While major layoffs are still a regular occurrence amongst Western game companies, Nintendo continues to do things its own way.
It’s estimated that over 10,000 video game developers have been laid of in the last 12 months, a staggering amount that speaks to a crisis in the video games industry, brought on by the increasing cost of making triple-A games and a perceived lack of growth in the console market.
There are many other factors involved, including overstaffing during the pandemic, but in the vast majority of cases publishers are in no financial difficulty at all – they’re just making slightly less profit than they promised their shareholders.
The biggest caveat though is that none of this is affecting any Japanese companies (assuming you count PlayStation as American, since it’s based in California and run according to American business practices). While Microsoft laid off 2,000 people, despite being worth $3 trillion, and Take-Two got rid of more than 500 people despite making a $2.2 billion profit, Nintendo has been hiring at an unprecedented rate.
Nintendo didn’t highlight the fact, but fans noticed the detail in their recent shareholder meeting summary, where it’s made clear that over 400 new employees have been taken on over the course of the last 12 months.
There’s no indication of what exactly their roles are but the obvious assumption is that they need to staff up for the impending Nintendo Switch 2 console.
It is the very opposite of current market trends in the West though, with suggestions that many of new roles may have involved contract staff being taken on as full-time staff – which also goes against everything that Western publishers are doing at the moment.
Japanese employment laws make it harder to lay people off than in the West but clearly that is not the only reason for such a significant difference in approach.
Many Japanese companies – including Nintendo, Capcom, and Square Enix – have also been increasing wages recently, in order to retain talented developers.
Where Western companies seem to treat developers as disposable assets, ready to be sacrificed the moment publishers need to boost their profit margins, Japanese companies appear to view them very differently.
It’s not only new staff that Nintendo is investing in at the moment, as it has spent over half a billion pounds on a new 12 storey office building in Japan, for its key EPD development studio. Rather than downscaling these plans because of the current industry problems it actually delayed them by a year to increase the scope.
Nintendo has made many mistakes in its time but, overall, its ability to run a sustainable business, making high quality products, remains unmatched in the industry.
As such, it’s frustrating to see Western publishers rushing to copy each other, as they ruin the lives of thousands of game creators – and the stability of the whole industry – rather than taking a leaf out of Nintendo or Capcom’s book.
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