Pushing Buttons: When even PlayStation is cutting jobs, something is seriously wrong with games

In this week’s newsletter: Sony’s news that it is cutting jobs and cancelling projects for the mega-console underlines a depressing fact about game development – it’s go big, or go home

[Asterphoenix]

It seems to be happening with one company after another. EA and Playstation in the same week.

[Eonjay]

But its been happens for like a year now so I find it hypocritical for them to be complaining now. After all of the thousands of devs lost their job already this year, if they waited for Sony to cut jobs before you decided to say something, they are being a hypocrite. The journalist don't give a damn about workers or the industry or developer pay or any of that.

[Sitdown]

Why are you choosing to completely miss the point? This has nothing to do with being hypocritical. It's normal to wonder what is really going on when the market leader is seeing an impact.

[Cacabunga]

Terrible management

[thorstein]

Exactly. And never forget that From Software is hiring and Nintendo didn't lay anyone off, their management took pay cuts instead.

I'm lining up to buy Switch 2.

[attilayavuzer]

Big part of that is developers being super underpaid in Japan vs America. Like 40k low.

[Johnh5223]

Go Gaas Go broke.

[Redemption-64]

This is 0 to do with gaas

[MontyeKristo]

@Redemption - I would disagree, somewhat. Developers and publishers have got to take a look at their games and the design. Too many are banking on the idea of micro transactions because games like Fortnite and Apex made truck loads of money.

We used to get new unlocks and cosmetics for free, in game, by winning and accomphing achievements.. now it's by paying. Not everyone wants to pay for a new unlock, $10 for a new skin or gun color.

I've bought like 5 games, new, in the past 5 years. They just don't hold the value, to me, anymore. Games release broken, need constant updates, charge for simplistic cosmetics, release without content to sell later, lack features, etc.

[TheEroica]

Playstation profits have dropped from 12% a couple years ago to 9% last year and is at 6% profit this year. Sonys game division at this trajectory will be unprofitable in two years.

[dcbronco]

Corporations know the US economy is about to be in bad shape and they just aren't telling the whole story. The issues we've started in Ukraine and Gaza were things we could get away with in the past but countries are standing up to the west now. And despite western media claims Ukraine is losing badly and instead of draining Russia its us that got drained. Now countries in Africa and Latin America are rebelling and much of western economies were based on exploiting them. Many refuse to sell their most valuable resources to the west like gold and only sell to Russia and China and a few others. In return Russia and China builds the infrastructure in the places the west refused to. They also build them the means to refine their own resources so they can maximize their profits for themselves. Last everyone is dropping the dollar as the reserve currency and our ability to borrow was based on everyone's need of dollars. Things are about to flip and the west will have to adjust. Russia and China wanted a multipolar world and they are about to get what they want. So it's in our best interest to start rebuilding our infrastructure and manufacturing in order to become self-sufficient. Because most of the world has bones to pick with us. And we can expect more layoffs and companies going out of business completely.

[Kiryu1992]

We went from PS1/2 era PlayStation to Sony becoming arrogant and losing their relationship with the fans during the early years of PS3

And here we are after huge success of PS4 and the market share Sony now controls to PS5 selling so well yet fans definitely aren’t happy/satisfied

Jack Trenton
Andrew house
Shu yoshida
Ken Kutaragi
Shawn layden
Kaz

To the current executives who are totally out of touch with what the fans want. And sadly nothing will change because Nintendo doesn’t compete for same market share as PlayStation and Xbox can’t compete so we are left with PS and PC

On topic:

Companies hired more staff during and after pandemic with working from home and now as market shifts back a lot of companies are trimming the staff to pre pandemic levels. Google, MS, sony, EA etc only difference is now we as gamers pay more attention but this is very normal for the industry. A lot of these gaming companies hire more staff when games are in development and cut staff when things are in pre production

[dcbronco]

I promise you this isn't a gaming thing it's an economic thing.

[Duke19]

Tech CEOs and not giving a shit about their workforce - name a more perfect duo.

[crazyCoconuts]

So the entire industry's problem is simply that CEOs are not nice people? And before these layoffs hit they were?

