Game Developer Bucks Trend, Raises Salaries

FromSoftware's recent announcement of increased starting salaries for new graduate hires stands in stark contrast to the widespread layoffs impacting the gaming industry in 2024. This article delves into FromSoftware's decision and the broader context of the industry's current challenges.

FromSoftware's Counter-Move to Industry Layoffs: A Salary Increase

FromSoftware Boosts Starting Salaries by 11.8%

While 2024 has witnessed significant job cuts across the video game sector, FromSoftware, the celebrated developer behind titles like Dark Souls and Elden Ring, has implemented a substantial 11.8% increase in starting monthly salaries for new graduate hires. Effective April 2025, these salaries will rise from ¥260,000 to ¥300,000. In a press release dated October 4, 2024, the company stated this increase reflects its commitment to a stable and rewarding work environment conducive to successful game development.

In 2022, FromSoftware faced criticism regarding relatively lower compensation compared to other Japanese studios, despite its international success. The reported average annual salary of approximately ¥3.41 million (roughly $24,500) was noted by some employees as insufficient to cover Tokyo's high cost of living. This salary adjustment aims to align FromSoftware's compensation with industry benchmarks, mirroring similar increases at companies like Capcom, which will raise starting salaries by 25% to ¥300,000 by the start of the 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

The global gaming industry experienced unprecedented layoffs in 2024, with over 12,000 jobs lost. Major players like Microsoft, Sega of America, and Ubisoft implemented significant cuts despite record profits. This surpasses the 2023 total of 10,500 layoffs. While Western studios often cite economic uncertainty and mergers as reasons, the Japanese gaming industry has largely avoided this trend.

Japan's robust employment protections, including stringent labor laws and a deeply ingrained corporate culture, contribute to its stable employment landscape. Unlike the "at-will employment" prevalent in the US, Japanese labor laws offer significant worker protections, making mass layoffs legally challenging.

Several major Japanese companies, including Sega (33% increase in February 2023), Atlus (15%), and Koei Tecmo (23%), also implemented salary increases. Nintendo, despite lower 2022 profits, committed to a 10% pay hike. These actions may be partly in response to Prime Minister Fumio Kishida's push for nationwide wage increases to combat inflation and improve working conditions.

However, the Japanese industry isn't without its challenges. Long working hours, often exceeding 12 hours daily for six days a week, remain a concern, particularly for contract workers whose contracts may not be renewed without technically being classified as layoffs.

While 2024 marked a grim record for global gaming layoffs, Japan's relative stability provides a compelling case study. The industry's future will depend on whether Japan's approach can continue to protect its workforce amidst growing global economic pressures.