The recent and massive layoffs at Microsoft are further proof that big gaming budgets have been unsustainable for far too long.
I have already covered this layoff situation in gaming, but it is clear now that Microsoft’s recent layoffs indicate that this is far more to do with unsustainable gaming budgets than anything else.
While I cited issues with inflation and Elon Musk’s layoffs at Twitter being contributory factors in my previous article on the subject, the fact this has now happened at Microsoft and at such scale shows that budgets are the primary culprit.
Factoring in the 1,900 layoffs at Microsoft, we now have had around 8,000 layoffs in total across the Western games industry. That’s way more than just a COVID hiring correction and is indicative of a clear structural problem facing Western game production.
The reason for this conclusion is that if this were an industry-wide problem, as in a COVID hiring correction, we would be seeing these layoffs happen on a global scale. In short, we would see similar numbers of layoffs in Japan as well as everywhere else.
This has not happened and while Japan certainly has stricter employment laws, it’s not unheard of for big companies to layoff staff en masse.
The main reason this has not happened in Japan is that, on the whole, Japanese games cost a lot less to make than their Western counterparts. In general, Japanese games companies are more cautious with their spending, bar a few outliers.
Now, we may still some gaming layoffs in Japan, but I am not expecting them to be anything like at the scale of what has happened in the US and Europe.
What angers me the most about all these layoffs though is that I have been warning of the dangers of unsustainable budgets in gaming since 2015.
Moreover, the architects of this situation are not the ones being laid off. It’s mostly the developers that are bearing the brunt of this poor decision making. People that had no input or control over ballooning budgets in the first place.
My only hope is that the thousands of people that have been laid off set up their own gaming studios and show their prior and wholly incompetent management how it should be done.
For now though, this is a financial correction that had to happen in order for gaming to survive, but the cost of this is being paid for by people that weren’t responsible for any of it.
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