Polygon: Video game company layoffs are creating an industry crisis

[John Elden Ring]

Via Polygon (More at website)

‘People were just an expense. They don’t necessarily care about the human impact’

Developers at Palia studio Singularity Six were still celebrating a successful early access launch when a surprising announcement was made: The company was laying off around 10% of its workers. Though the game is a cozy life simulator, layoffs were something that was “not so cozy,” as a Singularity Six leader had called parts of game development in a previous meeting, according to two workers.

Singularity Six is just one of the dozens of game companies that laid off workers in 2023, and its workers are among the thousands of people who lost their jobs this year. Only days after ringing in the new year, layoff announcements started rolling in: Wizards of the Coast canceled multiple projects and laid off a dozen people; game engine maker Unity Technologies cut 300 people; Microsoft laid off a staggering 10,000 people, which impacted both Starfield’s Bethesda Game Studios and Halo Infinite’s 343 Industries. The bad news just kept coming as the year progressed, as studios both big and small axed jobs — Digital Extremes, Epic Games, Telltale Games, BioWare, Bungie, CD Projekt Red, Ascendant Studios, Electronic Arts, Embracer Group and Volition, Amazon’s games division, and too many more.

Though there isn’t clear data on how 2023’s disastrous layoffs compare to other years, game developers Polygon spoke to agree: This has been one of the worst years for workers in a long, long time. (Polygon interviewed more than a dozen game developers for this story.) Unofficial trackers suggest more than 7,000 video game workers have been laid off in 2023; for comparison, another community-driven list suggested there were roughly 1,000 in 2022. The nearby tech industry has seen a 716% increase in layoffs announced year over year, too, according to research firm Challenger Gray & Christmas.

“This is not just one individual company,” video game producer Shayna Moon told Polygon. “This is our entire industry. The current situation is not debatable.”

“Paired with tight economic conditions, the impact of layoffs has been amplified by reduced hiring and increased job competition,” said International Game Developers Association executive director Dr. Jakin Vela in an interview with Polygon.

“This has been one of the most volatile periods in the games industry in the last 15 years.” Vela said that the IGDA is “deeply concerned” about the layoffs.

But why have there been so many layoffs this year? Studios have provided similar kinds of statements about laying off workers: We’re very sad to see our employees go, but we’ve had to make hard decisions during this economic downturn. Sometimes an executive will blame it on a lack of sales or player numbers, like a dwindling player base for Destiny 2 or poor sales with Immortals of Aveum, which was out for mere months before Ascendant laid off half of its staff. Epic Games, which cut its workforce by 800 people, pointed to overspending.

“For a while now, we’ve been spending way more money than we earn,” CEO Tim Sweeney said.

Regardless of the details that led to this moment, the current picture is clear: Thousands of people have lost their jobs, plunging a massive group of people into instability and flooding the market with lots of qualified, established game developers looking for work.

 

[Satoru]

For the purposes of avoiding doubt, let's call a spade a spade:

• Bigger companies are doing this because it devalues the cost of the roles. Corporate bootlickers like to say "they are just getting rid of useless people", but anybody working in any industry that has ever gone through layoffs knows that, for the most part, the job of those laid-off is put on top of those that stay, which are usually overworked already.
• Smaller companies have had their credit cost increase substantially due to the rise of interest rates. They may need to lay people off to survive.
• Most companies laying people off are bigger companies, not smaller ones.

The same has happened in tech. My company laid off over 10% of its workforce, with entire departments being dissolved, only for critical business functions and product lines to go unattended or put on top of people who are either not qualified for them or already working 12h days to keep up with the existing backlog. This is transversal to the whole industry, you just need to get out there and start chatting with people who survived layoffs and have been putting in more work than ever, with salaries not increasing due to "macroeconomic conditions".

Talking about Macroeconomic conditions, that is another excuse. While there was a tiny blip in global markets, economies are still growing, industries are still growing, hell, the gaming industry is still growing.

Video Games - Worldwide | Statista Market Forecast

The Video Games market worldwide is projected to grow by 9.83% (2023-2027) resulting in a market volume of US$363.20bn in 2027.

www.statista.com

There's no economic downturn, we're being sold a lie and a lot of people are buying into it because they think they'll somehow become rich if they suck enough corporate dick.

Global Economic Outlook

The latest data and biggest trends affecting the global economy in the short, medium, and long term

www.conference-board.org

A deceleration in growth =/= economic downturn.

 

[Snes nes]

The above comment is debunked by the list of companies that keep making flop After flop And the ceos saying Their spending more than their making. All these buggy Launch’s and an empty promise to fix it later has made many people not want to buy games day one. It’s been said numerous times the current model for the industry isn’t sustainable the games being made now have a very high budget and not enough money is being made. Rather than cut costs they just keep making these games that cost more than they’ll make back.

