Los Angeles, California – Despite a successful year for the video game industry in 2023, there has been a noticeable trend of major layoffs by leading game publishers like Epic Games and Activision Blizzard.
While popular games like “The Legend of Zelda: Tears of the Kingdom” and “Marvel’s Spider-Man 2” received widespread acclaim, the industry has been hit with devastating job cuts. This pattern of layoffs has continued into the early weeks of 2024, with Microsoft, Epic Games, Embracer Group, and Electronic Arts all downsizing their workforce.
The reasons behind these layoffs are complex. Some are attributed to redundancy due to mergers and acquisitions, while others are a result of the industry’s rapid expansion and subsequent contraction. The Covid-19 pandemic also had a major impact on the industry, as the surge in interest in video games during lockdown led to inflated expectations and subsequent disappointment as sales declined post-lockdown.
The situation in Sweden’s Embracer Group is particularly enlightening, with the company having to cancel games, close developers, and make staff redundant after an aggressive mergers and acquisitions strategy backfired. Similar stories from other major publishers and smaller studios indicate a widespread pattern of layoffs across the industry.
Additionally, there is growing concern about the role of artificial intelligence in the development and production of games, as it poses a threat to traditional job roles, particularly for voice actors. As a result, more development staff are moving towards unionization and pressurizing the industry to self-regulate.
The wave of layoffs has forced many publishers to rethink their business strategies and focus on more predictable hits, sacrificing innovation and creative risk-taking in the process. Despite the challenges, industry experts remain hopeful that the gaming sector will emerge stronger and wiser from this turbulent period.