Why Japanese Game Studios Are Less Affected by Mass Layoffs

While Western publishers have repeatedly made headlines with large waves of layoffs in recent years, Japanese game studios have notably remained largely unaffected. An industry expert has now explained why this might be the case – and the reason has less to do with luck than one might think.

Why Do Japanese Studios Lay Off Staff Less Often Than Western Publishers?

According to the analysis, the key difference lies in team size and salary structure: Japanese studios traditionally operate with significantly smaller teams, and management salaries are noticeably lower than at comparable Western companies. This results in a lower overall cost burden, which doesn't necessarily have to be offset by radical staff reduction measures during economically challenging periods.

Which Western Studios Have Been Particularly Affected by Layoffs Recently?

As counterexamples, the report mentions Xbox, where under the new leadership of CEO Asha Sharma, around 3,200 jobs were cut and four studios were completely sold off. Bungie, EA, PUBG Productions, and Take-Two also had to announce significant staff reductions in the recent past.

How Should This Development Be Interpreted?

This debate is part of a growing discussion spanning several years regarding cost structures in the Western gaming industry, where disproportionately high management salaries compared to development teams are repeatedly criticized – especially when hundreds or thousands of developer positions are cut simultaneously. For industry employees, this analysis also provides some explanation as to why major Western publishers, despite billions in revenue, so often resort to austerity measures, while smaller, leaner Japanese studios navigate economic downturns more stably. This does not mean that Japanese studios are inherently crisis-proof – but their business model simply makes radical layoff waves less necessary as a response to weaker quarters. Additionally, many Japanese publishers traditionally focus more on long-term employment and manage staff reductions through natural attrition rather than large waves of dismissals – a cultural difference that is difficult to quickly transfer to Western corporate structures.

Source: Eurogamer

What do you think – should Western publishers take a leaf out of the book of Japanese studios' leaner structures? Discuss in the comments!