Why is the $180bn games industry shedding thousands of staff?

Despite healthy sales, publishers such as Epic Games and Activision Blizzard are making hundreds of employees redundant - which may radically reshape the industry

It is widely agreed that 2023 was a stellar year for video games. The Legend of Zelda: Tears of the Kingdom, Baldur's Gate 3, Alan Wake 2, Marvel's Spider-Man 2 ... barely a week passed without some blockbuster hit or independent gem.

But beneath these accolades there is a sadder, more worrying story: it was also a year of widespread industry redundancies, and the trend is continuing into the opening weeks of 2024. Microsoft laid off 1,900 staff after its $69bn purchase of Activision Blizzard. Publisher Embracer Group let at least 900 staff go across its many studios, as well as closing veteran UK developer Free Radical Design. Epic Games, the creator of Fortnite, one of the most successful titles of the decade, laid off 830 employees; Electronic Arts shed 6% of its workforce, amounting to approximately 780 jobs. There have been similar grim stories from Ubisoft, Naughty Dog, Sega and Unity; major publishers and smaller studios alike are being affected.