Big game companies have listened to the siren song of AI and attempt to reduce their workforce to increase revenue and please their shareholders. Expect games that are even more soulless than current ones to hit the market in the future.
One reason more for me to prefer buying from smaller studios which aren't infested by pencil pushers.
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It's a very strange idea that some people have about companies being morally required to keep unprofitable projects or segments within their company running, just because they could finance that with profits they make in other areas.
Sure, it's something that you can do. And it's what companies do, for some time. But sooner or later you must axe some, otherwise they might risk all jobs in the long run.
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My guess is that it has to do with the fact that video games exist in a weird intersection between art and business. So people have the expectation that video game studios and publishers exist for the sake of making games due to a genuine passion for the medium and that any profits are just a means to keep the operations going for as long as humanly possible, basically the end goal is to make more games, not to make money, money is just a necessity of how the world works. So the public despises investors that see the games industry as just yet another industry to squeeze profits out of.
I don't know if this position is wrong or not, I'm not even sure if I personally share it or not, but it is what appears to be going on, at least to me. I'm pretty sure that a decent portion of gamers would be glad to turn the entire industry into a positive feedback loop that produces games rather than money, since that's the currency they're actually interested in.
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turn the entire industry into a positive feedback loop that produces games rather than money,
The tragic part is that another part of the gamers (and ironically often enough the very same people) think that they owe developers next to nothing. Either they have tons of the most bizarre justifications to pirate or they are cheapskates, only willing to buy at ridiculously low prices.
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Yes! But I don't see that as a contradiction but rather a symptom of the same mentality. They want games, everything else is a means to get more games, and any shortcut is justifiable as long as it helps on that mission.
Now that I stop to think about it a bit more deeply I don't remember ever seeing this angle of the gaming community discussed in depth, makes me wonder if this is a case of people missing the forest for the tree or if I'm the one missing the point by a mile and going down a road that leads nowhere.
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I also heard rumors the Ceo doubled their salary? If true, would make this action even worse.
Just like activision boosting about record profits and then laying of 10% or something like that couple years ago.
But to be fair, more and more layoffs are not that unexpected. Like others already said. AI is one but Tech seems to be contracting as a whole.
A lot of blogs are shrinking or outright shutting down.
And a while ago we had to ones with Amazon, X, Meta and google I think and now also Tesla
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Perhaps their diversity and inclusion staff will try to put most focus on classism rather than the things which divide most people for reasons which they cannot change about themselves?
Or it could be the DEI staff who are getting laid off which means games journalists and propaganda outlets masquerading as gaming news outlets are the next on the block.
Most people just want good games to play and laugh about without someone trying to make them bad for no good reason.
On the flipside though at least these guys can already code.
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The journalist are already being laid of, deadspin was sold all staff fired.
Kotaku looks to be next. (same owner and news is that they have given employees busywork and no big projects right now...).
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It's been a long time since GameSpot and Giant Bomb had someone like Jeff Gerstmann state that game development was beyond reproach and that "Gamers" didn't understand the complexities of reporting, or commenting, upon it. Once the door was opened to the potboiling pencil pushing pundit parasitoids posing as players it was always a matter of time until that golden calf was tied to a rock and left to be carrion.
It will all tip back into place with a new wind though, just sad that lots of people who put effort into the whole thing have been discarded.
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https://gameworldobserver.com/2024/03/21/mass-layoffs-publishers-greed-profits-swen-vincke-larian
"I've been fighting publishers my entire life and I keep on seeing the same, same, same mistakes over, and over and over. It's always the quarterly profits. The only thing that matters are the numbers, and then you fire everybody and then next year you say 's**t I'm out of developers' and then you start hiring people again, and then you do acquisitions, and then you put them in the same loop again, and it's just broken."
Swen Vincke (Funder, CEO and Creative Director of Larian Studio (Baldur`s Gate 3))
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Larian has 436 people, take two has 11,500. The mistake he should see, is hiring people that don't bring in the quality in the first place.
