “In a world that used to be all PC, then used to be all console, now it’s neither. It’s not a packaged goods business any more,” he says. With EA and everyone else trying to make more games fit for the digital marketplace, Pandemic was apparently a necessary casualty.

While the majority of Pandemic’s employees are gone, along with a printer, the brand name will stick around with games being developed by EA in Los Angeles. The first of those apparently being the recently announced Mercs Inc, which is currently in early development.