 

[Satoru]

The above comment is debunked by the list of companies that keep making flop After flop And the ceos saying Their spending more than their making. All these buggy Launch’s and an empty promise to fix it later has made many people not want to buy games day one. It’s been said numerous times the current model for the industry isn’t sustainable the games being made now have a very high budget and not enough money is being made. Rather than cut costs they just keep making these games that cost more than they’ll make back.

"The above comment is debunked by exceptions".

Good job.

 

[Snes nes]

"The above comment is debunked by exceptions".

Good job.

Yes I’m certain your facts are not debunked by the enormous budgets these games have these days.

Why the Video Game Industry Is Becoming Unsustainable

Something's gotta give in the video game industry.

culturedvultures.com

Large booms are followed with a loud crash. That’s how this‘ll go. That’s why All these companies are buying one another and laying offs are Happening because of that.

 

[Satoru]

Yes I’m certain your facts are not debunked by the enormous budgets these games have these days.

Why the Video Game Industry Is Becoming Unsustainable

Something's gotta give in the video game industry.

culturedvultures.com

Large booms are followed with a loud crash. That’s how this‘ll go. That’s why All these companies are buying one another and laying offs are Happening because of that.

And yet, the biggest publishers are raking in large profits, and the gaming industry revenues have doubled in less than 10 years. Go read my original post if you have any difficulty understanding.

Btw, you're the typical corporate cocksucker I expected to reply.

 

[Snes nes]

And yet, the biggest publishers are raking in large profits, and the gaming industry revenues have doubled in less than 10 years. Go read my original post if you have any difficulty understanding.

math equation:

If I spend 30 dollars on a broken trinket ,spend 20 repairing it then sell it for 60 dollars. Let’s say I did three of these. Did I truly make a worthwhile investment?

Btw, you're the typical corporate cocksucker I expected to reply.

A corporate shill would not be arguing the current triple a model is not working.

 

[historia]

math equation:

If I spend 30 dollars on a broken trinket ,spend 20 repairing it then sell it for 60 dollars. Let’s say I did three of these. Did I truly make a worthwhile investment?




A corporate shill would not be arguing the current triple a model is not working.

Yea Western developers nowadays are entitled for sure, no ways in hell somebody could be overworked and still have time with "activism" online.

I would say Bungie's layoff is the best. All the communication team are fired and they are utterly useless. Like that Latinx is so disrespectful if I was literally 1/5 of the North America population.

 

[Zzero]

For the purposes of avoiding doubt, let's call a spade a spade:

• Bigger companies are doing this because it devalues the cost of the roles. Corporate bootlickers like to say "they are just getting rid of useless people", but anybody working in any industry that has ever gone through layoffs knows that, for the most part, the job of those laid-off is put on top of those that stay, which are usually overworked already.
• Smaller companies have had their credit cost increase substantially due to the rise of interest rates. They may need to lay people off to survive.
• Most companies laying people off are bigger companies, not smaller ones.

The same has happened in tech. My company laid off over 10% of its workforce, with entire departments being dissolved, only for critical business functions and product lines to go unattended or put on top of people who are either not qualified for them or already working 12h days to keep up with the existing backlog. This is transversal to the whole industry, you just need to get out there and start chatting with people who survived layoffs and have been putting in more work than ever, with salaries not increasing due to "macroeconomic conditions."

I'll say this, at my old job we had layoffs early on in Covid and it actually increased productivity because a bunch of roadblock people were gone. Even though our industry ended up getting a boom in sales due to covid (much of which was squandered by incompetent management) we didn't bring a lot of those people back and ended up better off for it.

I think a similar thing is going on here, a lot of the cuts were non-core people in HR and marketting (who probably spent hours a day chatting with their friends anyway) and the cuts were made to prepare for an "economic downturn" that never ended up occuring. Not in the US anyways, which is where a lot of these cuts are occurring. So in addition to the pretend recession, I think its also as much a re-evaluation of Covid-era spending priorities as anything else.

 

[Satoru]

I think a similar thing is going on here, a lot of the cuts were non-core people in HR and marketting (who probably spent hours a day chatting with their friends anyway) and the cuts were made to prepare for an "economic downturn" that never ended up occuring. Not in the US anyways, which is where a lot of these cuts are occurring. So in addition to the pretend recession, I think its also as much a re-evaluation of Covid-era spending priorities as anything else.

In my company we had quite a few entire teams disbanded, only for those functions to either be abandoned or put on someone else's lap. It's quite funny to see engineers running around trying to figure out who owns a particular section of core product, only to find out the team was laid off.