>[!INFO] You can view [[2024]] through the sidebar on the left Earlier this year, Volition Games, formerly known as Parallax Software, celebrated their [30th anniversary](https://www.youtube.com/watch?v=6FcNi5pujI8). A few months later, as part of Embracer Group's re-organization efforts, they were shuttered - a fate they had dodged earlier with THQ during the mid-2000 downturn and publisher closure. Historically it's been a luxury for a lot of game studios to develop a sequel to their first game, building upon the success and learnings of a project that has done well enough to fund a next project. It's even rarer to build a substantial fanbase who would be interested in more than just a sequel but a franchise. Of the number of established studios and publishers we have today, only a handful of them existed back in the late 80s and mid 90s. Volition's closure makes that handful even smaller. As 2023 comes to an end, I'd like to share some of the findings and thoughts, including a comparison to 2022. --- --- ### Looking back at 2023 and 2022 >Over the past several weeks, I've had the time to collate, clean up and put up my personal notes from 2022, and will look to do the same for 2021 in the future. You can now find [[2022]] data on the sidebar. The tail end of last year saw the start of layoffs amongst companies that had aggressively expanded through M&A strategies. 2022 was bookended by [PlayTika laying off roughly 600 staff](https://mobilegamer.biz/playtika-to-lay-off-over-600-staff-with-studios-at-risk-and-three-games-canned/), and this year we've seen companies like ByteDance, Unity and Embracer continuously shed staff throughout 2023. The reasons have been different, from Unity wanting to re-focus on their core offering and making multiple cuts to support that, to ByteDance's CEO having an [alleged frustration](https://www.theinformation.com/articles/tiktok-parents-gaming-stumble-shows-limits-of-founders-vision) and overall disinterest in games. A common theme across these companies, however, is that all major layoffs come from companies that have spent a lot of money acquiring and expanding their size over the past few years. ![[2023-monthlyHeadCountsagainstEvents.png]] | Parent Location | Percentage | | Studio Location | Perecentage | | ---- | ---- | ---- | ---- | ---- | | United States | 52% | | California (United States) | 15% | | China | 14% | | China | 12% | | Sweden | 11% | | North Carolina (United States) | 8% | | Brazil | 4% | | Sweden | 5% | | France | 4% | | British Columbia (Canada) | 4% | <small>2023 - Top 5 breakdowns of parent companies responsible compared against actual effected locations. *California is over-represented due to Unity layoffs*</small> <br><br> --- In 2022, the landscape was much different and defined by both the escalation in the [Russo- Ukranian war](https://en.wikipedia.org/wiki/Russian_invasion_of_Ukraine) and the [drying up of license approvals by the Chinese government](https://www.statista.com/statistics/1198719/china-license-approval-number-of-video-games/) both resulting in layoffs and studio closures - in many ways hard to capture due to the scope of both. The recorded data shows the impact of both the licensing and sanctions against Russia through spikes in January and June. ![[2022-monthlyHeadCountsagainstEvents.png]] | Parent Location | Percentage | | Studio Location | Percentage | | ---- | ---- | ---- | ---- | ---- | | China | 27% | | China | 27% | | United States | 22% | | Russia | 13% | | Israel | 16% | | Washington State (United States) | 12% | | Singapore | 16% | | California (United States) | 9% | | Lithuania | 7% | | Singapore | 8% | <small>2022 - Top 5 breakdowns of parent companies responsible compared against actual effected locations. </small> <br> --- In 2023, approximately 60% of studios affected by layoffs were owned by a larger company, down from the 64% in 2022. The recorded data suggests that 2023 has seen roughly a *22%* increase in global layoffs. ## The Asian Games Industry in 2022 and 2023 By the end of 2021, an estimated [14,000 Chinese game companies](https://www.scmp.com/tech/policy/article/3161717/china-gaming-crackdown-freeze-new-video-game-licences-extends-2022)had not renewed their business license - indicating they had shut down or gone out of business. 