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Massive Layoffs Don’t Happen In Japanese Gaming Companies - Here’s Why

Japanese gaming companies may have had a lot of struggles, but none of them end in layoffs.

The gaming industry is growing. According to market researcher Newzoo, the global games market is expected to grow from US$137.9 billion in 2018 to more than US$180.1 billion in 2021. There's no doubt that the number of gamers is increasing with more platforms such as mobile and PC games being more accessible than just console games. 

The potential is huge; there's always jobs aplenty in the gaming industry, and yet there seems to be a never ending slew of news about big gaming companies letting go of their staff, or worse; gaming companies actually shutting down!

The challenges of the gaming industry

EA, Blizzard, Telltale. News of staff being laid off brings a lot of bitter thoughts at the fact that so many game developers and those working in the gaming industry, who worked hard to bring us the games we love, have no choice but to move on elsewhere with no security. But they're not the only ones, based on the layoffs tags in Kotaku as well. 

If you think that layoffs this big has never happened in Malaysia, it has. Streamline Studios, a game development company in Kuala Lumpur, had laid off 40 of their staff, thankfully compensated according to those witin the company. While Malaysia’s game development scene is comparatively small compared to Japan and America, it’s likely to go down the same path as bigger companies that may eventually lead to major layoffs.

 

There are articles discussing why this is happening where game developers lamenting over their lack of job security, and questions on whether working in the game industry lacks stability. It's just a never ending cycle of doubt and depression for those who want to pursue their passion in games.

"The constant employee burnout from this process of hiring and rehiring — let alone from the deadline crunching — might make the video game industry feel dangerously unstable to someone looking for employment security. So while you might be able to find lots of jobs in the video game industry, you might not be able to have the same job for a long period of time.” - Kate Kershner - How Stuff Works

There's only one place that's known for it's big gaming industry yet with little to no news of there being layoffs; Japan. So when Square Enix developer Tokita Takashi came down to Malaysia to share his knowledge for the growth of the games industry in Malaysia, he also shared some insights on why layoffs will not be something common in Japan compared to other countries.

They hire contractors and freelancers

As of March 2018, Square Enix had about 4,335 staff. That sounds like a lot but compare that to EA with 9,300 and 9,900 at Blizzard reported  in 2018, and you can see that companies with layoffs have more than double the number of staff Square Enix has. Even Nintendo's reported staff is at 5,501! 

According to Tokita, Japanese gaming companies try to keep themselves relatively small, keeping staff that are key to the direction of the company and game development. They don't aim to grow a company bigger unnecessarily or hire staff only to let them go when the project is over or when the company is struggling (thus the layoffs), rather they hire contractors to work with them on projects and hire freelancers with skills they may be lacking.  

Most importantly, they're always aiming to work within their means and they will outsource if they have to. 

In the same way, said Tokita, gaming companies in Malaysia should also consider their limits and work with what they have. Even if it means producing games without music, as long as the game is capable of captivating their audience, it can always grow from there.

They master and take pride in their skills

Based on the point above, it’s also why gaming developers must take pride in their skills, said Tokita. They must refine their skills, adapt to today's requirements and continue to hone it so that it remains a demand. 

Tokita believes that as long as you're good at what you do and there's a demand, then you don't have to worry about job security too much. As the gaming industry continues to grow, there will always be a demand for good skills; it's a matter of how you market yourself and even possibly finding the right section for you to work in.

The company's image matters

While not commented on by Tokita himself, we should not forget our favourite gamer Satoru Iwata, who instead of firing people for the failure of the Nintendo 3DS and Wii U, he took a salary cut instead. It’s not a Nintendo culture, but a Japanese culture, where those in the top position take the fall instead of the rest of the employees when hit with hardships. 

It's also a major reason why you will not see major layoffs in any big Japanese companies. This Japanese culture of loyalty, of "saving face", is why getting work in Japan can be a challenge; when employees are employed, it's set for life. It's a culture most of the world doesn't practice, sure, but it's still significant that rather than firing people, companies would instead take salary cuts and work harder instead to save the company until the very end. 

When faced with such a challenge, of course it’s better to hire smarter than to hire indiscriminately to merely make a company appear bigger and stronger.

Can Malaysia adapt this culture too?

In the case of Streamline Studios, it didn’t take long for other local game development companies to chip in and help those who were laid off. Lemon Sky even posted a notice that a walk-in interview is possible for all those affected. So it’s good to see game companies supporting each other. 

Malaysia has a lot of amazing talent that are also at risk of being lost due to bad employment practices. This is why for Tokita, coming to give advice and discuss on how game companies can help each other is key to maintaining the strength of the gaming industry. By sharing experiences, cultures, and even knowledge, Tokita believes the potential of the gaming industry, even in Malaysia, can only grow further. 

But for that to happen, it’s important to work smart even when facing the ever known work crunch in the gaming industry. Don’t be afraid to ask for help and limit yourself to what you have. And let’s hope the gaming industry learn a thing or two from Japan.

 

 

UPDATE (4/4/2019): We were approached by Streamline Studios who clarified that the staff that were laid off were 40 in total and had been compensated accordingly. We have rectified this according to their statements.​