Why are thousands of video game workers losing their jobs?

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Why are thousands of video game workers losing their jobs?

“I had just woken up and got an email saying, ‘We’re going to have a company-wide meeting.’ I knew right away.”

James, whose name has been changed, was visiting family earlier this year when he saw the post.

“I started thinking about everything I was going to lose.”

He had worked as a games designer at one of the UK’s biggest companies. video game studios for almost a decade. It was a job he loved and dreamed of since he was nine years old. But recently he had been worried.

All around him, friends in the video game industry were being laid off.

“My mind was racing, what could I do? I wasn’t going to be the only one looking for work right now because there were so many layoffs. They all happened at the same time.”

He went to the meeting, where his worst fears were confirmed. The company’s chief executive said about 25% of the studio’s workforce would be cut. James was one of them.

“It was hard,” he said, shaking his head.

Gaming is an anxious world right now. More than 8,000 jobs have been lost globally since the start of this year and in March the number of available jobs in the UK hit a record high, according to the Games Jobs Live report.

But in London, like the The BAFTA Games Awards 2024 take place last week, players could just have fun.

It was an evening of glitz and glamor with a black tie dress code. The red carpet was laid along London’s South Bank and hundreds of the gaming world’s elite were in attendance.

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Baldur’s Gate 3 actor Neil Newbon poses on the red carpet at the 2024 BAFTA Games Awards.

The team behind Baldur’s Gate 3, the Dungeons and Dragons hit that won Best Game, walked the carpet taking selfies.

Nadji Jeter, the actor who played Spiderman in the latest version of the comic book game, was in London for the first time for the event.

“Oh my God, I’m so nervous,” he told Sky News, before taking home the leading role trophy for his performance.

Actor Phil Wangwho organized the party, swooned over the legends he had played as a child.

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Phil Wang hosts the BAFTA Games Awards 2024. Photo: BAFTA
Picture:
Phil Wang hosts the BAFTA Games Awards 2024. Photo: BAFTA

“Seeing the people I love struggle, it’s hard”

But the world of video games is very close-knit. Workers often have to move to new cities to find work, so their coworkers can make up a significant part of people’s social circles. Layoffs were not far from mind.

“Seeing people in the industry that I love, who work hard and are damn talented, seeing them struggle is really hard,” said Baldur’s Gate 3 narrator Amelia Tyler.

“I think we’ll get through this, but it’s going to take time.”

Mass layoffs have hit the industry hard over the past two years. More than 10,500 people working in the video games sector worldwide lost their jobs in 2023. More than 8,500 jobs were lost in 2022.

People were hoping the situation would improve in 2024, but four months into the year, 8,000 more jobs have disappeared and the UK is far from safe.

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More than 8,000 people lost their jobs in the video games sector in the first four months of 2024
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More than 8,000 people lost their jobs in the video games sector in the first four months of 2024

“So much institutional knowledge lost”

Around 1,000 people across the country have lost their jobs since the phase-out began, according to Ukie, the sector’s trade body. This means more than one in 30 people working in the UK games sector are affected.

Swen Vincke, the founder of the studio that made Baldur’s Gate 3, didn’t make any noise.

“It’s a stupid thing to do. There’s so much institutional knowledge that’s being lost and it just doesn’t make sense because it’s a thriving industry.

“There are more and more people playing games, so you should cherish the developers who work on them.”

He is right. More than 40 million people regularly play video games in the UK alone, and the UK industry is growing – it is now worth £7.82 billion to the economy.

So what’s going on?

One expert, George Osborn, who wrote the Video Games Industry Memo, said there were three issues at play: ; COVID, game release delays, and the cost of living crisis.

During lockdown, 61% of us played video games, according to Ofcom.  Photo: iStock
Picture:
During lockdown, 61% of us played video games, according to Ofcom. Photo: iStock

“The video game industry was hit by the COVID effect later than everyone else,” he said.

During the COVID-19 pandemic, when people were cooped up at home with nothing to do, video game sales skyrocketed. In just one year, the industry brought in 21% more money globally, raking in £27.6 billion more in 2020 than in 2019, according to global accounting firm PwC.

In response, the industry grew. Game studios grew rapidly and hired more staff.

“It created a bubble in the industry and there was overinvestment in games from investors who have since been burned because the market wasn’t quite stable yet,” Osborn said.

End of confinement, people stopped buying

Lockdowns ended, people went back outside and stopped buying so many games to occupy their time.

Then came the delays. At least 60 major games have had their release dates delayed in 2021.

Most didn’t explain why, but developers have since spoken out about the difficulty of working on these kinds of games remotely and in confinement. When games started coming out, they flooded the market and made it harder for smaller games to get exposure.

Alan Wake 2 was one of the biggest games released in 2023. Photo: Remedy Entertainment
Picture:
Alan Wake 2 was one of the biggest games released in 2023. Photo: Remedy Entertainment

In 2023, the blockbusters The Legend of Zelda: Tears of the Kingdom, Alan Wake 2, Resident Evil 4 and Super Mario Bros. Wonder were all released, each selling millions of copies. It was a good year for big games but much more difficult for everyone.

James, the developer who was laid off, said his bosses expected sales to remain at the same level as during COVID.

“I felt like the industry was still growing. It just wasn’t growing as much as they would like.”

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Like the rest of the world, gaming is also affected by the cost of living crisis.

“Video game prices haven’t changed much in the last five years,” Osborn said.

“That means the cost of making games has gone up a lot while the market has weakened. So while the industry did really well last year, it wasn’t enough.”

Things could improve…

But there may be light at the end of the tunnel. Ukie has released figures which suggest the industry is growing again.

It did not reach pandemic growth levels, where double-digit growth rates were the norm, but last year 4.4% of value was added. Ukie managing director Nick Poole was keen to send an optimistic message.

“When you look at the way games are spreading into other parts of our culture, we see an industry that has come of age.”

And for James, there was also good news. Although he lost the job he thought was stable, he found a new studio in a town where he has friends. For the first time, he asked about the company’s finances during his job interview.

“Maybe I was a little naive, but I started in this industry at a boom time, so every job seemed safe to me, it was just a matter of what they could offer you. Now this is no longer the same,” he said.

Sam Lake (right) poses on the red carpet at the 2024 BAFTA Game Awards. Photo: BAFTA
Picture:
Sam Lake (right) poses on the red carpet at the 2024 BAFTA Game Awards. Photo: BAFTA

Sam Lake, creator of Max Payne and Alan Wake, had some wisdom to share after more than 30 years on the job.

“I’d like to remain hopeful. In my experience, with all these things, it’s a pendulum swing. Things get worse and more difficult, or we struggle financially, but so far at least, we We have always gone backwards.”

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