Maybe I am just out of the loop, or fail to connect the dots. What's with a whole bunch of gaming companies laying off people or canceling projects? Is it simply the bad economy all over the world? Because that has been going on for a while, so why so many companies doing this just now, and all at once? A lot of games have been shit too for a while, so it's probably not that either. Do they have to publish quarterly reports in the upcoming days, and are trying to get ahead of the bad news by pretending that they have already done something about the issue?
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They've all been slowly dying for a while. A lot of them made money off ESG than making a product that sells and with ESG running out, they no longer have the talent to make a product that sells.
Last company I remember dying was the zombiefied corpse of Volition with Saints Row, EA has been trying to sell itself for years and we just had the recent flops of Suicide Squad and Skull and Bones.
Meanwhile indies are RAKING in the money from Palworld to Helldivers 2 and even attempted boycott last year of Atomic Heart didn't stop that being successful despite it's flaws. Gaming is doing perfectly fine but the companies doing cuts have lost all talent to make games so can't make money, similar to Disney.
The games being bad is political. The people making these games belong to forcibly diversified studios who are paying twice as much for real labor as the indie studios. It’s like an inverted economy of scale, which is how you know it’s leftism lol
Where I work we got a shit ton of investment money about 5 years ago. At the same time the company decided to get an all female board (they were very proud of this) and they started spending all the money on big offices, hiring their friends. Wasting money on courses about "being strong and showing your vulnerability" as well as all the usual DEI training. Massive overstaffing aswell.
Now a lot of contracts have dried up, moneys gone. Many of the best people quit. DEI hires won't leave and don't know how to do their jobs and many in upper management are too terrified to take any kind of risk. They haven't learned anything either, trying to worm trans shit into every prototype and pitch.
When the marketing starts with diversity and representation you just know they know they have a turd on their hands.
Hello Games just announced its hiring for everyhing, likely for Light No Fire.
I know, it was just surprising to me that it happened to quite a few companies in what feels like quick succession.
January tends to be when accounting does their yearly reports, might explain why they all happened quickly this year as under the hood 2023 was CRIPPLING to the major studios by and large.
I'm not an expert but I think that they have the same problem as movies. Everyone expected growth, so companies just hired a lot of people to show growth, they had higher budgets, this budgets got to extreme levels.
Starfield budget was 400 millions (not sure about marketing) vs Skyrim a total of 85 millions with marketing.
Fiscal year ends in April and now they need to cut cost because investors are pissed. Everyone involved are woke except investors that would rather see a profit rather then a tax write-off.
Turns out that the growth was not there, a decade later and they still did not find the mythical "modern audience" that will buy every propaganda filled cinematic walking simulator.
Woke people don't care, they have no brand loyalty and they don't care about games. They will go forth to infest a different company.
Over 400% budget increase and not even 25% of the quality. The industry is run by a bunch of idiots.
Someone here explained to me that you "need" multiple layers of environmental design, gameplay, writing, QA etc to make an AAA game, all paid at minimum $80k a year in a major metro area (probably more realistically). I wonder who decreed that.
They keep making bad games, and as unfathomably stupid as the average American consumer is they have finally started to stop buying bad games.
Surely that contributes to this, it was just surprising to me that it happened to quite a few companies in what feels like quick succession.
Doesn't surprise me. Cancer can spread widely before it metastasizes.
There are some other good answers here -- I would say it's largely because the economy is shit.
It's the same with sports media companies. The money on the balance sheet keeps going up, but the profit never appears. Companies have gone from 7-figure contracts to 10-figure contracts in the last 20 years but these same companies are now laying people off and claiming insolvency.
Same with game companies.
Same with housing.
Same with education.
Same with everything.
At some point, this huge bubble is going to collapse.
During Covid there was a lot of bets that people would spend more on videogames at home. So, big companies hired more people and had teams making games they had no skills in. The game as service idea was also the big thing. When all of them failed, the companies started tossing people away.
Clown World funds are running out.
It’s a cover for clearing out worthless diversity hires and useless administrative positions. These leftist initiatives to bloat the ranks with women and minorities as well as various consulting and organizational positions have resulted in a labor force that is no longer fit for purpose; they simply can’t make good games at reasonable costs anymore.
The mainstream media narrative can never be “leftist ideology failed”, so the cover story is muh covid bubble burst and muh greedy executives. But good game companies who have made good games don’t seem to be firing people, and the industry seems to be growing still…
In addition to the comments about the general state of the economy and the DIEversity money drying up Twitter also showed tech companies that you can still run if you sack 90% of staff (or however much it was).
The death of major publishers and studios is great. I hope it accelerates and only Indies are left. Especially hope all console companies like nintendont die first.
Shit keeps losing money, they're supposed to fire them. I dunno, makes perfect sense to me.
I'm glad gaming peaked between 2009-2014.
Everything is dirt cheap, got a million mods to upgrade from, and guaranteed to be good quality. With the notable exception of Assasins Creed Revelations, I got exactly what I expected from digging for old classics.
A bunch of things are colliding right now.
Overhiring from covid times, when people were working from home is just letting people go left and right because costs have gone up now that they want people back in the office again. Rent and other overhead is not cheap anywhere.
ESG in many places is running out because the infinite money train, as it turns out, does not in fact have infinite money.
Workers at companies that have over hired and underperformed are scared because none of the hires actually know how to do their jobs, due to letting go of the competent workers because of the bad thoughts, so they're just biding their time until the inevitable firing and the company goes under or is bought on the cheap to harvest what it's holdings have.
Despite the rosy inflation picture painted by the cooks calculating the CPI, we just had an article about Wendy's attempting "surge pricing" and Dementia Joe shaking his fist at Big Grocery price-gouging people (calling it Greedflation™). People are suddenly becoming discriminating consumers now that the stimmy spigot stopped, especially with $70 games that are just as shit if not worse than $60 games in the past.
Financials are a big part of it.
But at least some of the headcount reduction, at least in 3D, is down to maturation of procedural generation. Even AAA development doesn't necessarily need a staff of thousands of animators and modelers anymore.
It's almost any tech company, not limited to gaming ones.
multiple reasons. overhiring during covid, shit economy, realizing that you don't need as many people (twitter shwoed that to everyone), drying up of investor funds, ...
iirc some ceo said "2023 was the year of layoffs". 2024 will be "the year of company closures".
ESG money is drying up until the companies make further concessions. Making capitalism work against itself.