It’s about time for another look at the week in gaming business, and sadly, we’ve got some more grim numbers for you this week, with industry layoffs already surpassing last year’s totals.
Several studios laid off employees or closed their doors for good this week, lending a rather moody coda to the summer gaming showcase season, and the week also featured some questionable comments by Xbox head Phil Spencer.
Here’s our roundup of this week’s biggest gaming business news.
2024’s industry layoffs have surpassed 2023’s figures
We start today with a rather sad and grim figure. According to this industry layoff tracker, layoffs have reached a rough total of 10,800 this year, which means they’ve surpassed 2023’s total already, despite the fact we’ve still got half of the year ahead of us.
In late May, 2024 industry layoffs hit 10,000, so there are just a few weeks between that unfortunate milestone and this one. In fact, the number is likely even higher than the tracker suggests, given that we don’t have numbers for some of the companies listed.
Given these figures, the enthusiasm of the Summer Game Fest showcases feels misplaced, especially given that some of the companies excitedly demonstrating new games were the very same ones hit by the worst layoffs.
Several studios hit by layoffs
Unfortunately, this week saw a wave of layoffs to add to the aforementioned counter, and some pretty big studios were affected, as well as some smaller outfits.
Final Fantasy Brave Exvius developer Gumi announced that it plans to cut around 11% of its staff this week, and Archiact, which has already been a victim of the layoff wave this year, said goodbye to further staff members as well.
Contract studio Lionbridge, which has worked with Activision and other studios, reportedly laid off 160 employees, and Polygon’s Nicole Carpenter claimed these layoffs occurred due to “union organizing and inquiring about working conditions”.
Further layoffs occurred at Sumo Group, which announced plans to cut “up to 15%” of its staff and to close down subsidiary Timbre Games. We also saw layoffs of around 30% at VRChat‘s developer, which cites 2021-22 overhiring among its reasons for laying off employees.
Additionally, Armello studio League of Geeks made a decision to go “into hibernation” this week, citing “the economic situation in games” at the moment. This layoff and closure train sadly just keeps rolling, it seems.
Phil Spencer’s questionable comments at IGN Live
During the tail end of the IGN Live event, Xbox’s Phil Spencer made some comments about the ongoing wave of industry layoffs, as well as his own shock decision to close Tango Gameworks, Arkane Austin, and two other studios last month.
Speaking to Ryan McCaffrey, Spencer said that he “ha[s] to run a sustainable business inside the company and grow”, and that this mandate requires him to make “hard decisions that frankly are not decisions I love”.
Given that Microsoft isn’t exactly doing badly right now in financial terms and that Xbox has referred to Tango’s Hi-Fi Rush as “a breakout hit”, Spencer’s comments seem mystifying, especially since he neglected to provide any kind of clarification regarding how exactly closing these studios would contribute to a “sustainable business”.
It seemingly gets worse, though. During the aforementioned IGN Live event, the crowd cheered during Spencer’s response to the question regarding studio closures, despite the fact that the question, and the response it demands, don’t seem like a laughing matter.
According to a person who was apparently in the crowd during that event, attendees were “told and pumped to cheer”, with the loudest cheers getting prizes like gaming headsets.
If that’s true, it seems at best like a shamefully inadequate response to a problem that’s sweeping the industry, and at worst like trying to force audience members to cheerlead a company that has just caused hundreds of people to lose their livelihoods.
In other news…
We’ve just got time to take a look at a couple of other stories that happened on the business side of the industry this week, and they don’t involve layoffs, thankfully.
According to GamesIndustry.biz, Netflix Games boss Mike Verdu is moving on to a new role within the company. We don’t know what that role is, but GI.biz says it involves “innovation in game development”. How mysterious.
Finally, Embracer Group announced this week that it has completed the divestment of Borderlands developer Gearbox, which was sold to GTA publisher Take-Two back in March.
That’s all we’ve got for you on the industry side of things this week. Join us again next week when we’ll take another look at what’s been happening (and hopefully have a slightly less devastating layoff number to report).