2022 saw a number of Chinese companies continue to struggle from licensing restrictions that at that time, was seemingly [indefinite](https://asia.nikkei.com/Business/Media-Entertainment/Game-over-China-hits-developers-with-regulatory-triple-threat). This is reflected by the top 5 impacts in the region. ![[2022-AsiaParentData.png]] But at the end of 2023, with the publishing of regulatory updates, the government also released a list of 105 new domestic licenses approvals. This was the largest batch of approvals in the past two years - and marked a dramatic rise of licensed approvals since 2017 with just over 1,000 total approved licenses by the end of 2023. At the end of November, ByteDance decided to pull out of games entirely - laying off an [estimated 1,000 staff](https://asia.nikkei.com/Business/China-tech/TikTok-parent-ByteDance-to-cut-1-000-gaming-jobs-in-strategic-shift) from their games division and is now reportedly looking to completely sell off their gaming division. The company jumpstarted it with the purchase of Moonton Technology for a [staggering $4 billion dollars](https://www.reuters.com/article/idUSKBN2BE0EI/) in 2021. --- Over the past couple of years, we've seen Asian companies increasingly target more global audiences. Notable releases this year include Lies of P, Dave the Diver & My Time at Sandrock. Netease, Krafton, Neowiz, Tencent and more have recently started looking into spreading their development power overseas in an attempt to diversify and have invested in a number of studios or setup new ones entirely. We've also seen [NCSoft and Sony's partnership](https://koreajoongangdaily.joins.com/news/2023-11-29/culture/gamesWebtoons/NCSoft-Sony-join-forces-for-global-entertainment-collaboration/1924313) make headlines, overshadowing news on what was the [first exclusive publishing agreement between a Korean studio, Shift Up, and Sony](https://www.yna.co.kr/view/AKR20231124037400017?section=industry/game). Often referred to as an emerging or 'sub'-genre, the [G-Star expo saw a rise of console and PC games](https://www.yna.co.kr/view/AKR20231110153000017?section=industry/game) and a rising discontent in the typical business model used in freemium Korean games. But not every Asian company has seen success expanding to western audiences / markets - a majority of Asian companies that made the 2023 lists have had layoffs in their western subsidiaries. Notable examples include the shuttering of Japanese owned CyberConnect2 Montreal, and Funplus' Imagendery Studio. Entrenched giants like Sony have had multiple cuts across their own studios, resulting in layoffs, and a [studio closure](https://www.pcmag.com/news/sony-shutting-down-playstation-studio-pixelopus#:~:text=Best%20known%20for%20producing%20Concrete,its%20doors%20on%20June%202.&text=Sony%20is%20shutting%20down%20PixelOpus,in%20a%20statement%20to%20IGN.). ![[2023-AsiaParentData.png]] ![[2023-AsiaStudioData.png]] Several South Korean studios made the list in 2023, with the last recorded layoff of the year coming from Lion Games the day after Christmas, marking the difficulty seen by these studios in domestic markets. It's likely we'll start seeing a [continued trend of Asian studios aiming for more global audiences and console titles](https://www.yna.co.kr/view/AKR20231228155600017?section=industry/game) instead of what they've been focusing on the past decade - freemium mobile games, SLGs and MMOs. ## The European / MENA Games Industry in 2022 and 2023 It's hard to talk about Europe without looking at Sweden's Embracer Group, an entity that has frequently made the news by acquiring a number of studios over the past few years - and now makes the news as it sheds staff and shutters studios. While the studios they own are scattered across the globe, a quick look at 2023 shows they are responsible for roughly 50% of recorded layoffs by European game companies this year - which makes sense considering that [Embracer is responsible for just over 60% of Swedish-owned studios in the world](https://www.gamesindustry.biz/swedish-games-industry-worth-31bn-in-2022). 2022 ended with a bit of foreshadowing, as Embracer Group shuttered [Studio Onomo](https://www.gamedeveloper.com/business/embracer-shuts-down-new-studio-onoma-formerly-square-enix-montreal) which they had purchased from Square Enix just a few months prior. We've seen a few more studio closures under Embracer Group this year, and it's unlikely that will stop, as Embracer has [indicated they will continue to restructure well into 2024](https://insider-gaming.com/embracer-group-layoffs-continue-at-3d-realms-and-slipgate-ironworks/). ![[2023-EUParentData.png]] But Embracer Group is not the only investment group caught with their pants down these past two years. Enad Global 7 (who own Daybreak Studios) shut down Antimatter games and others such as Modern Time Group (owners of Kongregate), Paradox Interactive, and Media Games Invest (owners of Gamigo) ended up making Swedish companies the biggest source of recorded layoffs from Europe across 2023. Swedish owned studios made up just over 10% of global recorded layoffs in 2023. The landscape was significantly different just a few months before entering the year, as the Russian-Ukraine war had [impacted