The video game industry is facing increasingly tough times. While 10,500 employees were laid off in the entire year of 2023, the industry has already reached this number in the first five months of 2024.
Troubles in the Video Game Sector
In 2023, the technology world witnessed a significant wave of layoffs, and the video game industry was no exception. According to Obsidian’s data, 10,100 people in the gaming sector have lost their jobs so far in 2024. This figure nearly matches the total number of layoffs in the sector for the entire previous year.
One of the most significant layoffs this year came from Microsoft, which let go of 1,900 employees from Activision Blizzard and Xbox in January, citing the need to create a sustainable cost structure. Similarly, game engine developer Unity cut 25% of its workforce, equating to 1,800 jobs, after a challenging year.
Take-Two, the parent company of Rockstar, also announced last month that it was reducing its workforce by 5%, which means around 600 employees were let go. Interestingly, Take-Two stated that while this move would cost approximately $200 million, it would save over $165 million annually. Another major player, Electronic Arts, also reduced its workforce by 5%.
Overall, more than 20,000 people in the video game industry have lost their jobs in the past 18 months. This number could be higher as some companies have not disclosed the exact number of layoffs. Analysts predict that while the rate of layoffs might slow down, it will not come to a complete halt.
Industry Reactions and Future Outlook
Michael Douse, the publishing director at Baldur’s Gate 3 developer Larian, recently commented that these layoffs are unnecessary. He asserted that no company is on the brink of bankruptcy, but rather, they are taking these steps to keep shareholders happy and continuously increase profits.
As the video game industry navigates these challenging times, it’s clear that the focus on profitability and shareholder satisfaction is driving many of these decisions, much to the detriment of the workforce. The impact of these layoffs on the industry and its employees will be felt for years to come.
What are your thoughts on the increasing number of layoffs in the gaming industry? Share your opinions in the comments below.
