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Economics or stupidity: 1UP podcast firings to save UGO $2.5 million annually?

1:50 AM on 01.07.2009, Niero 77 comments

Economics or stupidity: 1UP podcast firings to save UGO $2.5 million annually? photo
     Industry Bullshit

I remember walking down the hall of the Los Angeles Convention Center as I watched a white glossy banner pass over my head with a logo I already knew all too well. I guess a lot of us tonight are having similar memories. Yours might include a favorite review or cover art. Maybe a podcast. I didn't even work there or know most of those guys that well, and I'm finding myself extremely nostalgic and in a fuss about it.

You know, I was going to let the whole 1UP buyout sink in overnight and hope to awaken with a yawny fat optimistic face. Instead, I'm anything short of restless. It's 4 AM and find myself bristling in my room in disbelief repeating the same words over and over in my head:

My favorite childhood gaming magazine is dead. Fuck.

Some of the most talented people in games media were fired today (or coincidentally quit, as Shane blogged it), as Ziff Davis folded the business to Hearst's wannabe-IGN, a polished me-too men's interest portal that once stood for "Underground Gaming Online" but has since lost its way. The CEO said that picking up 1UP would basically finally let them buy some personality, but they ironically fired most of it on day one, causing a ten-page Internet trainwreck in their announcement thread. Despite letting go key podcast production staff, Sam Kennedy told MTV that they're going to try to maintain some semblance of a media program:

Will we have as many shows as we have in the past? Probably not, but we have – we’ve had – a lot of ideas for future shows and we’re pretty excited about what we’ll do in the future. Right now, we’re going to go through the process of really figuring out what kind of shows and products we want to keep going in the future. Our intention is to keep as many going as we can.

Nevertheless, 30 good people were let go. While many are busy flaming UGO for being money-hungry pigs with no intentions, I began to ponder the economics of the firings and did a little (highly flawed) research to dig into how an incredibly stupid call like this might make any sense in the books. I dared to piss in the wind and found numbers that sound probable.

We all know that San Francisco is not a cheap town. 

According to salary aggregating service PayScale (who claims to have surveyed over 22,000 people), the median salary for seasoned Web Geeks is in the $50-80k range and upwards of $100k for director-level positions. Multiply that times 30, then add the cost of equipment and studio space, and you're easily looking at $2.5 million annually. That's a lot of ads to sell for free podcasts to break even. Unless money was being thrown at them by listeners, that team should have been disassembled a long time ago and put towards other, more profitable enterprises within 1UP. Common sense.

Thus, Ziff clearly ran the expensive operation in an attempt to win market share, but couldn't stay the course of their flawed economics. What podcast or magazine can ever hope to break even on on that kind of money in this economy? The media arm would have to do all the grunt work to turn a profit... and that's what UGO kept. Smart. Dickheaded, but smart. We knew they were gonna go. It was obviously a long time coming. And yet, it doesn't make any of this easy.

I'm now less upset at UGO for being lame and furious, and more upset that a reputable group of suits like Ziff Davis could be so bloated and mismanaged. No wonder they filed for bankrupcy. The unfortunate people whose talents could have been put to better use will be forced to move on -- hopefully with little difficulty, as many are household names to people involved in the industry. While scouring through the riot of fan outcry around the Web, one of our editors compiled a list of all of the rumored firings:

Yamaguchi, Marci
Cox, Simon
Convertito, Monique
Donahoe, Michael
Pinkham, Rosemary
Wilson, Jason
Bettenhausen, Shane
Ford, Greg
Gallegos, Anthony
Mielke, James
Bertrand, Jason
Bowen, Robert
Chandronait, Matt
Fitch, Andrew
Frechette, Justin
O'Donnell, Ryan
Pfister, Andrew
Quintero, Cesar
Scott, Ryan
Serrano, Rey
Varanini, Giancarlo
Frieg, Adrian
Garcia, Andrea
Gelfand, Leslie
Jaramillo, Jervilyn
Madu, Ndubuisi
Moran, Amy
Steel, CoyLou
Stowe, Meredith
Ubbelohde,  Tipler
Boothe, Norris
Chinn, Derek
Ellis, Eric
Ross, Tammy
Tong, May
Mishra, Amy
Parsons, Doug
Rosa, Christina
Suttner, Nick
Kollar, Philip

Unbelievable.

