2022–2025 video game industry layoffs

The layoffs were not a singular event but rather the culmination of several converging factors. The COVID-19 pandemic unexpectedly fueled a surge in video game demand.{{Cite web |last=Carpenter |first=Nicole |date=2024-02-19 |title=What's going on with all these video game industry layoffs? |url=https://www.polygon.com/gaming/24074767/video-game-industry-layoffs-explainer |access-date=2024-03-03 |website=Polygon |language=en-US}} This led companies to make ambitious investments in acquisitions, mergers, and staff expansion, anticipating sustained growth.{{Cite web |last=Skwarczek |first=Bartosz |title=Council Post: How The Gaming Industry Has Leveled Up During The Pandemic |url=https://www.forbes.com/sites/forbestechcouncil/2021/06/17/how-the-gaming-industry-has-leveled-up-during-the-pandemic/ |access-date=2024-03-03 |website=Forbes |language=en}} However, as the world reopened and the market returned to pre-pandemic trends, the rapid growth proved unsustainable, and companies found themselves with bloated operational costs, necessitating cutbacks.{{Cite web |date=2024-02-02 |title=What the video game industry's layoff wave means for you |url=https://www.digitaltrends.com/gaming/game-developer-layoffs-january-2024/ |access-date=2024-03-03 |website=Digital Trends |language=en}}

The cost of developing AAA games has steadily climbed in recent years due to several factors. The increasing complexity of game design, the adoption of advanced technologies to create "visually stunning" experiences, and rising player expectations for expansive and cinematic content all contributed to this cost inflation.{{Cite web |date=2023-05-01 |title=Blockbuster Game Development Costs Are Out Of Control |url=https://kotaku.com/microsoft-activision-blizzard-call-duty-gta-vi-halo-1850391113 |access-date=2024-03-05 |website=Kotaku |language=en}}{{Cite web |title=How Much Does It Cost To Make A Game In 2023? |url=https://gamemaker.io/en/blog/cost-of-making-a-game |access-date=2024-03-05 |website=GameMaker |language=en}} This put immense pressure on company budgets.{{Cite web |title=Development budgets for AAA games are now reportedly 'reaching unprecedented ranges' |url=https://www.trueachievements.com/n53671/aaa-game-development-costs |access-date=2024-03-05 |website=TrueAchievements |language=en}} The global economic slowdown in 2024, coupled with rising interest rates, made it more challenging for companies to secure funding. This limited their ability to invest in new projects and maintain existing ones, further contributing to the need for workforce reductions.

According to a report cited by the Competition and Markets Authority (CMA), development budgets for AAA video games have surged in recent years.{{Cite web |last=Parreno |first=Ryan |date=2023-05-04 |title=CMA Discovers Video Game Budgets Are Ballooning To As Much As $ 1 Billion |url=https://gameranx.com/updates/id/465096/article/cma-discovers-video-game-budgets-are-ballooning-to-as-much-as-1-billion/ |access-date=2024-03-05 |website=Gameranx |language=en-US}} While AAA releases previously had budgets ranging from $50–150 million, games set for release in 2024 or 2025 are now seeing budgets of $200 million and higher. Some franchises, like Call of Duty and Grand Theft Auto, have budgets exceeding $250 million and $300 million, respectively. Additionally, according to the CMA, one major publisher mentioned that a single AAA game could have development costs between $90–180 million and marketing budgets ranging from $50–150 million. For certain franchises, such as one cited by the CMA, combined development and marketing costs reached $660 million and almost $550 million, respectively.{{Cite web |title=Multiplatform |url=https://multiplatform.com/news/the-cma-report-reveals-rising-costs-for-aaa-game-production-which-could-exceed-1bn/ |access-date=2024-03-05 |website=multiplatform.com}} Activision noted the increasing need for multiple studios to meet the demands of annual Call of Duty releases, leading to greater reliance on outsourcing.{{Cite web |last=Zollner |first=Amelia |date=2023-04-28 |title=Major Publishers Report AAA Franchises Can Cost Over a Billion to Make |url=https://www.ign.com/articles/major-publishers-report-aaa-franchises-can-cost-over-a-billion-to-make |access-date=2024-03-05 |website=IGN |language=en}} According to Bloomberg, video game executives anticipate a trend towards big-budget games that take fewer risks and rely on well-established intellectual properties (IP), especially as game development costs continue to rise. Martin Sibille, Vice President at Tencent Games and a former EA executive, highlighted the increasing difficulty in taking risks within the industry.{{Cite news |title=Video-Game Executives Lament Lost Creativity at Developer's Show |url=https://www.bloomberg.com/news/articles/2024-03-22/video-game-executives-lament-lost-creativity-at-developer-s-show |access-date=2024-03-23 |publisher=Bloomberg L.P.| date=22 March 2024 }}

Rising development costs have prompted video game publishers to either cancel or delay their games and lay off development teams. The Embracer Group notably announced the cancellation of 29 titles.{{Cite web |date=2024-02-15 |title=Embracer Group quietly cancelled 29 unannounced games and shut 7 studios within six months last year |url=https://www.yahoo.com/entertainment/embracer-group-quietly-cancelled-29-142430421.html |access-date=2024-03-05 |website=Yahoo Entertainment |language=en-US}} Microsoft Gaming canceled Odyssey, a game Blizzard Entertainment had worked on for over 6 years and laid off some of the same staff who had worked on Odyssey.{{Cite web |date=2024-01-26 |title=Report: Microsoft Cancels Blizzard's Survival Game Amid Layoffs |url=https://kotaku.com/xbox-activision-blizzard-odyssey-survival-game-cancel-1851200488 |access-date=2024-03-05 |website=Kotaku |language=en}} Sony canceled a live service game from Naughty Dog and London Studio, resulting in layoffs at both studios.{{Cite magazine |last=Stewart |first=Marcus |date=2020-06-19 |title=Naughty Dog Ceases Development Of The Last Of Us Online |url=https://www.gameinformer.com/2023/12/14/naughty-dog-ceases-development-of-the-last-of-us-online |archive-url=https://web.archive.org/web/20231215011151/https://www.gameinformer.com/2023/12/14/naughty-dog-ceases-development-of-the-last-of-us-online |url-status=live |archive-date=December 15, 2023 |access-date=2024-03-05 |magazine=Game Informer |language=en}}{{Cite web |last=Carpenter |first=Nicole |date=2024-02-27 |title=PlayStation laying off 900 workers, closing PlayStation Studios London |url=https://www.polygon.com/24084509/playstation-layoff-900-workers-feb-2024 |access-date=2024-03-05 |website=Polygon |language=en-US}} Electronic Arts canceled an untitled Star Wars game by Respawn Entertainment, indicating a shift in focus away from licensed titles towards live service games and original IP.{{Cite web |date=2024-02-28 |title=EA Cancels Respawn Star Wars Shooter Amid Mass Layoff |url=https://kotaku.com/star-wars-fps-respawn-canceled-cuts-layoffs-ea-1851295478 |access-date=2024-03-05 |website=Kotaku |language=en}} Ubisoft canceled three previously unannounced games in January 2023, citing dismal financial results from the previous quarter.{{Cite news |date=2023-01-11 |title=Ubisoft cancels three unannounced games, delays Skull and Bones again |url=https://www.eurogamer.net/ubisoft-cancels-three-unannounced-games-delays-skull-and-bones-again |access-date=2024-03-09 |work=Eurogamer.net |language=en}}

Some of the newly founded AAA game development studios, such as Ridgeline Games and Deviation Games, closed down before even releasing their first video game. Ridgeline Games, founded in 2021, shut down just three years later in 2024. It was previously led by game director Marcus Lehto, who made a decision to leave Ridgeline Games. EA laid off the entire team on February 29, 2024.{{Cite web |last=Grganto |first=Katelyn |date=2024-02-29 |title=EA Shuts Down Battlefield Developer Ridgeline Games |url=https://gamerant.com/ea-battlefield-developer-ridgeline-games-closed/ |access-date=2024-03-09 |website=Game Rant |language=en}} Deviation Games shut down on March 1, 2024, just four years after its establishment in 2020.{{Cite web |date=2024-03-09 |title=Deviation Games shuts down |url=https://www.gematsu.com/2024/03/deviation-games-shuts-down |access-date=2024-03-09 |website=Gematsu |language=en-US}} The studio co-founder, Jason Blundell, left the company in 2022, and the studio canceled its new AAA live service game in 2023.{{Cite web |last=Fox |first=Tanner |date=2022-09-12 |title=Deviation Games' Co-Founder Leaves Studio |url=https://gamerant.com/deviation-games-co-founder-jason-blundell-leaves-studio/ |access-date=2024-03-09 |website=Game Rant |language=en}}{{Cite web |date=2023-05-12 |title=Deviation Games' PS5 Exclusive Project Doesn't Appear to Be Progressing Well |url=https://www.pushsquare.com/news/2023/05/deviation-games-ps5-exclusive-project-doesnt-appear-to-be-progressing-well |access-date=2024-03-09 |website=Push Square |language=en-GB}} Less than two years after the studio was opened, Prytania Media closed Crop Circle Games, citing "changing consumer tastes" and "economic conditions changing due to the pandemic."{{Cite web |last=Rousseau |first=Jeffrey |date=2024-03-25 |title=Prytania Media shutters Crop Circle Games |url=https://www.gamesindustry.biz/prytania-media-shutters-crop-circle-games |access-date=2024-03-27 |website=GamesIndustry.biz |language=en}} Smilegate Barcelona, the studio established in 2020 to develop an open-world AAA console title, shut down just 4 years after its establishment.{{Cite web |date=2024-03-27 |title=Smilegate Barcelona reportedly closed and all employees let go |url=https://www.videogameschronicle.com/news/smilegate-barcelona-reportedly-closed-and-all-employees-let-go/ |access-date=2024-03-28 |website=VGC |language=en-GB}}

The video game tariffs imposed at the onset of the second Donald Trump presidency could contribute to increasing costs.

