Layoffs hit gaming in 2024: The industry’s biggest headwinds

Nearly 6,000 gaming industry workers have already been laid off in 2024, according to PC Gamer reporting, while 2023 saw well over 10,000 job cuts across video game studios. Are industry employers correcting themselves after seeing surging interest in gaming dating back to the pandemic?

LightShed Partners Media and Technology Analyst Brandon Ross joins Yahoo Finance to comment on the headwinds contributing to these lay offs seen across the gaming sector.

“A big one was actually mobile games where the IDFA changes by Apple happened and it made it much harder for mobile publishers to acquire users and reactivate users, and I think the industry is still struggling with that,” Ross explains.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor’s note: This article was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: During the pandemic, of course, so many people were at home. You saw this boom of course, of interest in gaming, Brandon. Post-pandemic, as we sit here, Brandon, now in February 2024, give us your take on just the health of the gaming industry, Brandon. How healthy is it? And where is the growth right now in terms of the verticals and kind of subsectors?

BRANDON ROSS: Sure. You just referenced the pandemic, and there was an obvious pull forward in growth that occurred because everyone was at home had nothing to do and a great way to socialize and interact with others was by playing games. So you got a little bit of a pull forward there. Since that time, growth has been pretty meager. I think if you look at the CAGR out of 20, it’s low single digits of growth. So part of it has to do with the pandemic.

But then there are actually other headwinds that hit the industry. A big one was actually in mobile games, where the IDFA changes by Apple happened. And it made it much harder for mobile publishers to acquire users and reactivate users. And I think the industry is still struggling with that.

JULIE HYMAN: Hey, Brandon, it’s Julie here. So when we look at the number of layoffs this year, which is already trending according to industry watchers, around 6,000. So at this pace, would actually surpass what we saw in 2023? So that seems to reflect some of these changing dynamics that you’re talking about. A lot of other big tech industries have cut their way towards back into investors, good graces, and back into efficiency. Is that going to work for the gaming industry?

BRANDON ROSS: Look, it never helps to cut when you kind of get into a situation when you start cutting and you’re a content and creative-focused industry, where you might be robbing for from the future in order to make profitability strong now. However, if you look at the gaming industry now, it’s really just– it’s pretty top heavy overall outside of the, quote, metaversey platforms.

And I think you’re seeing a lot of growth out of projects that were probably– were headcount come out of projects that probably weren’t going to be that effective anyway. So I think just like the tech companies are all of the game publishers, especially in a flat growth environment are looking to take investment dollars away.

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