If I can feign any optimism at this hour, I can say that where there is crisis, there is hope. Everyone at Destructoid wishes those guys the best. I strongly recommend fans to download the old podcast episodes before uncle UGO yanks them.

Despite the gloom and doom, I'd like to remind everyone (and try to make myself believe it this time so I can go to bed) that we all thought 1UP was going to suck ass and die years ago when Ziff Davis picked it up, and they instead produced a better product in the end. Sam Kennedy will still be at the masthead. UGO is sitting on a mountain of old money and people that appear to have the basic understanding of a calculator. This could provide a more stable future for 1UP despite the chopped heads. That's really the best I can muster to say.

Tonight has also forced me to look at our own economics.

As a micro-publisher of a smaller site, it makes me wonder what I could possibly do to prevent a similar fate down the line. This makes every challenge and drama I've faced at Destructoid seem a little petty in scale. I hope everyone who operates a gaming Web site -- or does anything for the love or enthusiasm of it -- takes a good, hard look at how one of the most loved legacy brands spun out of control and let its overhead walk it out the door. I can't stress enough how important it is to remain independent for as long as your frail little brain can bear to protect your readers from completely losing the things they've come to love.  

And there it is. I know what's finally keeping me up. I'm afraid it might someday happen to Destructoid, too. Hey kids, turn off those ad blockers, won't ya?

*Knocks on wood, calls it a night*


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Dimly's Avatar
Dimly at 01/07/2009 03:59
This Destructoid, she's sea-worthy.

I have strong faith, and only look forward to the future.
OrangeGoblin's Avatar
OrangeGoblin at 01/07/2009 04:02
To say the podcasts didn't make money oversimplifies things. I only started visiting 1UP because of the podcasts, as they made me realise that these guys had something interesting to say. I just hope that they get to stay in the industry, because now Dtoid and GiantBomb are the only people worth a damn.
Vedicardi2's Avatar
Vedicardi2 at 01/07/2009 04:04
"Gallegos, Anthony"

D:

Nuuuuuuuuu
protomark's Avatar
protomark at 01/07/2009 04:05
I don't think it's UGO that's solely to blame, here. I think we should give a healthy nod to Ziff Davis, who should feel proud that their shareholders may now rest easy, knowing that, thank the lord, they can make the next payments on their 100 foot yachts now.

Here's to fiscal responsibility, Ziff Davis. Die in a fire.
The Incredible Edible Egg's Avatar
The Incredible Edible Egg at 01/07/2009 04:06
I never turned my ad blocker off <3
Freekdeman's Avatar
Freekdeman at 01/07/2009 04:06
I think the industry and the public needs guys like the ones fired. It`s not all about gaming, it`s about fun. We all need that. Otherwise we might ass well work.
Niero's Avatar
Niero at 01/07/2009 04:07
Sorry, a draft went live before I can hash that out. I guess I was trying to say that its obvious that the podcast team was not profitable as well as the magazine, so the media/web team had to do all the heavy lifting. Instead of balancing them UGO decided to drop the cost part. I agree that it makes the site much less worth visiting. But the economics under anyone's rule (UGO or Ziff) would have produced the same results.
Clance's Avatar
Clance at 01/07/2009 04:12
Sleep well, Niero.

This ol' place will be fine. Just stay true to yourself and the community will do the rest, have no fear.