a large number of people](https://gameworldobserver.com/2022/06/21/up-to-2500-russian-devs-lost-jobs-over-last-month-following-mass-layoffs-at-top-game-studios) when it came to studio closures and layoffs - both inside and near the country as sanctions started hitting Russia in February 2022, and continued well into the year. >[!INFO] One estimate suggested [upto 2500](https://gameworldobserver.com/2022/06/21/up-to-2500-russian-devs-lost-jobs-over-last-month-following-mass-layoffs-at-top-game-studios) layoffs occurred due to sanctions, however I was unable to find sources that added up to that. If you were effected and feel comfortable reaching out - please let me know. ![[2022-EUParentData 1 1.png]] ## The North American Games Industry in 2022 and 2023 The major headlines in 2023 have revolved around [one of the biggest recorded tech acquisitions ever, valued at $69 billion](https://www.cnbc.com/2022/01/18/biggest-tech-deal-ever-microsoft-activision-set-69-billion-record.html), but in 2022 it was the start of an immense number of tech related layoffs, [starting at around 90,000 and growing to over 190,000 in the span of several months.](https://news.crunchbase.com/startups/tech-layoffs/), with Microsoft, Alphabet, Meta and Amazon accounting for some of the largest overall layoffs in the tech industry. Both Unity and Epic Games, game companies that are defined (at least nowadays) by the technologies they provide were amongst the largest layoffs in the North American games industry in 2023. In 2023, American owned game companies make up just over 50% of global layoffs, up from 33% in 2022. Of the studios located in the Americas the top 3 states/provinces that made up layoffs were California (42%), North Carolina (22%) and British Columbia, Canada (12%). ![[2023-AmericanParentData 1 1.png]] ![[2023-AmericanStudioData 3.png]] <br> Brazilian based Wildlife Studios was responsible for the majority of South American impacts, both [last year](https://www.gamesindustry.biz/wildlife-confirms-layoffs-described-as-massive) and [in 2023.](https://www.bloomberglinea.com/english/game-over-for-wildlifes-ceo-as-brazilian-unicorn-restructures-cuts-13-of-staff/) Amazon, Epic Games and Unity made headlines in 2023 as they each laid off several hundred or more people per company - either sporadically throughout the year or abruptly. In 2022, things looked different, with Microsoft making the top of the list with mobile studios far behind. ![[2022-AmericanParentData 1.png]] ![[2022-AmericanStudioData 3.png]] # Studio closures in 2023 28 studios shutdown in 2023, the biggest being Volition Games (Embracer Group) - the smallest being Dang! Indie studios made up a little over 40% of closures, with Asian and Swedish owned studios accounting for roughly 20% each. ![[industrial-toys.png]] ><small>Thank you to the anonymous contributor for providing a shot of EA Industrial Toys on the day it was shuttered</small> --- # Entering 2024 As we enter 2024, we know of a few things to come: - Embracer will continue its restructuring. - Unity has indicated they plan on [making another round of layoffs in early 2024 as well](https://www.techradar.com/gaming/job-cuts-early-in-2024-likely-says-unity), the extent which we don't know much about. - ByteDance is [trying to sell-off Moonton and it's gaming division](https://www.reuters.com/world/china/chinas-bytedance-is-talking-likely-buyers-about-gaming-unit-moontons-sale-2023-11-15/) to willing buyers by mid-2024. It's currently rumored that they are looking to sell at [half it's original $4B value and that current offers have been closer to an 'insulting' $1B](https://36kr.com/p/2536413744539143) China's regulatory pressure has continued, although it is now showing [signs of softening](https://www.reuters.com/world/china/tencent-netease-shares-rebound-after-regulators-vow-improve-proposed-rules-2023-12-27/). A total of 1,075 licenses were approved in 2023, compared to 512 in 2022 (in 2021, 748 licenses were approved before the 16 month pause) - so there is optimism that the freeze of licenses that hit the [chinese games industry incredibly hard in 2021 and 2022](https://www.scmp.com/tech/policy/article/3161717/china-gaming-crackdown-freeze-new-video-game-licences-extends-2022), is over and will rebound in 2024. Activision Blizzard has now fully changed hands to Microsoft ownership, complete with leadership changes. We can hope that such a large acquisition doesn't result in redundancies, but we've already seen Microsoft make cuts to its gaming divisions already in [2022](https://www.washingtonpost.com/video-games/2022/10/18/microsoft-xbox-layoff/) and shortly after [in 2023](https://www.thegamer.com/microsoft-layoffs-affect-bethesda-343-industries-and-the-coalition/). Thanks for reading