Why Are So Many Game Studios Closing? Gaming Industry Layoffs Explained | The Soapbox

[@swordbladez]

I can tell you why I got laid off from a major developer you all know… AI took my job of writing NPC dialogue trees. Felt I was expendable. And this was when it was in its infancy!

[@SinCitysOnly]

It's inevitable - just like we see a pendulum swing in politics and economics, we are seeing it in gaming right now. We are moving from the big companies making big games (like during the mid to late 90s) to smaller gaming companies and indie devs (like we had during the mid to late 00s). Plus it doesn't help that a lot of gaming companies are basically snubbing their customer base.

[@Nathan_Byrne]

Yeah, of course. These things all go through cycles. And there's definitely a sense that the indie scene is fighting the lack of originality from the big companies and making exciting, new ideas. The indie scene is feeling very PS2-like at the moment. In the best way!

[@Bossmoonpie]

Big love to Nathan. Great comedic timing, great info. Lej.

[@yeetonmydeet7013]

insane production quality bro

[@drewtheunspoken3988]

CEOs are *not* like regular people. Most of them would be diagnosed as sociopaths. A necessary quality to run a highly profitable company. No, they don't lay off people for fun. They lay them off because when their new, half baked live service crapfest inevitably fails, they still need to get their yearly bonus. So, to help recoup those losses, they shutter the studio (who didn't want to make the game to begin with) and tout their money saving bloodbath to the board of directors. Those directors then reward that CEO with a huge bonus and order another development team to rip off Fortnite or Overwatch without making it obvious. Or it could also be that making a AAA experience now costs too much to afford to make more than 1 or 2 at a time. So you can't afford to have 4 different teams working on 4 different games.

[@vivizwag]

I totally agree with that last bit. These big companies just think that the bigger is better whenever they make a game, rather than keeping things small and cheap like indie devs would. They end up wasting millions in game development, forcing them to sell those games at an insane price This strategy has a worked in the past, but nowadays the gaming industry is bigger than ever with a lot of gamers not just having their eyes on the newest Assassin's Creed, but rather following original concepts like Vampire Survivors and Lethal Company. On a second note, this also makes it that gamers aren't used to spending a fortune on a single game anymore. With amazing games with infinite replayability releasing for just 10 bucks, most gamers either wait for a sale to happen or decide to pirate those games, taking away a big cut out of the profit

[@Lock2002ful]

Because the companies don’t want to share their profits.

[@mr182winter]

Good shit my dude. Love seeing you try new things!

[@Nathan_Byrne]

Ahh thank you, man! Really appreciate that.

[@treuzebits]

it's absurdly sad to see this happening, really hope they get back on their feet and can keep building these amazing worlds we love so much! Bussiness world is creeping over to the videogame world and these are the consequences, it's all about the money and the deadlines, unfortunately. The indie studios are the ones holding on the video game community until this gets better. Good video Nathan!

[@Nathan_Byrne]

Thanks very much! God save the indies. They're our only hope.

[@forestwells5820]

Uh no, books aren't doing much better thanks to people trying to make a quick buck with ChatGPT and self-publishing avenues. Makes it SO much harder to find the good stuff, or rise your good stuff above the slop. But I've often wondered if budgets have just been allowed to balloon for too long for no good reason. I just saw a thing saying that Godzilla Minus One, a movie that was VERY well received, only had a VFX budget of $15 million. Clearly good content can be made cheaper than it is. Though also, it may be time for companies to go and stay private. No need to appease share holders. Just gotta have the year end number be bigger than the year start number. Nothing more.

[@Thanatos--]

This is late stage capitalism and consumerism happening way faster than any other industry brought on by the rapidity of tech advancement (streaming and digital downloads.) I am a bit disappointed that the presenter didn't point out that acquisitions are more about buying IPs not the meat bags who made them.

[@the-icephoenix]

Also the price of AAA games on ps5 and x box means people aren't buying 2 or 3 a month more 1 or 2 a year so a lot of games regardless of quality are not selling ff7 rebirth an example square lost money butcits a good game

[@steelcoyote2868]

The cost of games isn't really a problem. Games have not increased in cost all that much. Even SNES games used to cost $50. So a $10-$20 increase in 30years is not really that bad. I know you want to counter with "inflation" but homie, they're obviously not gonna go lower... And Games take so much resources and people to develop now. Yes, even indies. Other than the very very few that are developed by teams of 5 or less. But those are usually passion projects and they develop those over a much longer span of time.

[@DMBLaan]

Bandwagoning might be more likely than many of us want it to be. Playstation/Sony closed down a bunch of studios at the beginning of this year, and as soon as Xbox does it, everyone forgets about Sony immediately

[@swordbladez]

You hit the mail on the head. Not about stopping playing video games, but in opting out of this future model. There are plenty of fan made and independent games to play for the rest of our lives. Don’t give another penny to this business driven model. Personally, since being let go, I have gone back to the retro games world and “noped” out of all of this. The more I hear, the more I’m sure I made the right decision.