Also, I'll write and podcast for peanuts. Or free!
Necros's Avatar
Necros at 01/07/2009 04:13
I'm still really bummed to see that a giant, corporate site that had somehow managed to maintain its passionate spirit, high quality writing, and journalistic standards after so many years has had 80% of its soul destroyed within a day. I can only hope that these people will go on to strong jobs in other parts of the games industry - and wishful thinking that maybe they could even one way find their way to Destructoid if the stars align. (But after jumping on Summa after he left Joystiq, I'd understand passing on them. :P)

Also, am I the only one who doesn't use ad blockers mainly because they leave giant empty spaces in site design that look really strange?
MotoRobo's Avatar
MotoRobo at 01/07/2009 04:13
The methods of profit-increasing management take more hardness than craftiness. Lowered pay, fired employees, and closed stores are how a body survives when it no longer gains from its' members. Invest in Europac or anything besides dollars.
Spectreman's Avatar
Spectreman at 01/07/2009 04:16
* Podcasts are my main interest in 1up. They are all great. 1up show, 1upfm and retronauts. Now the people that I listened every week was gone. They buy an URL empty. Stupid.
Usedtabe's Avatar
Usedtabe at 01/07/2009 04:16
Well, to support the sites I visit, I never had ad-blocker turned on to begin with. No one should work for free. Besides, I'm a business owner myself, so I couldn't do that in good conscious. I even click some of the ads.
toastrbot's Avatar
toastrbot at 01/07/2009 04:17
Bah. If I took a handful of craptacular events such as getting dumped by my girlfriend, stepping in a pile of dog poo, having my car towed, and finding out that Santa Claus isn't real and rolled them all into one, it would still come up short to the sadness I'm feeling now :[

After poring over a good twenty pages at the 1 UP forums it feels like we're all in accordance and can agree that a sizable piece of our gaming family has died. 1 UP was one of the last bastions of real games journalism and now UGO will undoubtedly run it into the ground.

Indeed Redzie, UGO can die in a fire and then its ashes can then go and proceed to fuck themselves, hard.
vApathyv's Avatar
vApathyv at 01/07/2009 04:21
Well...you're all I have left now Destructoid. 1up was always my favorite site until I discovered this one about three months ago, where it slowly started to turn me over thanks mainly in part to the fact that your writers are hilarious, thought-provoking, and have far less corporate rules to live up to, which in turn led to very entertaining articles. Just because you guys became my 'new favorite' though didn't mean I stopped caring about 1up...after all, it was 1up that actually inspired me to go to college and pursue a career in journalism...so, as many other people on the internet have previously stated...Die. In a fire. Thanks, Ziff Davis. Thanks, UGO. Congratufuckinglations, you've ruined it for everyone.
Fronz's Avatar
Fronz at 01/07/2009 04:25
"I'm now less upset at UGO for being lame and furious, and more upset that a reputable group of suits like Ziff Davis could be so bloated and mismanaged. No wonder they filed for bankruptcy." I concur. That's why one of my buddies who used to work for them got out while he still could, over half a year ago. They knew this was coming, but it's still sad to see. The Internet certainly is a love/hate relationship.

Best of wishes to everyone involved. You got where you were by kicking ass. Keep it up and I'm sure you'll find your way back to the top again. <3
wardrox's Avatar
wardrox at 01/07/2009 04:27
I've only just woken up and it's taken me a while to catch up with all this.

Excellent post. I think the question of prevention is one of direction and value. Pick a direction, stick to it, and know what is truly valuable (people). You also need to know what is classically valuable (ads). The challenge is to find the balance between them, and it's fucking hard.

Dtoid is a touch better of and less-prone to these kind of giant business cockups for several reasons. Being independent is a huge bonus. You, Niero, have ultimate control. You can see the fine detail and stop things before they erode value. Suits simply cant. They see charts and bullshit.

Dtoid also maintains much lower overheads (I assume) than the larger sites. It's kept a lot of the bonuses from having a small site, yet managed to (against all odds) grow.

The openness in which you conduct business here has built up trust with us. Something the other sites will basically fail at achieving.

That's plenty of unhelpful vague business waffle for now. The site is behind you, and has confidence in your leadership abilities.

