Why Video Game Layoffs Aren't Done Yet I Extra Credits Gaming

[@extracredits]

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[@danielsantiagourtado3430]

Keep up the good work 😊😊😊❤❤

[@rocko7711]

❤️🎮🕹️👾❤️

[@trevorromein14]

You know what would've helped in a better way? The CEOs and Higher-ups taking a pay cut. 😑 But what do I know, I'm just a human with Morals. Maybe Bobby really needed that 7th yacht.

[@davidbeppler3032]

I want an AI congressman. Not an AI CEO.

[@Canyoureadmydeadpan]

Looks disgusting.

[@isthisajojoreference]

Important context for the Nintendo execs taking pay cuts is that Japan has laws against mass layoffs like we’re seeing now.

[@gamelover2222]

This. This is the important part everyone!

[@jorgemontero6384]

But note that this is also why Nintendo makes relatively few high budget games in house, as every hire is also a big risk: Hard to hire also means less likely to want to hire. Legislation that makes layoffs difficult thus also raises the natural rate of unemployment. If the choices were, say, Spain's job security, and 12% unemployment, or US job security, and 2% unemployment, that 10 percent gap in unemployment seems like a big problem. Japan manages to avoid the high unemployment a different way though: by having very low wages. If companies pay very little, they can afford to keep workers during downturns. Also not necessarily people's favorite alternative.

[@thijmstickman8349]

@@jorgemontero6384 Yeah in Japan there is a type of person called madogiwazoku (tribe who sits by the window), basically an employee who is left out of the loop and given no work to do until they eventually don't show up (which is grounds for fireing) or get so bored they quit. Some companies have special departments "Oidashibeya" (banishment room) where people are sent when they want to lay that person off. I support better worker protection from getting fired, especially in the US, but what happens in Japan needs to be avoided

[@Flameblade102]

It's not that it's completely illegal in Japan to have mass layoffs, but companies operating in Japan have to state a strong case to the gov't proving they're in truly severe financial distress and that layoffs are the only solution in order to avoid insolvency. But that does mean Japan's gov't does hold companies accountable unlike here in the USA

[@arkhe1n107]

Yeah. Whenever this story pops up, people tend to forget that very important part of it. The C-suit didn't do it from the bottom of their hearts.

[@tiaxanderson9725]

7:37 Two big caveats here; 1) Japan actually has decent worker protection, so unless the company was in danger of going under they can't fire their staff for "Whoops management fucked up" 2) Those protections don't extend to people not working directly for the company, thus lots of people *were* fired: they just technically weren't Nintendo employees

[@patricksmith6680]

Can we Americans get these laws? **Please???**

[@tiaxanderson9725]

@@patricksmith6680 Best advice is probably; unionize

[@andrasbiro3007]

​@@patricksmith6680 Japan's economy has been stagnating for like 40 years, so think twice what you wish for. Worker protections are fine, but companies have to be able to get rid of those who don't perform well. The problem is that low quality workers don't just do poor job, but tend to pull down others too. For example if you see someone not doing any work and getting away with it, that destroys your motivation to work hard. Even worse are bad managers and administrators, because they can prevent others from doing their jobs well. The best for everyone is to make switching jobs easy and painless, and support the unemployed.

[@pimppimpproductions6497]

Those Japanese workers can’t get fired, but they also have obscenely low wages, and companies like Nintendo are much less likely to have big hires because they know they can’t have big fires. Harder to fire means harder to hire.

[@macroxela]

​@@andrasbiro3007the Japanese economy has been stagnant the past few decades but people are still doing relatively well. Wages are not as high but life is still quite affordable. An economy doesn't always have to be growing to do well.

[@GumbyTTL]

Sounds like the film industry. "Every movie has to be a billion dollar tentpole franchise move," says coprorate CEO who had no experience in the industry who ends up cranking out factory pressed big budget snooze fests while virutally killing the 20-60 million dollar film economy.

[@Tacom4ster]

This is why capitalism must be overthrown

[@StrangeGamer859]

@@Tacom4sterAs long as we don't try to ressurrect some failed system to replace it

[@Tacom4ster]

Anarchy without the Tankies getting in the way@@StrangeGamer859

[@XxJayandTomxX]

*Godzilla Minus One has entered the chat*

[@r3dp9]

@@Tacom4ster Capitalism was never the problem. In a working democracy, you vote with your vote. In a failed democracy, there's only one uniparty to vote for. With working capitalism, you vote with your money. With failed capitalism, there's only one megacorp to buy from.

[@trevinbeattie4888]

If we’re going to compare this to the video game crash of 1983 there were a lot of other contributing factors to that one including lack of originality, poor quality games, and oversaturating the market. This was also around the time that home computers were taking off, which could run many games better than game consoles of the day. Nintendo sweept up the market by focusing on giving players a good game experience and making high-quality games instead of just looking for easy money. I think many of today’s game studios have learned some of these lessons, but big tech companies have not.

[@Nate-bd8fg]

Which... is exactly what we see today?😅

[@Nate-bd8fg]

Except for the console part. But consoles GOT NO GAMES

[@txorimorea3869]

@@Nate-bd8fg This. The only thing different is nintendo being replaced by pal-type companies creating games like Helldivers.