The escalating expenses associated with video game development have prompted major gaming companies like Sony and Warner Bros. Games to pivot towards creating mobile and live service games.{{Cite web |last=Peters |first=Jay |date=2023-05-24 |title=PlayStation is betting big on new franchises and live service games |url=https://www.theverge.com/2023/5/23/23735274/sony-playstation-new-franchises-live-service-games-business |access-date=2024-03-05 |website=The Verge |language=en}}{{Cite web |last=Pureza |first=Gabriel Machado |date=2023-11-09 |title=Warner Bros. Wants to Turn Biggest Franchises into Live-Service Games |url=https://gamerant.com/warner-bros-live-service-games-franchises/ |access-date=2024-03-05 |website=Game Rant |language=en}} Layoffs and studio closures have also impacted successful live service game companies, such as Epic Games and Bungie.{{Cite web |date=2023-09-28 |title='Fortnite' maker Epic Games cuts 16% of staff after 'spending way more money than we earn' |url=https://www.latimes.com/entertainment-arts/business/story/2023-09-28/epic-games-layoffs-fortnite |access-date=2024-03-05 |website=Los Angeles Times |language=en-US}}{{Cite magazine |last=LeBlanc |first=Wesley |date=2024-06-04 |title=Destiny 2 Dev Bungie Hit With Layoffs, Just 15 Months After PlayStation Acquisition |url=https://www.gameinformer.com/news/2023/10/30/destiny-2-dev-bungie-hit-with-layoffs-just-15-months-after-playstation-acquisition |archive-url=https://web.archive.org/web/20231030183445/https://www.gameinformer.com/news/2023/10/30/destiny-2-dev-bungie-hit-with-layoffs-just-15-months-after-playstation-acquisition |url-status=live |archive-date=October 30, 2023 |access-date=2024-03-05 |magazine=Game Informer |language=en}} Several live service games launched in 2023 shut down within months, affecting developers and publishers alike.{{Cite web |title=What the heck is happening with live service games? |url=https://www.gamedeveloper.com/business/what-the-heck-is-happening-with-live-service-games- |access-date=2024-03-05 |website=gamedeveloper.com |language=en}} These games, which employ a substantial portion of the industry workforce and generate significant profits, have faced challenges including rising development costs, user fatigue with monetization, and revenue declines post-COVID-19. Additionally, trends like battle royale games are maturing, and expanding franchises to mobile platforms does not always yield expected returns.{{Cite magazine |last=Melrose |first=Carter |title=Why Battle Royale Games Like 'Fortnite' Are Everywhere (It's Not Just Money) |url=https://www.wired.com/story/fortnite-battlefield-rise-of-battle-royale/ |access-date=2024-03-05 |magazine=Wired |language=en-US |issn=1059-1028}} Sony's entry into live service gaming has encountered significant challenges and delays, resulting in the postponement of several major live service titles.{{Cite web |last=Kaser |first=Rachel |date=2024-01-23 |title=Subscriptions, live service games will slow down in 2024 {{!}} Newzoo |url=https://venturebeat.com/games/subscriptions-live-service-games-will-slow-down-in-2024-newzoo/ |access-date=2024-03-05 |website=VentureBeat |language=en-US}}{{Cite web |date=2023-11-09 |title=Sony Delays Six Live Service PS5 Games, But Company Remains Committed to Model |url=https://www.pushsquare.com/news/2023/11/sony-delays-six-live-service-ps5-games-but-company-remains-committed-to-model |access-date=2024-03-05 |website=Push Square |language=en-GB}}

Although live service initiatives are becoming more popular, 68% of producers say their pipelines cannot support these kinds of projects.{{Cite web |title=The real challenges and rewards of running a live service game |url=https://games.creative.barclays/resource-hub/games/industry-insights/the-real-challenges-and-rewards-of-running-a-live-service-game/ |access-date=2024-03-05 |website=Barclays Games and Creative |language=en-US}} Furthermore, 53% of major studios expect difficulties in handling their technical debt. 88% of developers questioned said they are looking into integrating new tools into their workflows due to the steep rise in game production expenses and complexity.{{Cite web |last=Kaser |first=Rachel |date=2024-02-02 |title=Report suggests studios lack tech to sustain live service ambitions |url=https://venturebeat.com/games/report-suggests-studios-lack-tech-to-sustain-live-service-ambitions/ |access-date=2024-03-05 |website=VentureBeat |language=en-US}} The market is nearing saturation, leading to increased competition for player time and higher user acquisition costs.{{Cite web |last=Severin |first=Karol |date=2023-07-25 |title=Competing in the live service games sector is about to get really difficult |url=https://www.midiaresearch.com/blog/competing-in-the-live-service-games-sector-is-about-to-get-really-difficult |access-date=2024-03-05 |website=MIDiA Research}}{{Cite web |last=McWhertor |first=Michael |date=2023-11-09 |title=Sony's plan for 12 live-service PlayStation games by 2026 just got cut in half |url=https://www.polygon.com/23954006/sony-playstation-live-service-games-marathon-last-of-us-factions |access-date=2024-03-05 |website=Polygon |language=en-US}}

The first few months of the COVID-19 pandemic brought about a sharp increase in revenue for the gaming sector worldwide as people looked for indoor entertainment. According to IDC, in 2020, revenue from mobile games climbed by 32.8% to $99.9 billion, while expenditure on digital PC and Mac games increased by 7.4% to $35.6 billion.{{Cite web |date=2022-05-25 |title=data.ai and IDC Report Reveals that Mobile Extends Lead Over PC and Console as the Gaming Market is Set to Hit $222 Billion |url=https://www.businesswire.com/news/home/20220525005651/en/data.ai-and-IDC-Report-Reveals-that-Mobile-Extends-Lead-Over-PC-and-Console-as-the-Gaming-Market-is-Set-to-Hit-222-Billion |access-date=2024-03-05 |website=businesswire.com |language=en}} The amount spent on home console games increased significantly as well, reaching $42.9 billion, up 33.9%.{{Cite web |date=2024-02-02 |title=Mobile Gaming Vs Console Gaming Statistics 2023: Revenue, and Market Share |url=https://jimmtech.com/mobile-gaming-vs-console-gaming-statistics/ |access-date=2024-03-05 |language=en-gb}}{{Cite web |date=2024-03-01 |title=Video game industry layoffs are a collision of trends |url=https://www.aol.com/finance/video-game-industry-layoffs-collision-205100988.html |access-date=2024-03-05 |website=aol.com |language=en-US}}

In the ensuing years, this growing pattern abruptly stopped.{{Cite web |title=Multiplatform |url=https://multiplatform.com/news/mobile-dominates-with-56-of-2023-gaming-revenue-projection/ |access-date=2024-03-05 |website=multiplatform.com}} Revenue growth from mobile gaming fell by 15% in 2021, and then fell even further in 2022 and 2023, to -3.3% and -3.1%, respectively. Sales of PC and Mac games saw a brief rise of 8.7% in 2021, a drop of 1.4% in 2022, and a rebound of 2.1% in 2023.{{Cite web |last=Takahashi |first=Dean |date=2023-06-19 |title=Traditional gaming shrinks to 26.7% of game and esports revenue as overall U.S. sales head to $72B by 2027 {{!}} PwC |url=https://venturebeat.com/games/u-s-game-and-esports-revenue-to-grow-from-54-1b-to-72b-by-2027-pwc/ |access-date=2024-03-05 |website=VentureBeat |language=en-US}} Similarly, after a surge in 2020, console game spending plateaued in 2021 with growth at 0.7%, followed by a decline of 3.4% in 2022, before returning to growth at 5.9% in 2023.{{Cite web |date=2021-12-08 |title=Global Mobile Gaming Industry Report 2021: Key Market Trends, Leading Player Profiles, and Growth Projections to 2026 |url=https://finance.yahoo.com/news/global-mobile-gaming-industry-report-090800317.html |access-date=2024-03-05 |website=Yahoo Finance |language=en-US}}

