The past calendar year has been a banner one for best-selling, critically acclaimed video games.
Blockbuster titles like Alan Wake 2, Marvel’s Spider-Man 2 and Super Mario Bros. Wonder headlined a year full of critically acclaimed games that sold tens of millions of copies.
But behind the screens, the games industry has been in a dramatic state of turmoil, as thousands of developers and other employees have lost their jobs in the past 12 months.
“I have personally never written so many stories about layoffs from the industry,” said Nicole Carpenter, senior reporter at the video game website Polygon.
“I’ve never heard from so many workers concerned about layoffs in the industry, which is interesting because the video game industry is notoriously volatile.”
More than 6,000 jobs had been cut in 2023 as of mid-October, according to industry news site Gamesindustry.biz — with more announced since then.
That includes cuts at several teams in Canada, like Ubisoft, Digital Extremes, Electronic Arts-owned BioWare, Sega-owned Studio Lumi and Phoenix Labs.
The most dramatic numbers come from some of gaming’s biggest players, including more than 800 at Epic Games, makers of Fortnite; and more than 1,000 over several waves of cuts at Unity Technologies — both based in the U.S.; and more than 900 at Sweden-based Embracer holdings group.
It’s fomented a sense of fear and anxiety among developers, with many worrying they may be next on the chopping block — whether their own workplace has seen cuts this year or not.
“The vibes are rancid,” said Leisha-Marie Riddel, an associate art director at Behaviour Interactive, maker of the popular online game Dead by Daylight.
“No one really knows what the future holds for them.”
Cooling market after pandemic boom
The reasons for the layoffs are myriad, as every studio or publisher’s circumstances are unique, said Rebekah Valentine, reporter at the gaming site IGN.
But a common thread is overspending in 2020 and 2021, as gaming saw an explosion of interest during the pandemic lockdown periods.
“They hired tons and tons of people for tons of new projects. They approved a bunch of projects. I believe there was probably a lot of investing in, like, cryptocurrency and AI technologies as well, Valentine said. “We saw a bunch of acquisitions.”
As 2022 rolled into 2023, however, rates of COVID vaccination rose, lockdowns lifted, fewer people were working from home — and interest in gaming plateaued.
WATCH: Video game reporter on why so many jobs were lost in 2023
Overspending by developer studios is one factor that led to massive layoffs in the industry throughout 2023, says IGN reporter Rebekah Valentine.
Many games currently in development also had their release dates delayed, pushing back potential revenue sources to 2024 or beyond.
“I do think that trend of overspending, not fully paying attention, not adequately preparing for the future and over hiring and then suddenly saying, ‘Oh, well, crap. Now it’s the people we hired who are going to pay the price for that’ is a pretty common trend,” said Valentine.
A letter to staff by Epic Games CEO Tim Sweeney backs this up, at least for that studio.
“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeney said.
“I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.”
Canada losses could have been worse: industry rep
Jayson Hilchie, CEO and president of the Entertainment Software Association of Canada, said many companies “had no choice but to scale up” as interest in gaming soared during the pandemic.
He said many developers knew cuts would eventually claw back those expansions — they just didn’t know when.
“No one had any clue when that was going to end, and no one actually knew for sure, you know, how much normalization would happen,” he said.
A dramatic rise in inflation, and an increase in interest rates, made things even harder in Canada, he said.
However, Hilchie said the losses at Canadian studioswere not as drastic as some industry watchers had feared.
“We haven’t seen any, you know, meltdowns. We haven’t seen any massive studio closures or … layoffs of hundreds and hundreds of people,” he said.
That may be cold comfort for developers who have lost their jobs, as well as those left behind.
Several developers who spoke to the CBC describe a sense of survivor’s guilt, compounded with the fear that they could be next.
“There’s a lingering unease permeating,” said Osama Dorias, lead gameplay designer at Brass Lion Entertainment based in Montreal.
“No company seems immune. It’s as if the entire industry is holding its breath and bracing itself for another blow. And the blows keep coming.”
Riddel said some developers may be trying to outperform their coworkers in the hopes of protecting themselves from future layoffs. But she warned that approach was more likely to lead to burnout, and fail to influence their chances of surviving any potential cuts.
Growing unionization talks
Carpenter said unionization talks have accelerated in the past few years, particularly as news of layoffs increased in 2023, but also as a response to companies calling employees to return to the office after spending much of the pandemic working remotely.
That’s a major shift for the games industry, which like other technology sectors has historically resisted this kind of organization.
In 2022, quality assurance workers for Ireland-based Keywords Studios, who are based in Edmonton and did contract work for BioWare, became Canada’s first unionized game workers.
But in October, they were all laid off by Keywords, after BioWare chose not to renew their contract.
James Russwurm was one of the people laid off. Now he’s a campaign organizer for a union representing video game industry workers. For many years, he said, developers have been treated as “disposable” by studios.
“It’s a very passion-based industry. You’re putting a lot of your heart and soul into what you’re doing. And then for the company to just turn around and be like, you know, you’re a line on a spreadsheet and you’re cut, you know, is pretty disheartening, I think, for a lot of people,” he said.
Carpenter said the relentless headlines about job losses might slow down in the coming months, as many of these announcements tend to come around the end of companies’ third fiscal quarter.
But Valentine notes that even if employment in the sector does recover, that won’t ease the hardship felt by those who were laid off, nor can it totally make up for the loss of their institutional knowledge.
“There aren’t a whole lot of open positions right now, due to the situation we’re in. And so maybe they just desperately need to feed their families and they’re going to go somewhere else and will never have their creativity in game development again.”
