It's Only January And Almost 6,000 Video Game Development Or Gaming Industry Related Jobs Have Been Eliminated (UPDATED)

Kotaku recently published a gut-wrenching article that annotated every single studio closure or layoff announcement in the game development industry and in gaming-related companies in 2024 thus far. There are a few themes with the cuts and layoffs in January. In the gaming adjacent businesses, most, including Twitch and Discord, have admitted that their pandemic-informed growth targets and projects were unsustainable. In terms of the industry, the cuts are starting to shift to international businesses, though a soul-crushing number of layoffs still centered in the US game development sphere. A handful of developers cutting staff came from South Korea where mobile games are cooling and investments into the Metaverse have not delivered. Concerns about the Japanese mobile and gacha market are looming but have yet to translate into any major collapses or layoffs.

Nonetheless, the list of cuts and layoffs in January as of the publishing on this thread are:

• Archiact - Unknown Number Of Impacted Employees - Developer of Doom 3 VR port.
• Bossa Studios - 19 Impacted Employees - Only 40 employees remain and all are dedicated to Lost Skies
• Unity Software - 1,800 Impacted Employees - Layoffs have cut approximately 25% of all staff remaining after 2023's cuts and layoffs.
• Twitch - 500 Impacted Employees - Cuts eliminated approximately 35% of Twitch's total staff and the CEO continues to maintain Twitch is not profitable.
• Playtika - 300-400 Impacted Employees - Israeli mobile game developer.
• Discord - 170 Impacted Employees - Cuts represent approximately 17% of the company's total employees. CEO admits that Discord try to do "too many projects" since 2020.
• Lost Boys Interactive - 125 Impacted Employees - Layoffs impacted "all disciplines at all levels" in this Gearbox-owned subsidiary.
• Funselektor - 3 Impacted Employees - Small indie developer of art of rally.
• PTW (aka Pole To Win) - 45 Impacted Employees - Q&A contractor that has worked for Blizzard & Capcom. Mostly impacting employees oyutside of the United States but in "several countries."
• Thunderful/Thunderful Group - 20% Of Staff Or At Least 100 Impacted Employees - Swedish video game holding company and domestic rival to Embracer.
• Pixelberry Studios - Unknown Number Of Impacted Employees - Nexon-owned mobile game developer that shutdown servers for their game, High School Story.
• Netspeak Games - 25 Impacted Employees - Studio behind Sunshine Days, set to release in Q1 2024.
• Wimo Games - 35 Impacted Employees & Complete Studio Shutdown - Studio behind RPG Dice: Heroes of Whitestone, Battle Bows, and Micro Machines: Mini Challenge Mayhem.
• Behaviour Interactive - 45 Impacted Employees - The studio behind Dead By Daylight and claims the cuts represent "less than 3% of our total workforce."
• CI Games - Cutting 10% Of Staff (Estimated To Be Around 15-20 Impacted Employees) - Developers behind Lords of the Fallen, Hexworks and Sniper Ghost Warrior, Underdog, are reportedly being impacted are targeted in these layoffs.
• 31st Union - ~10 Or Fewer Impacted Employees - This 2K-owned subsidiary claims only "a very small number of team members" are being laid off.
• Com2uS - "a two-digit number of people" Impacted - A Korean mobile and online game developer and the cuts are largely do to a cooling of expectations on Metaverse expectations and a lagging South Korean economy.
• Metaverse World (Netmarble F&C) - 70 Impacted Employees - A South Korean metaverse-focused subsidiary that has been completely liquidated.
• Ntreev Soft (NCSoft) - 70 Impacted Employees - NCSoft has laid off all employees at its Ntreev Soft subsidiary and prior to this shutdown three of its mobile titles, Trickster M, Pro-Baseball H2, and Pro-Baseball H3.
• Riot Games - 530 Impacted Employees - Cuts represent 11% of Riot's workforce and Riot Forge will shutdown in Feb. 2024. Riot promised "a minimum six-month severance pay, a cash bonus equal to their 2023 Annual Performance Bonus, a laptop, job placement services, and access to their work email for a limited time after termination"
• One Player Mission - 15 Impacted Employees & Complete Studio Closure- A video game recruitment agency that had been in operation for 26 years.
• People Can Fly - 30+ Impacted Employees (And Growing) - Scope of Outriders is being scaled back and reports indicate that 20 remaining staff at the Polish developer have been migrated to other projects instead of Outriders previously announced revitalization project/roadmap, "Project Gemini."
• Black Forest Games - ~50 Impacted Employees- Cuts represent 50% of total workforce. Insider source told Kotaku that "creative directors and most “if not all” of the managers will keep their jobs"
• Microsoft - 1,900 Impacted Employees - Approximately 8.6% of Microsoft's "gaming workforce." Cuts primarily impacts Activision-Blizzard and Blizzard president Mike Ybarra and chief design officer Allen Adham have left the company.
• Reikon Games - About 60 to 70 Impacted Employees - Approximately 80% of the studio's workforce. Studio's last release was Ruiner in 2017.
• Little Red Dog Games - 27 Impacted Employees & Complete Studio Shutdown - Indie studio behind Rogue State Revolution.

