28 votes

Over 50% of the job cuts in video games are in California

22 comments

  1. [8]
    raze2012
    Link
    Funnily enough, this is a title that still manages to bury its lede. I don't think anyone here would be surprised hearing that California is a hotbed for tech, but hearing that over half of all...

    Funnily enough, this is a title that still manages to bury its lede.

    "Over 70%, and in some years 75%, of the layoffs have been in North America,” Satvat shared. “

    " And here’s another stat, over 50% of the cuts globally have been in California. California AAA is like the epicenter of the difficulty.”

    I don't think anyone here would be surprised hearing that California is a hotbed for tech, but hearing that over half of all cuts globally is focused here was still quite a bit shocking.

    Amir gives some other interesting statistics he's gathered over the years as well, so it's worth a read of you really want to see some more numbers about the situation. Amir's solution isn't too encouraging, though:

    There is opportunity, but it may be that if you want to stay in the industry, being open to going to some of these places like China, like Japan, not forever, but for some amount of time, that's going to become a larger part of the equation

    17 votes
    1. [7]
      Ganymede
      Link Parent
      American corporations need to face severe tax consequences for offshoring jobs.

      American corporations need to face severe tax consequences for offshoring jobs.

      11 votes
      1. [2]
        stu2b50
        Link Parent
        I’m not sure how that is relevant to the situation. The layoffs from Californian game developers were not from offshoring.

        I’m not sure how that is relevant to the situation. The layoffs from Californian game developers were not from offshoring.

        14 votes
        1. Eji1700
          Link Parent
          But they kinda are? The whole point is that if you're looking to do cuts, when 3 local devs cost the same amount as a team of offshore devs, then yeah you're cutting the local devs. It's EXTRA bad...

          But they kinda are?

          The whole point is that if you're looking to do cuts, when 3 local devs cost the same amount as a team of offshore devs, then yeah you're cutting the local devs.

          It's EXTRA bad in california because you could be paying someone $200k and that's "reasonably livable" in silicon valley, not "oh shit i'm comfortable" like most of the rest of the country. When you consider that you can pay cost of living for a local developer to do ok, or for an entire team of offshore, well it's hard to keep the local dev.

          4 votes
      2. [3]
        MimicSquid
        Link Parent
        While I don't disagree with your main point, we're kind of past the point of a corporation being an "American" one, even if it's incorporated in the USA. If it's publicly owned, its loyalty is to...

        While I don't disagree with your main point, we're kind of past the point of a corporation being an "American" one, even if it's incorporated in the USA. If it's publicly owned, its loyalty is to its shareholders. Many of those might, in aggregate, be Americans through various mutual funds, but the corporation isn't American. If it's privately held, it follows the desires of its owners, whoever they happen to be. Some of them may be Americans, but that doesn't make the corporation "American" in the way that a person may identify as an American.

        And within the game industry, it's a rare development house that lasts for more than a game or three. Is it offshoring if the private equity firm that has majority control decides to extract all the value from the brand, sell the IP to another firm, and dissolve the corporation, while hiring a few, high-performing candidates at a new firm to oversee a Chinese development house? Not legally, as none of the specific actions could be banned without having to overhaul how corporations even exist.

        It's a hard situation to fix.

        9 votes
        1. [2]
          stu2b50
          Link Parent
          Do you actually have an example of this? I don't think that's what's happening at all. The growth in game dev jobs in China and Japan are because Chinese and Japanese game companies are doing...

          Is it offshoring if the private equity firm that has majority control decides to extract all the value from the brand, sell the IP to another firm, and dissolve the corporation, while hiring a few, high-performing candidates at a new firm to oversee a Chinese development house?

          Do you actually have an example of this? I don't think that's what's happening at all. The growth in game dev jobs in China and Japan are because Chinese and Japanese game companies are doing well. Not any kind of offshoring or any relation to US ownership.

          In particular, in China the arrival of Genshin Impact caused a massive hiring spree in the gacha space to match Genshin's production values. Additionally, there is a AAA/AA game dev scene that is booming in China after the success of Black Myth Wukong proved that there is a market, domestic and international, for high production value Chinese video games.

          12 votes
          1. MimicSquid
            Link Parent
            Fair enough. Is it offshoring if they close down a domestic studio and entirely fire the staff and instead invest in a studio somewhere else?

            Fair enough. Is it offshoring if they close down a domestic studio and entirely fire the staff and instead invest in a studio somewhere else?

            4 votes
      3. CannibalisticApple
        Link Parent
        I agree with the sentiment, but that's not really the issue for the game dev industry. The jobs aren't outsourced overseas, they're just removed entirely as studios are shut down. Maybe you...

