July 3rd, 2024

Why are Japanese developers not undergoing mass layoffs?

Japanese game developers like FromSoftware, Konami, Capcom, and Nintendo maintain stable employment and development, contrasting with global layoffs. Japanese labor laws and long-term focus on talent retention offer industry resilience.

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Why are Japanese developers not undergoing mass layoffs?

Japanese developers have largely avoided mass layoffs seen in the global gaming industry. While Tango Gameworks faced closure by Microsoft, other Japanese studios like FromSoftware, Konami, Capcom, and Nintendo have maintained stable employment, increased wages, and continued development amidst record profits. Japanese labor laws make layoffs difficult, protecting permanent employees, and promoting stability. The country's focus on mobile gaming, limited outsourcing options, and lower development costs contribute to this resilience. In contrast, Western companies prioritize short-term profits, leading to widespread layoffs even amid profitability. The long-term approach of Japanese companies in retaining talent may position them better for industry revitalization. The contrast in philosophies between Japanese and Western companies highlights a potential risk for the latter if the industry undergoes a resurgence. The industry's current trend of layoffs risks losing valuable experience and may hinder future growth if not managed carefully.

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Link Icon 5 comments
By @snakeyjake - 5 months
My employer only had a profit of $850,000,000 last quarter instead of the anticipated $860,000,000.

edit: that's not a joke, that's real, those are actual numbers rounded to the nearest ten million.

This caused the line to remain flat instead of going up, and the line has only doubled in height in the last four years instead of tripling or quadrupling, so the executives decided to lay off half of the overhead staff to prove that they're doing something to turn around this sinking ship.

Now we have mechanical engineers troubleshooting PDM login issues instead of system administrators.

The PE jackals slowly tearing apart the still-living body of this century-old company are very pleased.

It seems to an outside observer who has done some limited in-country contract work for Japanese aerospace firms that Japanese companies face less of this type of pressure.

By @leros - 5 months
I have experience (directly and via friends) at international companies with offices in Japan. When they announce layoffs, they immediately lay off their US employees. A month or so later, they lay off their European employees after going through some process. The Japanese employees are safe though because apparently it's very difficult (or impossible) to lay off Japanese employees. However, they will tell the Japanese employees they're having layoffs to trick them into quitting voluntarily.
By @j7ake - 5 months
It’s harder to fire people in Japan and Europe compared to USA.

The downside is that it is extremely hard for new grads with no experience to get their first job in Japan and Europe compares to USA.

By @PaulHoule - 5 months
I’m not sure if giving up on PS exclusives is going to cause difficulties for Square Enix at all.

I mean, I used to have a PS Vita and I enjoyed Japanese games such as the Neptunia series and Akiba’s Trip 2 and Persona 4 Golden. Most games like that come out on Steam these days.

Back in the day porting was difficult but there is no major technical difference between the current XBOX and PS and a gaming PC. Even the Switch is not all that different except it is much lower spec and requires more optimization.

Making exclusives in 2024 is just a choice to go out of business.*