The last year has been absolutely brutal for the video games industry.
Thanks largely to an increase in loan interest rates and the carnivorous nature of larger companies buying up smaller ones, almost every major game studio has had major layoffs. On July 31, 2024, Halo and Destiny developer Bungie simply became the next studio hit—again. They already laid off 100 people in 2023.
Bungie announced Wednesday morning that 220 positions would be eliminated—which, as the announcement itself points out, is a shocking 17% of the studio. The announcement continues to say that the layoffs “will affect every level of the company, including most of our executive and senior leader roles.” Since Bungie has several ongoing projects, a change of leadership is no small matter.
These layoffs can be directly linked to a depressing trend within the games industry. Sony completed its deal to buy Bungie for a whopping $3.6 billion in July 2022. As Nathan Grayson wrote for the Washington Post shortly after the acquisition was announced, Bungie employees were assured by leadership that the buyout would not result in layoffs. Not only did that promise age like cheese laying on concrete in the sun, but also those leaders themselves have now likely been laid off as well.
Unfortunately, that’s not the end of it. There’s more than one way to shrivel up a company, and Sony’s apparently going all in. Another 155 roles—an additional 12% of Bungie’s workforce—will transition from working at Bungie to working elsewhere at Sony. Bungie spins this as a way they “are deepening [their] integration with Sony Interactive Entertainment.” They also say—perhaps truly—that this was Sony’s way of ensuring that as few people as possible lost their jobs.
Additionally, Bungie has a game currently in development which they will be spinning out into its own studio. In other words, today, the company announced a combined 29% of its workforce is getting laid off or moved.
How did we get here?
After the announcement, Bungie CEO Pete Parson’s announcement ventures to ask the question on everyone’s mind: How did we get here?
Parson offers a number of reasons. Bungie tried to expand too much and “stretched [their] talent too thin, too quickly.” Parsons also cites “a broad economic slowdown, a sharp downturn in the games industry, our quality miss with Destiny 2: Lightfall, and the need to give both The Final Shape and Marathon the time needed to ensure both projects deliver at the quality our players expect and deserve.”
These are all valid reasons. But concerns about stretching talent “too thin, too quickly” hit poorly when the studio is now going to continue on with 29% less staff. And even more poorly given that Parsons’ extravagant lifestyle (including reportedly spending millions on classic cars and continuing that spending after mass layoffs began) has been the subject of public criticism for years.
The industry as a whole
On the surface, the industry seems to be doing incredible: Games like Baldur’s Gate 3 and The Legend of Zelda: Tears of the Kingdom are expanding what’s possible, The Last of Us and Arcane are proving games can make for prestige TV, and indie games are better than ever. But things are so much darker when you look underneath.
By the end of 2023, over 10,000 people in the games industry had lost their jobs. We’re just over halfway into 2024, and we’ve already passed that number. In other words, in 2023 and 2024 combined, over 20,000 people have lost their jobs. And counting.
There’s a whole slew of reasons things are this bad. One commonly cited reason is that companies took advantage of low interest rates during the pandemic—which coincided with a boom in sales—and now that they can’t pay those loans back. But there’s another huge underlying current here: consolidation.
Last year, Fortnite developer Epic Games bought independent music platform Bandcamp and sold it off, complete with layoffs, one year later. Earlier this summer, Xbox shut down four studios it had purchased. One of the axed studios, Tango Gameworks, had just delivered Hi-Fi Rush, a high-selling, award-winning game. The destruction of Tango was doubly notable because Hi-Fi Rush‘s acclaim made it exactly kind of game Xbox execs were going around and saying they wanted their studios to make.
The Bungie layoffs aren’t the first layoffs at Sony or PlayStation this year, either. In February, they laid off 900 people and shuttered their London studio entirely. The only major studio that seems to be adding to its employee pool is Nintendo.
In other words, talented people are losing their jobs en masse because a couple of people (mostly men) at the top of major companies irresponsibly toyed with, even gambled on, their assets. It’s infuriating.
Published: Jul 31, 2024 08:19 pm