What I Believe Really Causes Layoffs in the Video Game Industry
I just read a GamesIndustry.biz article covering Jack Buser’s thoughts on AI as a “savior” of the video game industry’s current business woes, and I had to whip up a quick blog post to vent about it. Jack Buser is the global director for games at Google Cloud, and while not new, his perspective as a director in the games space when it comes to AI’s place in video games is truly frightening.
For years now, business executives across all industries have been brainwashed by the idea of artificial intelligence coming into their companies so that the number of zeroes on their quarterly reports can increase. And of course, to save face in the eyes of employees and consumers, these executives preach about how AI “is a tool” and isn’t meant to “replace” people, but rather make those people more effective and efficient. Of course, all of these executives truly can’t think for themselves or already know that this is a fallacy. My belief is largely the latter.
I have little doubt in my mind that Jack Buser is a competent person and director, and that’s why statements like the ones he gave in the abovementioned article are so shocking. Essentially, he argues that AI has arrived to save the industry from these five-plus-year development timelines that cost hundreds of millions of dollars with little chance of turning a decent profit and lead to massive layoffs. Buser claims simply that “This is not a sustainable business model,” and I absolutely agree with him. Even Battlefield 6 developers weren’t spared the axe when the game they created over the span of about three years allegedly sold over 20 million units by the end of 2025 on its way to becoming the best-selling game of the year in a year full of breakout hits like Clair Obscur: Expedition 33, Dispatch, Split Fiction, Kingdom Come: Deliverance II, DOOM: The Dark Ages, and more. Against all of these beloved games, it also managed to win Best Audio Design at The Game Awards and two other awards in the industry. If those developers’ jobs aren’t safe, then nobody’s job is safe; and if nobody’s job is safe, the industry is hurting in a bad way.
How does Buser believe these issues can be resolved? With AI, of course! “Can we return to an industry that's much healthier where we can spend potentially tens of millions on a game and get it out in a few years?” That would be great! Although, his statement does seem to imply that there was a time when layoffs weren’t an issue in video games, and I’m not sure that’s super accurate; they’ve just been much worse lately. Regardless, it’s a well-known fact that the number one cost associated with video game development is labor. People are expensive. The average annual salary of a game developer is only getting higher as studios continue to ignore junior talent in favor of seniors who can get a game out more reliably but at a tremendous financial cost. In order to significantly decrease the cost of game development, something needs to be done about the people. Let’s look at some options companies have for reducing employee costs:
Hire fewer people. This of course is where a lot of the industry is turning now. Get rid of these pesky people who want to afford a family, an emergency fund, a retirement account, further education, medical insurance, blah, blah, blah, and boom! Our profits are through the roof! Imagine that! Somewhere, though, the equation has to even out. In this case, it largely evens out in the development time. Fewer employees can oftentimes mean longer development unless the style, length, and/or quality of a game are subjected to change. However, changing the game formula is often a nonstarter for AAA game developers since they know the combo that sells tens of millions of copies, and deviating from that is thumb-in-mouth, hide-under-the-covers, keep-the-nightlight-on scary. So development timelines increase instead, leading to more quarters of low revenue since the studio isn’t releasing a game.
Shrink the scope. Because revenue sores when games release, studios are usually better off when they can release games faster while at a consistent quality. This equation is evened out not by reducing the workforce but by limiting the scope of games. Time to rely less heavily on the massive, visually stunning, open-world, adventure games that take a decade from start to finish. Limit the scope, limit the playtime, limit the content, and make smaller games at a faster rate to keep everyone employed, keep money coming in, and keep costs low since each game requires fewer years of salary for each employee. Problem: there’s a huge market for the exact type of game that is being cut out. We’re talking about losing potentially millions of buyers and instead focusing on a smaller subsection of the video game audience. This is generally where I and a lot of other people think the industry should move toward. This is a model that increases a studio’s chances for game success and has a lot of promise to show steady, long-term growth rather than the boom-or-bust model.
Crunch. Everyone’s least favorite games industry practice. We’re not increasing the budget, so we’re not giving more time to work on the game, we’re not changing the game’s scope or quality, and we’re not hiring more people. What’s left? Get more for the money that is being spent; no more 40-hour work weeks. Game developers are largely exempt from overtime pay in the United States, so bring on the 50, 60, 80, 100-hour work weeks for no extra pay. If all of these parameters are going to be met, then the employees need to work more to prevent the studio from spending more on the game.
Increase efficiency. This is just like crunch but more employee-friendly, and business-friendly for that matter. If we can find a way to increase the output of a developer’s 40 hours in a week, then the game will get done sooner while still achieving the same results. And as Jack Buser always says, “Time in a development pipeline is highly, if not linearly, correlated, with cost.“ A quicker result means saving money. This is the camp that Buser falls into. In his particular case, he believes AI is what will allow for a tremendous increase in efficiency. Now, this isn’t getting into the Braess's paradox of it all. My personal inference is that if AI helps developers increase efficiency the way Buser posits, then companies will be competing to utilize this extra efficiency to make bigger and better stuff in the same development timelines as opposed to being happy with making the same stuff they have been at a quicker rate.
Great! We have so many options for reducing the cost to the business… There’s just one big problem: none of these prevent layoffs.