[@jd2792]

​@@Nate-bd8fgexcept the crash was a myth it only happend in the USA eorupe was uneffected if it will happen again it will only hurt one part of the world

[@dimfre4kske67]

@@Nate-bd8fg Consoles have plenty of games, just not good ones.

[@StarContract]

In order to address cost of living, inflation and unemployment, we need to address executive salaries.

[@ImBoredBuddies]

Whole heartedly agree. As well as "shareholder interests." We know that just means money

[@tassadar7945]

Bring back pre-Reagan corporate tax rates

[@Mischievous_Moth]

@@tassadar7945 Honestly with all the ground we need to make up I say higher taxes than pre-reagan until we're caught up.

[@haldir108]

How does executive salaries (and bonuses) impact inflation? How does it impact Cost of Living? I can kinda see a mechanism where it would impact unemployment, but i'd love to hear what your reasoning on the question is.

[@Bedwyr7]

It does matter morally for sure and in Nintendo case it matters financially. But I'm not sure at the scale of Microsoft or (to use another troubled company) Boeing, whether you can cut C suite compensation enough to make a difference. There's just a scale difference.

[@ivain8704]

I remember seeing a post about a company laying off about 600 people and then turning around and giving their CEO a $20 mil bonus. Because being in a financial state where you need to lay off hundreds of people is definitely bonus-worthy, right?

[@davidbeppler3032]

Lucid laid off just under 2,000 employees and the CEO got a $245 million dollar bonus. :)

[@paaperclips]

That sounds like Activision a couple years ago. They claimed it was their "biggest quarter ever" so Kotick took a big bonus. Then said it still fell short of projections so they laid off hundreds of people.

[@benjaminfrench7541]

Have to mention that Nintendo does still have a large volume of contract workers who do not have the same benefits and pay as their full time employees, so those kind of cost saving measures where CEO's take pay cuts are coupled with contracts being run out or terminated early and don't translate to the same specific metrics done on layoffs most people find. Its a stealthy, more kid-friendly way to control your work staff, which to be fair does sometimes give the contract workers time to find work when they know their contract will end, but thats IF THEY KNOW.

[@Yoshizuyuner]

to be fair you be getting alot amazing portfolio work to show off if some big company see you been working with nintendo for years

[@user-sl6gn1ss8p]

Also, I just don't think the situation is the same. Why would Nintendo fire the core people making their marios and zeldas and animal crossings and stuff out of low sales for the WiiU? And, frankly, if a pay cut from a single executive can save a lot of jobs, there's something to be said about that as well, but that's another story : p

[@r3dp9]

That human element is overrated. Many of the best things that happened to me were the direct result of losing my planned career, and winding up with a better career I wasn't even aware of. I no longer view jobs as 'life careers'. Instead, a job is like school. If you get verifiable work experience, certifications, linkedin connections with coworkers (and esp bosses), and real life experience... you come out ahead, even in the unfortunate even of getting fired without notice tomorrow. Losing a job is still nerve wracking and stressful, but if you plan for that eventuality from the outset, it's not a bad thing in the long run. For example, most of those game programming jobs that were 'lost' require the exact same skills that warehouse programming jobs require, and I can tell you that there are a LOT of openings in this field. I'm sure there are many other great careers out there, for anyone willing to look at the pay, benefits, and hours instead of chasing an imaginary dream job or prestige.

[@deeps6979]

2:11 "It all ties together." I wish people would realize how interconnected so many things are.

[@HardCodedGaming]

On a lighter note, when you mentioned Snowcrash, my brain heard Snowpiercer, and I can absolutely picture a CEO watching the movie where the horrifically abused underclass violently rebels against their corporate overlord and the very structure of their society, and only taking away "hey a big train would be cool, let's make one".

[@RorikH]

Lies. Elon Musk would never set foot in the same vehicle as a poor person.

[@hilburn-]

Provided the poor people were only there to a) act as an example to the privileged to keep them under control (it could be worse for you y'know) or b) renewable child slave labour pool, I think he'd be OK with it

[@DuranmanX]

I loved this video, but ending with what would Iwata do was a mistake. We can't rely on CEO's sensibilities or moral judgment. We need the strong labor laws that Japan has that are the reason why Japan companies don't have layoffs.

[@pimppimpproductions6497]

Japans workers also have extremely low pay, especially in industries like the games industry. Plus they work far longer hours. I don’t think Japan is exactly an ideal role model for us.

[@Sonic_the_hedgedog]

I agree that we need strong labor laws. These greedy corporations are destroying the video game industry with mass layoffs.

[@DuranmanX]

@@pimppimpproductions6497 Japan has problems and solutions, like anywhere else. We don't need to mimic them to just take the good

[@jamesportnow2786]

Would that we lived in such a society...

[@KamiRecca]

So while all for labor laws, Japan is a bad example, since they have laws to an excess.

[@HunterGoodin]

You said in the beginning that the companies committing these cuts are large companies like Amazon, Unity, Embracer, etc. But that’s simply not true. Tons of A/AA and indies are laying people off in droves. VC’s and publishers aren’t investing in projects anymore. Publishers are going out of business because VC’s won’t find them. I worked at a A/AA company that had staff of almost 200 people that’s done smaller indie titles and worked with large studios like Nintendo. The beginning of this year. Projects were cut, and a lot of the company was laid off. It’s not just these massive juggernauts like Microsoft, it’s the entire industry that’s bleeding.

