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Video video games in 2023: Acquisitions, layoffs, unions

This was a 12 months of upheaval in video video games. The business has shapeshifted over the previous 12 months, and it’s not all because of Microsoft’s prolonged acquisition of Activision, Blizzard and King. Whereas Xbox executives have been defending the legality of a $69 billion deal that might create the third-largest online game studio on the earth, smaller corporations have been firing workers and shutting down total groups, even amid fervent collective-bargaining efforts. It’s been a wild trip.

In 2023, the principle components molding the online game panorama have been consolidation, layoffs and unionization, with every of those phenomena feeding into one another. This previous 12 months, the online game business shrank, even because it grew financially.


When its buy of Activision-Blizzard-King was legally authorized on October 12, 2023, Microsoft turned the world’s third-largest online game studio by income. Because the proprietor of the Xbox ecosystem, Microsoft was already an enormous participant in video video games, however buying a tentpole AAA studio solidified its place within the high three. Activision and Blizzard are the homeowners of Name of Responsibility, Diablo, Overwatch, World of Warcraft and Starcraft, however the true meat of this deal comes from King, the cellular division. King operates Sweet Crush Saga, a recreation with 238 million month-to-month lively customers, which is greater than twice as many as Activision Blizzard’s mixed participant bases. Sweet Crush Saga has generated greater than $20 billion in lifetime income, and King routinely outperforms Activision and Blizzard by way of quarterly returns. Cellular gaming stays a big enterprise, particularly within the Chinese language market, which represents the biggest and most profitable viewers in video video games.

Although the $69 billion Activision deal was the largest in Microsoft’s historical past — beating its buy of LinkedIn for $26 billion in 2016 — it wasn’t the corporate’s first online game acquisition. Microsoft owns practically 40 builders and it purchased a bit of these prior to now 5 years. The Xbox umbrella covers 343 industries, Arkane Studios, Bethesda, Compulsion Video games, Double Advantageous Productions, id Software program, Infinity Ward, Mojang Studios, Ninja Idea, Playground Video games, Tango Gameworks and Flip 10, amongst dozens extra.

LOS ANGELES, CALIFORNIA - JUNE 12: (L-R) Tim Schafer, Feargus Urquhart, Dom Matthews, Matt Booty, Feargus Urquhart, and Larry Hryb speak onstage at the Xbox Game Studios - One Year Later panel during E3 2019 at the Novo Theatre on June 12, 2019 in Los Angeles, California. (Photo by Charley Gallay/Getty Images for E3/Entertainment Software Association)

Charley Gallay by way of Getty Photographs

With these studios at its again, Microsoft is leaning exhausting into cloud gaming whereas trying to construct a device-agnostic ecosystem powered by the Xbox model. These strikes are designed to unlock the cellular market much more, placing Xbox video games on all gadgets, all over the place, on a regular basis.

Nonetheless, Sony is larger than Microsoft by income. Although Microsoft is commonly the face of the game-studio acquisition spree, Sony is the proprietor of 21 growth groups, together with Bungie, Guerrilla Video games, Haven Studios, Housemarque, Insomniac Video games, Media Molecule, Naughty Canine and Sucker Punch Productions. Sony has been subtly increasing its roster — extra subtly than Microsoft, at the least — over the previous three years, and it’s additionally made heavy investments in studios like Epic Video games and FromSoftware.

With this lineup, Sony is betting closely on ongoing video games, and it has 12 live-service titles in manufacturing proper now, on high of Bungie’s Future franchise. These embody Haven’s Fairgame$ and a multiplayer Horizon title from Guerilla.

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“By increasing to PC and cellular, and… additionally to dwell companies, now we have the chance to maneuver from a scenario of being current in a really slender phase of the general gaming software program market, to being current just about all over the place,” Sony Interactive Leisure president and CEO Jim Ryan mentioned in 2022.

For the businesses on the high, complete domination is the purpose.

Even nonetheless, Tencent is larger than each Sony and Microsoft. Tencent isn’t a console producer, so it isn’t a family title amongst most gamers, nevertheless it’s one of many largest corporations on the earth, and it wields a ridiculous quantity of economic energy in video video games. Tencent owns a portion of Bloober Staff, Bohemia Interactive, Don’t Nod, Epic, Paradox Interactive, PlatinumGames, Treatment Leisure, Roblox and Ubisoft, amongst others. It has a majority stake in Supercell, Grinding Gear Video games, Klei Leisure, Tequila Works, Techland, Yager Improvement and others. It totally owns Riot Video games, Funcom, Sharkmob, Turtle Rock Studios, and, after all, others. It additionally runs a number of inner growth corporations, together with the Stage Infinite and Tencent Video games publishing labels.