[@SilverSpectre266]

Another thing that hurt a lot of studios, specifically ones under the umbrella of companies, was the sheer levels of greed by higher ups. There are many examples of this, down to the most basic principles of economics that I even learned in grade school, but the big example that isnt talked about as much is how execs arent willing to bend, even a little, for the people who make them money over their own already well off financials. Higher ups in a lot of these companies already make absurd amounts of money, and on top of that they get bonuses These bonuses can be double or even in the triple digit of millions. No matter what happens to the company, you can be sure those people will make sure they get their bonuses, even when they are fine and well off with just their regular salary. Meanwhile, even slashing just a sliver of that could save thousands of developer jobs. No one will ever beat when Iwata took a 50% pay cut after some terrible earnings in order to prevent laying people off, and how even the board and other execs each took a 20% cut to help out their developers. If any of those company execs here did even a fraction of that, they could have saved a bunch of studios and their employees, even when some of those bad decisions also fall on those execs hands too. But you can be sure their will collect their optional bonuses no matter what happens.

[@33Ocelot]

I think the elephant in the room is that since the advent of AI, companies became more interested on reducing human personel, in order to reduce costs, even if it means a drop of quality. But as you say, it makes no sense that studios that do fantastic games that sell great, get closed or their games cancelled. For example, Crash 5 was cancelled recently while crash 4 sold 5 million copies (compared to for example Sonic frontiers which sold 3.5 and is considered a success) As you mention, they become exponentially greedy an want ever increasing returns for decreasing investments. Totally oblivious to even the public who vote with their wallets. The only message that they understand is public backlash, and they are willing to do anything in their power to hide it. Thanks for the video.

[@chrisdoran3673]

Far too many studios have shit the bed chasing the live service dragon.

[@monkofbob]

Thank you! Thank you! Thank you! For finally being a channel that acknowledges the fiduciary duty part of running these studios. People invest in Microsoft for infinite growth; people invest in a games company for their vision.

[@JMcMillen]

I think the video game industry needs to look at the tabletop game industry to better understand where the problem is. Essentially, the two most disliked companies in the tabletop games industry are Games Workshop and Wizards of the Coast (Hasbro). Even though they do have huge fan bases, what makes them different is that the first is a publicly traded company and the second is owned by one. So they have CEO's that are constantly trying to increase profits to meet unrealistic shareholder demands, because shareholders don't seem to understand that at some point profit increases massively slow down. The potential audience is only so big, they only have so much money to spend, and once you hit that ceiling growth slows down... a lot. And if their audience doesn't like their decisions, they're tons of alternate choices out there, choices that are privately owned and know if they don't listen to the concerns of their customers they won't be around much longer, since most of them are only a few bad decisions away from going out of business. In short, a lot of these smaller game dev studios really need to rethink being acquired by anything that's publicly traded. Because their continued existence will be at the whim of a CEO more concerned about keeping shareholders unrealistic expectations met so they can keep their own job, than the people responsible for the product that brings in the money. And at least in the US, barring any legal holdups, September 4, 2024 will see the end on non-compete clauses being enforceable here so many of these workers will easily be able to jump ship to other game companies or start their own, whenever they want.

[@kryskozlowski142]

It's not so off, what you're saying. I've been working on games of all calibers, and the larger they got, the more cost is associated with them. The huge scale of AAA can come with the price tag of over 1k of people at very lofty income levels over the entire time of development. Remote work came along with the pandemic, and some studios have certainly expanded to lower cost areas, especially in the US. But not all is doom and gloom, us and lots of other good people from the industry are setting up new places right now. Mid core is having a Renaissance and I love that

[@ssmcarpediemclashroyalegam9883]

Love the little TV view so many memories

[@Nathan_Byrne]

I tried to play Time Crisis on it the other day and it was stressfully small.

[@ssmcarpediemclashroyalegam9883]

@@Nathan_Byrne lol have to go 8 bit

[@FinandDandy]

8:51 the way i was caught off guard and choked on my laugh at "the most hated golfing sim on earth" oh my God. I had to pause the video for 5 minutes because I laughed so hard I couldn't stop coughing. Oh my God

[@SilverSpectre266]

And the day I watch this video, we lost another studio; the makers of Wizard with a Gun. Who despite finally releasing their game, and having decent sales and positive reviews, it simply wasnt enough to sustain the studio.

[@SilverSpectre266]

I feel like Tango and Insomniac should have not been touched from either side. You would have thought those studios were safe. Insomniac especially because they have put out banger after banger, and you would have thought they were the golden child of Playstation and that they were untouchable. Then they lay off members of the studio just a week after the CEO of the time posts pictures with them on social media. Which is a pretty scummy move regardless of whose decision it was or what happened behind the scenes. Not only did Insomniac put out amazing games, and are still working on some upcoming ones, theyve been one of their most consistent in terms of not only quality but releases so they need every hand they can get. Tango...Xbox keeps talking about how they want to break into the Japanese market more, and they just let go one of their Japanese studios. To rub salt in the wound, after releasing them, they said they would like to release another game like Hi Fi Rush, after releasing the very studio that made Hi Fi Rush. All the inactive studios Microsoft currently still has on their payroll, and of all of them they cut ties with Tango is wild.

