Mass Layoffs Are Causing Big Problems in the Video Games Industry

As games like Baldur’s Gate 3, Alan Wake II, The Legend of Zelda: Tears of the Kingdom, Spider-Man 2, and so many more marked 2023 as a year of instant hits and commercial success, developers were suffering. Layoffs rolled across the industry worldwide, knocking out a reported 6,500 jobs from studios like Amazon Games, Ubisoft, Epic Games, and Niantic. Roughly one-third of developers were affected either directly or indirectly by job losses in 2023, according to new data released today by organizers of the Game Developers Conference, and the industry impacts will be felt for months to come.

Each year, the GDC polls attendees about issues facing the industry, from layoffs to generative AI to diversity efforts. For the current survey, they polled 3,000 developers from game studios large and small. The replies paint a concerning picture about long-term career sustainability within the game industry, a field that perhaps grew too quickly during the Covid-19 pandemic and is in the midst of rapid consolidation as well as burgeoning unionization efforts.

According to the survey, conducted in October 2023, 35 percent of developers were either laid off or had colleagues laid off at their companies. Of those layoffs, it was quality assurance workers who seemed to have been most impacted; 22 percent of QA workers said they’d been laid off in the last year. Only 7 percent of developers overall reported losing their jobs. (Perhaps unsurprisingly, it’s quality assurance workers that have been leading the union charge at companies like Activision Blizzard.)

Developers also expressed apprehension that their companies could have layoffs within the next year, with 56 percent of respondents declaring some level of worry about future cuts. “The layoffs are concerning because they don’t seem to be following the ‘typical’ cyclical trend of layoffs after a project ships,” said one respondent. “Not that that was great either, but it’s hard to predict these days where and when layoffs might happen.”

Many developers believe the reason behind the industry’s mass layoffs is pandemic-related: Studios that ballooned in headcount are now facing harsh realities as people spend their money elsewhere. “I see it as a correction now that revenue is back to more normal levels post-pandemic,” said one respondent. Another deemed it “a reality of doing business” in changing markets.

Job insecurity can lead to bigger problems for developers than just finding new work. Developers on work visas face the threat of deportation and losing the lives they’ve built abroad. For others, it keeps them from seeking out jobs with healthier environments: “I feel forced to stay in a toxic environment.”

For smaller studios looking to survive, the industry’s rush toward consolidation may offer some solace. According to a developer at “a small company just trying to make ends meet, there is an allure in making oneself desirable for acquisition.” It alleviates some of the pressures caused by financial burdens. Developers are still split on the impact of consolidation at large, however; 43 percent believe it will negatively affect the game industry.