The first few months of this year have seen the slow-burn layoff crisis that defined the video game industry’s 2023 reach a boiling point. Last week,EA laid off 670 employees, roughly five percent of its total global workforce, andSony laid off 900 workers, closing an entire London-based studio. In January, following its successful acquisition of Activision-Blizzard,Microsoft laid off 1900 employees.Unity laid off 1800,Riot laid off 530,Supermassive laid off 90. On a smaller scale,Disco Elysium’s ZA/UMandStar Citizen’s Cloud Imperium Gameshave both been hit by layoffs, too.
Grand Theft Auto 6developerRockstarrecently announced that all employees will need to return to the office five days a week to prevent leaks and increase focus in the lead-up to the game’s 2025 release — a move that will also, likely, lead to remote workers leaving the studio. Some developers also worry that it will mean the return of Rockstar’sinfamous crunch culture.
Elsewhere,Crash 4 developer Toys for Bob has gone independentafter being hit by the Microsoft layoffs, andEmbracer Group is reportedly selling Borderlands developer Gearbox.Saber Interactiveis also exiting Embracer.
In all, thousands of workers from the most successful and most acclaimed developers in the industry have lost their jobs. Naughty Dog, Insomniac, Eidos-Montreal, Sega —no one at any company seems to be safe from the cuts. It seems borderline apocalyptic and as someone in journalism, a profession that has also been hit by frequent layoffs in recent years, I sympathize with the workers who have lost their jobs and empathize with the many who remain, wondering if they’re next.
Much of this seems to stem from the increasing unsustainability of the games industry. Over the past decade and change, games have been increasingly sorted into two categories. There are indies, made by individuals or small teams. And there are triple-A games produced by teams of hundreds of developers. There aren’t many double-A games being made any more; the kind of game with a modest budget, modest team-size, and modest risk.
This tide seems to be turning somewhat as Helldivers 2 has found major success, and Banishers: Ghosts of New Eden and Pacific Drive have also kept the flame going for double-A in 2024.
Indie devs are often risking their livelihoods to get games made. Chad and Jared Moldenhauer, the brothers behind Cuphead, said that theyremortgaged their houses in order to get the game across the finish line. And triple-A games, increasingly, need to be massively successful to recoup their $100 million+ budgets, another kind of risk that may affect hundreds of people instead of a few. The middle is largely gone, and with it, the games that didn’t cost that much to make, did decent business, and made sure everybody was happy. And, if they flopped, it was okay because they didn’t cost too much anyway.
This is the same model the film industry has contorted itself into in the last few decades, and 2023 was a year of reckoning for the studios writing the checks. Many big-budget tent poles — fromThe FlashandThe MarvelstoIndiana Jones 5and The Little Mermaid — flopped or underperformed. Steven Spielbergpredicteda decade ago that Hollywood’s overreliance on mega-budget would-be blockbusters would come back to bite it when several mega-movies flopped at the box office, and he turned out to be right. Though some expensive movies, like Oppenheimer,Barbie,The Super Mario Bros. Movie, andGuardians of the Galaxy Vol. 3turned out to be big hits in 2023, many more disappointed.
That overreliance on tent poles led to a dearth of mid-budget movies, and directors to make them, as indie filmmakers were often drafted immediately to the blockbuster tier after finding success with a small movie. Directors often had two choices: get an indie passion project off the ground with a tiny budget or helm a $200 million effects extravaganza. There was little in between. The genres that fell in the middle — comedies, rom coms, thrillers, family dramas — all fell out of favor, shunted to streaming or overextended into a doughy limited series, instead of being treated like events worthy of a theatrical release in their own right.
The success of Anyone But You, and to a lesser extent The Iron Claw and No Hard Feelings, suggests that this is shifting in the wake of the superhero movie crash. The games industry seems to be on the verge of a similar shift, and it has additional factors contributing to the need for a change. Unlike movies, video games take way longer to make than they did 20 years ago. In the early 2000s, a movie took a few weeks to a few months to shoot, and up to a year to get post-production finished. That timeline hasn’t changed much (though MCU movies like Black Panther: Wakanda Forever and The Marvels were plagued by reshoots and/or pandemic-related delays). Movies still take about that long to make. But games took a year or two to develop in the PS2 era, and now take four or five. So, while both mediums have increased financial pressure, only one has seen its production timeline significantly extended.
That increased timeline makes each game more risky.Rocksteady Gamesspent nearly a decade working onSuicide Squad: Kill the Justice League, and had no other new sources of income during that time. The game hasnot been well-received, and has seen a sharp drop-off in players. Barring an act of God, it won’t make its money back. That’s one of many downsides to increased development time: a team spends a huge chunk of their lives trying to make something good, and if it doesn’t do well, it’s a massive amount of time and money down the drain with nothing to show. The Flash may have bombed, but it mostly cost money, not a decade of its creators' lives.
This added time pressure makes the likelihood of a sea change happening in games even more likely than it was in Hollywood. Developers seem to be sick of working on things for this long. And when we’ve seen a decade-in-the-making project with hundreds of millions invested in it bombed, it’s tough to see how the risk is worth it for anyone involved.