People wait in line to try games at the booth of Tencent during gamescom 2023 in Cologne, Germany, Aug. 23, 2023. The 2023 edition of the international computer and video games trade fair gamescom opened on Wednesday in Cologne, western Germany. Chinese companies displayed their products on the trade fair.   According to the Koelnmesse, organizer of the week-long event, gamescom is the world's largest trade fair for computer and video games in terms of space and visitors. (Photo by Zhang Fan/Xinhua via Getty Images)

Xinhua Information Company by way of Getty Photographs

Certain, Sony has a stake in Epic, however Tencent’s is larger. This funding alone means any time you purchase a recreation constructed on Epic’s Unreal Engine, Tencent (and Sony) is getting a minimize. Tencent is the largest investor in video games, with hundreds of tendrils throughout the business — in case you performed one thing this 12 months, Tencent was in all probability concerned.

On a smaller scale, corporations like Netflix and Devolver Digital have additionally dipped their toes within the acquisition pond not too long ago. Devolver began shopping for studios in 2020, and it now owns Croteam, Dodge Roll, Doinksoft, Firefly Studios, Nerial and System Period Softworks. Annapurna Interactive purchased South African studio 24 Bit Video games in November. Netflix launched its Video games division in 2021, and it’s already bought 4 studios, together with Oxenfree developer Evening College and Alphabear firm Spry Fox.

Evening College co-founder Sean Krankel advised Engadget in June that the transfer to Netflix was a boon for the studio, offering monetary safety, a devoted working area and loads of advertising and marketing help for its initiatives.

“A small subset of groups are good to go for the subsequent 10 years, however others have these peaks and valleys, and we have been someplace in between,” Krankel mentioned. “We weren’t at risk of something going sideways. However we have been at a spot the place we’re like, it will be cool to tether to someone who has an analogous imaginative and prescient, and someone that we might work with that would love, de-risk us.”

Oxenfree II


That is the short-term good thing about being purchased by a bigger firm, however there are downsides to relinquishing independence. Having a company overseer may end up in inflexible manufacturing timelines, hindering a studio’s means to pivot, and regardless of the entire guarantees in any other case, builders could also be pressured to stick to a particular tone, vibe or game-development construction. Owned studios are held accountable by folks outdoors of the particular growth of a recreation, and the larger the corporate, the additional away its bosses are from the inventive course of.

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Essentially the most excessive adverse outcomes for an acquired indie studio are, after all, layoffs and closures. We noticed rather a lot of those in 2023.


The post-acquisition energy dynamic is taking part in out in public and in real-time. It’s estimated that greater than 9,000 folks in video video games have been laid off this 12 months and the firings affected groups of all sizes. This can be a disaster quantity of cuts. In 2022, simply 1,000 online game jobs have been misplaced, in accordance with layoffstracker.com.

The Embracer Group supplies the clearest instance of rampant, shock layoffs in 2023. Embracer has spent the previous few years buying distinguished midsize studios, together with Gearbox Software program (Borderlands), Crystal Dynamics (Tomb Raider), Eidos-Montreal (Deus Ex) and Sq. Enix Montreal (Deus Ex Go). Prior to now decade, Embracer grew its portfolio to cowl greater than 100 recreation studios, together with Volition (Saints Row), Espresso Stain (Goat Simulator), Free Radical Design (TimeSplitters) and Zen Studios (Pinball FX). The holding firm additionally secured the rights to The Lord of the Rings in 2022, promising to show it into “one of many largest gaming franchises on the earth.”

Saints Row IV


In June 2023, Embracer introduced a six-year, $2 billion funding deal had fallen by means of, and it was going to restructure — which means, layoffs and studio closures. Since this announcement, Embracer has shut down Volition, Free Radical Design and Campfire Cabal, it divested Goose Byte and it’s fired builders at Saber Interactive. Greater than 900 folks misplaced their jobs throughout these strikes. In the meantime, Embracer’s share value rose by 11 factors in November.