Unofficial estimates indicate as many as 9,000 people in the games industry were laid off in 2023. With these cuts in just the first month of 2024, the new year does not look like it will be any better for individuals not in the highest and most-protected echelons of the industry. That's especially the case when insiders are apparently telling corporate leaders in the industry to prepare for "two years of pain" regardless if the United States and world markets ebb into a recession or not. To highlight, here's what one such insider and a studio boss had to say about the financial prospects of the industry heading into 2024:

The video game industry and its supporting beneficiaries echo resounding and overwhelming cuts in technology this year. For example, Google has laid off around 1,000 employees in January of 2024 alone, though its attempts to introduce layoffs in South Korea are being met with massive resistance. Cuts in legacy media this year have also been especially brutal with Pitchfork being subsumed into CG, National Geographic discontinuing newsstand sales, and Sports Illustrated firing its entire editorial staff. Also, Giant Bomb's former owner, Red Ventures is attempting to explore a sale of CNET and other CBS/Viacom websites it purchased in 2020 for $500 million. Axios reports that they are attempting to "to get at least half of that for CNET alone."

I just read that Insomniac is possibly going to be forced into reduction - makes me realize that absolutely nobody is safe.

This is all pretty disheartening this early in the year. Some of these companies like Riot seem like they are/should be profitable. Worth noting that none of the CEOs who overexpanded or invested in bad projects seem to be impacted.

The most curious thing here, though, is that Behavior Interactive has 1,500 employees if 45 people is 3% of staff. How BIG is Dead By Daylight? I would have thought maybe 100-150 employees but I guess they pump out a lot of DLC.

@mach_go_go_go: What often goes unnoticed is how rapid the manpower growth in gaming has been, since Sony acquired Insomniac they've tripled in size ~500, the same for Bungie who went from 900 to 1350 despite laying off ~100 people. Gaming studios are massive even a small staff reduction will impact a lot of people.

@mach_go_go_go: If you're making cuts it kind of makes sense to cut everywhere so that studios don't appear favored, but Sony making cuts now just seems like another arrogant move. And closing another studio after Japan Studio seems like yet another escalation of their strategy of putting all their eggs in a shrinking number of baskets.

It's absolutely infuriating that mismanagement is not only ruining thousands of lives, but that leadership never seems to be held accountable for their poor decision-making. You have to have a Unity-sized self-own to even consider replacing a CEO apparently. It's either cowardice, or evidence of a broken system, or both.

@allthedinos: This is a large scale problem of "tame" boards that are either CEOs themselves (and thus not interested in holding CEOs accountable) or are friends of the current CEOs. There's just no accountability in leadership. It's not just a matter of CEOs not being replaced (which they should be more often but which at least you can argue is expensive and can lead to inconsistent strategy if you do it too often) its that they never get pay or bonus cuts even when they perform badly. And sometimes cutting staff, even in times of profitability, can be seen as a good move and is rewarded.

Spider-Man 2 was a huge hit and Sony's PlayStation business is doing very well. There's no need to cut staff at Insomniac. But they're (probably) going to do it because cutting for cutting's sake is seen as a positive.

@bigsocrates: Agreed. The number of Sony-driven titles (partnered, published or developed) is shrinking year over year and I don't know how anybody from within looks at that and thinks "this is going to end well for us".

Also, breaking: Microsoft lays of another 1,900 across Blizzard and Activision.

This is not just in the video game industry. Economist predict 2024 is going to be a very hard year for people. This is just the beginning.

That's how several Vice executives framed it after they did all those layoffs last year that included Waypoint (who, again, it has since come out that they may have accidentally been fired and weren't supposed to be but somebody fucked up and fired them and couldn't undo it. That's the level of confusion and mismanagement going on at Vice at the time). When pushed to justify why executives gave themselves five-to-six figure bonuses in the few days between firing a bunch of staff and filing for bankruptcy, Vice management basically said that it was a tough time for them and they were having to make difficult decisions that would help the company.