[@jayleevt]

I work in mobile games, which I know this was focused on AAA titles, but we are also having massive layoffs for similar reasons. I think one other thing is contributing to this, however. During the pandemic, video game popularity went up cause we were all bored at home with nothing to do. The money we WERE spending on going out to eat, concerts, movies, etc. we were spending on in-home entertainment instead. I worked for 3 different companies since 2020, and they were super excited about growth and exploding and opening new offices and starting new app projects, etc. I think we grew bigger assuming the success would continue... and now that it's gone back to what it was pre-pandemic as far as how much people are spending on digital entertainment vs IRL entertainment... we're all getting screwed. Seriously just a few years ago job offers were falling out of the sky, it felt like. One company didn't renew my contract and I had a new job less than a month later that paid the same level. But now i've had to stop looking for jobs in mobile games at all and branch out to other fields (AI chatbot creation, for example) to find positions.

[@Mischievous_Moth]

I work in IT and have been laid off THREE times in the last six years since I got into the industry. It's baaaaaaaaaaaaad out there.

[@RorikH]

Have you tried turning your career off and then on again?

[@rudeboyjohn3483]

​@@RorikH... I shouldn't have laughed, but I did

[@r3dp9]

Have you looked at industrial maintenance, industrial IT, and/or industrial programming?

[@williamanthony915]

What kind of companies were these? Were the big FAANG companies, or smaller to mid size companies?

[@FictionHubZA]

I like your funny words magic man.​@@RorikH

[@Zuginator]

I heard Nintendo didn't fire tons of people because Japanese Law FORBID it, not because the CEO were actually people with empathy and a feeling of responsibility of their employees.

[@Flameblade102]

It's not that Japanese law forbids it, but companies operating in Japan have to make a public case to the gov't to 1) prove that they're in truly severe financial distress. and 2) layoffs are the only solution to avoid complete insolvency. But definitely means Japan's gov't actually holds companies accountable, unlike here

[@GamerFromJump]

I do think Iwata took the cut to help the workers though.

[@nashwinston1395]

I’m no expert on it but there is a cultural element to it. But like a lot of laws the culture allowed for these laws to pass and the laws enforced the culture it’s a chicken and egg thing.

[@user-sl6gn1ss8p]

Also, it's not like Nintendo games were vaporware, a crazy bet or had suddenly stopped being profitable - their hardware didn't sell as well as they'd like, why would they kill the still very likely profitable games they already had in development?

[@a1pha_star]

Nintendrones

[@Aranesque]

I'll Never forget that moment with Iwata and Miyamoto. While sometimes I despise Nintendo's corporate decisions (not the games or devs: corporate) Iwata... he was a different kind of person. I was already amazed with his achievements as a developer and game designer, but that decision made me respect him so much. It was very sad to hear of his passing later that decade. It kinda reminded me to the time an ex-president of Sega (Isao Okawa I think?) donated everything he had in his will to Sega, which allowed them to survive as a third party company to this day.

[@ChrisKetcherside]

This is one reason why the 70 dollar price tag was disecuesed a few years ago

[@pfifo_fast]

Video game crash of the 80's was caused by a flood of low quality games... the video game crash of the 2020 is being caused by a flood of low quality games.

[@ponyote]

As someone who worked for Netflix in the 90s, all of this has happened before, all of this will happen again. Same as it ever was.

[@ashey218]

all of the major recent layoffs started just after I locked in my uni applications for game design and its honestly left me so scared for the future

[@RaphBlade7]

Gotta hand it to Miyamoto & the late Iwata, they were smart to cut their own pay rather than laying off staff!

[@AegixDrakan]

I find it "hilarious" that the same companies that complain "we can't give away free money!"(ie, better salaries, benefits and social programs) are the ones with their mouths fixed firmly over the near-0% interest rate free money pipe... >:(

[@unnamedenemy9]

and giving their executives massive piles of money every single year. Never forget that even before this, in the same year Activision Blizzard boasted record profits they also fired 9% of their staff while giving Bobby Kotick enough money in salary and bonuses to pay every one of those fired employees a 6 figure salary.

[@stephenjenkins7971]

@@unnamedenemy9 If that was a terrible decision, then the company would flounder due to a lack of staff, no? If that didn't happen, then those layoffs probably were necessary. Idk what to do about the high CEO salaries though; shareholders can prolly twist their arms.

[@unnamedenemy9]

@@stephenjenkins7971 that is a stupid argument. They could have just not given Kotick a truly insane bonus, allowing them to retain that manpower for other projects and also not make other people's lives hell. It's a terrible, short-sighted decision done entirely to squeeze profit out of their own employees in order to maximize quarterly earnings and projections -- BS like that has always been detrimental long-term but executives and their shareholder buddies simply don't care. They're getting their dividends and golden parachutes so they can cash out before everything eventually implodes, they don't give a damn who suffers in the meantime or if the company crumbles under the weight of mismanagement.