A new fad in the video game industry, metaverse, once led many investors and companies to believe that it was the future of the gaming industry.{{Cite web |title=Insights on the metaverse and the future of gaming |url=https://www.ey.com/en_us/tmt/what-s-possible-for-the-gaming-industry-in-the-next-dimension/chapter-3-insights-on-the-metaverse-and-the-future-of-gaming |access-date=2024-03-06 |website=ey.com |language=en-US}}{{Cite web |title=The Metaverse and the Future of Gaming |url=https://www.telusinternational.com/insights/customer-experience/article/the-metaverse-and-the-future-of-gaming |access-date=2024-03-06 |website=telusinternational.com |language=en}}{{Cite web |title=Metaverse Gaming 2024: A Comprehensive Guide |url=https://game-ace.com/blog/metaverse-gaming/ |access-date=2024-03-06 |website=Game-Ace |language=en}} Companies like Meta and Microsoft have made significant investments in this space.{{Cite web |last=Quah |first=Nicholas |date=2022-01-19 |title=It's All About the Metaverse |url=https://www.vulture.com/2022/01/microsoft-activision-blizzard-metaverse.html |access-date=2023-12-12 |website=Vulture |language=en}} The Metaverse has encountered challenges impacting investor expectations.{{Cite web |last=Welsh |first=Oli |date=2022-03-06 |title=The metaverse, explained |url=https://www.polygon.com/22959860/metaverse-explained-video-games |access-date=2024-03-05 |website=Polygon |language=en-US}} Meta reported significant operational losses of $13.72 billion in its Metaverse division in 2021, raising concerns among investors. Meta's acknowledgment that full realization of Metaverse products may take another 10 to 15 years tests investor patience with its long-term horizon.{{cite web|url=https://s21.q4cdn.com/399680738/files/doc_financials/2023/q2/META-Q2-2023-Prepared-Remarks.pdf|title=Second Quarter 2023 Results – Prepared Remarks|website=q4cdn.co|access-date=9 March 2024}} Inflation and economic uncertainties have affected consumer behavior, delaying the adoption of Metaverse-related technologies like headsets. Meta revised its monthly active user targets downward from 500,000 by the end of 2022 to 280,000, disappointing investors with lower-than-expected engagement.{{Cite web |last=Allen |first=Christopher |title=Council Post: Why Isn't The Metaverse Catching On? |url=https://www.forbes.com/sites/forbesbusinesscouncil/2022/12/14/why-isnt-the-metaverse-catching-on/ |access-date=2024-03-05 |website=Forbes |language=en}}

One of the primary reasons for layoffs in the video game industry is mergers and acquisitions. Video game companies believed that the significant growth witnessed during the pandemic would continue afterward, leading many firms to explore mergers and acquisitions.{{Cite web |last=Kim |first=Matt |date=2023-11-08 |title=The Axe Drops on Gaming's Acquisitions Gold Rush |url=https://www.ign.com/articles/2023-video-games-layoffs-mergers-acquisitions-bungie |access-date=2024-03-05 |website=IGN |language=en}} Between 2020 and 2024, 16 out of the 22 most expensive video game acquisitions in video game history occurred, with major players such as Microsoft, Sony, Embracer Group, Tencent, Take-Two Interactive, and Electronic Arts each making at least one acquisition.{{Cite web |last1=Whitson |first1=Jennifer R. |last2=Weststar |first2=Johanna |last3=Gordon |first3=Kenzie |last4=Gouglas |first4=Sean |date=2024-02-11 |title=The video game industry is booming. Why are there so many layoffs? |url=http://theconversation.com/the-video-game-industry-is-booming-why-are-there-so-many-layoffs-222685 |access-date=2024-03-05 |website=The Conversation |language=en-US}}

After several acquisitions, Embracer Group announced that they will undergo a significant restructuring of the company, including the closure of studios, layoffs of employees, and cancellation of dozens of video game projects.{{Cite web |last=Parrish |first=Ash |date=2023-12-05 |title=More layoffs at another Embracer Group studio |url=https://www.theverge.com/2023/12/5/23989128/new-world-interactive-layoffs-embracer-group-insurgency-sandstorm |access-date=2024-03-05 |website=The Verge |language=en}} Embracer Group faced a setback when a $2 billion deal with an anonymous partner fell through, later revealed to be Savvy Games Group. Savvy, owned by Saudi Arabia's sovereign wealth Public Investment Fund, had already invested $1 billion in Embracer.{{Cite web |last=Yang |first=George |date=2023-08-14 |title=Embracer Group's Partner Who Walked From $2 Billion Deal Finally Revealed |url=https://www.ign.com/articles/embracer-groups-partner-who-walked-from-2-billion-deal-finally-revealed |access-date=2024-03-08 |website=IGN |language=en}} Following the deal's collapse, Embracer announced a restructuring, including shutting down or selling studios and pausing game development. The reasons behind the deal's collapse remain undisclosed, but it was intended to establish Savvy as a major player in the gaming industry.{{Cite web |title=Report: Embracer's doomed $2B deal was with Saudi-backed Savvy Games |url=https://www.gamedeveloper.com/business/report-embracer-s-doomed-2b-deal-was-with-saudi-backed-savvy-games |access-date=2024-03-08 |website=gamedeveloper.com |language=en}} Embracer CEO Lars Wingefors had previously faced criticism for accepting investment from Savvy due to concerns about human rights violations by the Saudi government.{{Cite web |last=Davis |first=Wes |date=2023-08-14 |title=Saudi group reportedly abandoned $2 billion deal with the Lord of the Rings game company |url=https://www.theverge.com/2023/8/14/23831768/embracer-group-saudi-government-lord-of-the-rings-investment-deal-collapse |access-date=2024-03-08 |website=The Verge |language=en}} After several restructuring programs, Embracer Group reduced its headcount by 7,761, closed or divested 44 internal and external studios, and decreased the number of game projects by 80.{{cite web | url = https://www.eurogamer.net/heres-the-human-cost-of-embracers-restructuring-programme | title= Here's the human cost of Embracer's restructuring programme | first = Ed | last = Nightengale | date = May 23, 2024 | accessdate = May 23, 2024 | work = Eurogamer }}{{Cite web |last=Fareed |first=Salman |date=2024-08-15 |title=Embracer Group Laid Off Whopping 7,761 Employees In 12 Months |url=https://tech4gamers.com/embracer-mass-layoffs-12-months/ |access-date=2024-08-16 |website=Tech4Gamers |language=en-US}}

Several studios and publishers under Embracer Group, Sega and Microsoft Gaming have either opted to spin off from their parent companies or have been compelled to be sold off, resulting in mass layoffs. On February 29, 2024, Microsoft Gaming studio Toys for Bob revealed their decision to spin off from Activision and operate as an independent studio, while expressing openness to collaborating with both Activision and Microsoft on future projects.{{Cite web |date=2024-02-29 |title=Crash Bandicoot 4 developer Toys for Bob is going independent |url=https://www.digitaltrends.com/gaming/toys-for-bob-goes-independent/ |access-date=2024-02-29 |website=Digital Trends |language=en}} Embracer Group announced plans to divest Saber Interactive to a private firm for $500 million.{{Cite news |date=2024-02-29 |title=Embracer Group to Sell Saber, Developer of a New 'Star Wars' Game Remake, in $500 Million Deal |url=https://www.bloomberg.com/news/articles/2024-02-29/embracer-group-to-sell-saber-subsidiary-in-500-million-deal |access-date=2024-03-08 |work=Bloomberg.com |language=en}} On March 28, 2024, Take-Two Interactive announced its intent to acquire Gearbox Software from Embracer Group for $460 million.{{Cite web |date=2024-03-28 |title=Take-Two Interactive Software, Inc. to Acquire The Gearbox Entertainment Company Inc., Developer of Highly Successful Borderlands Franchise |url=https://finance.yahoo.com/news/two-interactive-software-inc-acquire-034000260.html |access-date=2024-03-28 |website=Yahoo Finance |language=en-US}} On the same day, Relic Entertainment was sold by Sega to an unspecified investor,{{Cite web |last=Reynolds |first=Ollie |date=2024-03-28 |title=Sega Sells Relic Entertainment And Announces Layoffs Across Multiple Teams |url=https://www.nintendolife.com/news/2024/03/sega-sells-relic-entertainment-and-announces-layoffs-across-multiple-teams |access-date=2024-03-28 |website=Nintendo Life |language=en-GB}} and Thunderful Group sold Headup Games to Microcuts Holding. Headup Games was initially acquired by Thunderful for €11 million in 2021.{{Cite web |first=Sophie McEvoy Staff |date=2024-03-28 |title=Thunderful selling Headup for €500k |url=https://www.gamesindustry.biz/thunderful-selling-headup-for-500k |access-date=2024-03-28 |website=GamesIndustry.biz |language=en}}

