505 Games parent Digital Bros lays off 30% of staff due to fears that players don't want new IP
Consumers are "more selective" about new games since the pandemic, company claims
505 Games parent company Digital Bros have announced - you guessed it - a round of mass layoffs. Following in the wake of Microsoft, Epic, CD Projekt, Sony and, well, take your pick, the company aim to cut roughly 30% of their workforce to shore up profits. The specific reasoning here is that Digital Bros think that people aren't interested in playing original new games; they'd rather get to grips with fictions and franchises they know and love already. As such, the company plan to "limit" their big budget projects in future, though no specific cancellations have been announced.
"The videogame market has evolved since the pandemic to be more selective in terms of new games, with consumers increasingly reverting to well established Intellectual Properties and playing these same games for longer periods," reads a statement. "Digital Bros strategy has had to adapt to this new and evolving competitive scenario and will focus its efforts moving forward on the release of sequels and new versions of previously successful and established games, with a limited number of new larger budget productions."
"In order to prioritize high-quality and long-standing successful titles, Digital Bros has reconsidered the number of projects under development and as such, will review the organization structure accordingly to align with the evolving competitive environment in the medium to long-term to ensure maximum operational efficiency," it continues.
It's not clear which teams are on the chopping block, but according to the statement, the "predominant portion" of the Digital Bros layoffs will be "concentrated within the studios". Aside from 505 - publisher of the PC version of Death Stranding, together with Control, Dead by Daylight, and Abzû, among many others - Digital Bros are the owner of Monopoly Tycoon devs DR Studios, Assetto Corsa devs Kunos Simulazioni, Last Day of June devs Avantgarden, Warlords devs Infinity Plus Two, Crime Boss devs Ingame Studios, RPG specialists Nesting Games and FPS specialists Supernova Games.
Digital Bros say the reductions won't impact the company's expected profit-and-loss statement for fiscal year 2023 to 2024, with any restructuring costs being offset by all the money they'll save on payroll.
According to a recent Challenger, Gray & Christmas study passed on by Forbes, 2023 has been a banner year for layoffs in the United States, with the technology industry by far the most affected. It’s a similar situation in Europe, according to Reuters. I've read a few explanations for the bloodshed - some point to the knock-on effects of Russia's war on Ukraine, while others argue that companies are cutting back after staffing up too dramatically during a Covid-era consumption boom created by stay-at-home distancing measures.
Best of luck to all affected by the Digital Bros announcements.