[@unnamedenemy9]

@@stephenjenkins7971 they could have just *not* given Kotick a truly insane bonus, allowing them to retain that manpower for other projects and also not make other people's lives hell. It's a terrible, short-sighted and greedy decision done entirely to squeeze profit out of their own employees in order to maximize quarterly earnings and projections -- BS like that has always been detrimental long-term but executives and their shareholder buddies simply don't care. They're getting their dividends and golden parachutes so they can cash out before everything eventually implodes, they don't give a damn who suffers in the meantime or if the company crumbles under the weight of mismanagement.

[@billionai4871]

I don't think I agree with the final point of games industry going away from big tech. This feels like just game industry mirroring the boom and bust cycles of big tech, that happened with crypto, NFTs, will probably happen with AI, and is just almost par for the course in big tech nowadays. or maybe I'm just extremely jaded, only time will tell and I hope I'm wrong

[@AreWeLearningYet77]

Great video! Very well done breakdown of the current situation with the industry. Also, bonus kudos for mentioning Snow Crash and NOT Ready Player One.

[@ChenAnPin]

Just look to Arrowhead Studios CEO in response to issues with their game Helldivers 2 proclaiming that they will not just hire a whole bunch of extra devs to work on and stabilize the game just to then fire them after the issues have been resolved, and that's somehow such a profound statement to make.

[@Sientir]

Thank you for explaining corporate economics and why interest rates are connected to inflation. I'd not really understood that before.

[@MaxIzrin]

Interest rates have nothing to do with inflation. I don't know why they said that. Inflation is caused by governments printing more money, literally nothing else causes or affects it.

[@Myrtanae]

​@@MaxIzrinThis may be true in principle for the USA, but it falls short. Inflation is initially only the increase in the general price level within a certain period of time. The massive inflation of recent times is mainly due to the war in Ukraine and disrupted logistics processes, e.g. in the Red Sea

[@MaxIzrin]

​@@Myrtanae More dollars were printed in the last several years than in the entire history of the US prior. You think a little war has more affect than that? What was the financial burden of the 20 years of war in Afghanistan, or all the other wars before that? I didn't see much inflation when Saddam was being bombed, did you?

[@Sientir]

@@MaxIzrin I can buy that inflation is partly affected by governments printing more money, but unless that money actually enters the economy, can it really inflate it? It seems likely to me that these low-to-no-interest loans are a mechanism by which that happens? (Not sure here, just speculating.) Additionally, it also seems like increases to prices in certain sectors (e.g. energy, such as fuel prices) also causes inflation in the sense that everything is affected by energy prices. If fuel costs more, then shipping costs more; and if shipping costs more, then the cost of shipped goods costs more. To say inflation is only or entirely about how much money the government has printed doesn't entirely pass the sniff test for me. It definitely smells like it's a decent sized component of it, though.

[@user-sl6gn1ss8p]

@@MaxIzrin Right, changes in production, levels of stock, taxation, exchange rates, levels of savings, changes in employment rates or laws, level of investment in fixed capital, prices of commodities and the commercial balance, among others, have no influence whatsoever on inflation. Only "money-printing". Literally nothing else. Sure.

[@dreamingacacia]

I tried to think of business model for game development since over 10 years ago. At first it was similar to normal company's R&D with cheap employees to build the game. Then all I could see is that it's better to have a small team of highly skilled people and outsource the parts where you could. The problem with the current gaming industry is the people at the top are far from being skilled or have great vision toward videogames. Y'know, it's hard to have Kojima or people of the same caliber in every companies. Insider info said that many skilled people got ignored by managers while the board only cares about profits.

[@andrasbiro3007]

The problem isn't the layoffs, but the hiring frenzy. Hiring tons of people fast is only possible by lowering your standards by a lot, so when the bubble bursts, you have a lot of employees not worth keeping. But if you keep your high standards and have well functioning dev teams with a lot of experience, layoffs really hurt, you likely never fully recover from them, so it's far better long term decision to cut costs elsewhere. If you have someone still learning the ropes, but getting paid a lot due to the recent labor shortage, you save a lot and sacrifice nothing. But if that person has been at the company for 10-15 years, helped to build everything you have, and get paid less too (switching jobs usually gets you more money), then letting them go is like cutting off a limb for no reason.

[@TheJadedJames]

Nintendo cutting executive compensation was essential to keeping the company alive. If they did massive layoffs they would have sent the company into a death spiral where smaller teams would have to make even better projects. This could have damaged the Switch launch and killed the company. Instead the recovered because the quality of life at the company was maintained and the top brass got to their money back when the Switch literally made ALL the money

[@partyjams]

Thanks for explaining all this. Economics aside I was wondering how many people are on AAA teams. Especially when Game Freak and Sonic Team are very small for the major IPs they have

[@shaider1982]

Man, it has been quite a time since Iwata passed away. Hearing his example is quite exemplary.

[@metadoxy]

As I teach my econ students, in a properly functioning economy, capital absorbs risk. That’s what profits are for: to create the buffer that allows firms to continue to employ & produce through hard times. If owners (and the C suite) aren’t insulating workers from this kind of volatility, there’s no social justification for them to keep the profits from good times, either! Proper incentives mean whoever pays for losses should keep profits, and it’s heartening to hear that Japan has incentivized the right behavior.

