Bad times for video games. With Paris Games Week set to begin on Wednesday, October 23, bad news is piling up for the sector. The latest example: one of the largest French video game developers and publishers, Don’t Nod, announced on October 16 a sharp cut in its workforce. Observing “ the poor economic performance of the latest launches”, Oskar Guilbert, general director of the company, announced “a reorganization project, in particular, to safeguard its competitiveness in an increasingly demanding competitive ecosystem”.
“Up to 69 jobs” are threatened in this company that has just under 340. A measure that adds to the bleeding that the video game sector is currently experiencing and that to date could eliminate 13,000 jobs in 2024 around the world. A record, after 8,500 layoffs in 2022 and 10,500 in 2023. An important exit plan is also underway at the Japanese company Bandai Namco, which will affect between 100 and 200 people.
Nobody is saved. From the largest employers like Unity (1,800 job cuts) to the smallest, which are experiencing a “killing”, comments Charles-Louis Planade, director of international operations at brokerage firm TP ICAP Midcap. “In the industry we started talking about “Indiepocalypse”, since the number of small independent studios that have closed is enormous”.
The risky bet of withdrawal
In a sector that is characterized by a particularly cyclical activity – linked in particular to the arrival of new generations of products or technologies -, the brakes are all the more violent as the video game industry let itself go during the confinement periods related to Covid-19. . In response to the appetite for entertainment expressed by consumers, all players in the sector, from the largest to the smallest, have increased the development of new titles in the hope of getting their share of the pie. In the process, new studios were created. The result was an “excess supply” that penalized all competitors.
In response, companies that operate the most widely distributed franchises (assassin’s creed, Obligationsetc.), have chosen to resort to their flagship titles, which offer the greatest potential for return on investment. A risky bet since the failed launch of the new episode of a premium title can seriously penalize a company. This was, for example, the case very recently of the French company Ubisoft, whose disappointing sales of Star Wars Outlaw have weakened in the stock market. In the process, the company decided to postpone the launch of its next flagship game: the latest installment ofassassin’s creed – so that the copy is as clean as possible. The game should finally not be released until February 2025, after the prosperous end-of-year holiday period. A new failure would plunge society into a deep crisis.
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