Amidst high revenues, video game companies are reducing their workforce, a trend highlighted by Respawn Entertainment’s recent decision to cancel a solo-player game after a year and a half of development. This move led to layoffs for Ryan Lastimosa, the company’s innovation director, and his team of 47 technicians. Similarly, Electronic Arts announced a 6% workforce reduction, equating to 800 job cuts, as part of a restructuring to focus on “strategic priorities”.
Experts note that the video game industry is realigning after rapid growth, adjusting to post-COVID demand decline, increased production costs, and intensified competition. Around 6,500 jobs have been cut globally since January, with hundreds in California. Observers believe the actual number may be higher, as some companies haven’t disclosed their reductions.
Despite job cuts, the industry is growing, with global video game market revenue expected to reach $205.7 billion by 2026. California, home to about 720 video game companies, including major publishers like Activision, Blizzard Entertainment, and Riot Games, is significantly impacted. The state’s video game industry employed over 152,000 people in 2022, generating an economic impact of $54.1 billion. Aubrey Quinn, Vice President of the U.S. Video Game Industry Association, highlights the sector’s growth from $15.2 billion in 2012 to $56.6 billion in 2022, emphasizing that video games remain a growing industry despite job cuts.
Ryan Lastimosa successfully coordinated with his company’s management to find jobs for many of his team members. He attributes the current job cuts to the industry’s exaggerated growth during the COVID-19 pandemic.
To address industry disruptions, Amir Satvat in Connecticut launched seven online gaming employment resources, including a job guide and registration for job seekers to connect with employers. The global gaming workforce stands at 350,000, with the 6,500 job cuts representing about 2% of the total, yet these reductions are still of significant concern.
The industry faces challenges like post-pandemic uncertainty, company acquisitions, and increasing competition from live streaming and other entertainment forms vying for gamers’ time.
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