In February 2022 the Russian invasion of Ukraine caused an exodus of Russian studios and developers, many of which became established in Cyprus. By April, 42% of Russian developers had either already left the country or made plans to leave in the next few months.{{cite web |title=Report: Almost half of Russian game industry workers are leaving the country |url=https://www.gamedeveloper.com/game-platforms/report-almost-half-of-russian-game-industry-workers-are-leaving-the-country |website=gamedeveloper.com |language=en}} Russian developers outside the country have reported difficulty in getting projects funded by publishers, as trust is low.{{cite web |title=How game development is continuing during Russia's invasion of Ukraine |url=https://www.eurogamer.net/how-game-development-is-continuing-during-russias-invasion-of-ukraine |website=Eurogamer.net |language=en |date=29 March 2023}} The online games market in Russia suffered an 80% decline that year, and the market collapsed in both Russia and Belarus.{{cite web | url=https://allcorrectgames.com/insights/russian-gaming-market/ | title=The Gaming Market in Russia }}{{cite web |title=The Gaming Industry Labor Market In Russia and Belarus Continues To Collapse - Boost InGame Job |url=https://boost.ingamejob.com/the-gaming-industry-labor-market-in-russia-and-belarus-continues-to-collapse/ |language=en |date=12 August 2022}} Many western video game companies ceased operating in Russia, and all major Russian video game trade shows- many of which had not been held since 2019 due to the pandemic- were discontinued. This included IgroMir and Comic-Con Russia as well as several e-sports events.{{cite web |title=Выставки игр и Comic Con Russia {{!}} Канобу |url=https://kanobu.ru/articles/pokojtes-s-mirom-kakie-igrovyie-vyistavki-myi-poteryali-pomimo-e3-377742/ |website=Kanobu.ru |language=ru}}{{cite magazine | url=https://www.wired.com/story/gaming-industry-unites-russia/ | title=The Gaming Industry Unites to Cut off Russia | magazine=Wired | last1=Technica | first1=Kyle Orland }} Riot Games technical artist Farhan Noor hosts a website which provides tracking data for the layoffs, and this uses 2022 as the starting year for the period and includes the immediate aftermath of the invasion.{{cite web |url=https://publish.obsidian.md/vg-layoffs/Closing+out+2023 |title=Closing out 2023 - Game Industry Layoffs - Obsidian Publish }}{{cite web |title=Over 5,000 games industry workers have already lost their jobs in 2024 |url=https://www.videogameschronicle.com/news/over-5000-games-industry-workers-have-already-lost-their-jobs-in-2024/ |website=VGC |date=25 January 2024}}

Vladimir Putin made a series of edicts over the following two years with the aim of revitalising the Russian games industry; these were ridiculed by outside observers as ineffective and impossible to fulfill. Putin effectively legalized piracy,{{cite web |last1=Leston |first1=Ryan |title=Russia Reportedly Legalizes Piracy of Games, Movies, and More |url=https://www.ign.com/articles/russia-reportedly-legalises-piracy-of-games-movies-and-more |website=IGN |language=en |date=11 March 2022}} and ordered the creation of a "Russian Electronic Arts" and a game engine to compete with Unreal.{{cite web |title=Fearing Unity And Unreal Abandonment, Russia May Build Its Own Game Engine |url=https://kotaku.com/russia-unreal-unity-game-engine-development-ukraine-1849184860 |website=Kotaku |language=en |date=15 July 2022}} In 2023 he also ordered the creation of a game console on par with the Playstation 5 and Xbox in only three months.{{cite web |last1=Taylor |first1=Carson |title=Gaming in Russia: One Year Later |url=https://naavik.co/digest/russia-one-year-later/ |website=Naavik |date=14 September 2023}} Kommersant reported that such a project would take a decade, and others have noted that restrictions on importing chips to Russia would make that even more challenging. Techdirt questioned how well Putin understands the game industry given that he was 71 years old at the time of the console order.{{cite web |title=Putin Orders Russian Tech Companies To Somehow Make Competitive Game Console In 3 Months |url=https://www.techdirt.com/2024/04/10/putin-orders-russian-tech-companies-to-somehow-make-competitive-game-console-in-3-months/ |website=Techdirt |date=11 April 2024}}

Game development has continued within some Ukrainian studios during the war, though blackouts have of course disrupted operations. Nordcurrent's Dnipro office has continued development even after a bomb detonated fifty meters from the building and shattered the windows. Aurum Dust is a studio composed of a mixture of Ukrainians and Russians who are against the war, and has continued working together despite the fighting.

Beginning in August 2021, the Chinese government enacted a freeze on video game approvals. This was part of a crackdown on the industry, which the government termed "moral opium", and was accompanied by new restrictions on games for under 18s. The freeze was lifted in April 2022, but in the interim was significantly costly to the Chinese industry, affecting companies such as Tencent and NetEase.{{cite web |url=https://www.reuters.com/technology/china-grants-gaming-licence-xd-title-first-since-july-document-2022-04-11/ |website=Reuters |title=China ends gaming approval freeze, grants first licenses since July last year }} The freeze led to major layoffs and closures in China over the course of early 2022.{{cite web |title=China's suspension of new video game licences stretches into 2022 |url=https://www.scmp.com/tech/policy/article/3161717/china-gaming-crackdown-freeze-new-video-game-licences-extends-2022 |website=South China Morning Post |language=en |date=31 December 2021}}

Embracer Group made multiple layoffs, game cancellations, and studio closures between August 2023 and March 2024 after its $2 billion deal with Saudi Public Investment Fund fell apart. The company reportedly reduced its headcount by 7,761, closed or divested 44 internal and external studios, and decreased the number of game projects by 80. The company later announced that it will be separated into three standalone companies by 2026.

Unity Technologies was severely affected, and conducted six rounds of layoffs between June 2022 and February 2025. The exact size of the layoffs have not been made public, but 80LV has estimated that they amounted to 3165 to 3365 redundancies over the course of the first five rounds. The sixth round is currently of unknown scope.{{cite web |title=Breaking: Unity Lays Off a Number of Developers With a 5 AM Email |url=https://80.lv/articles/breaking-unity-suddenly-lays-off-numerous-developers-with-a-5-am-email/ |website=80.lv |language=en |date=11 February 2025}} PC Gamer has referred to the period as a "long downward spiral".{{cite web |last1=Chalk |first1=Andy |title=2 years into Unity's long downward spiral, even more employees are being laid off as CEO says it's still 'stretched across too many products' |url=https://www.pcgamer.com/gaming-industry/2-years-into-unitys-long-downward-spiral-even-more-employees-are-being-laid-off-as-ceo-says-its-still-stretched-across-too-many-products/ |website=PC Gamer |language=en |date=11 February 2025}}

On January 17, 2023, Unity Technologies laid off 284 employees as part of a reassessment of objectives, strategies, and priorities in response to current economic conditions. CEO John Riccitiello explained that the layoffs were meant to reduce overlap and shelve certain projects to ensure the company's future strength.{{Cite web |last=Sinclair |first=Brendan |date=2023-01-17 |title=Unity lays off nearly 300 |url=https://www.gamesindustry.biz/unity-lays-off-nearly-300 |access-date=2024-03-08 |website=GamesIndustry.biz |language=en}} Later, on November 29, 2023, Unity announced an additional 265 layoffs, constituting 3.8% of its workforce, as part of a "company reset," according to Reuters. Most of the affected workers (256) were from the Wētā Digital division, which Unity had acquired for $1.6 billion in 2021, along with several Wētā FX tools and 275 employees. On May 3, 2023, Unity announced plans to cut roughly 600 jobs, approximately 8% of its workforce. Additionally, Unity intended to reduce its global network of offices over the next few years from 58 to fewer than 30.{{Cite news |last=Needleman |first=Sarah E. |title=WSJ News Exclusive {{!}} Unity Conducts Its Third and Largest Round of Layoffs in a Year |url=https://www.wsj.com/articles/unity-conducts-its-third-and-largest-round-of-layoffs-in-a-year-48fdafe1 |access-date=2024-03-08 |work=The Wall Street Journal |language=en-US}}

The majority of the Unity layoffs occurred in the wake of a controversial pricing change termed the "runtime fee". The policy caused community backlash and a developer boycott. A number of studios announced that they were moving away from the engine permanently in the wake of the decision,{{cite web |last1=Obedkov |first1=Evgeny |title=Devs fume over Runtime per-install fees: "The breach of trust is so insane that it's impossible to stay with Unity" |url=https://gameworldobserver.com/2023/09/13/unity-runtime-fee-devs-reaction-switching-to-other-engines |website=Game World Observer |date=13 September 2023}}{{cite web |last1=Donovan |first1=Imogen |title='Road To Vostok' is moving away from Unity |url=https://www.nme.com/news/gaming-news/road-to-vostok-is-moving-away-from-unity-3506735 |website=NME |date=29 September 2023}} and tools were developed to assist in porting existing projects away from Unity.{{cite web |last1=Obedkov |first1=Evgeny |title=AppLovin launches free tool to help devs migrate from Unity to other engines amid controversial Runtime Fee rollout |url=https://gameworldobserver.com/2023/09/21/applovin-unifree-tool-migrate-from-unity-to-other-engines |website=Game World Observer |date=21 September 2023}} The incident ultimately resulted in the resignation of Unity CEO John Riccitiello,{{cite web |last1=Litchfield |first1=Ted |last2=published |first2=Wes Fenlon |title=The impact of 16,000 games industry layoffs, in one chart |url=https://www.pcgamer.com/the-impact-of-16000-games-industry-layoffs-in-one-chart/ |website=PC Gamer |language=en |date=7 February 2024}}{{cite web |last1=Carpenter |first1=Nicole |title=Unity cuts 1,800 more staff in 'company reset' |url=https://www.polygon.com/24030679/unity-engine-2024-layoffs |website=Polygon |date=8 January 2024}} as well as the leader of their engine division, Unity Create chief Marc Whitten.{{cite web |title=Unity Create boss Marc Whitten is resigning |url=https://www.gamedeveloper.com/business/unity-create-boss-marc-whitten-is-resigning |website=gamedeveloper.com |language=en}}