[@GLJosh]

Video games (like movies) had some great successes which led to bigger studios and bloated budgets. Success continued to follow which led to more bloat, the 'cost' of a AAA video game is near that of a major 'blockbuster' motion picture and some games became too big to succeed. CEO and/or CFO "FPS games are selling great, make more, don't forget 'Season Passes' and micro transactions!" Fans after years of solid FPS games are tired of a similar play experience at an elevated cost (need to pay for that bloat). Random person makes a passion project, and it is different and unique, low barrier to entry, and some do quite well. CEO and/or CFO "Well that game you (developers) made underperformed, best of luck in your future endeavors." CEO and/or CFO leap from burning studio building with their 'golden parachute' into their 'current hot vehicle' and drive off to next over paid job to pillage again.

[@the-icephoenix]

I know the answer because a lot of these games studios like ubisoft and bioware don't listen to fan criticism and blindly roll out the same shite year after year let's not mention rocksteady abandoning logic and realising suicide squad losing 200m in the process.

[@maxmikester8185]

Companies don’t care how successful a game is. If it isn’t raking in massive amounts of income then it gets slashed, that’s why everyone is going live service. The solution? Abolish the stock market, as it is the driving factor promoting all of these behaviors in literally every industry. We need to force people to think for the consumers and not their shareholders, and end the ridiculous myth of infinite growth.

[@symbionicrex10]

Oh you know... Just a wee bit of monopoly... nothing much😅

[@StorytellerDan]

Fantastic video. Thank you BUNDLES for putting this together - Very Important!

[@jayduffy5532]

The big companys dont want to share their toys or profits and so they shut down as they " save" their bottom line

[@sywrexile3078]

Fantastic "rant" / epic opinion ❤

[@Nathan_Byrne]

Thank you!

[@n00bc0de7]

I agree with most of the points in this video but how on earth do you think the Grand Theft Auto franchise started with GTA 3. It has a 3 in the freakin titile.

[@Nathan_Byrne]

Haha! I knew I'd rightly get pulled up on this. It's my bad wording, so I take full credit. What I meant is that I see the spirit of GTAV as having started with GTA3 more so than the 2D originals. Got big love for GTA1, GTA London, and GTA2 though. Multiple copies of each in my collection. ❤

[@RH1812]

It’s an industry. The answers in the name.

[@DMBLaan]

So this is just speculation at this time, but it does have some logic to it, but the closure of Tango and the other studios at Xbox might not have been 100% the fault of Xbox proper. I've heard some people theorize that it was a decision made by Zenomax, and because of Xbox's "hands off" approach to everything else Zenomax/Bethesda have done so far, they might not have been paying much attention until it was too late. Again, this is just speculation until proven one way or the other, and either way, it still suchs, but it does make a kind of sense.

[@TheCloudhopper]

Just a little thing: Mountain rug cleaning is fake. Well actually ALL rug cleaning channels are fake. They stain the rugs for the videos.

[@Nathan_Byrne]

Oh my god. We're all under the thumb of Big Rug.

[@willheismusical]

The thing is, until the huge bois loose a massive portion of money, we have just started to see this. And it makes them change. We will continue to see this trend. Also, I wonder how many losing their jobs are like ideologs. I bet a large portion is

[@drewtheunspoken3988]

I'm noticing more and more that the DEI departments are among the first to go. This just could be a case of bad timing all around. I think we may actually hit a point where creating a new console isn't worth the investment. With budgets shrinking, development time is growing, and game costs rising, most smaller publishers will only be able to get 1 or 2 games out per generation. This could mean any new console would be heavily reliant on indies and ports to have any amount of content. The bigger companies will lose a lot of money because, with long waits and less output, investors will no longer see them as having a huge growth potential.

[@MinaliaGames]

There's some corruption in the upload i think, from around 1:05 to 1:55 the video just drops.

[@drewtheunspoken3988]

It doesn't drop for me.

[@NotBen101]

Ok they want to invest in AI and replace some of the labor involved with making games fine. But where is the aaa title that was game of the year developed by a team using AI?

[@33Ocelot]

That's Palworld, best selling game on steam, huge use of AI. I can't deny it's interesting to a public cause it fills a gap that people seeked and has things of its own, but it's also a huge asset flip and the dev is openly known for using AI.

[@edwinsalinas3460]

Why are there three copies of Gitaroo Man? Lol.

[@DontKnowDontCare6.9]

Wannabe collector.

[@Nathan_Byrne]

Hahaha! I was hoping someone would notice that. Here is the story of all 3 copies. 1) My original copy - which got scratched in my PS2 slim (seemingly this is common with PS2 slims). 2) My backup copy I bought in case the scratched copy ever died. 3) The copy I saw in my local CEX. I was just so excited to see Gitaroo Man in the wild that I bought it without thinking.

[@edwinsalinas3460]

It's always good to have a spare. Lol. At least those will bring Gitaroo Man forward in the gaming consciousness, so more people will be aware of it and can give it a try.

[@oldcur]

Your third a$$h*l3 seems the most insightful. Group think sucks!

[@Nathan_Byrne]

That is a sentence I never thought anyone would say to me.