Taking the Pulse of the Gaming Industry
Videogames are our favourite pastime; they help us relax after a difficult day and allow us to delve into a world of fantasy. But they don’t just appear out of thin air. It takes millions of dollars from publishers and developers, with hundreds of employees, to make our favourite games happen. This is something that is often lost in translation when we pay the fee and pick up a new title.
As everyone should be aware by now, the price of purchasing these games has gone up over the last few years (about a 15% increase globally, before taxes). This is most likely a direct response to the cost of living increases and general inflation across many national economies. But while such things can be expected in unstable times, many may not be aware that, despite the increasing price of videogames, several big companies have been laying their employees off en masse. You may have already peaked at a story here or there, but today, we are going to take a tally of just how many layoffs have occurred in the past year.
It began back in January of 2023, and here at GameGrin, we were very excited about the giant lineup of big, important titles set to release over the coming months — in my many years of playing games, I had never seen such a lineup before! Then the news dropped from senior editor Tom Warren over at TheVerge that Microsoft was cutting 5%, or 10,000 jobs across multiple gaming sectors, within the next two months. According to Jason Schreier at Bloomberg, those cuts would dip into the divisions behind both Halo Infinite and Starfield. It is also worth noting that the deal between Microsoft and Activision-Blizzard was not yet complete at this time.
For those already feeling upset at the enormity of those layoffs, I regret to say this article does not end just yet; let’s fast-forward to April. Another huge company, this time Amazon, decided to make some cuts of its own. In the report in question, we learn that Amazon's Games Division would be letting up to 100 employees go. This is said to have primarily affected its San Diego development studio. However, Amazon Games vice president Christoph Hartmann said that the company will:
"continue to invest in our internal development efforts, and our teams will continue to grow as our projects progress."
It is worth mentioning that the 100 layoff figure was actually just a small part of a 9000 employee dismissal, 400 of whom were working over at Twitch (which is owned by Amazon).
These layoffs have been widespread throughout the industry, with even beloved Polish studio CD Projekt Red following the trend, announcing in July that it was downsizing its development team by up to 100 people. In fact, whole entities have even been closed down permanently — I am looking at you Embracer!
By this point, the troubles at Embracer should be well known, following a $2 billion investment deal with Saudi Arabia’s Savvy Games Group that fell through. Unfortunately, one such casualty of this debacle was developer Volition. Fresh off their 23rd of August, 2022 release of the rebooted Saints Row franchise, it is unlikely Volition had any idea that they would be shuttered within the next year. According to a 2021 census, about 236 people were employed at Volition.
If you have so far shrugged your shoulders at the news of layoffs, then perhaps this next bit might perk you up in your seat. Around the same time that Volition was closed forever, BioWare announced it was laying off 50 people from its development teams. This comes as BioWare is still hard at work on two highly anticipated projects, the first being Dragon Age: Dreadwolf, and the second being an unnamed Mass Effect title (both games would be the fourth main entry in their respective franchises). You can read BioWare general manager Gary McKay’s official announcement on the matter here. To sum it up for you, he is basically saying that to secure the health of the studio, they needed to trim the fat (yes, I am paraphrasing).
Moving on to September, this time, it was Epic Games stepping up to bat. Once again, Jason Schreier broke the bad news, reporting that 16%, or 830 jobs (about two-thirds from outside core development), were on the chopping block. Of this amount, 250 are leaving the company due to Epic Games having sold its control of Bandcamp and SuperAwesome. If you are interested, you can read the full statement from Epic Games CEO Tim Sweeney at this link. This left around 303 jobs that were cut from core development teams inside Epic Games.
The news for the month of October was no better, with it being revealed that several more companies — Telltale Games, Sony, Naughty Dog, and Bungie — were all laying off staff. Three of those companies have not publicly released information about the extent of the dismissals (at this point, they have probably smartened up), but we do know from a Kotaku report that Naughty Dog axed about 25 staff and proceeded to pressure them into silence. Understandably, there has been anger and talk of the need for developers to unionise among recently dismissed employees.
A former employee of Telltale Games, known as Jonah, shared his thoughts on the platform X (formerly known as Twitter).
Turning to even more recent news, we can look at a Reuters report that Amazon Games has issued another series of cuts, this time in the amount of 180 personnel.
For those keeping score, we have so far confirmed a total of at least 10,994 developer layoffs (within the last 12 months), though exact numbers from Telltale Games, Sony, and Bungie remain undisclosed and are not included in those calculations. Smaller, lesser-known studios have also not been factored into that number, meaning it probably does not even come close to the true amount of talent the industry has lost.
So why is this happening? Well, there are plenty of opinions, but let's try to answer this question by taking a look at the industry as a whole. As I mentioned at the beginning of this article, inflation is driving the price of games up as well as the cost of a livable wage. I also talked about how it takes millions (normally hundreds of millions) of dollars to produce the big-budget games we see year after year from AAA studios. There is a direct correlation between these two factors. When a huge project is finally released to the public and fails to meet shareholder expectations, financial consequences occur within the company, even if the game happens to be successful. This past year saw the completion of dozens of huge AAA projects. Sadly, the fallout almost always falls on the working people rather than those insulated at the top. This culmination of factors has brought about a “reckoning”, something that Ollie Barder (a contributor at Forbes) has long seen coming, writing that “game development budgets have been massive and unsustainable”. To his point, Bethesda Softworks’ recently released title, Starfield, cost an estimated $200 million to make.
A popular opinion from around the web has been that the COVID pandemic has also played a big part. During the peak of the lockdowns, production of film and TV shows was greatly reduced; as such, videogames were in heightened demand. Studios hired more remote workers in an attempt to meet that demand, but now, with the pandemic over and the economy being what it is, those same hires are no longer viewed as sustainable or necessary.
Whatever the reason is, I really want to emphasise the importance of remembering that these numbers represent human lives, relationships, and living conditions that have been turned upside down by these decisions. Sadly, this article is not a call to action, as I have no idea how we, as gamers, can help the situation, but I do know this. It is always important for a consumer to be aware of what's happening in the world. The least we can do is let these hard-working developers and those who are out of a job know that we see them and that they are on our minds.
So what's the verdict? Is this a sign the industry is dying? Should someone do CPR?! No, I don’t think so, but it's definitely not in the best shape, either. Hopefully, with 2024 just around the corner, we will see some stability for the industry we both love and sometimes hate.