The video game industry is going through a very rough time at the moment. Many blame the problems on the pandemic boom when we were all unlawfully trapped in our houses, buying video games like crazy cave-dwelling orcs, but many others look to industry greed. Take-Two, the publisher of GTA 5 and the much anticipated GTA 6 said in February that the company had no intention of laying off staff. But that has all changed with the recent announcement of laying off 5% of its workforce. This, in spite of the fact that the Rockstar game, GTA 5, has made the company over $8.5 billion since its launch in 2013. That game is one of the highest-grossing video games in history and this fact alone would leave many to believe that their jobs were safe. I know I would, but to receive a redundancy notification under these circumstances would not only be a slap in the face, but an insult in the extreme.
The Industry Got It Wrong
There was a massive boom in video gaming during lockdown – almost a 35% increase in sales – but when life returned to normal, sales dropped (predictably) as people returned to their normal routines. However, many gaming industry executives foolishly believed that the boom would continue, which led to numerous acquisitions by Microsoft, Sony, Embracer Group, Tencent, Take-Two Interactive, and Electronic Arts. I wrote about the Embracer Group in Be Glad You Don’t Work Under Embracer Group which highlighted the group’s over-ambitious expansion which has now blown up in its face.
More than 10,000 jobs disappeared from the industry in 2023 and a further 8,000 so far in 2024. Those are quite shocking figures and when you take into account that Microsoft has just paid almost $70 billion for Activision Blizzard, yet laid off 2000 employees in the last twelve months, you have to wonder what the heck is going on.
Golden Handshakes, Handcuffs And Parachutes
Dennis Durkin, former CFO of Activision received a $15 million golden handcuff deal when he took that position in 2019. Former Activision Blizzard CEO, Bobby Kotick walked away from the Microsoft takeover with a whopping $400 million, and former chairman, Brian Kelly, a cool $100 million. These are the kind of figures that would make Gordon Gekko proud, but strike me as obscene when entire families are being devastated by such layoffs.
Industry salaries are still huge in spite of the record layoffs with Microsoft CEO, Satya Nadella earning a salary of around $55 million including stock options and incentives, which puts things in stark perspective when you consider the impact any layoff will have on the life of an employee.
Where To Go From Here?
Many gaming companies are shooting for games as a service, loot boxes, and other in-game microtransactions that generate an enormous amount of money. Fortnite and GTA 5 are perfect examples of this greed and fool the gamers into falling for these traps in the first place. Between 2017 and 2020, Fortnite made almost $13 billion and during the lifetime of the game, has made over $25 billion in microtransactions – costumes, skins, Battle Passes, and V-Bucks – which players fork out for in-game. Bearing in mind that Fortnite is a free-to-play game, one can’t argue that the business model is genius, but benefits only one entity – Epic Games. Yet staggeringly, the company laid off 830 employees (16% of its workforce) last September, even though the company has a cash cow that never stops giving.
In my opinion, the games industry is simply going to continue milking gamers, finding more ingenious ways to loot us with microtransactions for us to pay in finding ways to beat the game, and in the end, the only losers will be gamers and the very employees who make those games.
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It’s not just the gaming industry. Many companies seem to be getting rid of people while giving their shareholders and those at the top lots of money. When people complain about the wage difference they say the wage is a good one but I’d like to see them try to live on it.
Energy companies put their prices up apparently because of high costs then said they where making record profits.
Before working in IT I worked in retail and we all got put on new contracts, it was either that or leave. We had set days but they told us they could change them with just a few weeks notice. I said what if I have plans on my days off and they told me I’d have to tell them. I refused telling them what I do in my days off is none of their business.
Sometimes it feels like we are going back to the Victorian age