Layoffs are hitting everywhere recently – and the gaming industry is no exception. Here’s how they are affecting big studios and what it could mean for gamers worldwide.
2024 Layoffs Continue to Impact the Industry
The video game industry has been dealt a tough hand in 2024. Last year the industry saw just over 10,000 layoffs across multiple companies.
Multiple Roles Affected by Job Cuts
Programmers, quality assurance workers, sound designers, artists, and many other workers found themselves without a job.
Hopes for a Temporary Setback Dashed
People were hopeful that it was just a blip in the sector – which raked in billions last year – but new figures from 2024 seem to indicate something else going on.
A New Norm?
It’s June 2024 now, and so far over 10,000 game industry workers have already been laid off – meaning last year’s blip wasn’t so much a blip as a new standard.
New Layoff Figures in 2024 Paint a Grim Picture
2024 started badly and has gotten worse for game industry employees. Days into January 2024, over 500 employees at streaming giant Twitch and over 1800 employees from game engine maker Unity were laid off. And as the months have rolled by, those numbers have only risen.
Some Companies Hiring Amidst Industry Downsizing
While companies like Nintendo continue to hire, the overall industry trend is worrying many. The cyclical nature of hiring and layoffs in the video game industry – where companies ramp up staffing during production and trim down post-launch – has reached a new extreme.
Record-Breaking Revenue Despite Layoffs
It’s a confusing time for many, especially as the industry is performing so well overall. Market analyst Newzoo predicted that the global video game industry would generate $184 billion in 2023 – a recovery following a slight dip in 2022.
Market Predictions
Full financial figures have yet to be released, but the gaming market does look strong, and with some big releases scheduled for this year, revenues could hit new heights.
Take-Two’s Staff Reduction
Individual company performances vary compared to the industry as a whole. Take-Two Interactive: Recently laid off 5% of its staff weeks after spending $460 million acquiring Gearbox. How this will impact their net revenue won’t be known for a long while, but experts claim the company hasn’t been profitable for a while despite its huge portfolio.
EA’s Revenue Increase Amid Layoffs
Electronic Arts: EA reported a 2% increase in net revenue shortly after laying off 670 employees as part of a strategic “refocusing.”
Profits Rise Despite Mass Layoffs
Sega: While Sega’s profits rose, primarily due to its pachinko business, the company still laid off hundreds and divested from studio Relic Entertainment – the studio behind Age of Empires 4.
Microsoft’s Studio Closures and Absorptions
Microsoft has worked hard to muddy the waters around layoffs and profits. This year, the tech giant closed three studios and absorbed a fourth, including Tango Gameworks, which had just released a hugely successful indie title in 2023.
Controversial Statements by Xbox Game Studios Head
Xbox Game Studios head Matt Booty was later quoted talking about the need for “smaller games that give prestige and awards,” which caused a huge outcry by gamers who questioned why they’d shut down multiple successful studios that were producing exactly those sorts of titles.
Impact on Game Releases and Project Delays
Several projects have been canceled or delayed due to these layoffs. So far, 2024 seems to be the year of the indie game, as layoffs at AAA studios have caused multiple delays for blockbuster games. This has resulted in a grand total of zero AAA games being released so far this year.
Delays of Major Titles to 2025
Major titles are getting pushed back to 2025, which is further complicating the issue as these big companies are working within strict budgets and with large teams. Experts are worried that this will just push more companies into awkward positions where they’re forced to lay off productive members of staff.
Economic Factors Behind the Layoffs
But why exactly are these layoffs hitting the industry? It’s a combination of many things. Post-pandemic economic adjustments have seen companies that expanded rapidly to meet demand now realizing they overhired.
Rising Costs and Financial Struggles
The cost of borrowing money has risen due to inflation and higher interest rates, making it difficult for companies to secure funding.
The Rise of Free To Play Games
Players are also spending less on games despite gaming as much as ever. A lot of this can be pinned on free-to-play games like Roblox and Fortnite, which continuously update, and place a big focus on user-generated content.
Long-Term Impacts on the Industry and Workforce
The drive to cut costs and improve a company’s finances often leads to layoffs and studio closures – always with a high human cost. The loss of experienced employees and the cancellation of potentially groundbreaking games are just part of the fallout.
Loss of Industry Experience and Expertise
Many skilled workers leave the industry altogether, taking their years of knowledge and expertise with them. The long-term impacts of these layoffs and closures will likely rebound through 2025 and beyond.
Remote No More: 19 Companies Returning to the Office
As the pandemic wanes, companies are recalling remote workers back to the office, sparking debates on fairness, costs, and convenience. However, there are also notable productivity, coworking, and mental health benefits to consider. Feeling the effects of these changes? Remote No More: 19 Companies Returning to the Office
8 Costco Must Buys and 8 to Leave Behind
Ever wandered Costco’s aisles, questioning if that giant jar of pickles is a real bargain? Or debated buying tires where you get your rotisserie chicken? Welcome to the definitive guide to Costco shopping—a journey to save money, prevent regrets, and offer quirky insights into bulk buying. 8 Costco Must Buys and 8 to Leave Behind
23 Reasons Texas Is the Next Big Thing
Texas is becoming a beacon of opportunity, blending cultural heritage with economic growth. From its landscapes to its industries, the Lone Star State offers a dynamic lifestyle. Here are 23 reasons why Texas stands out, attracting entrepreneurs, artists, tech professionals, and families seeking new beginnings. 23 Reasons Texas Is the Next Big Thing
15 Top Sites to Sell Your Unwanted Goods Besides Craigslist
Selling your unwanted items can declutter your space and boost your income. While Craigslist is popular, there are many alternatives with unique features and wider audiences. Explore these 15 Craigslist alternatives for selling everything from furniture to electronics, finding the perfect platform to turn clutter into cash. 15 Top Sites to Sell Your Unwanted Goods Besides Craigslist
Work from Anywhere: 19 Companies Still Supporting Remote Work
Tired of commuting and craving work flexibility? You’re not alone. Many companies now offer remote work, benefiting both employees and employers. Ever wondered how this shift could enhance your work-life balance? Work from Anywhere: 19 Companies Still Supporting Remote Work
The post Why Is There A Historic Amount Of Layoffs Hitting The Gaming Industry? first appeared on Career Step Up.
Featured Image Credit: Shutterstock / Flystock.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