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+1
And most corpo over-hire for 2 reason
- DEI: hire someone for just ✔ in their lists
- stupid CEO think: "more people = more tasks completed" but forgot reality new hire must learn before start work efficiently
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I'd guess the mindset also works, that if (let's say) 100 people can make a game, then some will jump projects, so we can make two games by hiring another 70 people. 170 for two projects. Then why not make it into 230 for 3 projects? Meanwhile individual attention decreases, the skillsets aren't the same, so some projects will end up failing - despite growing numbers of workers, the quality thins out - then things collapse.
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Exactly! Even we have example: Acti-Bliz tell need ~200 people for OV2 PvE content that s why they scraped idea. 200 people for write story and program bots for ready game!
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I got two takes about this:
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Lets be honest, a lot of those jobs are useless, how tf you spend $200 mil and can't make a new game every 3-6 months or provide s*** ton of content for an existing one? Simple, hire people who don't do anything relevant. So to some degree, I think this is a good wake up call. Make games, stop wasting it on pretty useless offices and pizza parties and whatever doesn't make games like people meant to just be present and that's it. If you paid each employee 100k a year to work on a game, and you can afford to let go of $200 mil worth of people, we're talking about what, 2000 people. According to Bloomberg, this $200 mil cut is only 5% of their workforce. They basically spend 4 billion a year on around 11.5k employees and I can't get a yearly top game from them? Overpaid and underqualified imo.
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CEO's and some other no names at the top who do absolutely nothing also cash in on absurd amounts of money, and I have this theory that once you're a ceo or in a high enough position, you can't fall back down, simply because you have a stupid amount of money to live off until you find another job + the connections you made as being in a power position in the first place, so you just switch places. Heck you leave take two, you go to ea as ceo, then you leave ea, you go to the next one. And heck, when you leave, you take your severance package too and eat the cake as well.
PS: According to the verge, this 5% of workforce is around 579 people. So if that helps them cut $200 mil dollars, these individuals make around $345k a year. So no, I don't feel bad, because there's people who survive on 10k a year.
source
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This is actually a really good take.
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I agree on big corporations basically blowing resources on nothing.
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As for the CEOs, you're pretty much correct, they just trade companies, and often keep their position regardless of where they work. The math on those salaries is wild.
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You misread the Verge:
Take-Two says it will incur charges of up to $200 million to enact its “cost reduction program,” which aims to save the company over $165 million per year. The downsizing efforts are expected to be “largely complete” by December 31st, 2024.
So, lower figure of 285k $ per person per year.
The people don't make that 285k $, they cost that much per year.
Office space (rental) and equipment like Software licenses, Technology, support.
Human resource costs like Taxes, Health Insurance, Training etc.
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Thank you for clarifying! Most people assume that the salary is the only cost associated with having employees. But everything below, above and around each employee is also extremely costly. Depending on the industry, the business cost of a given employee's salary can go from 1.5 to 3-4 times the actual salary.
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You make some good points, but lets note a few things:
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They say it "aims to save the company over $165 million per year" doing this, and in the top op they expect between 165 to 200 mil. Still, you're right the verge used the lowest amount possible. This does mean they can expect to save $180 mil, $166 mil, or even $200 mil. So the money spent on these people could be $345k at the higher upper limit, and $285k at the lowest limit. It's still a ton of money.
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You say the employees cost that much per year, which is true in a sense, however it seems implied that their wages are much lower, so what exactly could the costs be? A top end pc, 10k(kinda impossible but lets play along), whatever licenses you could give anyone to perform, maybe another 5k per year(although they're enterprise so they get this at a discount, and they more than likely own many of their own proprietary tools or even use open source ones)? As for support I'm not going to separate that because I'm certain they have their own IT employees, so they have in house support, those are employees part of that $165 mil.
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As for taxes, I mean everyone pays taxes, even the person who makes 10k a year. Some regions don't even pay taxes, so it varies a lot. They have a 401k but they don't specify to what % they match.
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Training. How much could they spend on training people? I can't imagine what this value could be, but my guess is that they hire people with some certifications, and not just hire a vfx artist who's never done vfx before. 3 months of paid training sounds good? It still wouldn't excuse why after another 9 months that employee doesn't produce content. 579 employees should be enough to release a proper game every 2-3 years.
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Insurances, lets say $20k although that's a little impossible.
