Unfortunately that's not how corporate America works so until the system changes, this is the norm, not the exception.
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Take-Two Interactive to lay off 5% of staff and scrap several projects that are in development as part of a cost-reduction plan
- Thread starter Smitch
- Start date
GTA VI is far from finished and real QA work basically just begun. And R* has a lot of long time employees (at least in higher positions) so they don't drop those. Overall I think that Rockstar is probably currently safest place. Cloud Chamber studio (Bioshock) Hangar 13 (Mafia, Top Spin), Visual Concepts (NBA), Firaxis Games (X-Com, Civ)... are more likely candidates because those are the ones that got projects canceled.
I really hope this stuff stops soon.
The gaming industry is gonna lose so much institutional knowledge and talent from devs getting disillusioned(and who can't blame them considering the past 2 years of neverending layoffs) and just leaving the industry for better paying pastures(I know other tech sectors have been hit by layoffs as well but if the job stability is gonna be shit anyway some devs are gonna go for it if the pay is better).
The gaming industry is gonna lose so much institutional knowledge and talent from devs getting disillusioned(and who can't blame them considering the past 2 years of neverending layoffs) and just leaving the industry for better paying pastures(I know other tech sectors have been hit by layoffs as well but if the job stability is gonna be shit anyway some devs are gonna go for it if the pay is better).
On topic I think what's happening may not really be P+L as much as it seems the big guys are slowing down the side projects and consolidating behind key IPs. If they are shuttering projects then there isn't anything to save these employees from layoffs because there's no work to do (I know technically they could be shipped to other projects but in my experience with project management in both govs, corps and in between that rarely ever happens)
So the Indy space really feels like the place where new stories and ideas will come from just like the film and tv industry. Is there a gaming equivalent of A24?
Annapurna and Devolver? But funding for Indie projects is in bad spot too.
The cost of doing business has risen across all sectors of the economy and gaming is feeling the brunt of it in the last year+. Funding is a problem at every level (Indie to AAA) now. It was easier to fund projects when money was basically free.
Yeah I think there's probably a bunch of Silicon Valley style fundies that came in during pre Covid stayed during Covid and are now having cold feet and walking back out but if the undies can hibernate for the next couple years we will have more success stories to lure them back in. The biggest 2 imo will be gta6 and switch 2 and maybe some bubbles from ps5 pro and the rumoured xbox handheld in 2026
But yeah the project management side of gaming is looking dire from funding and confidence perspectives for the next 18 months
I think somebody here predicted that the return to office mandate was always just R*'s way of quietly firing employees and would be followed by actual layoffs later.
These fuckers just claimed ÂŁ360million in tax relief in the UK without contributing any tax at all as well.
Greedy assed corporations.
Greedy assed corporations.
People keep talking about GTA money, but didn't this company just buy a bunch of other companies (Gearbox and more)a few weeks ago?
That's the real bullshit.
That's the real bullshit.
Net income was -1.1billion last fiscal year and they've had negative net income in the last 6 quarters I think. They haven't even had two billion dollars in net income in the last 5 years combined
This, in addition to receiving generous tax breaks and the GTA+ service getting a 30% price bump, just WTF.
Outside of Nintendo, the console industry is truly broken.
Tech across the board has been getting hit hard. It's not a videogame specific issue. You want to argue capitalism or corporate/shareholder greed fine but this isn't a videogame industry specific issue.
yeah i got laid off from a tech job last year after our profits weren't as mind-shatteringly high as the CEO expected (and this was for a fairly niche variety of software that just so happened to be compatible with the need generated by the early pandemic); the period of wildly unsustainable growth is over, and now we're seeing the crash. some related industries will have a faster comedown than others, but still.
This is accurate. Revenue and gross profit are not the numbers to be looking at here. Take-Two has been losing money every quarter.
It needs to be able to borrow for cheap. They could be making money hand over fist right now and the simple fact that they'd know it would be cheaper to operate at this capacity whenever the next economic upswing hits would be enough to have them decide to cost-cut and save as many resources as possible to hit said upswing in stride.
This is all irrelevant. Gross profit is "revenue minus *direct* expenses," and indirect expenses can also be hefty. The number to look at is net income, which as you can see has not been a pretty picture for Take-Two: https://www.macrotrends.net/stocks/charts/TTWO/take-two-interactive-software/net-income
(Their stock is stable despite the big losses because investors don't trade on current outcomes, they trade on expected outcomes, and GTA6 is looming.)
If they cancelled some projects and are not yet starting new ones or dont have plans to start new ones yet, and the people arent needed, it makes sense to lay people off.
Your not going to keep people on staff to literally just twirl their fingers, regardless of how much profit you have (or don't have).
I don't know the specifics here but some of the knee jerk "fuck corporations/capitalism" is ridiculous.
Your not going to keep people on staff to literally just twirl their fingers, regardless of how much profit you have (or don't have).
I don't know the specifics here but some of the knee jerk "fuck corporations/capitalism" is ridiculous.
