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  • Voltaire Staff

Video game industry sacked 9,000 employees in 2023



Around 9,000 workers were laid off in the gaming Industry in 2023, with a major chunk of them sacked by Epic Games, whose blockbuster game Fortnite earned $5.8 billion in 2021.


According to Verge, Epic Games, renowned for Fortnite and the Unreal Engine, laid off 830 employees.


Despite apparently being flush with money, its CEO Tim Sweeney claimed, "We've been spending way more money than we earn," citing unrealistic optimism about avoiding layoffs during a transitional period.


Despite having successful ventures like Fortnite, the company's spending on acquisitions like SuperAwesome and Bandcamp reportedly led to financial strain, resulting in the need for layoffs.


Over the past two years, Embracer Group grabbed attention with its extensive acquisitions, including gaming studios, media companies, and the IP rights to The Lord of the Rings.


However, the firm in a violent lurch this year went for a large scale restructuring, prompted by the collapse of a $2 billion investment deal, Axios reported.


The failed deal involved Savvy Games Group, the gaming arm of the Saudi government’s Public Investment Fund.


Other major players, such as Hasbro, EA, BioWare, Microsoft, Bungie, Naughty Dog, Ubisoft, Amazon, CD Projekt Red, Sega, Unity, and Activision Blizzard, sacked employees, with Hasbro laying off 1,000 employees, including the team behind Baldur’s Gate 3.


In contrast, Nintendo's historical approach of preferring pay cuts over a complete sundering stands out.


In 2013, after poor Wii U sales, executives took pay cuts up to 50 per cent to avoid layoffs, emphasising the importance of employee morale for creating impressive games. Nintendo's success with Tears of the Kingdom, selling 19 million copies, reflects the value of employee retention and institutional knowledge.


Unionisation emerged as a protective measure, with developers at Sega, CD Projekt Red, Avalanche Studios, and ZeniMax forming unions in 2023. While acknowledging that layoffs may be necessary at times, the scale witnessed in 2023 was deemed excessive.


According to a Statista report, the global video game industry recorded a staggering revenue of nearly $347 billion in 2022, with mobile gaming contributing an estimated $248 billion.


The dominant players, known as the Big 3, – Nintendo, Microsoft, and Sony – collectively secured 29 per cent of the industry's revenue, with Sony claiming the largest market share among them.


Beyond this triumvirate, Tencent emerged as a major revenue earner, succeeding in mobile and online gaming. Activision Blizzard, with a market capitalisation surpassing $67 billion in early 2023, led the pack among game developers.


The industry also witnessed a surge in mergers and acquisitions, with Microsoft's pending $69 billion acquisition of Activision Blizzard being a significant move.


Notable trends for 2023 include the anticipated growth of cloud gaming, with a projected annual rate of 62.5 per cent, and the rise of virtual reality gaming, expected to generate $3.2 billion in global revenues by 2024.


Multiplatform games like FIFA and Call of Duty continue to dominate, showcasing the industry's focus on broad accessibility and player engagement.

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