[@stephenjenkins7971]

Japan didn't incentivize that behavior, they mandated it by forcing everyone to become married to their corporation. Its a massively dehumanizing process that nobody should emulate; though it can have occasional good outcomes like this. Also, to be blunt, corporations and all organizations have no moral need to insulate their workers beyond self-interest, regulations, and cultural forces.

[@raventhorX]

as much as i wanted to, this is pretty much the reason i chose not to get into game development. tie all these issues as well with my lack of confidence in my skills and it creates a situation where working in the games industry just didn't feel like I would be competitive enough to have a stable living. Would still love to get in the industry somehow someday but I honestly don't think I ever will outside of a passing hobby and even then it's barely a hobby as honestly i have more fun just playing what other people have created. Unfortunately even my second choice is proving difficult to get into despite all my efforts already too, so it might not just be the games industry having issues, we just happen to notice that industry more due to our passions for said industry.

[@smugwendigo5123]

Game development is like art, create art for the sake of art not for profit.

[@raventhorX]

@@smugwendigo5123 game development is much more than art. Even so, should an artist not be allowed to sustain themselves from their hard work regardless of what their reason might be for doing said work? I personally wouldn't be trying to get rich and my reasons for not continuing to pursue game development are more than the issue of possibly not making a profit.

[@infin1ty850]

Before even watching the entirety of this video, the answer of if we are looking at a crash even vaguely similar to the 1980s crash is "No!" Anyone who thinks otherwise has absolutely no idea how devistating that actually was.

[@yousifnash5378]

Remember when Iwata took a 50% pay cut so he won't have to layoff any employees in Nintendo? Pepperidge Farm remembers.

[@thetipoftheweek200]

The greatest fear I have in post-modern capitalism is that desire to always see a number go up, even if you have to cut jobs or make other short-term choices. We need to normalise “success” as including no growth or overall growth over a period of years. Also stop cutting the mid tier people with lots of experience! They’re not the problem, they’re usually the only ones keeping afloat.

[@DannyboyO1]

This is also a reason to form unions.

[@FrinniferFran]

Nintendo’s Execs are like the GOLDEN STANDARD for what Executive Leadership should be like. Their legal department could use some work catching up but they have done close to no wrong in every other field.

[@Grizabeebles]

tl/dr - tech CEOs pulled a Cave Johnson and now a bunch of video game companies got Apeture-ed

[@gerardotejada2531]

Iwata should be the patron saint of the Videogame Industry. And Miyamoto... he already is our hero.

[@vonKobra]

You can't cut executive salaries to deal with large employee pools that have never been profitable and will never be profitable. Nintendo took a risk that failed, but the core business model was sound, and they knew that the company would need its employees once it recovered. It's a different situation.

[@tornielsen2888]

Alternative take. The AAA industri is mostly shoveling garbage out anyway. Its sad people are losing their jobs. But positive that room is created for the AA and indie games.

[@eldartaghiyev8422]

07:44 A reason they did was that Japan 🇯🇵 has good worker protection laws on how you can fire people.

[@rickyclover9393]

The rise of independent game developers for the last 20 years, mobile gaming and stream gaming has giving competition to AAA game developers. Also. AAA game developers has gotten greedy with there only internet-based gaming and micro transactions. 6000 people are getting fired from Sega, Nintendo, Microsoft, Bungie.

[@NeoHellPoet]

There's just not going to be a 1980's style crash. It could happen then because it was a niche industry with a massive barrier to entry. What's mostly happening is the big studios trying to buy success and failing. The massive, extremely expensive AAA games are not that much better looking than cheaper alternatives. Simply having a game that's big is no longer a selling point. Just look at the recently released games with the most buzz. It's mid sized studios like Larian and Arrowhead with Baldurs Gate and Helldivers and it's small and indy dev with Palworld and Lethal Company. And that alone would ensure the industry as a whole would survive, because we objectively don't need the AAA games... but in all honesty the AAA games aren't half bad. Sure you have your forgettable and overhyped titles like Diablo 4 and Starfield, but Spiderman was really good. Resident Evil 4 was great, Jedi Survivor was rock solid, Armored Core VI was pretty amazing, do I even need to point out how good Tears of the Kingdom is or how well Streetfighter 6 is doing. The stuff that's disappointing is largely the cash grab, trend chasing, millionth installment soulless garbage that nobody should miss. It's really horrible to say, but from a consumer perspective, getting devs out of big studios where they're forced into wasting their time on that nonsense is 100% going to produce some amazing games. Mark my words, 2026-27 are going to be absolutely filled with amazing maiden projects from new studios born out of this mess. If it was the gambling simulators and the live service ripoffs that are left standing I would be feeling gloomy but I don't remember being quite so spoiled for choice in terms of fantastic games and I don't see the good times randomly stopping because talented people aren't making games designed in board rooms and with focus groups.

[@antisonictardcringe433]

by my extension, movie companies should just release theater films on xbox/ps consoles immediately

[@Aging_Casually_Late_Gamer]

I feel no sympathy about the lay offs. I was told "this isnt for you!" For years. Now that those games who werent "for us" (whatever that meant) didnt make money, the studios have to get rid people. Not my problem.

