The video game industry is currently facing a big wave of layoffs, and even contract developers at PlayStation first-party studio Naughty Dog aren’t immune. Kotaku has learned that the maker of hits like Uncharted 4: A Thief’s End and The Last of Us Part II has begun cutting contracts short for dozens of workers.
Layoffs were communicated internally at the Santa Monica, California-based studio last week, according to two sources familiar with the situation. Departments ranging from art to production were impacted, but the majority of those laid off worked in quality assurance testing. The sources said at least 25 developers were part of the downsizing. Full-time staff do not appear to have been part of the cuts. Naughty Dog’s headcount was over 400 as of July.
Sources tell Kotaku that no severance is being offered for those currently laid off, and that impacted developers as well as remaining employees are being pressured to keep the news quiet. Their contracts won’t be officially terminated until the end of October and they’ll be expected to work through the rest of the month. Sony did not immediately respond to a request for comment.
Despite hit ratings for the recent HBO adaptation of The Last Of Us, a multiplayer spin-off for the zombie shooter based on the first game’s Factions mode has struggled in development. Bloomberg reported in June that Sony had diverted resources away from the project following a negative internal review by Bungie, the recently acquired live-service powerhouse behind Destiny 2. One source now tells Kotaku that the multiplayer game, while not completely canceled, is basically on ice at this point.
The layoffs also come just a few months after studio co-president Evan Wells announced his retirement at the end of 2023 after working at Naughty Dog for 19 years. Neil Druckmann, creative director and lead co-writer on both the most recent Uncharted and The Last of Us games, as well as a contributor to the HBO show, revealed a restructuring of the studio leadership around the same time.
Naughty Dog isn’t the only major first-party studio to face layoffs this year. The Xbox studio currently in charge of Halo, 343 Industries, was hit hard by mass layoffs at Microsoft back in January. Major gaming companies like Electronic Arts, Ubisoft, Epic Games, and Embracer have all added to the tally in recent weeks and months, with many developers increasingly unnerved by the constant influx of more bad news from colleagues and peers.
Back in April, Sony announced that it plans to sell a record-breaking 25 million PS5s in the current fiscal year.
The games industry is RIPE for organising worker owned studios. All the skill and talent is there.
Why suffer the insecurity of being cut to protect a profit margin ?
Because game dev, at the best of times, is a giant multi-year gamble. You have to hope that people like the game you are in year 3 on because you don’t have money to go much past 4. And you also have to hope that another more popular studio doesn’t release something similar that cannibalizes your sales.
One way to make that safer? Get a publisher with deep pockets. Someone who can say “Hey, Elden Ring just came out and even has the same ‘there is a whole other world underground’ gimmick that you do. Can we delay your game for another six months but keep paying you the entire time?”
And those kinds of publishers tend to prefer the big studios where pivoting to a new engine or making a prototype for a radical genre shift is viable.
And this also applies to the insanely successful small studios. Dead Cells is a great example. Motion Twin is mostly a worker cooperative. This greatly limited its scalability (profit sharing for indie games doesn’t scale all that well) and resulted in a spin off of Evil Empire to manage Dead Cells.
Unionization will go a long way toward avoiding the worker abuse inherent in game dev. But startups are dangerous no matter what industry you are in.
Reminds me of this video I watched yesterday when looking for CC content.
We basically have what OP describes already in form of indie studios & games. Mind you, not all of them are the same of course, but many are very much that. But that doesn’t really matter, because a game can be so good and created with so much love over so many years, and it can still commercially flop for a huge variety of reasons.
CrossCode is one of those examples. It’s an absolutely stunning game, it was a complete surprise hit for me which made me instantly buy into their early access at the time after trying the demo but as good as the game is, and even the ratings for it are, no one actually knows about it - and even less people are actually willing to try it. You have no idea how many times I tried to pitch this to for example Let’s Players who enjoyed other character & story driven games, but for them it’s a similar situation. They won’t pick games that are some sort of underdog, because that would not get them views. But games like this desperately need the exposure to even be seen by people. And people who hear about games like this also need to give them an actual chance. But for the vast majority, if the game isn’t coming from a big publisher or studio, they won’t even care.
Overall the gaming industry is tremendously fucked. A lot of people predict some sort of implosion happening at some point but I kinda doubt that happens, even though it might be necessary, especially if it takes down some of the giants like EA & Ubisoft, distributing all those developers and licenses into the wild. I believe in the long run it would be better for the industry.