Unity reduced its headcount by a further 1700 people and closed 23 offices in 2024, though it's unclear how many of those positions lost were the product of layoffs.{{cite web |title=Unity cut ties with over 1,700 workers and closed 23 offices in 2024 |url=https://www.gamedeveloper.com/business/unity-cut-ties-with-over-1-700-workers-and-closed-23-offices-in-2024 |website=gamedeveloper.com |language=en}} Further layoffs were announced by the company in February 2025. The scope of these are also unknown but it includes the entire Behaviour team.{{cite web |last1=Long |first1=Neil |title=More layoffs incoming at Unity amid further restructuring |url=https://mobilegamer.biz/more-layoffs-incoming-at-unity-amid-further-restructuring/ |website=Mobilegamer.biz |date=11 February 2025}}{{cite web |last1=Muhammad |first1=Isa |title=Update: Unity lays off staff and axes Behavior team |url=https://www.pocketgamer.biz/unity-lays-off-staff-and-axes-behavior-team/ |website=pocketgamer.biz |language=en |date=12 February 2025}}

On January 31, 2023, as part of broader Microsoft job cuts, 343 Industries laid off 95 employees following the "disappointing" launch of Halo Infinite's multiplayer mode. Bethesda Game Studios was also reportedly impacted by the layoffs.{{Cite web |last=McWhertor |first=Michael |date=2023-01-18 |title=Microsoft mass layoffs reportedly hit Bethesda, Halo Infinite teams |url=https://www.polygon.com/23561210/microsoft-layoffs-xbox-bethesda-halo-infinite-343-industries |access-date=2024-03-08 |website=Polygon |language=en-US}} On January 25, 2024, Microsoft Gaming underwent significant restructuring, leading to 1,900 staff being laid off. As part of this process, Blizzard Entertainment's President Mike Ybarra and co-founder Allen Adham departed from the company, while Blizzard's game Project Odyssey was canceled, and major teams working on Overwatch 2 were affected. Microsoft Gaming Studios, including Toys for Bob and Sledgehammer Games, saw staff reductions of over 30%, with most layoffs occurring at Activision Blizzard.

On May 7, 2024, Microsoft Gaming closed three studios: Tango Gameworks, Arkane Austin, and Alpha Dog Games, and announced the merger of Roundhouse Studios into ZeniMax Online Studios. This move was part of a larger "reprioritization of titles and resources" to focus on high-impact games and new intellectual properties, resulting in the cessation of development on certain projects and the reassignment of teams within Bethesda and ZeniMax. However, Tango Gameworks was acquired by Krafton in August 2024, retaining about half of its developers and the Hi-Fi Rush property.{{Cite web |author1=Hirun Cryer |date=2024-05-07 |title=Microsoft reportedly closing the Bethesda studios behind Redfall, Hi-Fi Rush, and more following "reprioritization of titles and resources" |url=https://www.gamesradar.com/games/action/microsoft-reportedly-closing-the-bethesda-studios-behind-redfall-hi-fi-rush-and-more-following-reprioritization-of-titles-and-resources/ |access-date=2024-05-07 |website=gamesradar |language=en}} And on September 12, 2024, Microsoft Gaming CEO Phil Spencer announced that an additional 650 support and corporate roles would be eliminated.{{Cite web |last=Totilo |first=Stephen |title=Microsoft to cut 650 more gaming jobs |url=https://www.gamefile.news/p/microsoft-gaming-layoffs-xbox-650 |access-date=2024-09-12 |website=gamefile.news |language=en-US}}

On October 31, 2023, Sony Interactive Entertainment announced additional layoffs affecting around 100 Bungie employees and disclosed delays for two upcoming titles: Marathon and the Destiny 2 expansion, The Final Shape. According to Bloomberg, the layoffs came weeks after executives revealed that Bungie's revenue was 45% lower than projected, which Parsons attributed to the underperformance of Lightfall.{{Cite web |last=Song |first=Victoria |date=2023-10-30 |title=Bungie delaying Destiny 2 expansion and Marathon release amid layoffs |url=https://www.theverge.com/2023/10/30/23938990/bungie-sony-layoffs-delays-destiny-final-shape-marathon |access-date=2024-03-07 |website=The Verge |language=en}}

On February 27, 2024, Sony Interactive Entertainment announced the layoff of 900 employees across various studios, citing the need to restructure operations in response to the evolving economic landscape and changes in product development, distribution, and launch strategies. Layoff timelines will vary by location, and PlayStation's London Studio will be closed entirely.

On July 31, 2024, Sony announced further layoffs at Bungie, cutting 220 employees (17% of Bungie's workforce), while 155 employees were reassigned to other PlayStation Studios, and around 40 moved to a new studio. Bungie CEO Pete Parsons acknowledged that the company had been overly ambitious and exceeded its financial safety margins, operating at a loss.{{Cite web |last=Valentine |first=Rebekah |date=2023-10-31 |title=Bungie CEO Claims Layoffs Were Due to Destiny 2 Underperformance |url=https://www.ign.com/articles/pete-parsons-tells-employees-bungie-kept-the-right-people-to-work-on-destiny-2 |access-date=2024-03-07 |website=IGN |language=en}}

On October 29, 2024, in light of the unsuccessful launch and subsequent shutdown of Firewalk Studio's live-service game Concord, Sony Interactive Entertainment announced the closure of two studios resulting in 210 layoffs.{{Cite web |last=Warren |first=Tom |date=2024-10-29 |title=Sony closes Concord studio and permanently shuts down the game |url=https://www.theverge.com/2024/10/29/24282900/sony-shutting-down-concord-firewalk-studios |access-date=2025-04-02 |website=The Verge |language=en-US}} Firewalk Studios closure resulted in 170 employees being laid off and the Neon Koi closure resulted in their unannounced live-service mobile game being canceled alongside the layoff of 40 employees.{{Cite web |last=Tassi |first=Paul |title=Sony Shuts Down 'Concord' Developer, No Relaunch Coming |url=https://www.forbes.com/sites/paultassi/2024/10/29/sony-shuts-down-concord-developer-no-relaunch-coming/ |access-date=2025-04-02 |website=Forbes |language=en}}

During the first quarter of 2025, on February 14, 2025, an estimated 25 contingent workers were laid off from Bend Studio as a result of the cancellation of Bend Studio's unannounced live-service game the month prior.{{Cite web |title=Report: Bend Studio cuts contract staff following live-service cancellation |url=https://www.gamedeveloper.com/business/report-bend-studio-cuts-contract-staff-following-live-service-cancelation |access-date=2025-04-02 |website=gamedeveloper.com |language=en}}{{Cite web |title=2025 - Game Industry Layoffs - Obsidian Publish |url=https://publish.obsidian.md/vg-layoffs/Archive/2025 |access-date=2025-04-02 |website=publish.obsidian.md |language=en}} This project cancellation later impacted PlayStation Visual Arts as on March 5, 2025, it was reported that an unknown number of staff were laid off. Separately, that same day, PlayStation Malaysia also underwent layoffs.{{Cite web |first=Sophie McEvoy Staff |date=2025-03-05 |title=Report: Sony lays off employees at Visual Arts and PS Studios Malaysia |url=https://www.gamesindustry.biz/report-sony-lays-off-employees-at-visual-arts-and-ps-studios-malaysia |access-date=2025-04-02 |website=GamesIndustry.biz |language=en}}

On March 29, 2023, Electronic Arts laid off 6 percent of its workforce as part of a strategic shift to reevaluate its investment strategy and reduce office space, according to a blog post by EA CEO Andrew Wilson.{{Cite web |last=Goswami |first=Rohan |date=2023-03-29 |title=Electronic Arts is cutting about 800 jobs, or 6% of workforce, and reducing office space |url=https://www.cnbc.com/2023/03/29/ea-laying-off-6percent-of-workforce-reducing-office-space.html |access-date=2024-03-08 |publisher=CNBC |language=en}} The layoffs were aimed at moving away from projects that did not contribute to EA's strategy, reviewing its real estate footprint, and restructuring some teams. While specific departments affected by the layoffs were not mentioned, efforts were made to provide opportunities for affected workers to transition onto other projects where possible.{{Cite web |last=Roth |first=Emma |date=2023-03-29 |title=EA is laying off 6 percent of its workers |url=https://www.theverge.com/2023/3/29/23662228/ea-layoffs-workers-employeesrestructuring |access-date=2024-03-08 |website=The Verge |language=en}}

On February 28, 2024, Electronic Arts (EA) announced the layoff of 670 staff members. EA's CEO, Andrew Wilson, outlined the company's focus on owned IP, sports, and massive online communities as part of its business advancement. Additionally, EA shut down Ridgeline Games and canceled a Star Wars single player game developed by Respawn Entertainment.{{Cite web |last=Valentine |first=Rebekah |date=2024-02-28 |title=EA to Lay Off Around 670 Workers, Sunsetting Games, 'Moving Away From Future Licensed IP' |url=https://www.ign.com/articles/ea-to-lay-off-around-670-to-advance-the-way-we-work |access-date=2024-03-05 |website=IGN |language=en}} These cuts included 23 jobs at Respawn that were announced in March 2024.{{cite web |last=Bailey |first=Kat |date=March 14, 2024 |title=Respawn Hit by 23 Layoffs Amid EA's Ongoing Cuts, With Apex Legends Among the Games Impacted |url=https://www.ign.com/articles/apex-legends-hit-by-layoffs-amid-eas-ongoing-reductions |accessdate=March 14, 2024 |work=IGN}}