Let’s now talk about the real reasons layoffs happen:
Poor game sales. This is a large category with lots of subcategories. It could be a tremendously poor art direction for the game that makes it unappealing and therefore perform worse. It could be executives who insist, despite the developers’ cries, that the studio release a live-service game with no soul in it (see Concord). It could be that the game was marketed poorly for what it was, leading to poor reviews and poor sales (see Skull and Bones). Maybe the quality of the game simply wasn’t very good (see Call of Duty: Black Ops 7). Ultimately, these poor decisions lead to games having poor performance in the market, forcing studios to make layoffs when the game simply hasn’t brought in enough money to keep the developers onboard.
Poor performance elsewhere. Essentially, this is what happens when one team suffers in a larger company because other teams aren’t pulling their weight. Maybe Team A made a wonderful game that kicked butt, but Team B, Team C, and Team D (some of which may not even be working on a game necessarily) are bleeding the company dry because of their separate poor performances. Now the company has to make tough decisions and cut the development team to stay afloat.
Poor accounting. Some companies just don’t handle their finances well. To be fair, I’m not an accountant, but I think this is one of the silent killers in the video game industry. I rarely hear this talked about, but ultimately, I believe this is one of the two cruxes of the previous Battlefield 6 example (the second one is entry #5 in this list). It just makes zero sense that the developers of such a tremendously successful game can’t sleep at night assured that they’ll have a job the next day. I also think this is a big culprit of why game companies overhired during the COVID-19 pandemic. From what I can tell, a lot of game companies have a knack for bringing themselves to the brink of financial ruin for every game they make by overhiring, overscoping, and calculating poorly. Sometimes, this is done intentionally to keep stakeholders happy even though the stakeholders will be even less happy if their investments are lost due to these errors.
Poor management and producing. When games are poorly planned and managed, this leads to games being over-budget and poorly built. Suddenly, you have a game that took years longer to make than anticipated for double the original budget and selling half the expected number of units. What a recipe for disaster. When the production hums, the development hums.
Poor scheduling. This is sort of a subset of poor management, but I believe it deserves its own entry. This has to do with scheduling the development of multiple games. The obvious goal of any studio is to keep the company alive to continue creating games. However, whenever the company is making games instead of selling games, revenue is relatively sparse. This means it’s critical to properly schedule and time the releases of a studio’s games to help minimize the amount of time between games releasing. Lots of studios end up with release schedules that look like this:
This is actually what happened with Battlefield 6. According to public information, Battlefield 6 development began after the release and underperformance of Battlefield 2042.
In actuality, an ideal schedule looks something like this:
Look at that! In the first example, we got three releases in 12 years. In the second example, we got three releases in only 10 years and a fourth release after Year 13. This isn’t revolutionary. It’s not even news. This is just how things should be. As you can imagine, as the length of development decreases for each game, the benefit of staggering like this grows fast. Suddenly, the time between releases is only one or two years. That’s sustainable. Every year, there’s a nice influx of cash, ideally, from a new release in addition to relatively smaller revenue from previous releases that continue to flow in. With proper money management and planning, steady work for a studio’s employees is very achievable.
When this isn’t done properly, it’s hard for companies to stay afloat because they go so long without sufficient revenue. That’s not even the worst part, though. The reason development should be scheduled like this is because the pre-production of a game is extremely important but requires much fewer staff to complete. So let’s look at the first image. In Year 5, Game 1 has just released, and that’s great! However, the company likely has a lot of programming, art, and design employees that are ready to move on to another game. If the company waits until Year 5 to get pre-production for Game 2 underway, tons of employees are getting paid substantial salaries and benefits while not producing any work. Here’s where layoffs come. Without any work for those employees to do, it’s essential to rid the company of those superfluous employees so that the studio isn’t hemorrhaging money by paying people who don’t have work to do. This also applies to departments like marketing where marketers can’t market nothing. And when the company has fewer overall employees, it doesn’t need as many people in departments like HR. If there are fewer humans to give resources to, we don’t need as many human resources employees.
Now, remedying all of these items is easier said than done. If it were easy to schedule, manage, produce, and create, everyone would be doing it, and this wouldn’t be an issue. However, notice that except for the far-reaching scope of “poor game sales,” none of the above items that lead to layoffs necessarily have anything to do with development. These are problems with accounting, business administration, management, and planning. Speeding up development with AI doesn’t fix any of these, so ultimately, layoffs will be largely unaffected. If anything, introducing AI could lead to more layoffs as companies try to replace employee effort with AI effort while trying to save money and time.
This is why Jack Buser’s comments get under my skin so much. And what’s worse is that these are the views of a lot of executives today. And these are the executives in charge of accounting, business administration, management, and planning. The longer people like Buser continue to see the games business in this way, the more layoffs we can expect.
I’ll leave this post by mentioning a paper I learned about in college. I was a software engineering student, and I think this is especially relevant since video games—despite certainly being a fantastic artform—are ultimately software. The paper is called “No Silver Bullet—Essence and Accident in Software Engineering”. You can lift this quote straight from the Wikipedia page about it to get the idea: “there is no single development, in either technology or management technique, which by itself promises even one order of magnitude [tenfold] improvement within a decade in productivity, in reliability, in simplicity.” The key word in this quote is “single.” So no, Jack Buser, AI is not the silver bullet to rid the industry of its problems. Can we use it, and could it benefit us? Certainly! Absolutely! 100%! It needs to be coupled with other evolutions of technology and management to transform how we develop video games. And it needs to start with the problems that actually lead to layoffs. It needs to start at the top. It needs to start with you.