[@KryyssTV]

The other element you didn't mention is the massive financial cost for boneheaded executive meddling in the creative process. As you said, they play the stonks so games are being designed to exploit fads within the financial and investment industry (eg. NFTs) even when your consumers (the players) have utterly no interest in what is beung put into the game. The result is the destruction of popular brands (ie. Star Wars, FIFA, Mass Effect, ect..) and studio reputations because the point was to give a temporary boost to stock value rather than making great games or preserving the value of an IP. These losses then have to compensated for by not just closing the studio, which the corpo forced into making a bad game, but also unrelated parts of the business because the cost of development far outweighed the expenditure of the staff the studio employed. In the end the solution is simple, studios should NEVER sell out to or be partly owned by corporations. The games industry has not benefitted from development costs inflating to hundreds of millions of dollars. This is proven by the rising popularity of indie games which are made for a fraction of the cost and while studies by the likes of Humble show there's an unreasonable bias within console gamers against indie games this can be overcome with time and marketting to break this mentality that AAA games are of innately better quality than indie games.

[@stephenjenkins7971]

1) No way you can stop that since studios are private enterprises and can do what they want 2) Many of the best games needed financial support from large corporations to succeed to begin with, let alone get off the ground 3) Indie games are nice, but many times they also partner up or become part of a corporation to finish their products, or become major corporations themselves 4) A lot of Indie games are trash too anyway

[@KryyssTV]

@@stephenjenkins7971 Point 2 isn't even slightly true. Private investors, business loans, development grants and kickstarter campaigns can easily raise tens of thousands which is plenty to fund development and marketting. All they need to do then is find a publisher or do it themselves.

[@stephenjenkins7971]

@@KryyssTV And do you have any idea how unreliable such an avenue is? Most potential games won't even get off the ground with such an unstable source of support.

[@Daemonworks]

The firings will continue until c-level exec bonuses improve.

[@mesektet5776]

You need only look at Shakira Miyamoto or the late great Satoru Iwata, or read A Tale of Two Cities to realize how to handle company downsizing, namely if there are cuts to be made, you start at the top! Isn’t that right Madame De’Farge?

[@cecile.muller]

The worst part is it's everywhere, not just the gaming industry.

[@palladin9479]

This is what happens when you generate trillions of USD worth of currency without having the same increase in GDP.

[@benjyss8594]

7:40 Yes that is absolutely something more companies in general (not just gaming and tech) needs to do more of. However I only ever hear of Japanese companies doing executive pay cuts, and not all of them do that either.

[@George_M_]

They over invested because they thought gaming was an infinite money generator. We are not your lemon to squeeze, corpos.

[@HealyHQ]

We need a UBI so people laid off don't have to worry about their entire livelihoods being at great risk out of nowhere.

[@axolet]

I don't think it's fair to compare Nintendo with 0% interest loan bets. Nintendo's leaders cut their salaries not just because it was the responsible thing to do, but because the company was all they had. If the WiiU and 3DS failed, Nintendo would collapse. (Fortunately the 3DS was a huge success, enough to keep them afloat). When companies like Amazon are taking bets to create games, they don't owe employees a job forever. It's a bet, a startup child for experimentation. Some of these bets will win, and new permanent jobs will be created, while other bets will lose. The issue isn't with the companies. We all want businesses to take risks, expand and grow so that we have more jobs in the market! But that means we have to take a certain risk as well when joining these companies. Just remember, these jobs didn't have to exist in the first place. There will be ups and downs.

[@firdanharbima6997]

And another game with near exact theme got 1mill+ accumulated players(from both playstation and pc)in a month I have never EVER been Happier

[@draco84oz]

There's been predictions of another video game collapse going on for years now, but it hasn't happened. I'm actually wondering if it can't happen at this point. For one, the fee to pay/live service/microtransation model that infects games these days seem to be able to put out such a large amount of money that its almost impossible to fail. We see so many of these games attempting to work on mobile, and ultimately failing after less than a year, but they keep coming for some reason. If they weren't making money, why would companies like Zenga, Square etc keep pumping they out? I think they do end up making some money short-term, which is why they keep coming, looking for that one combo of factors that can create the next Fortnite. For two, even with tentpoles like Madden, FIFA and CoD gradually getting worse year on year, its not like they're ever going to stop making them, or the games are going to stop making money. And the publishers know this and don't care if they're if their of bad quality because their core audience will always buy them regardless. My view is that The tcollapse of the 80's happened because gaming was such a niche hobby that it didn't take much to cause the bottom of the market to fall out. Nowdays, gaming is so mainstream and has such a large userbase that its almost impossible for an enthusiast boycott/protest/lack of interest to have the same effect.

[@Notester82]

I appreciate the perspective of getting the bigger picture on why video game layoffs are happening!

[@postapocalypticnewsradio]

PANR has tuned in.

