Yes, that's what you are required to pay according to UK law. But like I said, skilled workers (such as software developers) which have bargaining power receive more in severance packages than what the law states they should get, as part of their contracts. Associated costs are usually referred to as restructuring charges.
I couldn't find numbers for restructuring charges for Lionhead specifically, but I did find this in the 2016 financial report for all of Microsoft:
That was for the entire company. If Lionhead has 100 employees costs for layoffs should be on the order of magnitude of tens of millions of dollars.
More in general about restructuring charges:
.
http://www.investopedia.com/terms/r/restructuring-charge.asp
Supporting my original point that layoffs and studio closures cost money up front, but pay off long term
So 4700 employees if I'm reading that right? That's not just contract termination fees, that's over $100k each. That will be including relocation aswell as other factors that wouldn't be relevant to the closure of studios. I'm guessing a lot of that is from the Nokia/Mobile phone stuff? I can't remember exactly what went down with that though but I know they had major changes to it last year.
It might be more than what I said but I still have a hard time believing it's enough to offset them into a negative. Xbox makes a lot of money these days I think people understimate just how much. Don't forget they have Minecraft aswell under that umbrella which has sold another 50M since MS bought it. They could be making more, absolutely, but they still make roughly a billion revenue each month. When you're making that much money a million or 2 loss here and there doesn't really move the needle.
- Console price down 1/3 (-Kinect) after 1 year ($500->350)
- At it's first post launch Black Friday you could basically get the console for half it's launch price (-Kinect) through further reductions, rebates and pack-ins
- Even bigger reductions in (parts of) Europe
- Completely dead in Japan
- Underperforming exclusive titles
- Higher cost for exclusive deals through lower marketshare
- Cost of canceled Kinect
- What? They cut the cost of kinect out the box, what does that have to do with them losing money? If anything they were probably making even more money from that and it was $399, the kinect was $150 so that essentially gave them an extra $50.
- Again irrelevant, those consoles didn't come with kinect to the whole half price (which is a ridiculous statement anyway) is nonsense. Yes the price dropped a lot but so did the cost of manufacturing said bundles making this not really relevant to wether they're losing money on it or not
- Where? Lol
- How does this make them lose money? It doesn't, they just don't get money from Japan and the stock and whatnot will reflect that. They never had Japan in the first place.
- Agree but that's not a lot and it's spread out so it will only be a couple mill loss each month of development at best, considering their revenue is around a billion each month, a million or 2 is pennies and really not gonna move the needle (FL was roughly ~1.5M a month and that was an expensive game)
- Which exclusives? By the time lower marketshare was known the only deal that's really been done is ROTR and I DR4 and we don't know how much that cost but I doubt it's a whole lot in the grand scheme of things - hell we don't even know if money exchanged hands, or if they just gave up part of their 30% cut.
- How do you know it cost them money to kill off kinect? It's not like those kinect bundles were lying about, they eventually got sold. Does it cost money to slow down production of an item? If so, any idea how much?
your whole argument for them losing money is basically "the cost of the items went down" while ignoring so did the manfucaturing costs meaning it's possible (and likely) they evened themselves out, actually made more per item or didn't take as big of a hit as you seem to think. Dropping from $499 to $399 with kinect removal wasn't really a price drop in the normal sense.