100% agree. Yes, it sucks, but the entire market is in a state of flux right now. Projects that may once have seemed like they would be successful may no longer be worth the financial risk - so more prudent to discontinue development than to keeping throwing money at them. These are surely difficult decisions, but summarily dismissing this as a money grab is oversimplifying a much more complex decision.
Capitalism doesn't work, so the real answer to your question is "infinite". The company must continue to make _more_ money every single year no matter what the cost. People, ethics, product quality, whatever. Under capitalism, there is no end to this, and every single product you love will likely have the same fate.
Few things: they acquired Zynga in 2022, for $12.7B, acquisition date May 23, meaning fiscal year of 2023(April 1-March 31).
They stated cost synergies of $100M annually for five years.
And now they've Agreed to Acquire Gearbox for $460M in 2024, expected acquisition date first quarter of FY25.
Cost synergies are cost savings which can take several forms, including supply chain improvements, R&D, tech advancements and layoffs.
They stated cost synergies of $100M annually for five years.
And now they've Agreed to Acquire Gearbox for $460M in 2024, expected acquisition date first quarter of FY25.
Cost synergies are cost savings which can take several forms, including supply chain improvements, R&D, tech advancements and layoffs.
Working at a fortune 500 company in a mid level management position you are incorrect. You lay people off when there isn't enough work for them (do to automation, increased efficiency, or decreased demand for your product, etc). You can't just lay people off to "increase profits" because then you can't produce as much. Having less product to sell means less revenue and less profit.
And a regulated capitalistic system has been proven to be the best system for a middle class, and have pulled more people out of poverty than any other economic system. Name a replacement that is better. (Note my key word here is REGULATED capitalist system).
Cool, well that's good for your company. People are laying people off for the sole reason of increasing profits. That's why all these layoffs happen, and why any layoffs happen, if you're immune to seeing that because you work for some fancy company that's good for you! You don't need to feel apart of it until you do. :)
I guess I should add, just because arguing with people isn't cool, and I don't really mean to do it that I genuinely feel it's good for you if you feel that way, ignorance is bliss.
I have been working in games for a long time and have never once seen layoffs that were not about increasing profit, since that's the only goal of the company (Of course, this excludes small companies and co-ops etc.).
Usually it's worded in a way to remove the human element like "we need to be more efficient, we need to set ourselves up for success in the future, whatever."
All of that is true, but also not true, because under capitalism everything only exists to make profit, so that's the reason. I'm a bit sensitive to it, because I've seen countless friends and co-workers thrust into hardship for no reason other than appeasing some suits who do nothing to make our games.
I remember my first time! I was working as a junior and all of a sudden, out of no where, a bunch of people got up and walked out single file, friends stopping by my desk to tell me they were laid off. It never gets easy and it's always for the same reason.
Yes, likely a mixture of cost management by project/team and an overall general reduction in labor costs and implementation of new/increased revenue streams for the incoming storm many think will arrive.
Edit: This is not isolated to the games industry. It is going strong across all. This will get worse for many before the year is out.
Layoffs are not linked to how much money a company makes as they are targeting how much money a company is *expecting* to be making on their current investment (which workforce is a part of) in the future.
Also and again - the fact that some project is vastly profitable doesn't mean that anyone will burn these profits to fund projects which are bringing losses. These projects will be cut or closed regardless of how much money a company makes.
These stupid takes on how "capitalism" works are really tiresome.
FWIW, as far as I know Gross Profit doesn't include operating expenditure, which was reportedly $3.45bn last year. Which technically puts them like a billion in the red, though how much of that is just creative accounting, I have no idea.
I swear we need a threadmark on every earnings/layoff thread with a wiki link to definitions of gross profit and net income. The amount of confusion in these threads gets so repetitive.
So one of the richest publishers with the biggest cash cow in the industry still finds a way to fire people for cost reduction?
They fucking suck
They fucking suck
Idk. I've never thought they set the world on fire but did respectably well? Just a hunch.
I definitely wish the U.S. would at least shift to a social market model like Germany or Japan, but that of course would never happen with the Republican Party existing.
Social market economy - Wikipedia
Yeah, this exactly.
"But with operating expenditures, it's more like a MERE one an and a half billion profit" okay, then as an obscenely wealthy company you weather the storm for a quarter until the new project starts or whatever so you don't have to fuck over your street level people. That's what they do for you when it's CRunCh tIMe
As I said before R* is currently probably safest place to be. Other studios are one to worry.
Layoffs happen to cut costs. As to the reason those in charge think costs need cut, it varies quite a bit in need and intelligence.
As far as Capitalism "pulling people out of poverty", this is only true using an arbitrary and unrealistic metric of a livable income created by the World Bank. There's also the issue of people who were basically forced into the system by colonial forces boosting that claim too.
How about stop the name calling and veiled slander.
Where am I pushing de-regulation and decreased government spending? Even in my post I specifically emphasize regulation and regulated capitalistic system.
So what other economic system has shown to be better for civilization throughout history than a regulated capitalistic system with social safety nets?