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Vivendi Universal gaming unit closes office, cuts staff

The company's Flipside.com subsidiary closes its Seattle office and lays off 39 employees to focus on its core business.

Vivendi Universal subsidiary Flipside.com said Monday that it has closed its Seattle office and laid off 39 employees to focus on its core business.

Vernon Thompson, a spokesman for the unit, said the online game site last week transferred 30 percent of its 37 staffers in Seattle to Vivendi Universal Sierra Online's Bellevue, Wash., offices. The remainder were laid off. Another 13 employees, mostly game developers, were sent packing from the company's main Berkeley, Calif., office.

Flipside was formed in March 2000 following the merger of online game sites Won.net and PrizeCentral.com. It makes money through advertising and draws viewers by offering cash and prizes.

Although analysts say Web surfers are signing up to play online games, Web companies that rely on advertising revenues have hit hard times. Net bellwether Yahoo is among those facing substantially lowered expectations for 2001.

Many large Net companies have embraced online gaming, which has grown popular over the past few years. For instance, Lycos acquired Gamesville in December 1999, adding it to its network of sites. Sites such as Yahoo, Excite, Go.com, NBCi and Go2Net host rounds of backgammon, chess and card games on their sites. Flipside rivals such as Pogo.com and Uproar center their businesses exclusively on gaming.

Flipside has offered some innovations in a crowded market.

In August, the company partnered with America Online to produce games that can be played over the ICQ instant messaging service. In January, it created a series of email games.

Flipside spokesman Thompson called the move "strategic" and not primarily aimed at cutting costs. He declined to say whether the privately held company is profitable.

"At one time we were doing some CD-ROM" game development work, he said. "We've stopped that."