The video game industry has experienced a significant downturn in recent years, marked by widespread layoffs across numerous studios. However, Japanese game development studios appear to be weathering this storm more effectively than their Western counterparts. Amir Satvat, who manages the ASGC Games Industry Layoffs Tracker, attributes this resilience to several key factors distinguishing the Japanese market.
Satvat described the situation in Japan as a "completely different ballgame," while acknowledging that the region is not without its challenges. He noted that Japanese studios often prioritize cutting contractors outside the country when staff reductions are necessary, a practice that helps protect their core domestic workforce. Companies like Nintendo, Konami, and Capcom reportedly maintain staff retention rates exceeding 97 percent.
A significant contributing factor, according to Satvat, is the general tendency for Japanese teams to be smaller and more focused. Unlike many Western studios that pursued live-service models or massive, multi-hundred-person development teams for blockbuster titles, Japanese developers have largely maintained leaner operations. Furthermore, executive compensation in Japan, while still substantial, is considerably lower than in the West. Satvat pointed out that executive salaries in Japan typically range from $2 million to $3 million, a stark contrast to figures like the $38.6 million awarded to EA's CEO Andrew Wilson last year or the $42.1 million earned by Take-Two's Strauss Zelnick in 2022, both companies having implemented layoffs.
Data from Satvat's tracker reveals that between 2022 and 2026, the global video game industry saw over 57,000 job losses, with 96 percent of these occurring in North America and Europe. Satvat estimated that at one point, over half of the global layoffs were concentrated in California. He characterized the current environment for traditional AAA developers in North America and Western Europe as being as severe as the industry crash of 1983.
While Epic Games CEO Tim Sweeney has described the current period as the most significant disruption since the 1980s, Satvat suggests that the relative stability of major Japanese studios offers valuable lessons. A focus on smaller, specialized projects rather than chasing trends, combined with more reasonable executive compensation and leaner team structures, appears to be a more sustainable model.
This approach is reflected in the continued success of companies like Capcom, which has seen record financial performance with titles such as Resident Evil Requiem and Pragmata. Nintendo continues to break sales records with its hardware, and Koei Tecmo has explicitly stated its commitment to developing smaller-scale titles to ensure ongoing success.