@mach_go_go_go: What a bloodbath. About 8% of the entire Microsoft gaming division. They're struggling and layoffs after a merger are standard operating procedure, but Microsoft itself is making enormous amounts of money and this is a terrible look. Phil Spencer is immolating his "good guy" image. These may not actually be his decisions, but he is the face of the division and has to own them. Meanwhile Blizzard leadership is out the door...just an enormous mess.

@av_gamer: All this while the US economy grew 3.3% and the stock markets are hitting record highs. What a great system.

Guys, I'm starting to think "infinite growth" is some kind of, I dunno...MYTH.

@bigsocrates: no wonder E3 is cancelled - nobody can afford it.

Christ, it must suck to be a Microsoft shareholder right now, especially after yesterday's other announcement...

I really don't know how to brooch discussion of this industry anymore without just launching into a profanity ridden tirade and calling for the executive class to be rounded up and launched into the sun. I hate it.

I think a lot of the downscaling is a result of the upscaling the industry did during covid, everyone's trying to find a size that makes sense in the current climate, a lot of gambles didn't pay off and the human cost is pretty horrific.

Profitable publishers are firing people anyway but... that's something they've always done, we've also entered an era where AAA games are insanely expensive to make, hundreds of millions of dollars, and the results have been pretty disappointing in recent times.

I think we've pushed the boundries enough, the industry defining experiences of the past had a tenth of the budget and while there's lots of arguments to be made about the state of the world and the value of money, you could still make Metal Gear Solid 2 10 times using the budget of Forspoken.

I don't think the answer in this environment is to create the new biggest best looking thing ever, i think it's smaller teams making smarter games, if $500 million results in mediocrity it's time to find out what $50 million can do.

@cikame: Why would you want to make Metal Gear Solid 2 10 times? I think they've only made Metal Gear Solid 3 like 6 times and that seems to have worked out okay. That's 4 too many!

I think there's something to the scaling up thing. In Microsoft's case there's also post-merger cost cutting, which is normal, and probably the cancellation of projects that made sense for Activision as an independent entity but not Microsoft as a whole.

But I don't think budgets are going to shrink. Games are and always have been a hit driven industry, and most of the predictable hits (as opposed to the out of nowhere indies like Minecraft or Stardew Valley) are huge budget projects. There are exceptions; Fortnite being a huge one, but you look at the best-selling games year to year and they're usually pretty predictable.

Most of us would agree that Hi-Fi Rush executed on what it was trying to do better than Starfield did, but it looks like Starfield sold better and moved more Gamepass subscriptions. And Sony has moved almost entirely to massive budget releases for first party stuff.

I think the layoffs have complex causes, and in many ways they're similar to the causes of other tech industry layoffs. But I don't think scaling down budgets is going to fix things and save jobs (in fact you'd probably lose jobs because most of the spending in games is on salaries.)

Game Pass is in some ways an attempt to make smaller games more viable (because a project like Hi-Fi Rush or even Pentiment can have value there and find an audience) and yet it doesn't look like Microsoft is avoiding huge expensive developments because it knows that's where most of the big hits still come from.

@cikame: Those big games have enormous returns, Spider-Man 2018 cost 220m yet made 825m. From the Sony leak pretty much all the big games see a 2/3x return, the recent studio closures have been the smaller titles. Its why the industry has consolidated around a fewer bigger games.

@thepanzini: The only thing I'd add is that sometimes the big games DO whiff. Like Avengers or Anthem, and when they whiff they often whiff hard, and can take developers or even publishers down with them. Sony is mostly making "guaranteed" hits, but there's no actual guarantee that will continue.

And of course sometimes these games explode into more or less entire industries, like GTA V.

@bigsocrates: That's true for any game particularly lower down the scale, indie games face a lot more competition and are one miss from being done.

At least the big studios get several chances to fail, and the misses are not always fatal, Anthem did 2m week one even at $50 that's 100m it probably broke even or was very close.

@thepanzini: It's true for any game, but on a publisher level it's very different. A single big flop can destabilize a smaller publisher, while if a smaller game flops it's much less consequential. This used to be one of the main reasons we HAD publishers, to spread the risk out among games so that they could fund 10 games and if 2 were hits they would pay off the other 8 (this is also how the book and movie industries typically worked.)

Some big studios get multiple chances. Bioware certainly has, but it was at one time one of the premier studios in gaming. Volition got 2 chances, which I guess is more than 1. Other big studios have closed after one major flop.