[Eonjay]

Thank you Crazy. The job of a CEO in a corporation is to facilitate the growth of returns for INVESTORS. I think the reason why the people keep parroting the same simpleminded phrases about CEOs and management is because people don't understand what a corporation is. People don't want to know things anymore. They want to see who screaming the loudest.

The Guardian doesn't give a shit about developers.

[Tacoboto]

It's a problem regardless of the others. We don't hear anything about CEOs of these companies taking a hit to their pay, no sacrifice from them in an effort to save jobs. But it's one of many problems.

Sony missing the mark on console sales and Xbox performing worse than the One era has knock-on effects of third parties having a smaller customer base, combined with higher employee costs, combined with games taking longer to make, combined with needing more developers per game...

[senorfartcushion]

Yes

[Crows90]

@taco

How many ceo vs regular employees. They have a function...if they dock CEO pay then CEO gets ready to leave for better opportunities.now they have no CEO.

[Sharky231]

In my opinion everybody no matter what business they are in over hired during Covid. The manufacturing side had its corrections last year. This year is the video game industry correcting itself. I don’t think any of these companies are in danger. It’s just the way it is. It’s awful but this cycle happens after world events like pandemics. This year may be a down year but next year will be more of a normal year.

[H9]

Man the day Nintendo Lays off employees will be Armageddon

[Profchaos]

Nintendo are different their games are still being made for hardware that's as powerful as the 360 was and that's a good thing as we're seeing them release games far more frequently with a high level of polish

[fsfsxii]

what polish? the games are substandard in terms of tech, not pushing any boundaries, i bet these devs clock out at 4pm everyday the way they work on hardware from 2007. its easy to polish small mobile games that are cookie cutter

[Profchaos]

@fsfsxii
Polish and tech are two different things

Life of black tiger is technically more advanced than say crash Bandicoot 1 on PS1 but can you tell me what's more polished

The physics system that was introduced in totk most development teams wouldn't be able to do that on the most advanced hardware and Nintendo's built a complex physics system on a potato so yeah give them a little credit they craft well designed highly popular games on low spec machines.

I love the switch same as my ps5 if you just want to root for a single system and call everything else garbage then you're really missing out

[FinalFantasyFanatic]

@fsfxii,
Clock out at 4pm? I doubt it with the way Japanese work culture is, maybe the branches in other countries do.

Nintendo is still pushing out amazing games despite how badly they've crippled themselves with their hardware, it's amazing that something like BoTW/TotK actually exist, every other developer struggles to understand how they even got those physics working.

[thorstein]

Nintendo leadership took paycuts so their employees wouldn't lose jobs.

[tehpees3]

That was under Iwata. Not necessarily going to happen under Furukawa.

[H9]

Iwata was built different he was a man among men, Furukawa not so much, so I don't really think it's out of question they lay off eventually, yet it is still hard to think of

[TiredGamer]

Supply and demand. Basic economics. Despite the growing number of gamers, there are too many games out there for the number of consumers willing/able to buy them. It’s the Gold Rush principle. Everyone was putting their skin into the market to capture the explosion of dollars during the pandemic, but most of the contestants will end up losers and be forced to capitulate.

That, and the enormous AAA game budgets are just out of control. The days of experimental single-A experiences are over, as expectations have boiled over to unsustainable levels. Gamers are accustomed to expecting photo realistic graphics, exceptional sound/music design, and 50-100 hours of gameplay. And you can’t really achieve that without hundreds of staff members on board.

All the experimental, smaller experiences, today have fallen to small budget indie developers who can afford to sell only a handful of copies for their work.

[crazyCoconuts]

Looking at SteamDB and the trend of game releases, it does support that there has been a marked increase in game releases every year.
I feel like maybe the pattern of game consumption has changed too with the increase of social media and connectedness. The network effect on games like Fortnite seems to create a smaller number of winners and so many losers. Don't know, but it's like the "middle class" of games has a harder time surviving when all the kids are playing the same game at the same time. Just an observation.

[FinalFantasyFanatic]

I just feel like there's too much content, I'll never play all the games I want to play in my lifetime, I'm going to need at least 3 lifetimes to enjoy everything.

