The Great Video Game Layoffs

[avatar! | 1,823]

The video game industry is booming. Why are there so many layoffs?

A great question!

https://theconversation.com/the-video-game-industry-is-booming-why-are-there-so-many-layoffs-222685

The video game industry had a banner year in 2023, with critically acclaimed blockbuster titles selling millions of copies. Yet, it was also a year of layoffs with 10,500 game makers losing their jobs. And with 5,900 reported layoffs in January alone, 2024 will likely surpass the previous year’s numbers.

If the industry is booming, why are there so many layoffs? Who is benefitting? Who stands to lose? And what can we do about it?

There’s an easy answer to the question of who benefits from layoffs — it’s shareholders. Many of the largest layoffs have come in the wake of corporate takeovers. Some companies explicitly point to improving profit margins as their impetus.

You're welcome to read the rest of the article, but the two lines above are basically it.

https://www.gamesradar.com/games/after-at-least-1400-layoffs-7-studios-closed-and-29-games-canceled-embracer-ceo-admits-i-deserve-a-lot-of-criticism/

Amid an ongoing period of unprecedented volatility in the video game industry, Embracer laid off 1,400 employees, shuttered seven studios, and canceled 29 games over the course of about nine months in 2023.

[CEO Lars Wingefors] "As a leader and an owner, sometimes you need to take the blame and you need to be humble about if you've made mistakes and if you could have done something differently...I'm sure I deserve a lot of criticism, but I don't think my team or companies deserve all the criticism. I could take a lot of that blame myself. But ultimately I need to believe in the mission we set out and that is still valid, and we are now enabling that by doing this [new] structure."

Yeah, typical CEO. They always have golden parachutes anyway -- so even if a company goes down, people lose their jobs and wonder how they will pay rent, these CEOs just quietly take in some millions of dollars and call it quits. Apparently the CEO of Activision earned over $77,000 PER HOUR --

https://www.nme.com/news/gaming-news/activisions-bobby-kotick-is-the-second-highest-paid-ceo-in-gaming-3137849

Honestly, with AI becoming what it is, I'm wondering if these companies are basically waiting for this scenario --

1)Purchase and have a ton of well known IPs
2)Use powerful AI that can create, debug, and make games. There will be some limited human oversight of course.
3)Since the vast majority of people will be replaced by AI, it's time to make bank!
4)Repeat steps above.

Edited April 26 by avatar!

[Reed Rothchild | 9,563]

You should read the book Press Reset.  Very insightful.  And not flattering of the AAAs.