2024 has already had more video game industry layoffs than all of 2023 — and it’s only June

The video game industry reached a grim milestone in 2023 as the year closed with more than 10,000 layoffs affecting programmers, quality assurance workers, sound designers, and artists — alongside countless other people and job titles. But the new year did nothing to stop the trajectory of layoffs. Just days into 2024, more than 2,000 video game industry workers were laid off from game engine maker Unity and streaming platform Twitch — and in the months that followed, that number continued to climb. Now, the industry has reached another unfortunate landmark event: Just six months into the year, the total number of video game industry layoffs in 2024 has surpassed 2023’s total of just over 10,000.

The numbers, for both 2023 and 2024, are conservative, community-counted estimates from technical artist Farhan Noor’s layoff tracker and from Polygon’s own count; there are likely well over 10,000 people laid off from the video game industry across the globe. Though the data is not exact, it tells a devastating tale — as CEOs bemoan an economic downturn, the workers who make games continue to suffer the consequences of leadership’s decisions. Of course, video game companies are still hiring, and some, like Nintendo, continue to up their employee pools. Although hire-and-layoff cycles aren’t necessarily uncommon in the video game industry — The Conversation rightly called it a “long-standing structural issue” in which companies boost hiring during production, then fire workers after launch — the scope of the current situation is unprecedented.

Even Geoff Keighley, the video game industry’s unofficial hype man, could no longer ignore reality: Keighley briefly paused the sparkle and shine of his Summer Game Fest broadcast to acknowledge the layoffs and studio closures.

The video game industry isn’t necessarily doing badly. Market analyst Newzoo estimated that the global video game industry would generate $184 billion in 2023, a return to growth — albeit a small one — after a minor decline in 2022. Individually, the big companies vary: Take-Two Interactive hasn’t been profitable lately, and it saw major layoffs weeks after it spent $460 million to purchase Gearbox. Electronic Arts reported net revenue growth of 2% just months after it laid off 670 people during a company “refocusing.” At Sega, profits are up, yet Sega laid off hundreds and divested from Age of Empires 4 studio Relic. (Sega’s good profits were, however, largely due to its pachinko business — not video game success.)

But despite the reality of the financials, the number of layoffs, studio closures, and divestitures cannot be understated or ignored; this decline continues to impact the health of the industry and the people who make it run. Companies are hiring, but it isn’t happening fast enough for a lot of developers. Over the past several months, Polygon has spoken to dozens of video game industry workers who’ve collectively submitted hundreds of applications, but who hear back on very few of them.

“It feels like I’m at the bottom of a pile and they keep pouring more people on top of me,” a game designer laid off in September 2023 told Polygon. “The cynical part of it is, yes, there’s this part of me that’s like, Oh man, the job market is even more rich with excellent candidates. My chances of landing a job have just become that much smaller by virtue of numbers alone. I hate having that thought, but I do. The entire industry is hurting.”

The confusion of it all extends to Microsoft, too, which recently shut down three studios and absorbed a fourth into another — and one of the shuttered studios, Tango Gameworks, released a critical and commercial hit for Microsoft in 2023. According to The Verge, Xbox Game Studios head Matt Booty told staff that Microsoft needed more “smaller games that give [it] prestige and awards” — arguably a good description of the success of Tango Gameworks’ Hi-Fi Rush.

Among the layoffs and closures, several projects have been canceled or delayed, making it inevitable that the video game release schedule will be impacted by this period. You can see the impact of the past several years already, in fact. There hasn’t been a blockbuster game from a AAA studio in 2024 — it’s been successes from a whole bunch of indie studios all the way down. The weirder-than-usual schedule may be due to slowdowns related to the current industry landscape, with the biggest titles all pushed out to 2025, putting the biggest companies with ballooning budgets, massive teams, and expanding timelines on edge.

Midsize and small teams are not immune. Most recently, Phoenix Labs and Singularity 6 both laid off dozens of people, while indie developer Die Gute Fabrik closed entirely.

Why is this happening? It’s complicated. Executives often point toward a challenging economy following the COVID-19 pandemic — businesses expanded to meet demand, but realized they overinvested when it inevitably constricted. The money used to make games, wherever it’s from, is expensive to borrow, as inflation and interest rates continue to rise. And that’s if you can get money from investors, because that money has all but dried up.

On the player side, people are spending less money on video games, despite engagement staying stable.

“Gaming’s long-term tailwinds haven’t changed — there are over [100 million] new gamers born every year, there are more indie successes than ever, the medium’s creative achievements continue to grow (and expand into books, film, TV) — but without material growth in players or spending, or new breakout genres… the challenges seem likely to continue,” video game investor and The Metaverse author Matthew Ball told Polygon in February.

Players are also playing differently. People are spending a lot of time in just a few games, instead of dipping their toes into the gamut. And in response, publishers and developers are adjusting. Roblox and Fortnite are masters of this: People play a lot of these games and new content is always coming out, but these developers use player labor to update the game through the so-called creator ecosystem.

“Companies want to sell these transformations to us as new forms of innovation — but really, what motivates a lot of this activity is the fear of having the value of one’s platform degrade,” Laine Nooney, New York University assistant professor of media and information industries, told Polygon over email in January. “There is, of course, a $1 million question lurking under all of this: if these platforms were only profitable when they were experiencing 400% engagement booms because everyone was locked indoors, are any of these businesses actually profitable at the scale their investors gambled on? What, exactly, is propping up all of these valuations?”

Layoffs and studio closures are the solution for executives looking to cut costs and therefore increase the numbers on a sheet of paper. What’s lost in it all is the devastating impact on the people who make games — some of whom may end up leaving the industry altogether. “There’s this existential crisis of, Has any of this hard work been worth it if I can’t stay in my career?” a community manager laid off in 2020 told Polygon. “I don’t want to leave games, but I feel like I have to.”

There’s also a massive loss of institutional knowledge at each individual studio as companies drop employees with long tenures and valuable skills, not to mention the cancellation of games that could have been your next favorite. It doesn’t feel like the industry’s layoffs will end soon, which puts its people in a precarious place. Like the movie industry, the video game sector seems to have a “survive till ’25” mentality — but what happens then? There’s no doubt the impact of the past several years will bleed into 2025 and beyond.