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Let's say they pay $20-$30 million of this amount to rent spaces for these 579 associates, not sure why they couldn't just own their own space with that many millions, 11500 employees and instead decide to rent it. If they wanted to cut costs, owning their own space is the first step, and I'm certain they've taken it. They're basically paying 2-3x anywhere to rent space. I'm assuming they have at least one guy hired to look at their finances.
Doing all this math, and assuming the lowest possible outcome expect, the $285k a year, we'd still get, $285 - 10k(pc) - 5k(licenses) - 20k(health/dental/vision) - 52k (renting a cubicle for that employee? seems like a lot but I went by $30 mil / 579 although you can probably rent an apartment in new york for an entire year for cheaper), -20k(401k I'm pretty sure that's the upper limit to how much any employee can put into it, might vary by state but correct me if I'm wrong) - 15k(my assumption of how much the company could match at it's max assuming a 285k salary(which we say can't be true)) and 50k per employee for who knows what else that they'd spend on an employee every single year just to shower them with gifts or something, or 2500 pizzas for every employee per year, around 7 pizzas a day per employee. All this still totals to that employee making at least $113k a year, which is still well above average. This is at the lowest I could calculate it and that's spending an extra $50k a year on every single one of those 579 employees, on who knows what after everything else maxed out.
I think my point stands that these employees are still overpaid and underqualified. Rockstar hasn't published a game since 2018(except a remake in 2021, which was awful on release with tons of bugs although it's better now, still a remake), Global Star Software hasn't released one since 2007???. 2k has released I think 63 things since 2018, 37 of them being sports games, alongside maybe in the wikipedia page just being different platform ports(so not new games), remakes, etc. The only memorable games from them or original since 2018 imo are Borderlands 3, X-COM Chimera Squad, Tiny TIna's Wonderlands, The Quarry, New Tales from the Borderlands, Marvel's Midnight Suns, Lego 2K Drive, some which aren't well reviewed at all. I'm a little at fault here since I consider all the wwe and nba and pga games to be low effort games so I don't count them, but there must be fans out there. So 2k is doing meh, alright. Private Division is the one that's killing it releasing 2 games in 2024, 3 in 2023, 2 in 2022, 1 in 2021, 2 in 2020, 1 in 2019 and 1 in 2018. They're good games, but they're not all AAA's, so a mix, like Hades, Outer Worlds, Kerbal Space Program, Rollerdome,
So with 11500 employees, there's about 12 memorable games since 2018, heck if you wanna include pga nba and wwe as titles add maybe 15, and that' be 766 employees per game since 2018, so 6 years in development for 766 people, although I don't think private division has 766 devs, artists, vfx, sound, (should be even more considering global star hasn't made anything since 2007 so they probably just have a lightbulb employee that clocks in and out so there's 765 employees to distribute to the others) etc. and they've been the most original in these 6 years, compared to 2k for instance which copy pasts nba games like I go to the bathroom after two burritos, or rockstar which spent 6years on gta vi so they have no excuse for it not being a 95% game but we'll see about that.
source : https://en.wikipedia.org/wiki/Take-Two_Interactive
Not trying to be mean so sorry if I sound so, I just see a lot of wasted money, so overall I think it's a good cut for them, and they should keep reconsidering these positions and what actually brings value to the company. I want a game company to make good unique next level games. When I see them spend all this money and fail to produce then I'm like wtf. I can't side with that and say "think of the employees".
As an example, 1 person made Stardew Valley. What's stopping Take Two from putting 15 devs to make the best 2d pixelated multiplayer open world farming sim out there? What's stopping take two from putting 150? 500? If with 500 people they can't deliver what 1 person can, something's wrong.
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Just a general statement, but I'm honestly sick of companies always feeling the need to increase their profit and reduce expenses. Like it's never good enough. GTA Online generated so much money but it's just never good enough. And when it comes to something like games the art will just suffer. The music gets worse, the story is less cohesive, nothing looks as good as it could. GTA 6 will be without a doubt one of the biggest AAA games but it might also be the last with all the layoffs for AI, money or whatever reason. Why would any upcoming dev want to work for a company that always has layoffs? And why would a seasoned dev want to stay if their days are numbered? Hopefully the iii Initiative can develop into something of a counter-movement to everything the aaa industry is doing. I just want games to be the best they can be.
