The last few months have seen massive layoffs in the gaming industry. The latest studio to let go of game developers is Naughty Dog, the studio that brought Uncharted and The Last of Us to life. According to a report from Kotaku, the development was communicated internally last week.
At least 25 temporary workers will not have their contracts renewed. The temporary staff are drawn from different departments, from art to production, with quality assurance staff mostly affected. Apparently, the layoff in the Sony-owned studio did not affect full-time staff.
What was most touching in the development was the fact that the laid off staff did not get a severance package from Naughty Dog. Also, Kotaku’s sources claimed that both the impacted developers and the rest of the employees “are pressured to keep the news quiet”.
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Naughty Dog is one of Sony’s treasures in the video game industry. Earlier this year, The Last of Us got a movie adaptation. The live-action adaptation debuted on HBO to critical and social acclaim. Nevertheless, it appears that success has not been enough to sustain the development of The Last of Us multiplayer project.
A report by Bloomberg earlier this year revealed that the development of The Last of Us multiplayer spin-off had “slowed down” due to poor internal review from Bungie—a studio Sony recently acquired that has a great success record for making live-service multiplayer games like Destiny 2. Although the project has not been canceled, it has been put “on ice at this point”, Kotaku reported.
So far, 2023 has been a great year for indie and AAA game development with studios declaring huge profits. However, it has been a challenging year for those behind those games as violent waves of layoffs continue to blow across the industry.
Epic Games laid off over 800 employees last month
Last month, Bloomberg reported that Epic Games, the Fortnite maker, will layoff 16% of its workforce. The development will affect about 830 employees. Part of an email sent to Epic employees by the company’s CEO Tim Sweeney read,
“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators. I had long been optimistic that we could power through this transition without layoffs, but in retrospect, I see that this was unrealistic”.
Tim Sweeney, Epic Games CEO
While Sweeney agreed that “Fortnite is starting to grow again”, he mentioned that the growth was driven mostly by creator content with “significant revenue sharing” which is not enough to continue funding the company’s expansion.
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“Success with the creator ecosystem is a great achievement, but it means a major structural change to our economics,” Sweeney said.
Basically, Sweeney blamed the layoffs on the poor performance of Fortnite and offered no apology for the decision. Also, he mentioned that Epic plans to sell Bandcamp, an independent music storefront company they acquired last year. Part of the planned structural change will also see the spin-off of SuperAwesome, a company that creates safe online experiences for kids.
Unlike Naughty Dog, Epic Games offered a severance package to the laid-off employees “including six months base pay and in the US/Canada/Brazil six months of Epic-paid healthcare”.
Other high-profile layoffs in the video game industry
This has been one of the toughest years for game developers as there have been sweeping layoffs across high-profile studios. Earlier this year, Microsoft laid off a massive 10,000 employees including in Bethesda and Xbox.
In July, CD Projekt Red, the developer behind the Cyberpunk 2077 IP, announced that it was laying off 10% of its staff. The company’s CEO Adam Kiciński said the company wants to have “teams that are more agile and more effective”.
Layoffs have also been reported in several other companies including Striking Distance, the developer behind The Callisto Protocol, Crystal Dynamics, BioWare, Blizzard, Riot Games, and Unity. It is believed that the layoffs are readjustments to the hiring spree occasioned by a surge in spending during the pandemic era.
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Embracer Group has also canceled multiple projects and shut down Volition Games. It also plans to sell off Gearbox. The massive readjustment happened after a $2 billion investment deal fell off the cliff. Activision also recently laid off employees in its Hearthstone division. This came on the heels of another massive layoff in its esports department earlier this year.
The massive layoffs and deteriorating working conditions in the gaming industry have led to a growing call for unionization in the industry as a way of shielding workers from corporate greed and supporting them during inevitable layoffs.
Do you support the unionization of video game workers or what other solution do you propose to curb the chaotic hiring and firing in the industry? Share your thoughts in the comment box below.
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