[@FanTaz1986]

i like how you show a lot of layoff is for PoC and similar DEI peoples , but do not tell it out right

[@Graghma]

Lots of smaller developers that publishers contract (to make all or part of a game) have been getting decimated lately. Especially when big game companies are slimming up and investor money has evaporated. Also, when a company is bought by another, only the name lives on. Sure they may have to hire all the employees but that is also normally for only a set amount of time (think 6months-1year). That original company is dead. It has a leg up on restarting but to act like 'everything's okay' just because the new company keeps using the name people like... People use "fiduciary duty" as an excuse to do a-moral things. For those caught up on Japan's legal protections... even given that, they could have cut people's pay instead of exec's taking less money. Japanese culture always seemed to take being a leader seriously... complete opposite to people making sure to maintain their 'fiduciary duty'.

[@sakurapablo671]

And this is why some minor Indie companies, try to make sure they don’t do layoffs, if they wish to stay afloat. Since they can make some money back. Sadly, not all companies will do this, like Ubisoft and others that we know. Beside those who did the third Baldur’s Gate. Hence why they took their time on it.

[@ryansmith841]

AAA games haven't delivered, indie games have been great, and these companies spent money hiring way beyond their means and paying consultants oodles of money to generally make their games worse. It's no surprise layoffs are starting to hit.

[@MaxIzrin]

Exactly, those are the primary reasons for the contraction we're seeing now, not interest rates.

[@antisonictardcringe433]

pfffffftttttt ffvii rebirth destroys any indie with a single pansyslap >ffviiribirth pansyslaps hollow knight with a ghey uhhhhh *smallslap* >hollow knights screams irrationally for hours on end over a harmless slap

[@ChronoStrife]

Good. Layoff the entire industry and start over from scratch at this point.

[@thecactusman17]

In addition to many people's notes about Nintendo and Japanese labor laws, it's also important to note that an unusually high number of Nintendo corporate executives are internal company veterans who have literally made games and hardware; largely as a result of Japanese corporate culture favoring internal promotions. Even then within only a few decades their board is slowly filling up with the usual collection of lawyers and investment professionals as dev work gets outsourced to partner studios and individuals have less and less personal contribution to each new title.

[@stephenjenkins7971]

While this may sound like a good thing; this kind of culture tends to be created from the massively dehumanizing Japanese work ethic that ties your life into your company.

[@ChrisAshtear]

Fixed term contracts for employment would be really helpful in both heading off this reckless hiring and giving advance notice to employees

[@christopherg7483]

was in the first wave, oct 2022 (Not gaming, but was the first big round of the tech layoffs)

[@we12man]

I called it as Titanomaquia, when chronos was defeated by Zeus and its brothers. That mean, only the big companies may die, but the newers and smaller studios may survive

[@Kellan__they-them]

Yeah, I definitely have my gripes with how Nintendo does things sometimes, but there's no denying that the executive pay cut was an absolute W, top-notch move.

[@Halcon_Sierreno]

Personally I wouldn't mind another games recession. The industry has become overbloated and convoluted. It seems that today nothing but shovelware is coming out. Creativity is gone out the window and non-gamers are taking over the hobby to instill their own personal values or to profit from it. We need a reset in the industry and a way to get back to basics.

[@tomcurl8034]

i hope that game companies especially game freak take longer to make higher quality games instead of pumping out yearly installments that are rushed and buggy

[@Zearonith]

I thought it was the Japanese Business laws that made Iwata and Satoru go the direction of salary cuts? That the Japanese Business laws stated a company must attempt all avenues to reconcile down turns before attempting to layoff employees.

[@armorbearer9702]

Basically, investors threw money at an industry they did not understand or have a plan on how to make profit.

[@UrdnotChuckles]

The mass layoffs help pad the bottom line and continue the fiction of infinite growth. Frankly it wouldn't surprise me if a lot of the big companies either implode, or divest themselves completely from the space all in the interest of more short term profits. Meanwhile all the smaller studios seem to be doing just fine? Could make for a big shakeup in the space and more indie groups.

[@masterofrockets]

The government made it easy to subsidize game developers then the government stop subsidizing, and now there’s a loss those darn executives

[@appalachism40]

7:57 I audibly laughed at the prospect. Not a chance in 7 separate Hells our CEOs would take that kind of a hit. They'd sacrifice infants into a volcano before they scarified their salaries.

[@ElectricFire9000]

The bad timing around the Rooster Teeth news :(

[@kristbg]

Nothing is going to "correct itself". The "correction" will be an even bigger round of irresponsibility with few or no people getting their jobs back.

[@jesusromanpadro3853]

And is looks like Hasbro, after firing many employees, is going to concentrate more in video games than toys, Magic the Gathering and D&D. 🤷‍♂️

[@fleity]

Great video, thank you so much. Haven't seen anyone sum up the issue that well. It's a difficult /shitty time to be in games but the reasons are utterly in the corporate space. When your product becomes entire companies there is little room for humans.

[@stephenjenkins7971]

And without those companies, most games would never be made to begin with. "Humans" is an unnecessary hurdle for the product, and people support them as long as their optics are okay. Sometimes they ignore the bad optics anyway. Mostly because nobody cares about how "human" it looks as long as they benefit.

[@Targe0]

There's been so many lay-offs because the baby boomers have mostly retired, so they have pulled their capital from the market. Meaning, all those companies no longer have as much capital to invest. It's why the overall corporate culture has gone to hell, and it's also causing massive inflation. And we always knew it was coming because it's just basic demographic data.