        I agree with the sentiment, but that's not really the issue for the game dev industry. The jobs aren't outsourced overseas, they're just removed entirely as studios are shut down. Maybe you thought the mention of contractors and freelancers meant overseas workers, but to my knowledge the majority of those jobs would still be sourced within the US. It's just to avoid having to pay a salary and benefits like for a full-time employee.

        7 votes
  2. CannibalisticApple
    Link
    As someone interested in narrative design, I both hate and feel amused by the callout of how difficult it is for writers to get a job in the industry. Most writing jobs are freelance, it's just...

    As someone interested in narrative design, I both hate and feel amused by the callout of how difficult it is for writers to get a job in the industry. Most writing jobs are freelance, it's just not seen as a big priority by most games. It makes sense to an extent for some games, since gameplay takes precedence, but a story can make or break a game.

    Honestly I'm also not too surprised that most of the layoffs are in California. Most game studios are set up there (serious emphasis on most, my college made the point that we'd likely need to move there to get into the industry), and it's a super competitive industry. Companies pop up and go under all the time, and layoffs are unfortunately very common and can be very unpredictable. The game dev scene in the US has been very unstable for a long time now, to the point that I remember one person explaining in a twitter thread how they realized they had actual PTSD from the layoffs. I think it was during the time #TelltaleJobs was trending, after the very abrupt closure announcement.

    Between that and the horror stories of overwork/crunch time at AAA companies... Yeah, the AAA scene is a hellscape in the US. So overall, the most surprising thing to me is that the 50% is on a global scale.

    8 votes
  3. zestier
    Link
    I used to be a game dev in the US, and maybe one day I'll go back, but my view is that the economics of game dev are just not very well suited to the US these days. This is for a variety of...

    I used to be a game dev in the US, and maybe one day I'll go back, but my view is that the economics of game dev are just not very well suited to the US these days. This is for a variety of reasons, but largely being a combination of high salary expections (not compared to other industries, but compared to other countries) and culture.

    The salary bit should be a bit obvious. Making games paying US salaries is expensive. I think that's why people keep bringing up offshoring even though I'm not seeing offshoring happen so much as just US businesses falling.

    The culture bit is much more complicated and potentially controversial to discuss. It spans both what content is in a game and how it is monetized. The problem for US developers there is that other countries, most notably China and South Korea, can unapologetically do things that make a lot of money but spark controversy and backlash in the US. The most obvious examples being leaning heavily into fan service character designs, gacha mechanics, and pay to win.

    So when you combine high development cost with limited monetization opportunities the industry becomes very very hard in the US. Obviously not impossible, but very very hard. A model that seems to be working a whole lot better is to make a game that will be lucrative in the East where people are more willing to spend a ton on "micro" transactions and then also export it to the West where the profitable but controversial elements get hand waved away as to be expected from an import, but that obviously doesn't help the US games industry.

    6 votes
  4. [12]
    pekt
    Link
    I think the focus on "California AAA" being where a lot of cuts are happening makes some amount of sense. I know I'm not the target market anymore, as I don't buy many games and wouldn't touch a...

    I think the focus on "California AAA" being where a lot of cuts are happening makes some amount of sense. I know I'm not the target market anymore, as I don't buy many games and wouldn't touch a modern AAA game, but I have friends who still play video games a ton. When I have chatted with them and asked if they're getting [insert big name release] they've mostly laughed and say no because they don't think it'll be worth it.

    I remember seeing this article about how PC gamers spent most of their time playing older games, and I think it makes it harder for these large AAA games to make a return on their investment, which makes it a riskier proposition to continue funding them. I can see how people playing older games consistently would lead to employees in California, especially if they live in Silicon Valley, where the cost of living is so high, being cut first as studios try to cut costs. The cost savings from off shoring is something I'm not a fan of, but even if they don't take the jobs out of the US and used remote working to hire someone in a cheaper area or formed a subsidiary studio there, the company could still see significant savings.

    This is just some quick Google math, but the cost of living in Raleigh, North Carolina is approximately half of San Jose, California, so you could afford to have approximately twice as many developers working there for the same cost. Note: I'm using quick math and I know there are additional costs associated with having employees than just their salary.

    4 votes
    1. [8]
      stu2b50
      Link Parent
      The article doesn’t mention off shoring at all? Where are yall getting this from lol

      The cost savings from off shoring is something I'm not a fan of, but even if they don't take the jobs out of the US and used remote working to hire someone in a cheaper area or formed a subsidiary studio there, the company could still see significant savings.

      The article doesn’t mention off shoring at all? Where are yall getting this from lol

      4 votes
      1. [2]
        pekt
        Link Parent
        I was going off the implication that @raze2012 mentioned and that many large companies making AAA games have offices in different places in the world. With the article focused on how 50% of those...