[BlackOni]

This, and this again. I wish people were more willing to just look at the facts, instead of blaming what's happening in the entertainment industry as "woke propaganda." Well said, and backed by real applicable points given the circumstances.

I'd add, that there's been an ever increasing pressure on publishers (the tech and entertainment industry as a whole) to only ever expect exponential growth, without factoring in reference points and consumption behavior over time. Many hardcore gamers only have so much time in a day to play x amount of games. It's literally, and physically impossible to engage in every live service game that people even already have interest in, let alone adding in more. Helldivers seems to be the exception, and personally, I'm playing a lot less COD cuz of it. (totally different games, but the point being my itch for going pew pew with friends with an ever expanding game is being itched here.)

[thorstein]

There is nothing about supply and demand in today's globalist economy.

Remember, during the pandemic when supply and demand had oil at -30 dollars a barrel? That minus sign is not a typo.

Funny how the price of gas never dropped.

[FinalFantasyFanatic]

Supply and demand feel like completely disconnect terms in today's business world (the stock market is so disconnected from reality), the amount of times I work into a supermarket and the place looks like a bomb hit it, shelves empty, no staff. And a lot of stuff I buy just seems to be lesser quality compared to it's equivalent before the pandemic, clothes fall apart faster and more easily, office chairs are built like crap, I hate today's economy.

[crazyCoconuts]

Supply and demand still applies but international economics do complicate things.

[Fishy Fingers]

Shit for those who are facing redundancy - been there and even if youre one of the lucky ones the whole process is horrible and reminds you, nothing is secure, youre a number.

But also, entertaining to see the comments (and excuses) here depending on who is doing the cuts.

[GamingSinceForever]

This may be an unpopular opinion but I think by deregulating the Suggested Retail Price and allowing the developers/publishers to charge more for certain games may help. At the same time there are other smaller games and annually recycled games that shouldn’t be priced the same.

For example there is. o reason for Madden Football t cost $70 year after year. Where a game like Elden Ring or Hogwartz Legacy could easily be $80 games. The content value can be justified.

[Ironmike]

Are u for real 80 for game thats a joke 70 is high enough

[GamingSinceForever]

N64 cartridges sold for $60 back in 1996-97 and they sold just fine.

I’m not claiming to have any answers, my point is that they should look into price tiers.Some
game have been a steal for $60-$70 while others have been a complete ripoff.

[Eonjay]

No gaming is quite cheep for the amount of hours of entertainment it can provide.

[Ironmike]

The cost modern games is the problem massive budgets 300 million for game they can't recoup their money or their profit margin is not enough u going to see the end of console game exclusives they will become mulriplatform u laugh now watch

[thorstein]

You got receipts for that massive number?

No publisher has released the cost of a game since the 1980s.

I doubt anyone in the internet has the receipts. More like made up nonsense just to win arguments.

[Stevonidas]

Spider-Man 2 cost $300 million to make:

https://www.forbes.com/site...

[thorstein]

"Pre-production began in 2018, and at peak earlier this year there were 264 developers working directly on the project, with an additional 116 contributing in the form of managers, IT staff, and other support roles. 314 minutes of cinematics alone cost over $40 million. The final cost was roughly $30 million over the original $270 million budget,"

All of this according to an internal presentation that includes the costs of "managers, IT, and support staff" all of who would be under other budgets.

It's also Spider Man 2. Insomniac. The budget will be higher. In fact the presentation names it the most expensive PS game to date. They've met their target sales by millions of sales on PS5.

The budget was 270 for Spider Man 2 with a 30 million overrun which is expected and would not have been a surprised.

And these are AAA games by the top studios, not run off the mill every day games. GTAVI? Believable. Helldivers 2? No. Skull and Bones? Nope. Ghost of Tsushima? Yes.

But I'd still take it with a grain of salt.

Who knows why the presentation was made. Or for what purpose. It could have been made for tax purposes for the accounting department.

Hollywood does that all the time to avoid paying taxes.

But, I've been wrong before. So, I'm happy to admit being wrong now.

