The game industry is at an inflection point. Major studios are laying off thousands of employees while reporting persistent talent shortages. This contradiction is reshaping the industry landscape for developers and gamers, as companies are finding the balance amid economic pressures. While they sort the details, development cycles and release schedules are affected.
Mass layoffs started in 2022, when the industry laid off 8,500 employees due to contraction. The pink slips increased in the following years, reaching 14,800 in 2024. Companies laid off workers following the pandemic surge, yet more people staying home meant developers needed to meet the higher demand for games and updates.
While layoffs were big stories for three years, the hits keep coming. Amir Satvat predicts up to 9,000 layoffs will occur in 2025. Mass exits from the gaming world mean fewer openings for those wishing to remain. However, they face competition from people who want to switch careers later in their professional lives.
Satvat says layoffs are vital to industry health, though global cost variances and artificial intelligence (AI) are other critical factors. Developers and designers fear AI will replace their jobs due to the cost savings. Companies use AI to optimize NPC behavior and make games more dynamic.
Layoffs have significantly affected the industry. However, the companies are simultaneously experiencing a talent shortage. The rise of AI and other advanced technologies demands highly specialized skills. Therefore, a complex contradiction exists at the heart of modern gaming development.
The issue is present in video games and the broader tech world, considering the half-life of skills is shrinking across the industry. These capabilities are helpful for a few years, but companies may expect workers to refresh or update them. If they’re niche, they may expire faster. In-demand skills in the gaming world may include cloud computing, systems architecture and automation.
Gaming companies may focus on redundant roles when laying off workers, which could result from project cancellations or task automation. Departments are facing reductions, from quality assurance testers to support staff. Publishers may decrease personnel in one area while needing more in another. These moves could worry retained employees while affecting game quality.
Layoffs have made workers worry about their job security. A recent report revealed the anxieties of BioWare employees dating back to 2024. One staff member said they have readied their portfolio to prepare for more firings.
BioWare had over 200 employees in 2023 before downsizing to under 100. The layoffs came after it released Dragon Age: The Veilguard in 2024.
“Look at the negativity that came after Dragon Age,” a BioWare employee said. “If we felt it was only going to get worse then, you can imagine what some of us think now.”
Confidence in employment status is essential for gaming companies because it affects the staff’s well-being. Experts say job security protects employee productivity and future hiring. Businesses wanting top talent must be willing to help their personnel and foster productive work environments.
Losing programmers, artists and producers may cause development bottlenecks at gaming companies. Therefore, the gaming community must endure delays for their favorite releases. In July, Supermassive announced its layoff plans and redundancy consultation process. Besides job losses, another ramification was delaying Directive 8020 until 2026.
The gaming industry is at a crossroads, as the consequences affect developers and gamers. Studios are navigating economic pressures and technological developments while managing consumer expectations. You may have to get used to longer waits for new titles and more frequent delays.