An additional 300-400 layoffs took place in May 2025, resulting in the cancellation of a Titanfall game.{{cite web |title=Mass layoffs at EA games have killed our hopes of a beloved video game franchise's return |url=https://uk.news.yahoo.com/mass-layoffs-ea-games-killed-083343210.html |website=Yahoo News |date=1 May 2025}}

On September 28, 2023, Epic Games announced a layoff affecting 16% of its workforce, or around 830 employees. The news was initially reported by Bloomberg before Epic Games published its internal memo online. CEO Tim Sweeney explained in an email to staff that the decision was due to the company's ongoing financial situation, stating that they had been spending more money than they were earning. Sweeney expressed optimism about navigating the transition without layoffs but acknowledged that it was unrealistic in retrospect."{{Cite web |last=Carpenter |first=Nicole |date=2023-09-28 |title=Fortnite maker Epic Games, worth billions, cuts its staff by 16% |url=https://www.polygon.com/23894267/epic-games-fortnite-unreal-engine-layoffs-2023 |access-date=2024-03-07 |website=Polygon |language=en-US}}

On April 16, 2024, Take-Two Interactive announced plans to lay off 5% of its workforce and cancel several video game projects. The company cited a cost-reduction plan, anticipating total charges of $160 million to $200 million. These measures are expected to be largely implemented by December 31, 2024.{{Cite news |last=Glickman |first=Ben |title=Take-Two Interactive to Cut 5% of Jobs, Slash Projects |url=https://www.wsj.com/economy/jobs/take-two-interactive-to-cut-5-of-jobs-slash-projects-785b1c21?mod=Searchresults_pos1&page=1 |access-date=2024-04-16 |work=The Wall Street Journal |language=en-US}} Previously, Take-Two Interactive stated that they were working on "significant cost reductions" but stated they had no current plans for layoffs.{{Cite web |date=2024-02-08 |title=Take-Two is working on 'significant cost reductions' but has 'no current plans' for layoffs |url=https://www.videogameschronicle.com/news/take-two-is-working-on-significant-cost-reductions-but-has-no-current-plans-for-layoffs/ |access-date=2024-04-17 |website=VGC |language=en-GB}}

On January 22, 2024, Riot Games announced a significant restructuring, leading to the layoff of 530 employees, which accounts for about 11% of the company's total workforce. The company also shut down Riot Games' indie publishing label, Riot Forge. The decision was made as part of Riot's strategy to refocus on fewer, high-impact projects, aiming for a more sustainable future.

Some media outlets compared the 2023-2024 layoffs to the video game crash of 1983, when the US video game market collapsed due to an oversaturation of poorly made, low-quality games, causing the video game industry to enter a recession for two years. This has sparked discussions about a potential "second video game crash."{{Cite web |last=GameCentral |date=2024-03-02 |title=The video game crash has already begun and few companies will survive - Reader's |url=https://metro.co.uk/2024/03/02/video-game-crash-already-begun-companies-will-survive-readers-feature-20383713/ |access-date=2024-03-05 |website=Metro |language=en}}{{Cite web |last=Duckworth |first=Joshua |date=2024-02-29 |title=Why a Second Video Game Crash isn't Happening Right Now |url=https://gamerant.com/second-video-game-crash-boom-2024-2025-layoffs-unlikely/ |access-date=2024-03-05 |website=Game Rant |language=en}} Windows Central's article titled "Embracer Group is a prime example of bad consolidation" criticized Embracer Group for its frequent layoffs, studio closures, and personnel cuts. The closure of Volition Studios, layoffs at Lost Boys Interactive, and the shutdown of Free Radical Design are highlighted as notable incidents.{{Cite web |last=Stradling |first=Colton |date=2024-01-19 |title=A huge gaming company, Embracer Group, is showcasing the dangers of irresponsible consolidation |url=https://www.windowscentral.com/software-apps/embracer-group-is-showcasing-the-dangers-of-irresponsible-consolidation |access-date=2024-03-07 |website=Windows Central |language=en}}

Both Microsoft and Sony have acknowledged that the current approach cannot continue and are exploring alternative business models. Microsoft Gaming CEO Phil Spencer addresses the stagnation in the gaming industry, recognizing its repercussions on job cuts and the challenging decisions faced by companies. He underscores the importance of industry expansion for long-term sustainability, advocating for a shift towards enlarging the player base rather than solely concentrating on extracting revenue from existing players. By prioritizing the growth of Xbox through attracting new players and nurturing creators, Phil aims to guarantee enduring strength and prosperity for the platform and the industry overall.{{Cite AV media |title=Updates on the Xbox Business {{!}} Official Xbox Podcast |url=https://www.youtube.com/watch?v=KGlD9SO3rKU |access-date=2024-02-15 |via=YouTube}}{{Cite web |last=Warren |first=Tom |date=2024-02-15 |title=Microsoft's gaming chief on Xbox games coming to PS5, next-gen hardware, and more |url=https://www.theverge.com/24073666/microsoft-gaming-phil-spencer-interview-ps5-switch-games |access-date=2024-03-05 |website=The Verge |language=en}}

When asked about the gaming layoffs, Phil Spencer addressed both the broader industry trend and the unique aspects related to Xbox's current business. Spencer expressed concern over the lack of growth in the industry, highlighting the pressure on publicly traded companies to show growth to investors.{{Cite news |date=2024-03-27 |title=Xbox boss Phil Spencer "concerned" over layoffs due to lack of industry growth |url=https://www.eurogamer.net/xbox-boss-phil-spencer-concerned-over-layoffs-due-to-lack-of-industry-growth |access-date=2024-03-27 |work=Eurogamer.net |language=en}} This scrutiny often leads to cost-cutting measures when revenue growth is stagnant. Spencer emphasized the need for the industry to focus on regaining growth to ensure job security and career opportunities for professionals. Regarding Xbox's strategy, he discussed the importance of exclusivity and expanding the player base by making games available on multiple platforms.{{Cite web |last=Mäki |first=Jonas |date=2024-03-27 |title=Phil Spencer is worried about lack of growth in the console industry |url=https://www.gamereactor.eu/phil-spencer-is-worried-about-lack-of-growth-in-the-console-industry-1374043/ |access-date=2024-03-27 |website=Gamereactor UK |language=en}} Spencer stated that every decision made by Xbox is aimed at strengthening the brand in the long run, even if not everyone agrees with those decisions. Spencer also touched on the evolving nature of Xbox, stating that the brand is moving away from traditional exclusivity models to adapt to the preferences of younger audiences. Spencer emphasized that Xbox aims to be a platform where players can find the games they want, regardless of the device they use, aligning with the accessibility and cross-platform trends seen among younger gamers.{{Cite web |last=Plante |first=Chris |date=2024-03-26 |title=Phil Spencer on what the hell is happening in the games industry |url=https://www.polygon.com/24108700/phil-spencer-interview-2024-xbox-exclusives-layoffs |access-date=2024-03-27 |website=Polygon |language=en-US}}

Sony Interactive Entertainment chairman Hiroki Totoki stated that he acknowledges the need to manage development costs better in PlayStation Studios, recognizing industry-wide challenges like rising expenses and lengthy schedules.{{Cite web |last=Yin-Poole |first=Wesley |date=2024-02-14 |title=Sony Boss Says PlayStation Has 'Room for Improvement' When It Comes to Cutting Development Costs |url=https://nordic.ign.com/marvels-spider-man-2/78748/news/sony-boss-says-playstation-has-room-for-improvement-when-it-comes-to-cutting-development-costs |access-date=2024-03-05 |website=IGN Nordic |language=en-se}} Totoki emphasizes sustainable profitability and transparently addressing challenges while highlighting the significance of first-party titles achieving growth across platforms.{{Cite news |date=2023-10-03 |title=Hiroki Totoki to step in as interim CEO of Sony Interactive Entertainment |url=https://www.thehindu.com/sci-tech/technology/hiroki-totoki-to-step-in-as-interim-ceo-of-sony-interactive-entertainment/article67375153.ece |access-date=2024-03-05 |work=The Hindu |language=en-IN |issn=0971-751X}}{{Cite web |last=Nam |first=Michael |date=2024-02-27 |title=Sony to lay off 900 at PlayStation as tough times for the games industry persist {{!}} CNN Business |url=https://www.cnn.com/2024/02/27/tech/sony-playstation-lays-off-900/index.html |access-date=2024-03-05 |publisher=CNN |language=en}}

Wes Keltner, CEO of Gun Interactive, expressed concern about the shrinking space for creative and innovative ideas from small game development teams. Keltner noted a lack of funding for indie projects, leading to promising ideas being abandoned at the prototype stage. Keltner highlighted the trend of mergers and acquisitions (M&A) leading to larger studios but diminishing creative freedom. He emphasized the notion that risk is a driving force behind creativity in the gaming industry.{{Cite web |last=Keltner |first=Wes |title=Wes Keltner on X |url=https://twitter.com/weskeltner/status/1765478908642631969?s=46 }}{{Primary source inline|date=April 2025}}

