The job losses that plagued the games industry in 2023 will escalate in 2024, a sobering new report suggests, with more closures and layoffs ahead.
As we wrote at the close of last year, 2023 was simultaneously a brilliant and awful year for videogames. It brought us some truly great titles – Baldur’s Gate 3, Zelda: Tears Of The Kingdom and Street Fighter 6 to name but three – but also a quite astonishing number of job losses across the industry.
According to a sobering new report published by Games Industry.biz, that misery will not only continue into 2024, but could even escalate further. The outlet spoke to a number of studio heads, investors and other industry insiders to get their expert opinion on where the industry’s headed – and their prognosis doesn’t sound good.
“If 2023 was the year of layoffs,” one boss told GI.biz, “2024 will be the year of closures. Not just developers, but publishers, media, service companies… there are just too many unprofitable businesses in videogames.”
More worryingly, the same insider predicted that the situation could continue well into 2025. “We’re looking at up to two years of pain,” they said.
The reasons for the industry turbulence are manifold. First, rising interest rates have prompted investors to move their money away from the risky business of making videogames and towards safer bets; this means that the money sloshing around the industry earlier in the decade, when interest rates were hovering around zero, have begun to dry up. Rising interest rates have also affected studios’ bottom line, making business costs more expensive, while the sheer number of games greenlit has created a saturated market.
As a result, companies are cutting costs and reducing staff numbers across the industry.
We’re only a few weeks into 2024, and we’re already seeing continued reports of job losses. Only today, it’s been announced that League Of Legends developer Riot Games is to reduce its staff count by a startling 530 employees. CI Games, the developer of Lords Of The Fallen, is laying off some 10 percent of its staff. Days earlier, Swedish firm Thunderful Group, which owns numerous indie studios, announced that it was restructuring, putting about 20 percent of its staff at risk.
These cuts are so widespread that it’s reckoned that 35 percent of game studios have seen redundancies over the past 12 months, according to a survey published by GDC.
The irony is that, from a player’s perspective, everything looks fine – in terms of great games, we’re all spoiled for choice. And while the outlook for the next 12 or even 24 months looks gloomy, there’s at least a shred of optimism from one boss in GI.biz’s report. “The games business is built on very solid foundations,” they said. “When things grow again, we would hope to see a more sustainable and wiser games industry emerge on the other side.”