Video game companies are bad | Take-Two sack 580 people (5% of workforce)

rinks wrote:Oh yeah, the numbers are huge. But just yesterday, Lloyds announced the axing of 1,600 branch staff, and nobody batted an eyelid. (Yes, obviously we're games industry focused here, but you know what I mean!)

It was the same in the 90s, when I worked in the banking industry. Massive layoffs all round, and the public didn't care. They seemed to think the branch staff were somehow the villainous "fat cat bankers" they heard so much about, when really we were appallingly low-paid. Job losses in other industries were wailed over. It felt very unfair. And now people bemoan the loss of branches.

FatDaz wrote:Seems like a massive domino effect at the moment. Not sure why? At a time when companies are spending billions to buy developers and the revenue is higher than ever. Was 2023 a bad year commercially? I’m curious why it’s become so prevalent these last 6 months or so.

The current turmoil in the video games industry will continue all year and likely into 2025, games industry leaders have told GamesIndustry.biz.

Speaking to us privately, publishing, development and investment heads have said that continued high interest rates, oversaturated video game stores and cautious investors will result in more restructures, layoffs and closures.

One CEO of a public company told us: "If 2023 was the year of layoffs, 2024 will be the year of closures. Not just developers, but publishers, media, service companies... There are just too many unprofitable businesses in video games. We're looking at up to two years of pain."

Some investors we spoke to expect interest rates to come down, which will likely stimulate more investment, but not until later this year. Until then, there are simply "far safer ways to invest your money than video games. Although it's not the only industry facing this issue," said one angel investor.

A leading VC added: "Why take a gamble with a games company when you can just stick the money in the bank and earn 5%?"

Interest rates put pressure on costs, and not just wages, but also insurance, travel, rent and other business costs. Meanwhile, there is no room to raise video game prices to compensate. "There is simply no tolerance of any further price moves," said one MD.

"If 2023 was the year of layoffs, 2024 will be the year of closures"

But a growing concern for the publishers we spoke to is the abundance of games being released across all platforms.

"Too many games were green lit in 2020 and 2021," one publisher boss said. "We need to get to pre-pandemic levels in terms of the release schedule, and that's probably going to take two years. You can already see publishers signing fewer games. That's happening everywhere. The stores are saturated, not just Steam, and the games just aren't delivering the levels they were. "

Another said: "The expansion and investment over COVID has left engagement-based businesses, not just video games, spread too thin. We're doing too many things that aren't delivering."

"Layoffs are a rare occurrence in Japan, and are only permitted in cases of truly severe financial distress where the employer can demonstrate that a reduction in workforce is necessary in order to avoid insolvency. In the case of a multinational employer, this necessity is judged based on the employer’s worldwide operations, not just its operations in Japan. Even in clear-cut bankruptcy cases, there are further procedural hurdles for the employer to clear.

Before implementing layoffs, the employer must make efforts to avoid layoffs by implementing other cost reduction measures. The scope of measures required can vary depending on the circumstances of the employer, but may include reduction of working hours, reduction of executive compensation[!!!), personnel reallocation and solicitation of voluntary resignations. If a terminated employee can demonstrate that alternative cost reduction measures were available to the employer, their termination may be declared invalid.

The selection process must also be reasonable. Case law suggests that employers can consider certain objective factors such as disciplinary history, attendance rates, and family support obligations when deciding which employees should be terminated. Age-related considerations have been upheld in certain cases and invalidated in others. The use of subjective or unclear standards, such as personnel evaluation results, may allow employees to challenge the process.

Throughout the process, the employer is required to consult with any applicable labor unions and to explain the process to employees in good faith. As in the case of disciplinary termination, there is a statutory 30-day notice period, which may be shortened with the approval of the regional Labor Standards Office."

https://www.employmentlawworldview.com/ ... -in-japan/

Jazzem wrote:

This was quite enlightening; I didn't know Japan's layoff laws were so employee favouring:

"Layoffs are a rare occurrence in Japan, and are only permitted in cases of truly severe financial distress where the employer can demonstrate that a reduction in workforce is necessary in order to avoid insolvency. In the case of a multinational employer, this necessity is judged based on the employer’s worldwide operations, not just its operations in Japan. Even in clear-cut bankruptcy cases, there are further procedural hurdles for the employer to clear.