        I was going off the implication that @raze2012 mentioned and that many large companies making AAA games have offices in different places in the world. With the article focused on how 50% of those layoffs were in California alone it made sense to me that other offices that are part of those companies not located in California, or in the US, would have received fewer layoffs due to the cost of their team members being lower.

        1 vote
        1. CannibalisticApple
          Link Parent
          Those overseas offices usually don't have roles in development, though, but aspects such as localization, marketing, customer support, business, etc. Bigger companies like Microsoft may have other...

          Those overseas offices usually don't have roles in development, though, but aspects such as localization, marketing, customer support, business, etc. Bigger companies like Microsoft may have other studios overseas, but to my knowledge they usually acquire those studios in part to acquire popular IPs.

          In the US, a lot of game development companies are also just clustered in California specifically. A lot of those layoffs aren't just closing a California office to move the jobs somewhere cheaper, it's closing down an entire studio. If they're under some bigger umbrella company some responsibilities may be delegated to other studios under the parent company, but the jobs are basically just cut out, not moved. As I said in another comment, they're likely to just hire contractors and freelancers on a per-project basis because that's cheaper than paying a full salary and benefits.

          And then there are standalone studios like Telltale, which went under rather abruptly. The workers went in that morning like any other day, and by lunch had no job or severence packages. Telltale is the most notorious one I can think of given its size, but plenty of other, smaller developers also quietly go under or let people go with little warning.

          Game development in America is just really, really unstable compared to other places. There are a lot of reasons involved that basically boil down to corporate screwery and greed, but outsourcing the jobs to cheaper locations is honestly at the bottom. In fact, for some reason I typically hear about them closing offices in those cheaper places and forcing those employees to either relocate to a high COL area to work for a different office, or just let them go.

          4 votes
      2. [5]
        raze2012
        Link Parent
        There's a implication from the "advice" given by Amir. Basically, the jobs are "there", but not "here". I don't think it's all about offshoring , but it's a bigger factor than many realize when...

        There's a implication from the "advice" given by Amir.

        if you want to stay in the industry, being open to going to some of these places like China, like Japan, not forever, but for some amount of time, that's going to become a larger part of the equation

        Basically, the jobs are "there", but not "here". I don't think it's all about offshoring , but it's a bigger factor than many realize when the scapegoat right now is "we're gonna be more efficient with AI!". I have to track it down, but I remember Microsoft specifically having an earnings call showing that hiring is roughly even, but way down in North America.

        1. [2]
          stu2b50
          Link Parent
          I don't think that's the implication. The job growth in China and Japan are being driven by domestic companies, not outsourcing. It's from Fromsoftware, Nintendo, Capcom, MiHoYo, Kuro Games,...

          I don't think that's the implication. The job growth in China and Japan are being driven by domestic companies, not outsourcing. It's from Fromsoftware, Nintendo, Capcom, MiHoYo, Kuro Games, Papergame,s Gamescience, Netease, and S-game. I don't think it has anything to do with offshoring.

          To be honest, neither are offshore destinations. Not only is business in China difficult as a foreign company, but there's a huge language barrier. That's why it tends to be India and South America that does outsourcing.


          The advice is kind of silly, though. Neither Japanese companies nor Chinese companies are going to hire western devs. What's the use of someone that can't even communicate with the rest of the team?

          7 votes
          1. raze2012
            Link Parent
            I don't know how else to take "you need to leave your country to get your career started". I think we all know very few people can nor would want to do that, so it's more to speak about how dire...

            I don't think that's the implication

            I don't know how else to take "you need to leave your country to get your career started". I think we all know very few people can nor would want to do that, so it's more to speak about how dire things are on North America.

            I don't think it has anything to do with offshoring.

            This article doesn't really talk about that, but it definitely is a factor in tech in general since 2022. It's a shame I can't find an easy article to point to it, but the general conclusion was: big tech companies still hire about at the same rate, but hiring was way down in 2025.

            To be honest, neither are offshore destinations. Not only is business in China difficult as a foreign company, but there's a huge language barrier.

            For most industries, no. But since the topic is on games, it makes sense to outsource to a hub that has growing industry, with 3x the population of the US and a much lower cost of living. I'm not sure if I can find literal "fire entire team and move to china" kinds of deals, but we've already seen the fruits of US IP's working with Asian devs to bring titles like Marvel Rivals and Diablo Immortals. The relationship was already there since they'd often work on Chinese specific titles for mobile previously.

            This is coming off the heels of some decade of work where many companies were trying to be friendly with China when they "opened up" around 2016-7.

            Neither Japanese companies nor Chinese companies are going to hire western devs.

            It is meant to be impractical, as discussed above. But Japan is very open to hiring talent, if they move to Japan. The population decline means demand for skilled labor is sky high. But visa conditions are not easy to obtain (and yes, it does help to speak japanese. But it's not required per se).

