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You can't talk about 2023 in games without talking about layoffs

A deep cut.

An image showing nine cubes with simple people silhouettes on, while around them, red cubes with scissor images on close in. It's an image that's meant to represent layoffs.
Image credit: Adobe Stock / Andrii Yalanskyi
Robert Purchese avatar
Feature by Robert Purchese Associate Editor
Published on

How is it that 2023 can have been one of the best years in memory for games but also one of the worst years in memory for games, and for the gaming industry. I can't balance this equation - I've been trying all year and it gives me a headache.

We should be talking about 2023 as one of the years that will go down in history for games, like 2007 did. We've had Baldur's Gate 3, Zelda 2 (Bertie that is not what it's called), Cocoon, Alan Wake 2, Banished Vault, and - genuinely - so many more. We've been giddy all year at Eurogamer at the relentless quality on show. We ought to be celebrating now during this end of year period, and we will celebrate. We can't do that alone, because there's another story we cannot ignore: layoffs.

To give you an idea of how dominant the topic has been, I'm going to do something a little experimental. I've looked through Eurogamer and pulled out (nearly) all the stories we've written about layoffs during the year, and I'm going to list them all below. It's a long, long list but I need you to see it. I need to remind you how big the issue has been.

Let's reconvene underneath.

Now, it's important to note that this list is not definitive. I've probably missed something somewhere and I know we as a site haven't covered every single layoff in the industry. But that's OK. It's more to capture your attention.

It's also important to understand that the scale of the layoffs varies wildly from company to company. In some cases, a handful of people have been laid off, whereas in the most extreme cases, at the biggest companies, thousands of people have gone. Thousands. You'll also see there are several companies systematically working through their catalogue of studios and restructuring them. And unfortunately, that work is going to continue until the end of their financial years, so until the end of 31st March 2024.

This calendar year alone, though - and I realise we're not done yet - there have been more than 9500 games industry workers laid off, according Games Industry Layoffs (which as I understand is one person attempting to track it all). Compared to last year, that's a nearly tenfold increase, just in case you're wondering how it all stacks up. That 2022 number comes from an excellent report on Polygon. And where there are layoffs, of course, there are also companies refusing to hire for the same reasons they're letting people go: to save money. This means there's a flood of talent eager to be absorbed by the industry. But will it? We don't yet know.

Sega cancelled its multiplayer project Hyenas in 2023, after many years of development and promotion.

Why is this happening? And why in 2023, the year that would otherwise beam like a beacon of what games can do and be? How is an industry that is performing so well also apparently imploding?

Obviously, it's complicated, and there are many factors involved. In some cases, you can quite clearly see the decision and consequence; a game performs badly so a studio lets people go, or as in Sega's case, with Hyenas, a huge project is canned so people are let go. In other cases, though, it's harder to directly see why it's happening, almost as though the reasons are deliberately obscured in that boardroom way, so companies don't look like they've done anything wrong. But it doesn't take long to discover that really, they're all saying variations of the same thing.

The root cause of so many of these layoffs is overspending. It's also often, ironically, overspending linked to success. Gaming boomed during the pandemic when most of us were locked up at home with nothing to do, so companies saw currency signs in their eyes and jumped in on it. But now that COVID is something we're living with, things have changed. And there are other important elements at work like the cost of living crisis and conflicts and global instability. That's what the gaming business will have you think anyway. And it's not wrong, but it's a way of spinning financial results that makes it look like the world's fault and not a company's for overspending in the first place.

The issue is picked apart in much more detail by a flock of analysts in a detailed piece on GamesIndustry.biz. There are a range of opinions. Some talk about the expand-and-contract normalness of what's going on, while others highlight the availability of cheaper borrowing during the pandemic - and a period of historically low interest rates - that fuelled the rampant spending and likely inflated some companies' valuations, and that lead to loans that were cheap to take on but were liable to get a lot more costly when interest rates rose.

But there are some more unexpected opinions too, such as how one analyst thinks senior game execs have been inspired by Elon Musk's brutal halving of Twitter's workforce, seeing how he kept the business running (debatable) with fewer salaries to pay. I also find the suggestion of companies copying each other interesting, and their rushing to make cuts because other companies are making cuts, for fear of being left behind if they don't. It's felt a lot like that this year - that or companies are seizing the opportunity to get bad stuff done while everyone else is, so they don't stand out.

Then there's this quote from Kantan Games CEO Serkan Toto: "There is also the phenomenon that often CEOs think 15 percent to 20 percent of their people are redundant anyway at any point in time."

Wow.

It's in statements like that that I see a big issue being overlooked in all of this, and it's the dehumanisation of the people affected by it. Note how companies refer to percentages rather than counts of people affected by layoffs. EA saying it's laying off six percent of its workforce almost doesn't sound that bad perhaps. Six is a small figure so it might seem negligible if you're just glancing at it. But when you realise EA is talking about 750 people losing their jobs, it feels completely different.

The danger whenever we talk about large numbers of people affected by something is the individual experience gets overlooked. We stop putting ourselves in the position of the people affected and look at it in terms of cold numbers instead. We distance ourselves from the fear and anxiety and humanity of what they're going through.

Polygon's piece does a great job of reminding us of the human cost by talking to several people affected by the layoffs. We hear about sudden all-hands meetings being called and the unexpected shock of the announcements. Then we get a feeling for the discombobulation afterwards as people scramble to deal with the news, and all the uncertainty and vulnerability it pipes into their lives. Some people have been applying for months and months, to hundreds of vacancies, to no avail. What do they do now?

What must it have been like to be one of the veteran BioWare writers, who'd given decades to the company, only to be unceremoniously laid off - and without adequate severance for their tenure too? What must it have been like to be one of the Free Radical team watching the doors to the studio close for the very last time? There are so many examples I could give. It's scary. And it's infuriating to see people's lives and careers gambled with like this.

That's why people are protesting outside The Game Awards, and why people in the industry are fuming on social media about 2023: they're angry people can be treated this way in an industry apparently doing so well. The same year Epic announces so many many layoffs, it celebrates new player milestones in Fortnite. The same year Microsoft announces so many layoffs, it spends $68.7bn on Activision Blizzard. It's hard to watch, and it makes the people affected look like disposable assets on companies' paths to fortunes. Those successes have come at a high human cost. So yes, some great games came out in 2023, but I'll say it again: you can't talk about 2023 without also talking about layoffs.