Before implementing layoffs, the employer must make efforts to avoid layoffs by implementing other cost reduction measures. The scope of measures required can vary depending on the circumstances of the employer, but may include reduction of working hours, reduction of executive compensation[!!!), personnel reallocation and solicitation of voluntary resignations. If a terminated employee can demonstrate that alternative cost reduction measures were available to the employer, their termination may be declared invalid.

The selection process must also be reasonable. Case law suggests that employers can consider certain objective factors such as disciplinary history, attendance rates, and family support obligations when deciding which employees should be terminated. Age-related considerations have been upheld in certain cases and invalidated in others. The use of subjective or unclear standards, such as personnel evaluation results, may allow employees to challenge the process.

Throughout the process, the employer is required to consult with any applicable labor unions and to explain the process to employees in good faith. As in the case of disciplinary termination, there is a statutory 30-day notice period, which may be shortened with the approval of the regional Labor Standards Office."

https://www.employmentlawworldview.com/ ... -in-japan/

So we hopefully shouldn't see this at Japanese studios at least. I have to imagine it would've happened at Tango Gameworks if not for these stipulations! That would've especially been galling on Hi-Fi Rush's anniversary.

Of course, it's horrific we're seeing mass layoffs anywhere, let alone to this extent...As Photek said, the testimonies coming out are heartbreaking

Ruiner developer Reikon Games lays off half its studio

60 to 70 people reportedly affected.

Reikon Games has reportedly laid off 60 to 70 people, equating to 56 percent of the company.

According to Kotaku, layoffs at the Ruiner developer happened on 23rd January. These layoffs were to the surprise of its staff, who said they were "sudden" and "shocking".

The Poland-based company was established in 2014. It went on to release Ruiner, a brutal action shooter, in 2017. In Eurogamer's Ruiner review, contributor Edwin Evans-Thirlwell called it a "powerfully grim, fleet-footed cyberpunk action odyssey that is caught in the spell of its own nihilism".

The studio has since shared a tease for its next game with a piece of sci-fi inspired artwork. "Piece by piece, implant by implant, everything is being prepared," Reikon shared in September last year. "Our new game is coming. Are you ready to know more?"

The studio was hiring for available positions at the company as recently as August.

twitter.com/jasonschreier/status/1750543289227284649

Eurogamer wrote:Crash Bandicoot developer Toys for Bob and Call of Duty studio Sledgehammer Games have reportedly lost around 40 per cent and 30 per cent of their staff, respectively.

Eurogamer wrote:Visual Concepts Austin - known for its work on WWE 2K23, NBA 2K24, and Lego 2K Drive - is the latest studio to be affected by layoffs across the video games industry.

While the exact number of those impacted by these recent layoffs remains unclear, the studio's former art manager Brad Bowling said he and a "group of very talented developers" were affected.

The layoffs at Toys for Bob are much higher than previously estimated - a report from two weeks ago claimed between 30 to 40 percent of jobs would be affected, which was estimated to be around 35 people.

rinks wrote:Cracking week for Microsoft news.

Activision Blizzard's Crash Bandicoot and Spyro studio Toys for Bob lose 86 employees as a result of layoffs.
https://www.eurogamer.net/microsoft-lay ... oot-studio

Part of the 1900 losses previously announced. But...

The layoffs at Toys for Bob are much higher than previously estimated - a report from two weeks ago claimed between 30 to 40 percent of jobs would be affected, which was estimated to be around 35 people.

Based on that estimate, Toys for Bob had about 100 staff. If 86 are going, that's basically the end of the company.

twitter.com/gamedevdotcom/status/1758068656431313229

Photek wrote:

rinks wrote:Cracking week for Microsoft news.

Activision Blizzard's Crash Bandicoot and Spyro studio Toys for Bob lose 86 employees as a result of layoffs.
https://www.eurogamer.net/microsoft-lay ... oot-studio

Part of the 1900 losses previously announced. But...

The layoffs at Toys for Bob are much higher than previously estimated - a report from two weeks ago claimed between 30 to 40 percent of jobs would be affected, which was estimated to be around 35 people.

Based on that estimate, Toys for Bob had about 100 staff. If 86 are going, that's basically the end of the company.

Toys for Bob went from 86 to 50 people and has not been closed down.

Photek wrote:

twitter.com/gamedevdotcom/status/1758068656431313229