Video Game Layoffs Highlight a Distinct Divide Between Japan and the West
- Mass layoffs have impacted Western video game companies this year, while Japanese studios remain relatively stable.
- Amir Satvat points out key differences in staff management practices between Japanese and Western game developers.
- In 2026, 96% of job losses in the gaming industry occurred in North America and Europe.
2023 has seen significant turmoil in the video game industry, with major layoffs announced by companies such as Xbox, Bungie, EA, PUBG Productions, Take-Two, and others, leading to a wider trend of staff reductions across Western studios. Xbox’s new CEO Asha Sharma reported 3,200 layoffs alongside the exit of four studios.
In contrast, Japanese video game developers are experiencing far fewer layoffs. While there are some job losses in the region, the stability of the industry in Japan appears markedly stronger, according to Amir Satvat, who runs the ASGC Games Industry Layoffs Tracker. Satvat discussed these disparities in an interview with Edge magazine, which was later shared by the Knowledge newsletter.
Satvat noted that “Japan is a completely different ballgame,” though he cautioned that the region isn’t without its challenges. He emphasized that when Japanese studios make budget cuts, they often focus on terminating contracts with overseas personnel rather than affecting local employees, thereby aiming to protect core teams within Japan.
According to Satvat, major companies like Nintendo, Konami, and Capcom boast staff retention rates exceeding 97%. He highlighted that Japanese studios typically function with smaller teams and avoided the trend of large, live-service games that characterize many Western developers. Furthermore, executive compensation in Japan is significantly lower, with salaries around two to three million dollars, compared to the much higher figures seen in Western firms, such as EA’s Andrew Wilson, who received $38.6 million, and Take-Two’s Strauss Zelnick, with $42.1 million in 2022.
Satvat’s tracker indicates that from 2022 to 2026, approximately 57,628 jobs were lost across the gaming industry, with an alarming 96% of those layoffs occurring in North America and Europe in 2026 alone. He remarked that over a 12-to-18-month period, California alone accounted for more than half of the global layoffs. Comparing the current situation to the 1983 video game crash, Satvat expressed that the current challenges are particularly severe for game developers rooted in traditional triple-A environments in North America and Western Europe.
While there’s no single solution to the industry’s problems in 2026, Epic’s Tim Sweeney has described the current state as “the worst video game crash, or disruption, that we’ve seen since the 1980s.” Satvat suggested that the resilience shown by Japan’s leading studios indicates that adopting smaller teams, maintaining reasonable executive salaries, and focusing on niche expertise rather than fleeting trends could foster a more sustainable industry model.
This strategic approach may explain the success of companies like Capcom, which has thrived with titles such as Pragmata, Resident Evil Requiem, and Onimusha, alongside Nintendo’s record-breaking sales and Koei Tecmo’s commitment to supporting smaller titles.
News Courtesy of Eurogamer