On a related note, I've been reading a book called Wikinomics. It could provide some interesting "how to do business and not be a dick" advice. I dunno.
Clance's Avatar
Clance at 01/07/2009 04:39
Exactly what Wardrox said. Only, I'm saying it slightly better.
YeagerMeister's Avatar
YeagerMeister at 01/07/2009 04:42
Since 2007 there hasn't been a week that went by I didn't listen to a podcast from 1Up. GFW Radio was the best, so good I'd listen to it and didn't even own a gaming rig, but I've been missing that show for awhile and now I'll just have to miss everything from now on...
darkwhitehair's Avatar
darkwhitehair at 01/07/2009 04:42
I dont even care that I paid for a full years subscription for EGM... I care that my favorite magazine is no more... its a damn shame... whats even worse is that stupid idiots will pay $30 more to buy a "Limited Collectors Edition" for a game... but they wont spend $25 for one year EGM subscription...

its a damn shame... I hope the writers find good home... but cant help but think how gaming related websites have mushroomed over the last coupla years... and how many are still in business...

1up show was great... gonna miss that the most...
CWal37's Avatar
CWal37 at 01/07/2009 04:50
Man, this is kinda sad. I get/got EGM, I liked it, but totally saw something like this coming eventually.

I still remember being amazed at the pictures of E3 years ago and dreaming of the day I could go. So much for that dream.
vexed alex's Avatar
vexed alex at 01/07/2009 04:54
Fuck OGU. Fuck them.

I know this sounds lame, but I've replayed the 1Up show's theme like 5 times just now.

It all just feels...surreal.
TheRemedy's Avatar
TheRemedy at 01/07/2009 04:55
I don't understand the logic that the podcasts cost them 2.5 million as everyone on them (well the people talking at least) had other roles. In fact the podcasts were a side thing.
vexed alex's Avatar
vexed alex at 01/07/2009 04:55
UGO, OGU. I hate you so much I refuse to spell your name properly...
JTHomeslice's Avatar
JTHomeslice at 01/07/2009 05:00
Damn, there's no reason to care about 1UP anymore. I hope all these guys find new jobs. Just, damn.
SnakeDude4Life's Avatar
SnakeDude4Life at 01/07/2009 05:05
May [Insert Deity] help us.
Big Evil's Avatar
Big Evil at 01/07/2009 05:07
Fuck

I love there podcasts, and there editors and writers are quite entertaining.

No more Retronauts D: :(
ArrestedDeveloper's Avatar
ArrestedDeveloper at 01/07/2009 05:15
=
Emrah's Avatar
Emrah at 01/07/2009 05:17
Also, tom's games is now a flash games site. The culprit is Bestof media. It totally degrades the Tom's brand.
Billy Monks's Avatar
Billy Monks at 01/07/2009 05:29
So, when's Destructoid going to be bought by a large corporation and stripped of its soul?

It's only a matter of time.
SnakeDude4Life's Avatar
SnakeDude4Life at 01/07/2009 05:38
@ArrestedDeveloper

Yes.

But who will be the One Free Man?
Oh wait...

dprime's Avatar
dprime at 01/07/2009 05:40
I really don't see how the corporate form of ownership is inferior to the sole propreitorship or partnership form other than a sort of foksly dislike of large companies getten ers down.
Mxyzptlk's Avatar
Mxyzptlk at 01/07/2009 05:40
Too many people on that list were the reasons why I still kept up with 1UP. This might save money, but when you suck all the life out of something like that you're only left with a corpse.
downsouthhustla's Avatar
downsouthhustla at 01/07/2009 05:40
Ok, just got done w/the article & comments...So, no more EGM? Or if there is will these guys still be employed to work on the mag? I mean I get most of my info from here, need to look up a certain FAQ I'll go to 1up, but there's something to be said for having a paper mag in your hands. Hard to read Dtoid from the crapper.
darkwhitehair's Avatar
darkwhitehair at 01/07/2009 05:46
I dont think we should hate on UGO... this is what companies do... theyd rather cut their employees in half than lose 1 cent of revenue... its the American way...

problem is... not many people bought their PC magazine... so that had to go... then... not many people bought EGM... so that had to go...

its like an avalanche of shit storms... thats my layman ANALysis...

dont worry Niero... the minute you sell our to a company... we will all happily put a bullet to your head to end your suffering... and then Chad will go around on a old lady-hitting spree...
dprime's Avatar
dprime at 01/07/2009 05:47
Of course it went down because it wasn't profitable. If those sections were profitable, what incentive would there be for the corporation to get rid of them?

