Game studio hardships likely to last 2 years
When you move fast and break things you BREAK THINGS. Three offices minimum closed, throwing hundreds of employees out into the most hostile job market in years.
While many parts of the economy are hiring and recovering, IGN did an excellent article on the bloodbath of layoffs going on in game studios the last 12 months. Major layoffs that have continued into 2024.
“If 2023 was the year of layoffs, 2024 will be the year of closures”
This has lead to some industry experts claiming this will last two years. They cite:
- Too many games were green-lit and now numbers must return to pre-covid levels
- Game investment is risky, and not attractive when banks give you 5% for no risk
- Customers have less money due to inflation while costs continue to rise – and customers have no tolerance for price increases.
- It’s not just competition against new games, but old games that still have big player bases.
The solution: divest or cut areas of the business that are unprofitable or distract from their core business that delivers the most money.. “Focus isn’t exciting, but getting back to basics…is needed in a lot of cases”
IGN’s take
Instead of the usual knee-jerk FUD and activist calls you see on the topic, IGN did some actual journalism and talked with studio devs. What were the causes as they saw it? Similar to the gamesindustry article above.
There’s plenty of layoffs due to gross mismanagement and greed, but there’s also plenty that happen because this is a stupidly volatile market that requires mountains of capital to participate in at a professional studio level. For all the things Ascendant did right (paying people well, an entirely remote studio, little overtime until the end, chill environment with lots of freedom to grow, respecting QA, hiring juniors, etc.), it did not work out.
I’d say our layoffs weren’t part of a broader trend. We were the noise amongst a clear signal: a company that was reckoning with nearly a decade of missed bets at the latest possible moment before even more drastic, maybe studio ending, change would have come. I can’t begin to document the sheer volume of 50/50 bets that Relic management made with Company of Heroes 3 that ultimately all went bad.
Some of the points made were the ever increasing development costs and time, inherently high-risk environment in which the MAJORITY of games do not become blockbusters or even recoup their costs, dramatic decline in venture capital with rising interest rates. Others bet on failed premises such at blockchain tech. But time and again, it seems that it’s clear that game companies make bets on what makes a hit title and were wrong. Which is statistically the case. Much like movies, it’s very hard to know what’s going to land and what falls flat. Games are risky, and the lessons might be that smaller, faster projects help you work through the bad ideas faster.
Definitely worth a read. Probably one of the better researched and accurate portrayals out there.