[@NikolajLepka]

the real reason is corporate greed

[@danilooliveira6580]

We really could use a catastrophic game industry collapse. Like a forest fire, it allows smaller saplings to grow. All those people that lost their jobs is a new potential successful indie project.

[@stephenjenkins7971]

And thousands of people who now suddenly have no income. And likely create a recession since everyone is pulling out their money and refuses to spend.

[@satyavarma2449]

​@@stephenjenkins7971 do love it when people simply just imagine that the people who lost their jobs will just get jobs at indie companies.

[@shakachoarroyo]

Iwata the GOAT, though to be fair, cutting upper corporate salaries is JP-wide practice. At least it used to be. Let's see if a US CEO ever tries that...

[@stephenjenkins7971]

Kinda have to. Its culturally and legally mandated for them. And yet in spite of that, Japanese companies generally cannot keep up with US ones. So maybe those US CEOs have a point?

[@Shadowreaper5]

The irony of picking Snowcrash as an example book is that they *did* hit super mega hyper inflation. People pay for stuff with million dollar bills

[@DTDdeathmas]

While the lay off are terrible, it does have the benefit of getting people into new studios or studios that are taking more appropriate risks. Im hoping this will lead to less samey game and more ethically run studios.

[@shawarmagames1689]

Man, its just bad decisions and nothing related to bad economy. I work in the game industry.

[@aggressiveindifference]

for those w/o sponsorblock, video ends at 8mins 20s

[@Endarire]

4:47 When a company's wishlist is its major competitors.

[@anonymous49125]

Not interest rates, not AI... it's section 174... Remember how Amazon and every other major company paid like $0 in taxes? The trick was, any profits were spent on R&D (software, new factories, new products, etc) each year before tax time rolled around. Why give money to the government if you could just spend your profits on yourself and say you made no money? Well, new tax code went into effect just when all the major tech layoffs were happening,... so you can't do that anymore. If you hire someone domestically, you can write off 1/5th that amount in salaries for R&D (especially software development) if the worker is domestic, or 1/15th that amount in salaries for R&D if the worker does not reside in the states. And just like a fart in the wind, all major companies cast off any and all nonessential developers, and all new software companies are unable to find investors... If you started a company today, and paid 10 devs, 100k each for one year to develop something that made 1 million bucks... you would owe uncle sam $800k, instead of $0 (which is what you have in the till - as you didn't actually make any profits after affording your workers). This is why devs of all sorts are out of the job and can't find another.

[@terryh.9238]

i hate when you keep acting like i'm gonna click off the video. i know half of the internet has no attention span but not everyone is like that. i come to this channel because i love the deep dives and you guys keep it real. so keep keepin it real. you're not gonna get much better viewer retention by trying to convince people like that to stay, you're just gonna annoy people like me who just wanna hear your game takes.

[@yurichtube1162]

Blackrock money is drying up.

[@ZetaPyro]

4:37 Uhh you know that Unreal is a product made by Epic Games, not a separate company right?

[@MongoIndyleo]

Iwata and Miyamoto giving up their salaries is more a result of culture thing in Japan than true leadership. Basically their social contract is "if you work hard, you will be rewarded. No exceptions." And even though the WiiU was a flop, every one knew it wasn't the workers' fault. To uphold the social contract, they took pay cuts. The social contract in the west and especially America is different.

[@Surfer669]

If it’s such a culture thing why can no one name another JAPANESE CEO & JAPANESE COMPANY. I’ve only heard of Nintendo doing it. Only Iwata and only Miyamoto. Famously enough that even over ten years people still discuss that moment.

[@Lordblow1]

I don't know what you are on about in this video. Few things are more interesting then interest rates. I may or may not be an economist.

[@Foxhood]

Honestly this localized collapse of the AAA segment was long overdue. Like yeah the economic factors are a major catalyst behind the ongoing inferno, but lets not pretend things were going peachy before it either. The AAA segment increasingly became this weird landscape where the focus shifted away from creating truly entertaining products, towards these futile attempts to create Skinner Boxes "Services" as a substitute. All the while Ignoring how such services have fundamental issues and limitations. Also as some pointed out. What Nintendo did was done in large part due to corporate (labour) laws which put the burden of responsibility onto the higher ups. Make no mistake though. Anyone that could technically be fired by nintendo like contract workers, where fired and they would have fired even more if those laws weren't in place. It is arguably another example as to why Labour Laws are so bloody important.

[@linuxstreamer8910]

in the wiiu era they did layoffs but that was all the people who did not have a full time contract

[@Semmelein]

The things that is so aggravating about all of this - if you're an executive and take a gamble, you should also take the responsibility. Just saying you take responsibility and then just laying off people just doesn't cut it. Asides from jobs that is.

[@Deantwo]

> 6:11 "I'm really starting to believe this whole CEOs are the easiest thing to replace with AI theory" I like that idea. It definitely couldn't be worse than the current big-tech/game-industry CEOs.

[@ujingamer]

I was laid off at the end of last year, and im about to get my degree in a few months, and all of this has me pretty nervous.