In response to layoffs in the gaming industry, developers expressed a mixture of frustration, disillusionment, and concern about the future.{{Cite web |last=Mello-Klein |first=Cody |date=0303 |title=After devastating layoffs, 2024 is a year of reckoning for the games industry, expert says |url=https://news.northeastern.edu/2023/12/21/game-industry-layoffs-2024/ |access-date=2024-03-06 |website=Northeastern Global News |language=en-US}} Many felt blindsided by the layoffs, especially when they were told the reasons were related to underperforming games or unsustainable costs.{{Cite web |date=2024-03-01 |title=Video game industry layoffs are a collision of trends |url=https://www.aol.com/video-game-industry-layoffs-collision-205100988.html |access-date=2024-03-06 |website=aol.com |language=en-US}} Some developers pointed out the disconnect between management decisions and the realities of game development, such as over scoping projects or investing in risky technologies without clear strategies. There was also criticism of how layoffs were handled, with some developers feeling that companies prioritized executive salaries and unnecessary expenses over investing in game development.{{Cite web |last=Valentine |first=Rebekah |date=2024-02-12 |title='I've Never Seen It This Bad:' Game Developers Explain the Huge Layoffs Hitting Riot, Epic, and More |url=https://www.ign.com/articles/ive-never-seen-it-this-bad-game-developers-explain-the-huge-layoffs-hitting-riot-epic-and-more |access-date=2024-03-06 |website=IGN |language=en}}

There were instances where studios spent extravagantly on events or office perks shortly before laying off a significant portion of their workforce, leading to feelings of betrayal among employees. Developers highlighted broader industry trends contributing to the instability, such as the increasing reliance on outside investors and shareholders who prioritize short-term profits over long-term sustainability. The pandemic exacerbated these issues but was not solely responsible for the ongoing wave of layoffs. Overall, developers expressed deep concern about the future of the industry and the toll these layoffs were taking on morale and creativity. Many feared that the current instability could have long-lasting consequences for both individuals and the industry as a whole.{{Cite web |date=2024-02-27 |title=PlayStation Laying Off 900 Employees, Shutters London Studio |url=https://hiphopwired.com/playlist/playstation-layoffs-900-employees/ |access-date=2024-03-06 |website=Hip-Hop Wired |language=en-US}}

At Game Developers Conference 2024, Epic Games staff organised a "GDScream", where a large number of developers gathered in a park to scream at the sky in "a moment of pure catharsis". The trade show more broadly featured many speeches from award winners about the state of the industry.{{cite web |title=As the internet raged, game devs at GDC screamed for change |url=https://www.digitaltrends.com/gaming/gdc-2024-developers-discuss-incustry-change/ |website=Digital Trends |language=en |date=26 March 2024}}

Dinga Bakaba, the studio head of Arkane Lyon, publicly criticized Microsoft Gaming executives for their decision to close several studios. He emphasized the importance of taking care of artists and entertainers in the video game industry, highlighting that their role is to create value for corporations.{{Cite web |date=2024-05-07 |title='A f***ing gut stab': Arkane boss criticises Microsoft execs for studio closures |url=https://www.videogameschronicle.com/news/a-fing-gut-stab-arkane-boss-criticises-microsoft-execs-for-studio-closures/ |access-date=2024-05-07 |website=VGC |language=en-GB}}

On December 12, 2024, the Game Awards 2024 introduced the inaugural Game Changers Award, which was presented to Amir Satvat. Satvat has been recognized for his efforts in assisting individuals who have lost their jobs by helping them find new opportunities. The presentation of the award received a standing ovation, noted as one of the most significant moments of the event.{{Cite web |last=Reyes |first=Mike |date=2024-12-13 |title=The Game Awards 2024 presented their first-ever Game Changers Award in an incredibly heartfelt moment |url=https://en.as.com/meristation/news/the-game-awards-2024-presented-their-first-ever-game-changers-award-in-an-incredibly-heartfelt-moment-n/ |access-date=2024-12-14 |website=Meristation |language=en-us}}{{Cite web |date=2024-12-14 |title=Everything We Saw At The 2024 Game Awards And More Of The Week's Top Stories |url=https://kotaku.com/game-awards-2024-reveals-announcements-witcher-4-1851720875 |access-date=2024-12-14 |website=Kotaku |language=en}}

Unions are relatively rare in the video game industry. But after several public scandals involving abuse, sexism, layoffs, and overwork, some game workers have developed a keen interest in organization in the last few years.{{Cite magazine |last=D'Anastasio |first=Cecilia |title=Why 2021 Was the Biggest Year for the Labor Movement in Games |url=https://www.wired.com/story/2021-biggest-year-labor-movement-video-games/ |access-date=2024-03-09 |magazine=Wired |language=en-US |issn=1059-1028}} After starting the process in April, employees at Sega of America's Irvine, California headquarters filed to become unionized with the Communications Workers of America on July 10, 2023. In July, the union election was successfully won by the Allied Employees Guild Improving Sega (AEGIS), with 91 votes in favor and 26 votes against. More than 200 positions in a range of areas, such as marketing, games as a service, localization, product development, and quality assurance, will be covered by the union.{{Cite web |last=Parrish |first=Ash |date=2023-07-10 |title=Sega workers form largest multi-department video game union in the US |url=https://www.theverge.com/23789935/sega-union-cwa-unionization-activision-blizzard |access-date=2024-03-09 |website=The Verge |language=en}}

On October 6, 2023, Over 100 developers at Avalanche Studio Group unionized.{{Cite web |last=Valentine |first=Rebekah |date=2023-10-06 |title=Over 100 Developers of Just Cause, Contraband at Avalanche Studios Have Unionized |url=https://www.ign.com/articles/over-100-developers-of-just-cause-contraband-at-avalanche-studios-have-unionized |access-date=2024-03-09 |website=IGN |language=en}} After experiencing layoffs, some workers at CD Projekt Red formed a union on October 9, 2023.{{Cite web |date=2023-10-08 |title=Following layoffs at CD Projekt Red, staff have formed a union for Polish game developers |url=https://news.yahoo.com/following-layoffs-cd-projekt-red-014752156.html |access-date=2024-03-09 |website=Yahoo News |language=en-US}} According to the union, these layoffs caused significant stress and insecurity among workers, leading to the need for better protection and representation. The union aims to provide more security, transparency, and a stronger voice for workers in times of crisis, believing that mass layoffs pose a threat to the gaming industry and that unionizing is crucial for preserving its potential. The union said its priority was to give CD Projekt Red staff a voice in company decision-making, with a view to increasing employment stability. It also wants to help workers' voices be heard on working conditions "in the long run."{{Cite web |last=Welsh |first=Oli |date=2023-10-09 |title=CD Projekt Red workers form union after layoffs |url=https://www.polygon.com/23909710/cd-projekt-red-union-layoffs |access-date=2024-03-09 |website=Polygon |language=en-US}}

{{Main|Microsoft and unions#United States}}

On December 5, 2023, 300 Quality assurance workers at ZeniMax Media announced that they were organizing a union.{{Cite web |last=Parrish |first=Ash |date=2022-12-05 |title=Around 300 QA workers at Microsoft-owned ZeniMax are organizing a union |url=https://www.theverge.com/2022/12/5/23495139/microsoft-union-zenimax-bethesda-cwa |access-date=2024-03-09 |website=The Verge |language=en}} Additionally, a labor neutrality agreement was announced in June 2023 by Microsoft and the Communication Workers of America (CWA). Under this deal, Activision Blizzard employees were entitled to freely form a union, and Microsoft promised to acknowledge and support that union.{{Cite web |last=Carpenter |first=Nicole |date=2022-06-13 |title=Tech is notoriously anti-union. Microsoft is taking a different approach — neutrality |url=https://www.polygon.com/23166217/microsoft-labor-union-neutrality-agreement-code-cwa-raven-software |access-date=2023-12-17 |website=Polygon |language=en-US}} On March 8, 2024, 600 workers from Activision's QA team joined CWA, establishing the largest game developer union in North America.{{Cite web |last=Carpenter |first=Nicole |date=2024-03-08 |title=600 Activision QA workers unionize, Microsoft voluntarily recognizes |url=https://www.polygon.com/24093254/activision-qa-600-workers-union-microsoft |access-date=2024-03-09 |website=Polygon |language=en-US}}

Despite the layoffs, studio closures, and cancellations of video game projects, as well as high inflation, the video game market continues to remain robust.{{Cite web |last=Carpenter |first=Nicole |date=2024-02-19 |title=What's going on with all these video game industry layoffs? |url=https://www.polygon.com/gaming/24074767/video-game-industry-layoffs-explainer |access-date=2024-03-06 |website=Polygon |language=en-US}} Many investors and industry analysts believe that the video game industry will fully recover in 2025 and 2026 with major releases like Grand Theft Auto VI, Monster Hunter Wilds, Ghost of Yōtei, Doom: The Dark Ages, Pokemon Legends Z-A, and others.{{Cite web |last=Dring |first=Christopher |date=2024-02-19 |title=Investors on the state of video games: "We are investing, but the bar is so much higher" |url=https://www.gamesindustry.biz/investors-on-the-state-of-video-games-we-are-investing-but-the-bar-is-so-much-higher |access-date=2024-03-06 |website=GamesIndustry.biz |language=en}} Investors also expect Nintendo to release its new hardware, which will boost video game sales and revenue.{{Cite news |date=2024-02-26 |title=Nintendo to introduce Switch console successor as early as March 2025 - Nikkei |url=https://www.reuters.com/technology/nintendo-introduce-switch-console-successor-early-march-2025-nikkei-2024-02-26/ |access-date=2024-03-06 |work=Reuters |language=en}} Executive Director of Circana (The NPD Group), Mat Piscatella, stated that consumer demand remains strong, but consumers are under pressure due to economic challenges. Some parts of the industry are already growing and in a healthy position, like mobile, and Piscatella believes that other segments will follow suit in 2025.{{Cite web |last=Piscatella |first=Mat |title=Mat Piscatella X |url=https://x.com/matpiscatella/status/1764357238389612666?s=46}}