This wasn’t the one layoff spherical of the 12 months. Unity lowered its headcount thrice in 2023, affecting about 900 jobs. In its quarterly monetary ends in November, Unity reported a yearly income enhance of 69 p.c and it advised buyers, “We continued to handle prices effectively.”

Sony minimize 100 jobs at Bungie, an organization it purchased for $3.6 billion in 2022. In accordance with builders which can be nonetheless there, Sony executives are trying to make use of this upheaval to wrest extra management of the studio from Bungie founders and leaders.

Epic Video games fired roughly 830 folks this 12 months, or 16 p.c of its workers. This included important job cuts at Mediatonic, the studio behind Fall Guys that Epic bought in 2021.

Fall Guys


“For some time now, we have been spending far more cash than we earn,” CEO Tim Sweeney wrote concerning the layoffs. He continued, “I had lengthy been optimistic that we might energy by means of this transition with out layoffs, however on reflection I see that this was unrealistic.”

Digital Arts was one of many first online game corporations to institute important layoffs this 12 months, with a discount of 6 p.c of its workforce, or about 800 workers, in March. EA later minimize jobs at Grime and F1 studio Codemasters, which it bought in 2021 for $1.2 billion. EA culled an estimated 1,130 jobs in 2023.

CD Projekt RED and Sega every laid off about 100 folks prior to now 12 months, whereas Ubisoft fired an estimated 255 workers. Microsoft minimize 10,000 jobs throughout its companies early within the 12 months, and that included about 100 folks at Halo studio 343 industries.

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Halo: The Master Chief Collection

343 industries

These are simply among the largest names in layoffs in 2023. Trying again on the carnage, it appears like a warning — as consolidation efforts enhance, extra recreation studios can be managed by only a handful of corporations, and so they’ll be weak to strikes like mass layoffs and closures. We’re laying the muse for the way forward for video video games proper now and consolidation solely makes the business smaller and extra generic, as accountants, buyers and shareholders push for low-risk ideas, reasonably than innovation and alter.

What is going to rampant consolidation imply for all of those acquired studios in 5 years’ time? What is going to it imply when these groups aren’t shiny, new investments any longer, and the folks on the high are able to get lean once more? Keep in mind that lots of the shuttered studios listed above have been bought throughout the previous three years.

Being acquired is a cost-benefit evaluation for smaller studios, the place the advantages are speedy and the prices are potential. It’s simple to say that gained’t occur to us. However it might probably occur, and it does, and as consolidation will increase, bulk layoffs are solely going to happen extra typically.


Unionization is one method that may assist defend the livelihoods of individuals within the online game business, and there was progress on this entrance in 2023. Builders at a number of studios now have union help, from small indies to AAA powerhouses.

Microsoft is at present the house of the business’s largest union, with illustration for greater than 300 high quality assurance employees at ZeniMax Media. ZeniMax is the guardian firm of Bethesda, id Software program and Arkane, and Microsoft bought the entire caboodle for $7.5 billion in 2021. Microsoft formally acknowledged the ZeniMax union this January and the events began negotiating in April. In December, Microsoft introduced it will rent 77 contract employees as full-time workers beneath the ZeniMax Employees United-CWA union. The deal assured a pay elevate, paid holidays and sick go away, and a replica of Starfield, the sport they helped ship.


Bethesda Softworks

“We at the moment are stronger on the bargaining desk and are working to safe a good contract for all employees — direct workers and contractors,” ZeniMax union member Chris Lusco mentioned. “We’re all part of ZeniMax Studio’s success and all of us deserve our fair proportion. We hope to set a brand new precedent for employees throughout Microsoft and the whole gaming business so that every one employees, no matter their employment standing, are in a position to enhance their working circumstances by means of collective bargaining.”

In the meantime, executives at Microsoft’s latest acquisition, Activision Blizzard, spent the previous few years stalling inner unionization efforts. Nonetheless, QA workers at Raven Software program, a subsidiary of Activision, efficiently voted to unionize in Might 2022. Microsoft has vowed to respect group makes an attempt now that Activision-Blizzard-King is beneath its management.

Different corporations with unions established prior to now two years embody Avalanche Studios, Anemone Hug, CD Projekt RED, Experis Sport Options, Key phrases Studios, Sega of America, Tender Claws and Workinman Interactive.