            I can't speak for China. Stories I've heard in other engineerins about it were not as flowery.

            2 votes
        2. [2]
          CannibalisticApple
          Link Parent
          That is very different from offshoring though. In the context of the game dev industry specifically, this is not transferring jobs overseas that would otherwise exist in America. There are more...

          That is very different from offshoring though. In the context of the game dev industry specifically, this is not transferring jobs overseas that would otherwise exist in America. There are more jobs available overseas because that's where other game development studios are based.

          It's the exact same reason my college told us we'd likely have to move to the west coast or at least another state to get into game development. There just weren't any jobs available in the midwestern US because there are barely any game development studios and companies that operate in this region. Back then there were barely any remote jobs for some reason, either, so if you wanted to get into the industry, your best bets were to move or hope you get really lucky on the indie scene.

          For comparison, it's basically like telling someone there are more job openings in the film industry in California than in Oklahoma. The jobs may exist in both states, but they're very sparse in one place compared to the other. So if someone wants to work in that specific field, they'll want to relocate somewhere that has job openings.

          What you said is a problem for other industries, but not game dev. The job markets in Asia and the USA are unconnected. When game dev companies have overseas branches, it's almost always for localization, marketing, etc.; all development typically happens exclusively in the company's home country.

          4 votes
          1. raze2012
            Link Parent
            Western studios are also very much either making deals with existing Chinese/Korean studios or winding up studios in Asia as well. So it's a factor. How much of a factor, I'm unsure. It's hard...

            this is not transferring jobs overseas that would otherwise exist in America. There are more jobs available overseas because that's where other game development studios are based.

            Western studios are also very much either making deals with existing Chinese/Korean studios or winding up studios in Asia as well. So it's a factor. How much of a factor, I'm unsure. It's hard enough getting tech numbers, let alone one specific to games.

            For comparison, it's basically like telling someone there are more job openings in the film industry in California than in Oklahoma.

            Well to extend the metaphor, it's more like saying "all the jobs moved from California to Oklahoma (Georgia or Vancouver is a better example). So you need to move in order to keep your job". Not every job literally moved there. But some studios that are downsizing in one area while another area is doing a mix of making new studios, or getting other studios to shoot there.

            So do you move, or predict that when times improve studios in California rise back up again? It's hard to say.

            the job markets in Asia and the USA are unconnected...l development typically happens exclusively in the company's home country.

            I do not agree at all. These businesses are global now, and will follow the money. They may not be connected in consumers, but certainly for workers. And companies definitely used the last 3 years to start looking into making use of development overseas as well.

            3 votes
    2. [2]
      redwall_hp
      Link Parent
      I increasingly have little interest in indie games. Games to me are about being an immersive, interactive story. Or a straight up shooter game. Games that try to be glorified arcade cabinets...

      I increasingly have little interest in indie games. Games to me are about being an immersive, interactive story. Or a straight up shooter game. Games that try to be glorified arcade cabinets quickly ended feeling like a waste of time.

      Of course, I also lean toward ones that are informed by Japanese storytelling and artwork. My perpetual go-tos are Final Fantasy XIV (an MMORPG) and Genshin Impact (which is basically a vastly superior Breath of the Wild). Otherwise, my top games from recent years would be Baldur's Gate 3, the Jedi series by Respawn, and Final Fantasy 16. All easily qualify as AAA.

      2 votes
      1. pekt
        Link Parent
        That's totally valid. There are AAA games I'd like to check out at some point, but it'll be when I'm buying them at a steep discount after they've been out for over a decade. I don't have the time...

        That's totally valid. There are AAA games I'd like to check out at some point, but it'll be when I'm buying them at a steep discount after they've been out for over a decade. I don't have the time to play shooters like I used to which keeps me from getting any new ones, and I'm not planning to build a new computer to play games anytime soon which means I'm mainly going to be playing older/lower spec games on my laptop for the foreseeable future.

        Baldur's Gate 3 in particular has made me want to go replay Baldur's Gate 1 and 2 since I played them as a kid and feel like there's a lot in those games that I missed out on or don't remember.

        1 vote
    3. Raistlin
      Link Parent
      Yeah, my millenial circle of friends is similar. I play older games, or go back to MMOs occassionally. I'll buy new games extremely rarely now. Not just too expensive, but with a job, wife and...

      Yeah, my millenial circle of friends is similar. I play older games, or go back to MMOs occassionally. I'll buy new games extremely rarely now. Not just too expensive, but with a job, wife and kid, I get very little time to myself a day, and don't really have the energy or desire to learn new systems. Would rather just fire up Kingdom Hearts or something.

      Like, E33 is definitely on my list. It's good and it's reasonably priced, I should want it. And I do, just not right now. One day.

      2 votes