There were numerous waves of layoffs at large game development companies in 2023, and this trend will continue in 2024. Smaller developers are also affected, as game publishers are more cautious about their investments. However, this was entirely foreseeable.
Pandemic-induced growth in video game revenues, in addition to good investment conditions, meant that investors were putting money into game development. Many companies expanded and speculated on continued success. After the lockdown, video games predictably shrank slightly and investment conditions deteriorated, so investors wanted to see quick returns, but this is not the nature of game development. This collision created a situation where many companies have to radically cut operating costs, resulting in waves of layoffs.
None of this is driven by the creative processes of game development, and the creativity of the industry is weakened by reduced risk-taking, unstable workplaces and smaller team sizes.
These layoffs uproot thousands of families. Changing jobs often requires moving, sometimes even abroad given the international nature of the industry, to find suitable work. The stress, both for those left behind and those laid off, also has real health consequences. The rubble of these layoffs may create new SMEs, but with publishers facing similar problems, SMEs may not have access to the funds they need.
And yet the industry is still hugely profitable. Therefore, improved strategic leadership needs to start putting long-term stable creative workplaces ahead of short-term profit maximization. Governments should work to create healthy video game development ecosystems, supporting companies through infrastructure and tax incentives, as seen in Canada, the United Kingdom and France. This creates stability for companies and their employees, leading to both economic and cultural gains.
Breda University of Applied Sciences (BUas) is a specialized and internationally oriented higher education institution in Breda. On the green and small-scale campus and in the various learning communities, students, staff and business partners work together to create a better world by creating meaningful experiences. They do this in the fields of Tourism, Leisure & Events, Hotel & Facility Management, Built Environment, Logistics Management, Game Design, Creative Business and Data Science & AI.
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