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IMO both the upcoming dev and seasoned dev would either way want to work for a huge project like that. You hardly work for the company these days. You work for the projects. That's why hopping jobs and short experiences is not that big of a deal these days. A project you love ends? Go to another company which has similar projects.
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Well, if you disagree with what they're doing, then you have to stop giving them money and buying their products. There is only one language that companies understand: money. If you complain but you still play their games, why the hell would any company change their way of doing things? It works!
This is one of the reason I mostly buy indie games from the store, now. I try and stay away from AAA games because I would rather give my money to people who love making games than to a corporate structure designed to funnel profits to stakeholders (which, in essence, is what every company is supposed to be).
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Not the most controversial play by Rockster Games so far...
Who are they going to overwork to death now?
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According to Take 2 Interactive 's latest financial reports the company's current revenue (TTM) is $5.39 B. In 2022 the company made a revenue of $4.83 B an increase over the years 2021 revenue that were of $3.41 B. The revenue is the total amount of income that a company generates by the sale of goods or services.
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Budgets of AAA games are ridiculously ballooned. Spiderman 2 cost 300 million dollars. Like, I'm sorry, but you can't put the budgets back without laying off some people. Most of them are better off in another job anyways - you don't get fired from such a big company without getting a nice leave payout, and there's few things worse workwise than having to do something, but not being actually productive. The companies are better off without them too. Criticizing companies over firing people is dumb, this is literally part of their organizing
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Actually Rockstar Games (might not even be affected at all, since they are actually lacking stuff), its their parent company Take-2, and its planned to be 5% not 7%
As much as I hate Take-2 and their idiotic CEO Strauss Zelnick (one of the worst human beings out there)
People often are too quick to criticize companies when they are doing lay-offs, but TBH you should look at the bigger picture here,
Take-2 has been having losses for 7 quarters now, losses of 100-150 millions, as big as they are, they are still business company
and they cant operate with losses, because the bigger you are the quicker you can go bankrupt, so laying off 5% of people to save 95% others
is actually ok.
Ideally you`d like to keep everyone, but that is not how business works, not only Take-2 almost all of the big companies have already done this, usually between 5%-7%, obviously everyone hired extra help during Covid time, and they cant keep it up post-Covid.
And lets face it and be honest, there are probably many of those not actually needed, who "work" but dont do anything, the same situation as when Elon bought Twitter, many of those workers drank coffee all day long and played games, and did nothing work related.
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Hey, the CEO needs his payrise... too bad for 7%, otherwise they cannot afford it.
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Everyone naturally starts attacking the CEO for wanting a pay raise, but is it the case?
Its a fact that big tech companies and IT companies in general have grown uncontrollably with money pouring in. They are living in a bubble were services and products keep getting more and more expensive, salaries sky rocket out of our world.. which would be awesome obviously, if there would be some ground to it. Not a surprise many big tech companies are laying off enormous amounts of employees now. They are realizing that hiring 50 people department, giving everyone premium benefits package is not sustainable in long term. Especially if the work can be done by 10 people lets say. And while I don't condone people that work two jobs (I am myself in 1 full time and 1 part time), it is obvious that you can take on two full time jobs only because the work load is not appropriate for full time job.
Don't get me wrong - I would love it if the whole world would get decent salary and wouldn't be overworked, but companies have to pay salary to these people, consumers have to chip in to cover these costs and it slowly spirals out of control.
So if the saved money after layoffs goes to CEOs salary - then hang him for all I care. But if a company simply realizes the harsh truth of not being bale to be overly bloated with most people not being needed, kudos to them. Sorry about people who lose their jobs, but I highly doubt that a highly skilled engineer (be it software or whatever) would be part of layoffs. It is going to be all the filler people who simulate working mostly.
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Take-Two Interactive, the parent company of Rockstar Games, is cutting staff as part of a cost reduction program. They’re aiming to save between $160 million to $200 million by canceling projects and streamlining their organizational structure.
it’s heartbreaking to see this happen. Around 7% of the workforce employees are expected to lose their jobs. And all this while GTA VI is in development, Even when they know they will generate huge amounts of profits from the release of GTA VI, This Very Cruel And we all need to condemn this Act, Feel free to join the discussion and tell me what do u think
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