[Ironmike]

Insomniac leak mt

[Ironmike]

The insomniac leak final fantasy 16 budget was huge as well the industry is in trouble Nd u being in denial asking for receipt trying to be sarcastic when all iam doing is point out a fact modern games cist a fortune to make

[Ironmike]

Why would make stuff up u Doyle ots what I've read most triple a games budgets are massive the developers them self's have stated it on many games

[PhillyDonJawn]

That's Sony doing that the average game budgets is no where close to that

[Ironmike]

Listen its a hobby a bit of fun the cost of games is extortionate

[Barlos]

It's a hobby for us, yes, but for those that work in the industry it's a very serious business that comes with a lot of risks.

[Inverno]

There's something wrong with corporations in general, their greed and lack of respect for the people who without them there wouldn't be companies. But people rather take sides with corps, same people who feel undervalued, underpaid, and feel unsecured in their jobs are the same ones who cheer when they see news of mass layoffs.

[FinalFantasyFanatic]

I cannot fathom the contempt that corporations have for their customers and staff, they don't even hide it anymore.

[dmonee]

Just the economy in general. Things are slowing down. Consumers being more selective when purchasing different forms of media.

[Profchaos]

There's a few factors I can point to.

1) obviously the global economy isn't the best right now and people are not buying entertainment items like games as frequently as they were say 3 years ago.

2) the industry is extremely risk averse and have gone in a direction of only greelighting sequels of proven IP.

3) copy and paste gameplay mechanics or modes hey destiny is popular maybe we should make a looter shooter to said every publisher in the industry.

4) games are shipping broken frequently leaving fans wondering if it's even worth buying a game at launch or waiting 6 months.

5) the biggest problem is the lengthy development timeline for games causing the production costs of games to skyrocket.

Between the 3rd and 6th generation games took a matter of months to a maximum of two years to make that numbers been creeping up industry-wide with the average becoming 3 years and now we are looking at development times between 5 and 10 years.

It why we see studios to look for these alternative funding arrangements via Mtx or passes even games going f2p hoping to gain popularity and get a fortnite level of money coming in

But think about all those factors declining sales excessive development times, costs and increasingly samey and sterile games they are not even garunteed working on day 1 and it's honestly looking more and more likely that the whole industry is heading towards a crash.

What is like to see is a move back to AA games that are not polished epics things that don't cost as much as the budget if a small island nation and are fun. Things like the awesome RoboCop rouge city

[terstomp]

For example, I'm still on PS4 and currently enjoying the Tomb Raider Remastered. I'll just be happy with remasters and updates of games of the previous 25 years released for new consoles. There are thousands of wonderful games waiting to be released and improved upon, waiting to be played by the younger generation.

Games subscriptions, paid DLC's, and micro-transactions, the buying up of studios, the pursuit of exponential increase in profit, the pandering to political 'correctness', the excessive greed of CEO's, management, board and shareholders have put a dent in gaming. New games are too long, too complex, too time consuming, too padded, cost too much to make, too long to release and are full of bugs.

[Profchaos]

Honestly buy a scaler like the retrotink 5x and if you still have those old systems you can play them on a modern display with the tink making them feel better than ever

[Ninver]

Has the industry been this bad before? Seems like every other week this occurs. Not just Sony but across the industry.

[DarXyde]

Corporate greed?

Nah, couldn't be.

[VincentVanBro]

One factor this article neglects to mention: interest rates have risen due to inflation so money doesn’t come as cheap as it used to. This has a 2 fold impact. For one, shareholders have become much more risk averse and only want “sure bets”, meaning vying for shareholder attention and investment as a company has become more difficult. Secondly, borrowing money (something corporations do all the time) is much more expensive now due to higher interest rates, so debt becomes much more dangerous for companies to hold. Sony in December 2023 for instance had 31.2 billion in debt, which is a 5 year peak. And their debt to equity ratio has been rising steadily since early 2020. That money has to be paid off in a certain time frame or be refinanced. The interest rate on a refinance would be very problematic in the current financial markets. So, to make the balance sheet more appealing to investors, layoffs occur. TL;dr this was entirely done for shareholder interest, which sucks, but it was exacerbated by global economic conditions.

[anast]

This comment should be pinned and moved to the top.

[RhinoGamer88]

I think (myself included) have held off buying most games day 1. The first 30 days are crucial to the bottom line as buyers pay full price. However, due to a shite economy/inflation (less money to spend) and buggy launch AAA games...the smart play is to wait for a sale and several updates. Better game + cheaper = good for gamers (bad for company profit).