If it's not profitable, that means the money they could get wasn't worth the cost of paying for it, basically meaning in real terms that the costs weren't worth the benefits. People could have paid, but they don't do that, that's not worth it to them, neither is shutting off their ad blocker on their website or not pirating the magazine etc. etc. Consumers drive these things.

Unfortunately cult fandoms like this just don't command that much in the real economy. If we want to stop things like this, we should be going to war against pirating/cheap skate take it for granted youth culture today, not corporations that understand the laws of economics. And reality.
funran's Avatar
funran at 01/07/2009 05:48
Man, this sucks so bad. The podcasts were so awesome, the people were so awesome, this is terrible. :( 1up and Dtoid are MY podcasts, even though I have my dtoid podcasts, 1up was still the other half of that. This is so sad. Best wishes to those whom are effected. Although they are very talented, I'm sure they will find new and awesome jobs.
dprime's Avatar
dprime at 01/07/2009 05:49
"theyd rather cut their employees in half than lose 1 cent of revenue"

So they should continually pay people to do something consumers aren't willing to pay more than that for receiving? Why? I know it plays into our cartoonish fantasies of a business monster out to get us, but Scrouge McDuck did not shut down this magazine because he wanted to ruin our day.
Half left's Avatar
Half left at 01/07/2009 05:57
Hmmm, bummer =[.
Detry's Avatar
Detry at 01/07/2009 06:03
Never really thought about that last bit...

/me whitelists the whole site in adblock
Xbudz's Avatar
Xbudz at 01/07/2009 06:06
I too can't sleep with this news, it depressed me and I didn't feel like playing COD W@W.
darkwhitehair's Avatar
darkwhitehair at 01/07/2009 06:27
well dprime... because 1up always had top notch quality articles and podcasts... and it should have been profitable... but people just dont buy magazines anymore...

maybe they could have kept all those people... because now UGO and 1up gets a lotta negative goodwill... and all there best writers are going to work for different companies...

Gamespot laid off some people too... its just sad...
EternalDeathSlayer's Avatar
EternalDeathSlayer at 01/07/2009 06:28
Don't use adblockers!
Takeshi's Avatar
Takeshi at 01/07/2009 06:52
@Niero and EDS

Adblockers suck ass.

Yours,
The Ad-mafia
Wedge's Avatar
Wedge at 01/07/2009 07:17
Ha ha, forgot about that... whitelisted >.>'
Cynical Gamer's Avatar
Cynical Gamer at 01/07/2009 07:24
Fuck UGO!
Spectreman's Avatar
Spectreman at 01/07/2009 07:37
* If one day Destructoid closes the podcasts IŽll find the niero son and dog to avenge.
Technophile's Avatar
Technophile at 01/07/2009 07:37
and thus the unfortunate crap that comes with trying to make money. I understand business. The whole point is to make money so you can keep doing what you are doing. The part I don't like is the opposite ends of the spectrum. The high level suits that would rather muck up peoples lives to keep the business afloat because it's just "easier". Then the other end with business that have talented people but just can't keep up with expenses going through the roof because what they bring to the table doesn't sit in that happy medium of "Mass market"

It makes me sad that mediocrity seems to be the only thing that keeps businesses afloat. How to solve it? I don't even know.
Bioautographical's Avatar
Bioautographical at 01/07/2009 07:56
Reading this article totally made me click on every banner on this page.
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