According to a 2024 PwC report, the global gaming industry is expected to reach a value of $321 billion by 2026.{{Cite web |title=Perspectives and insights: Global Entertainment and Media Outlook 2023–2027 |url=https://www.pwc.com/gx/en/industries/tmt/media/outlook/insights-and-perspectives.html |access-date=2024-03-06 |website=PwC |language=en-gx}} Deloitte predicts that the share of theatrical box office revenues from video game intellectual property (IP) will double by 2025. Additionally, most major video streaming platforms are expected to include shows based on popular games.{{Cite web |title=Cinematic and interactive universes: Games and studios come together to bring the biggest stories to life |url=https://www2.deloitte.com/us/en/insights/industry/technology/technology-media-and-telecom-predictions/2024/blurring-the-lines-between-video-games-and-movies.html |access-date=2024-03-06 |website=Deloitte Insights |language=en-us}} Another report by GlobalData suggests that the video games market could become a $300 billion industry by 2025. Factors contributing to this growth include mobile gaming and innovative offerings.{{Cite web |last=Lanier |first=Liz |date=2019-05-01 |title=Video Games Could Be a $300 Billion Industry by 2025 (Report) |url=https://variety.com/2019/gaming/news/video-games-300-billion-industry-2025-report-1203202672/ |access-date=2024-03-06 |website=Variety |language=en-US}} Bain & Company predicts that global gaming revenue could surge by over 50% in the next five years.{{Cite web |date=2022-10-13 |title=Level Up: The Future of Video Games Is Bright |url=https://www.bain.com/insights/level-up-the-future-of-video-games-is-bright/ |access-date=2024-03-06 |website=Bain |language=en}}

Mobile video games began growing in 2024, with U.S. mobile gamers spending over $28 billion that year. This marked a recovery for the industry after a two-year economic slowdown, surpassing the previous record set in 2021.{{Cite web |last=Astle |first=Aaron |date=2025-03-06 |title=PGC San Francisco 2025 nears after US mobile gamers spend record-breaking $28bn |url=https://www.pocketgamer.biz/pgc-san-francisco-2025-nears-after-us-mobile-gamers-spend-record-breaking-28bn/ |access-date=2025-03-07 |website=pocketgamer.biz |language=en}} Monopoly Go was the highest-grossing mobile game, and Call of Duty: Black Ops 6 led in console sales. Monopoly Go generated $2.7 billion alone.{{Cite web |last=Astle |first=Aaron |date=2025-03-06 |title=PGC San Francisco 2025 nears after US mobile gamers spend record-breaking $28bn |url=https://www.pocketgamer.biz/pgc-san-francisco-2025-nears-after-us-mobile-gamers-spend-record-breaking-28bn/ |access-date=2025-03-07 |website=pocketgamer.biz |language=en}} U.S. consumer spending on video games totaled $58.7 billion in 2024.{{Cite web |last=crosby |date=2025-01-23 |title=U.S Consumer Spending on Video Games Totaled $58.7 Billion in 2024 |url=https://www.theesa.com/u-s-consumer-spending-on-video-games-totaled-58-7-billion-in-2024/ |access-date=2025-03-07 |website=the ESA |language=en-US}}

The layoffs affected junior staff in greater numbers than other skill levels, and in some cases juniors were specifically targeted.{{cite web |title=People with junior positions in tech should not be overlooked - opinion |url=https://www.jpost.com/business-and-innovation/opinion/article-725124 |website=The Jerusalem Post {{!}} JPost.com |language=en |date=18 December 2022}}{{cite web |url=https://www.pocketgamer.biz/how-finlands-games-industry-is-weathering-the-storm/ |title=How Finland's games industry is weathering the storm |date=October 2024 }} As the industry was recruiting too few juniors to begin with, there are long term concerns for skills development, diversity, and the viability of the games industry as a career path for young developers. The layoffs were demoralising for juniors, and around a third of those who were laid off left the industry entirely.{{cite web |last1=Byshonkov |first1=Dmitriy |title=Values Value & inGameJob: European Gaming Job Market in 2024 |url=https://gamedevreports.substack.com/p/values-value-and-ingamejob-european-5bd |website=GameDev Reports |date=18 November 2024}} A level designer interviewed by PC Gamer commented that "As a Junior who put blood, sweat, and tears into obtaining my first role in the industry, I am now back again going in circles looking for roles that are junior level (which is non-existent as every job posting I see is either Senior, Principal, or Lead)."{{cite web |last1=Litchfield |first1=Ted |last2=Fenlon |first2=Wes |title=The impact of 16,000 games industry layoffs, in one chart |url=https://www.pcgamer.com/the-impact-of-16000-games-industry-layoffs-in-one-chart/ |website=PC Gamer |language=en |date=7 February 2024}}

The number of junior positions available has been low for years, but fell dramatically during the period. In 2022, 9.4% of available games jobs in the United Kingdom were at the junior level.{{cite web |last1=Partis |first1=Danielle |title=5% of H1 2022 games jobs were entry level |url=https://www.gamesindustry.biz/5-of-h1-2022-games-jobs-were-entry-level |website=GamesIndustry.biz |language=en |date=10 August 2022}} By 2023 this had fallen to 2.9%, with only 34 junior positions nationwide over the year. The junior figure had partially recovered to 7% by 2024, but there were no apprenticeships sector wide for the entire year.{{cite web |last1=Chapple |first1=Craig |title=UK skills crisis prompts call for games industry-led body to tackle key challenges |url=https://www.pocketgamer.biz/uk-skills-crisis-prompts-call-for-games-industry-led-body-to-tackle-challenges/ |website=pocketgamer.biz |language=en |date=18 April 2024}} The few junior jobs available are fiercely competed for; XR Games advertised for four junior positions in 2024 and received 18,000 applications.{{cite web |title=Everything you need to know about applying for your first job in game development |url=https://www.gamesindustry.biz/everything-you-need-to-know-about-applying-for-your-first-job-in-game-development |website=GamesIndustry.biz |language=en |date=26 January 2024}} Grads in Games, a major route into the industry for juniors in the UK, was placed on hiatus in 2024 due to the lack of entry level hiring. Industry support for the program had been in place for a decade but now "just doesn't exist".{{cite web |title=Grads In Games is going on hiatus this year. – Grads In Games |url=https://gradsingames.com/news/grads-in-games-is-going-on-hiatus-this-year/ |date=30 September 2024}}

The industry's failure to hire and train new workers is exacerbating existing skills shortages at the senior level, as there are not enough staff progressing through the field and moving up to higher positions.{{cite web |last1=Chapple |first1=Craig |title=Why is the UK games industry struggling to fill vacancies despite mass layoffs? |url=https://www.pocketgamer.biz/why-is-the-uk-games-industry-struggling-to-fill-vacancies-despite-mass-layoffs/ |website=pocketgamer.biz |language=en |date=24 November 2023}} A developer interviewed by DigiDay remarked that by recruiting only existing senior level talent, there may be "no new generation of seniors." In the UK in particular, the first wave of developers are now starting to retire, leaving fewer senior staff to train any new juniors. The current skills structure in the UK games industry is unsustainable.{{cite book |last1=Jackson |first1=Gina |title=The Skills Crisis in the UK Games Sector |date=2024 |publisher=Skillful |page=14}}

As juniors are more likely to be women or from minority groups such as LGBT demographics, this practice has also had a negative effect on diversity in the industry.{{cite web |last1=Lee |first1=Alexander |title='Left high and dry': Confessions of a laid-off gaming industry worker |url=https://digiday.com/marketing/left-high-and-dry-confessions-of-a-laid-off-gaming-industry-worker/ |website=Digiday |date=6 February 2024}}{{cite web |last1=Valentine |first1=Rebekah |title='I Stopped Believing in Myself': Game Developers Share the Human Impact of Over a Year of Mass Layoffs |url=https://www.ign.com/articles/game-developers-mass-layoffs-human-impact-sony-ea |website=IGN |language=en |date=1 March 2024}}

• Impact of the COVID-19 pandemic on the video game industry
• Video games in the United States
• Video game crash of 1983

{{reflist}}

{{DEFAULTSORT:Video game industry layoffs, 2023-2024}}

Category:Video game labor relations

Category:Video game development

Category:2023 in video gaming

Category:2024 in video gaming

Category:History of video games

Category:Termination of employment

Category:2023 in labor relations

Category:2024 in labor relations