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The gaming industry has never exactly been synonymous with job security, but what is causing this unprecedented amount of layoffs in 2024?
By 2027, the gaming industry is slated to be worth a staggering $282 billion. That said, what on Earth is going on with the continuous layoffs being reported across major publishers?
Sony is the latest in a slew of gaming giants to let hundreds of staff members go in one fell swoop. 900 employees were axed this week, with Sony citing missed sales targets and a $10 billion plunge in stock price as the motivation behind the ‘headcount’ reduction.
Prior to this, EA, Microsoft, Epic, Sega, and Twitch had terminated the employment of a combined 10,500 people throughout 2023, according to a trusted layoff tracker. Just 90 days into 2024, that number has reached a staggering 6,000 workers already and the word crisis is beginning to appear in analysts’ vernacular.
While there is no blanket reason for the continued exodus across the board, industry leaders tend to agree that gaming’s resounding success throughout the pandemic inadvertently led us to this point.
‘Unprecedented levels of engagement’ during periods of lockdown, when isolated folk were turning to games in droves for a level of escapism, supposedly fuelled unrealistic projections for industry growth in the following years.
Without a captive audience, however, hefty wage bills from publisher hiring spikes are becoming untenable when weighed against overshot profit projections. In hindsight, the figures were naively optimistic with no cautionary measures to guard against any potential backslide.
Years later, the reality isn’t so rosy for gaming executives. Games investments hit major lows in 2023, Sony has fallen significantly short of PS5 sale targets, and revenue streams are reportedly down by 4% in the US – a far cry from the boundless profits expected.
‘It’s hard to believe now, but the cultural conversation at the time was really driven by this belief that these gains would hold,’ explained computer industries professor Laine Nooney.
‘The media attention that was poured onto this spike [during the pandemic] in hours streamed or money made really did contribute to a kind of collective delusion that all of this was going to continue forever,’ he said.
With reality beginning to bite years later, both AAA and indie developers are cutting manpower as a quick and effective means of balancing the books. In the last month alone, Microsoft laid off 1,900 Activision Blizzard employees, Discord laid off 17% of its staff, and Unity dismissed a quarter of its entire workforce.
It’s not just overzealous hiring which has brought us to this point, though. Unfair as it is, staff have always been viewed as disposable for publishers, and the majority of those long in the tooth of gaming careers will be used to living project to project and bouncing around with no real job security.
