2024 Video Game Industry Shakeup: Layoffs Loom and Anxiety Mounts for the Future

In the wake of the significant layoffs throughout the video game sector in 2024, one out of every ten developers reports being among those dismissed from AAA studios and independent entities alike.

As per the recently published “2025 State of the Game Industry” report by the Game Developers Conference, 11% of the 3,000 developers surveyed indicated they were laid off within the last year.

In total, 41% of game developers experienced layoffs this year, whether by being dismissed personally or by having their teams affected, which is an increase from 35% the previous year. 58% of those surveyed reported “some level of concern” that further reductions might occur this year.

The survey revealed, “The primary reason companies have provided their workers for redundancies is restructuring (a general term for reorganizing a business to enhance profitability), followed by dwindling revenue and shifts in the market. This explanation was not given to everyone: 19% of developers stated that there was “no reason provided” for their company’s layoffs.”

Among the companies that implemented layoffs in 2024 were Microsoft (which acquired Activision Blizzard in 2023), Sony Interactive/PlayStation, Riot Games, Take-Two Interactive, EA, Epic Games, Ubisoft, and others.

“Developers were also encouraged to express what they believe is leading to the rise in redundancies,” the report mentions. “While many recognized that revenue and market alterations contributed to the issue, they attributed most of the blame to specific factors like overexpansion during the Covid period, climbing production costs, decreasing player engagement, unrealistic expectations for the “next major success,” as well as poor leadership and mismanagement.”

Another significant finding in the survey was an increase in developers worried about the impact of generative AI on the industry, with 13% stating it’s having a positive effect, down from 21% in 2023, and 30% indicating it has had a negative effect (up 12%).

The report additionally noted the rising enthusiasm for gaming in Hollywood, following the success of Amazon’s “Fallout,” HBO’s “The Last of Us,” and various other video game adaptations, with 13% of developers mentioning their games are being (or have been) adapted into movies, serialized shows, or other mediums (an increase from 10% the prior year). Among developers working at AAA studios, this figure rose to 36%.

(Displayed above: Activision’s “Call of Duty: Black Ops 6.”)