My point is just that these big swings are not sure things, and when they miss they can really hurt even major industry players. Did Avengers flopping close down Square Enix? No, but that's one of the advantages of the FF XIV steady income. It did cause them to sell off Crystal Dynamics, so there's a studio that didn't close on one major flop but took a heavy hit.

Sony has a very strong track record over the last 10-15 years with the vast majority of their big games hitting, but when you've only got a few titles coming out a year a couple big flops can hurt you badly. Now in Sony's particular case it's a larger company than just PlayStation and it's a leading platform holder so it will be fine, but we've seen smaller publishers and especially studios go under from one or two huge bad bets.

Won't someone think of the shareholders? They're our most precious resource!

We're literally seeing this happen in the movie industry right now with the audience fatigue showing for Marvel movies. Those movies had budgets in the hundreds of millions and were being treated as if they were guaranteed money printing machines (a similar thing happened previously with Star Wars too). Now suddenly these movies are shakier looking financially and the studios producing them are left figuring out what to do next since their hugely expensive safe bets aren't safe anymore. A lot of the game publishers seem to be copying this big budget franchise movie model but without any obvious pivots to move to should their big budget games lose the interest of the audience (See pre-Microsoft Activision, who went from having a diverse line up of games to literally only Call of Duty. Had Call of Duty suddenly lost popularity and sales, the Activision part of ABK would have been boned and the company would have been purely reliant on Candy Crush microtransactions and WoW to survive since they've basically got rid of everything else and Blizzard's two most recent games weren't massive hits like Blizzard games of old were).

@ben_h: ABK have $13b cash on hand that insulates them from the risks, games also have more more diverse revenue streams through B2P, mtx, subs and mobile etc. COD has been the best selling franchise for 15 years the suddenly lost popularity wouldn't hit across mobile, F2P and B2P, it would likely be a gradual decline. If a movie fails its pretty much game over it can't phoenix from the flames like R6 Siege.

Jeff Gertsmann would agree with you. He said this during his Tuesday podcast. Many of them upscaled during Covid, not taking into account that eventually things would go back to normal or close to it.

The Blizzard layoff was the real surprise to me. Microsoft has like several bajillion dollars in cash reserves. If there's anybody that I thought would have the balls to actually take a big bet on a new IP, it would have been them. Phil Spencer seemed to have the authority to actually try some crazy stuff and the understanding that they HAD to try some crazy stuff for the future of the gaming division -- man, why the hell would you buy Activision Blizzard and then gut Blizzard? It feels like something EA would do, and that's not a comparison you want made.

@thepanzini: You're not wrong there's always exceptions, i think Bethesda would have to disappoint many more times before their well established fan base stops buying their games, same with Call of Duty apparently despite the horrific delivery of MW3, which some sources suggest had a budget of over a billion $'s, you could make a hundred MGS2's with that budget :P.

A lot of us are looking at Suicide Squad as a catalyst for change in the AAA business, it's become the poster child of a business model that is out of date and out of touch, but hey bad publicity is still publicity, and i absolutely won't be surprised if it does gangbusters anyway.

More relevant now than ever

I think some of this falls into the same view of the world that is highlighted by this quote:

"The world has enough for everyone's need, but not enough for everyone's greed." ~ Mahatma Gandhi

I see this over and over again, a profitable business that makes money is bought up first by a conglomerate and the is attacked by "Investment Firms" that are not investing at all but rather tearing bit and pieces apart to sell off until nothing but a husk remains that is STILL profitable by other disreputable people "betting against" the company's stocks. The deck is stacked against any company taht does not have double digit growth.

Toy R's Us was not failing, it was set up to fail. GameStop was not failing, it was setup to fail. And so many other retailers and now these pirates are going after game companies. I think at least 2/3 of the companies on that list could have probably survived is they cut back a tiny bit, made a few 'conservatives bet' games, and regrew some strength. But, when you gte bought out the quality of what you can so is NEVER looked at...just how much sheer profit have a corp has made in the last 9 months.

For gaming the adage would be , "The market has enough for everyone's modest profit, but not enough for every multinationals' greed."

I truly think we need a stronger law passed by the US Legislature that will impose fines for speculating on company's failures or market manipulation. We need laws that makes firing staff to boost the bottom line untenable, and that punishes companies that reward executives for firing staff. I think layoffs should make using any tax breaks impossible, so that losing staff is simply not worth itas a scheme to increase profits.