Bad times for video games. As Paris Games Week is due to open on Wednesday October 23, bad news is piling up for the sector. Latest example: one of the largest French video game developers and publishers, Don’t Nod, announced on October 16 a severe cut in its workforce. Noting “ the economic underperformance of the latest launches”, Oskar Guilbert, the company’s CEO, announced “a reorganization project in particular to safeguard its competitiveness in an ever more demanding competitive ecosystem”.
“Up to 69 jobs” are threatened in this company which has just under 340. A measure which comes in addition to the bleeding currently experienced by the video game sector which to date could eliminate 13,000 jobs in 2024 across the world. A record, after 8,500 layoffs in 2022 and 10,500 in 2023. A major departure plan is also underway at the Japanese Bandai Namco, affecting 100 to 200 people.
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No one is spared. From the largest employers like Unity (1,800 job cuts) to the smallest, which are experiencing a « bain de sang », comments Charles-Louis Planade, director of international operations at brokerage firm TP ICAP Midcap. “In the industry we started talking about “Indiepocalypse”, as the number of small independent studios that have closed is enormous”.
The risky bet of withdrawal
In a sector which is distinguished 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 was carried away during periods confinement linked to Covid-19. In response to the appetite for entertainment expressed by consumers, all players in the sector, from the largest to the smallest, had increased the development of new titles in the hope of taking their share of the pie. In the process, new studios were created. The result was an “oversupply” which penalized all competitors.
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In response, the companies operating the most widely distributed franchises (Assassin’s Creed, Call of Dutyetc.), have chosen to fall back on their flagship titles, which offer the greatest potential for return on investment. Risky bet since the failed launch of the new episode of a premium title can seriously penalize a company. This was, for example, very recently the case of the French company Ubisoft, whose disappointing sales of Star Wars Outlaw have weakened on the stock market. In the process, the company decided to postpone the launch of its next flagship game – the latest opus ofAssassin’s Creed – in order to make the copy as clean as possible. The game should finally be released only in February 2025, after the prosperous end-of-year holiday period. A new failure would plunge society into a deep crisis.
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