Games industry leader predicts 2024 ‘will be the year of closures’

22.01.2024 - 20:41 / videogameschronicle.com / Tom Ivan

Games industry leaders have suggested that widespread job losses across the market last year will continue throughout 2024 and likely stretch into next year too.

Game developer Farhan Noor, who has been tracking job cuts dating back to the start of 2023 on videogameslayoffs.com, estimates that around 10,500 games industry employees were laid off last year.

And less than a month into 2024, some 3,000 planned jobs cuts are already thought to have been confirmed.

Speaking to GamesIndustry.biz anonymously, senior industry figures warned that more tough times are in store for the market due to continued high interest rates, an overabundance of new releases and cautious investors.

“If 2023 was the year of layoffs, 2024 will be the year of closures,” according to one CEO of a public company. “Not just developers, but publishers, media, service companies.

“There are just too many unprofitable businesses in video games,” they added. “We’re looking at up to two years of pain.”

One publisher boss said: “Too many games were green lit in 2020 and 2021. We need to get to pre-pandemic levels in terms of the release schedule, and that’s probably going to take two years.

“You can already see publishers signing fewer games. That’s happening everywhere. The stores are saturated, not just Steam, and the games just aren’t delivering the levels they were. ”

The latest GDC State of the Game Industry survey found that around a third of developers were impacted by layoffs at their workplace over the 12 months ended in October 2023.

Asked how concerned they were about layoffs over the following 12 months to October 2024, 14% of the 3000+ respondents said they were very concerned, 16% said they were somewhat concerned, and 26% said they were slightly concerned.

Some of those surveyed also provided anonymous feedback, including their thoughts on the rise of layoffs across the industry.

“Studios grew too quickly during the pandemic and people are spending less money on games during a cost of living crisis,” one respondent said. “The bubble is sadly bursting. I hope it creates new start-ups that revolutionise how we develop games and sets a precedent for larger studios to follow by.”

Another wrote: “The layoffs are concerning because they don’t seem to be following the ‘typical’ cyclical trend of layoffs after a project ships. Not that that was great either, but it’s hard to predict these days where and when layoffs might happen.”