[RhinoGamer88]

Another observation, GaaS was started due to mobile games going F2P right? The mobile game is free, you pay by IAP events. Console/PC publishers saw that some games were mega cash cows, and wanted to recreate that success on console/PC. The rare success of LoL and Fortnite showed them it 'could' work.

[Stevonidas]

You know who's NOT cutting jobs? Nintendo.

[Barlos]

They're not immune. Let's wait and see

[SeTTriP]

This was already predicted across all tech sector's.

[ROCKY28]

Yup - something is wrong with the force !

[Unknown_Gamer5794]

Yeah, I think it’s a combination of the cost of AAA development going up, the diminishing returns on the “whoa” factor that used to accompany a new gen of consoles, and a slew of other factors. The markets are different now too, with access to more games than ever competing for our wallets, services and distribution being different now, etc. Some market trends seem to be moving too fast, while others seem to be lagging behind.

Also, rich CEOs are seemingly holding more and more of the cards, and their jobs seem to be pretty secure…nothing sus about that. Regardless, more and more companies seem less and less focused on the art of their craft, and more and more focused on their bottom line.

I guess it’s a confluence of a bunch of factors. I don’t think a market crash is imminent, but there certainly seems to be some turbulence. I’m not sure where things are headed, but hopefully this is all just a bump in the road.

[aaronaton]

Basically, developers hired far too many people during covid, there was a high demand for games + interest rates were at an all time low.
Now we are in a global recession with interest rates at an all time high, and there has been flop after flop with apparent "AAAA" games.
The writing was on the wall.

[TrueRican69]

People complaining when Sony do it but what about when Microsoft's buy all them games studios and fire a whole bunch of workers.

[Ironmike]

I agree but Microsoft did get slated on here as well

[mark3214uk]

well the demand for games is there, rather than cut jobs try investing in new i.ps

[BrainSyphoned]

Fallout New Vegas was made in 18 months by about 65 people.

Starfield was made in 8 years by 500 people.

Why does it take so much more time and money to make shit?

[The-VG-shamman]

Lol, why don’t you guys go back into console wars? Or subscribe to your amazing game pass or ps access Lol. Or maybe you guys can glaze another A.I propaganda game?lol. Sorry not sorry.

[InUrFoxHole]

If I'm looking big picture the devs are just as much yo blame. They didn't stand their ground and let publishers rush them into half baked games with 50% content and day 1 patched. So of course gamers aren't buying like they used to. Then compound that with higer costs. The companies still want more $ so cut the fat. If you see a problem and let it go... you become part of the problem. It screwed them long term

[anast]

We are going to see a lot of AI in the industry.

[Garethvk]

I have seen a rougher approach to game media by p.r. firms and I do think the lack of participation at big cons is a contributing factor. Carefully edited videos do not replace seeing and playing a build in person and allowing the games to be hyped by media as a whole and the public versus cherry picked media or those who negotiated an early look is an issue. Games need to be able to stand or full on their merit and allow full press and public to see them in advance like we had at E3 and Pax West. Reveals would be done at E3 and those close to release would be hands on at PAX in many cases. Now its watch a trailer and buy the game and thr pool of feedback on the game is limited pre-release compared to what it used to be.

[Abear21]

During Covid the gaming industry soared while other industries pivoted to less workforce, such as manufacturing, leisure/hotel, and restaurants. I think these layoffs were long overdue, especially now that some normalcy has returned and gaming has leveled back off.

Gaming makes money, period. There is no reason to worry that there won’t be games to play or quality will be compromised and you can trust that’s true based on the level of quality that’s been releasing. Go on Gamepass or PSN and you are overwhelmed by options.

I think gaming and devs need this shake up, they have to figure out how to produce quality without employing armies to make games. It really shouldn’t take thousands of people and hundred millions to make a game. It’s silly and overblown and I think the whole industry needs to take a step back and create new ideas that aren’t 4k ray traced and actually improve how we play not just how the graphics look.

[gleepot]

playstation has cut jobs MULTIPLE TIMES over the past couple years, guys