Layoffs Hit the Video Game Industry
Over the last year, layoffs have plagued video game developers. Post-pandemic, the industry may be producing too much content at a time when people have less free time to game.
You may assume the video game industry is going strong. During pandemic lockdowns, youths spent their copious free time gaming. And in 2023, the industry had several commercial hits like The Legend of Zelda: Tears of the Kingdom and Baldur’s Gate 3.
In fact, gaming studios are beginning to hit headwinds.
According to a poll of 3K game developers, 35% were either laid off or had co-workers laid off within the last year. The L.A. Times estimates the industry experienced over 6.5K layoffs in 2023. That figure includes major studios like Amazon, Ubisoft, and Epic Games. 56% of developers are concerned about further cuts in 2024. Just last week, Microsoft laid off 1.9K Activision Blizzard employees. That’s about 8% of its gaming workforce. Amazon is laying off one-third of all workers at Twitch, the real-time video channel for global gamers.
So what’s behind this trend? People have less free time to game now that the pandemic is over. Moreover, as firms compete with each other, they may be oversaturating the gaming consumer with content. There are more video games to buy than ever before. And each game takes longer to master or even to complete. Some campaigns require 100 hours to slog through. (See “Video Games Are Taking Longer to Complete.”)
These layoffs may be triggering stronger support for unionization. According to the above-mentioned poll, 57% of developers support unionizing their firm—that’s up +4 percentage from the year prior. The poll did not ask developers how a union will generate more consumer demand for their products.
Did You Know?
Reruns Dominate Streaming. According to a recent Nielsen report, Americans streamed an astounding 21M years’ worth of content in 2023. That’s a +21% YoY rise. Eight of the top ten streaming shows benefited from large catalogs of episodes. Five of them are no longer running but have many seasons: Suits, The Big Bang Theory, Gilmore Girls, Friends, and Supernatural. And three of them have been on the air for over 15 years: NCIS, Grey’s Anatomy, and Heartland. Viewers can endlessly binge episodes from these series. Quantity of content is a major struggle for original shows on streaming services. While many new series are critically acclaimed, they don’t have enough episodes to keep consumers engaged for weeks (or even months) at a time.
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