The American video game publisher Epic Games has announced the dismissal of 16% of its workforce, which corresponds to 830 people, in a decision that, according to its CEO, Tim Sweeny, is due to the need to reduce costs and focus its strength. working in software development.
That the company behind Fortnite has announced a staff cut of this caliber is surprising considering the enormous success that this video game has been reaping for a few years, but it also coincides with a wave of layoffs in video game companies that has been seen especially accentuated this 2023.
“For some time now, we've been spending far more money than we make, investing in Epic's next evolution and growing Fortnite as a metaverse-inspired ecosystem for creators,” Sweeny says in a statement. “I had long been optimistic that we could push through this transition without layoffs, but in retrospect I see that this was not realistic,” he adds.
In his message, the head of Epic Games maintains that, “although Fortnite is growing again, this growth is mainly driven by content created by the players themselves,” and that these revenues represent “a lower-margin business.” than the one the company had when Fortnite took off in popularity in 2018 with the inclusion of its popular “Battle Royale” mode.
There has been talk about the decline in the number of Fortnite players for approximately two years, especially after the game established one of its historical peaks in May 2021 with around 290 million monthly players. Since then, and although it remains a hugely successful title, substantial drops in players have been recorded.
Coinciding with the decline in users, Fortnite is shifting its business model towards something more similar to what platforms like Roblox do, which allow their users to create experiences, share them and earn money with them. It is for this reason that Sweeny's statement insists on Epic Games' willingness to continue betting on promoting the metaverse aspect of Fortnite, that is, encouraging the users themselves to grow the platform and generate income with their creations.
But beyond Fortnite's change of direction, the staff cut at Epic Games also has a lot to do with the company's desire to reduce costs in areas that are not so closely linked to game development or its popular Unreal Engine graphics engine. , which is practically a standard in the video game industry.
“We're also doing some divestitures,” Sweeney says. The CEO of Epic Games is specifically referring to cuts at digital music distribution platform Bandcamp and children's advertising company SuperAwesome, two of its subsidiary companies that account for around 250 of the layoffs. The first will join the Songtradr digital store, while the second will become an independent company and not so closely linked to Epic Games. In fact, SuperAwesome has been closely linked to the million-dollar sanctions that Epic Games has received for violating the privacy of minors.
According to the message published on the official Epic Games website, around two-thirds of the layoffs have occurred in teams outside the development area and the company. In fact, special emphasis is placed on the fact that the company wants to prioritize the publication of the next season of Fortnite and Chapter 5 of Fortnite, as well as the projects with the code name “Del Mar, Sparks and Juno”, which is speculated to refer to a new kart game set in the Fortnite universe and a collaboration with the LEGO company.
In recent months, the electronic entertainment industry has been following the same steps as the large technology companies and their massive layoffs of personnel. Many might think that the video game sector was immune to these types of trends, but nothing could be further from the truth.
Without going any further, the dynamic is becoming more and more common that, after the launch of a large blockbuster - and the overload of work and overtime that workers usually suffer in the final stages of development - the company lays off en masse employees. much of the staff. For this reason, it is key that developers know how to combine various projects at the same time with the aim of relocating team members.
This 2023 is being especially bloody in terms of layoffs within this sector. At the beginning of the year, the dismissal of around 10,000 workers at Microsoft was announced, a decision that also affected workers at its video game studios such as 343 Industries, The Coalition, ZeniMax Media and Bethesda Game Studios. Likewise, in March, the also American Electronic Arts announced that around 800 workers would lose their jobs due to a company restructuring.
We could continue mentioning other cases, such as those reported in this Kotaku article when mentioning Unity (600 workers), Ubisoft (60), Riot Games (46) or CD Projekt (30), to name just a few. And the thing does not seem to have any signs of ending. This same week, Naughty Dog, the studio responsible for The Last of Us, announced that it will lay off 25 workers; and the British publisher Team 17, responsible for such popular games as Overcooked, the dismissal of another 50 employees.
For years, the video game industry has seemed to live surrounded by an aura of unstoppable successes, but it is increasingly noticing the same effects that technology companies are experiencing due to poor planning and questionable growth dynamics.
