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Power, profits and labor practices in the video game industry

NPR

Published December 1, 2023 at 5:00 AM EST

Video games. A massive global industry expected to generate nearly $190 billion in revenue this year, according to industry estimates.

The gaming industry is making more money than Hollywood — and North American sports.

So why have there been unprecedented layoffs across the gaming world this year?

Today, On Point: Power, profits and labor practices in the video game industry.

Guests

Dianna Lora, worked in the gaming industry for around 15 years. Former senior licensing producer and production manager for the game “Star Wars: Hunters” at the company Zynga. She was laid off earlier this year.

Nicole Carpenter, senior reporter at Polygon, a website covering video games and pop culture.

Also Featured

Rachel Sederberg, senior economist and research manager at Lightcast.

Paula Mackiewicz-Armstrong, quality assurance coordinator at CD Projekt Red, where she works on games like “Cyberpunk 2077.” Member of the Polish Gamedev Workers Union.

Transcript

Part I

MEGHNA CHAKRABARTI: Video games. You probably play them, right? If not you, I will bet that someone very close to you does, because more than 3 billion people around the world do, according to the Amsterdam based data firm Newzoo. And the games vary wonderfully and wildly. There are mobile games like Cat Snack Bar, where you are a restaurant tycoon, who also happens to be a cat, and you take orders, cook food, and serve guests.

And then there are, of course, the console games, like Red Dead Redemption, a western adventure set in the American Southwest and Mexico, and in that one you’re a former outlaw hunting down your old gang members. Then, there is the beloved Italian plumber Mario. Since his first appearance in 1981 in the arcade game Donkey Kong, Mario has spawned more than 200 games of various genres and sub genres. And, get this, as far back as 1990, a survey found that Mario was so popular, kids back then recognized him more often than they did Mickey Mouse.

So all of this is to say that video games are a big business, they’re a huge business in fact. Worldwide, the gaming market is expected to hit roughly $190 billion in revenue this year. The gaming industry makes more money than Hollywood. It makes more money than North American sports. So why, as of late, have gaming companies been laying off people at an unprecedented level?

Industry estimates show that around 8,000 developers have lost their jobs this year. That’s a massive spike from previous years. So what is actually going on? That’s what we’re going to want to explore today, and we’ll start with Dianna Loraa. She’s worked in the gaming industry for about a decade and a half, and until recently, she was the former senior licensing producer and production manager for the game Star Wars Hunters.

Star Wars Hunters, I should say. That’s the full name. And that was at the company Zynga. Dianna, welcome to you.

DIANNA LORAA: Oh, thank you for having me. This is a delight. I’m a big fan.

CHAKRABARTI: I’m not really an intense gamer, but I have been watching in awe as the industry has been growing since those early Mario days, which I don’t want to date myself by saying that, I, in fact, played that game.

But Dianna, I actually want to start at the beginning of your career that about decade and a half ago, what was the first game that you worked on?

LORAA: I actually started out in in theater. I went to school for musical theater. And from there actually was an early day content creator press type person.

So that was, those were my early days in in gaming. My first official game was a Japanese mobile gaming company that doesn’t exist anymore. I want to talk about the volatility of the industry. But this Japanese mobile gaming company started making Otome games for women. Drama, romance type games for the mobile.

CHAKRABARTI: Wow.

LORAA: For the mobile market. Yeah, it was pretty fun.

CHAKRABARTI: Okay. And so what drew you into moving into the industry full time? What was it about it that made it an exciting place to be?

LORAA: Oh, I just love it. It really comes from, I think, the gem of being in theater, a bunch of creative weirdos coming together and making awesome things and putting it out into the world.

What’s not to love about that? It’s the same concept of when you’re making a show on Broadway or when you’re making a movie or when you’re making music, it’s just, it’s that creative outlet. You love it.

CHAKRABARTI: So actually, now that you mentioned movies, audiences for films have been like very habituated for a long time that they know credits are going to come at the end, right?

So they know that it takes hundreds and hundreds of people to make one movie, right? Whether or not they sit around for the credits, can you give us a sense as to how many people it takes to make a modern day, let’s say, big headlining video game?

LORAA: Like a blockbuster type game?

CHAKRABARTI: Yeah.

LORAA: It could, you could easily say it’s hundreds, it arguably like at least 500 to 1,000 people.

It really depends on what you’re making. You have the concept of these blockbuster games that need many studios, that need a lot of people and need a lot of expertise to put it out, to make the cool things that we’re playing and that we’re seeing and makes that, make the water shimmer and makes the character’s hair flow. That all, that takes a group of people to make.

And you could argue, it really depends. Because there are games that take, you can, that make, one person makes it, a group of 10 but, it could be upwards to the hundreds of thousands.

CHAKRABARTI: So in that case, it’s very similar in terms of the variability of how much talent it takes, just like we see in films.

Okay you’re a gamer yourself too, right?

LORAA: Yeah, I am. Yeah, I am.

CHAKRABARTI: Okay, can you, would you mind naming like one or two of your favorites?

LORAA: Oh my gosh, I’m obsessed with Baldur’s Gate 3 right now. They just released a patch, so I need to jump back in, but so I’m obsessed with Baldur’s Gate 3. I’m playing like Dave the Diver, occasionally playing Diablo with my partner.

I played; I have a cycle of games that I go through cause my backlog is ridiculous. There are too many games coming out right now. So it’s always a good time. Always something to do.

CHAKRABARTI: Okay. But you’re not working for Zynga anymore.

LORAA: No, not anymore, no.

CHAKRABARTI: What happened? I got laid off, which is the part of the industry, right?

Yeah. Yeah, you make a game and then eventually you get laid off. Sorry for laughing. It’s very dark. Yeah. I’m sorry.

CHAKRABARTI: You know what? I’m glad you can laugh about it because it’s the only way to push back the darkness.

LORAA: Exactly. I don’t know.

CHAKRABARTI: Did that come in an expected round of layoffs from Zynga?

Or is it, did the game, was it finished and then there’s churn naturally? How did it happen?

LORAA: It was unexpected. I think at this point, we’re starting to get wise, at least the developers are, we’re starting to get wise that when the third quarter hits if things are looking scary that there’s a slight possibility that layoffs may happen. You have your, you know, you have your town halls, and you have your meetings with your leads and they’re like, “No, we’re projecting record profits. Everything looks fantastic. Everything looks great.”

And the next thing you know, like a week later, you’re being brought into a room with HR and they’re like, “Hey, thanks, you’ve been let go for redundancy.” And you’re like, “Wait a minute, hold on a second. I thought we were struggling. How am I redundant?”

CHAKRABARTI: The game that you were working on, Star Wars Hunters.

Was it done when you got laid off or not?

LORAA: No, it’s still in the middle of production, yeah.

CHAKRABARTI: Oh, okay. Okay. So help me understand something. We’re going to talk with a reporter who covers the gaming industry extensively in just a minute here. So you were saying the message you were getting was things are going well for the company. But then you got laid off, what, like a week or two later?

LORAA: Yeah. Yeah, pretty much.

CHAKRABARTI: Okay. And how many of your fellow, of your colleagues got laid off too?

LORAA: I don’t know.

CHAKRABARTI: Okay.

LORAA: I know there was a handful of us, but I sincerely don’t know. As much as we know, of the 8,000 people that have been laid off, it could be potentially even more than that. Because there are a lot of companies that aren’t announcing layoffs or whatever.

You have one person who disappears one day or five people who disappear another day. And then, you don’t know, you just don’t know. And then, you also have, you don’t want to say anything bad about the company, or you don’t want to say, “Hey, I just got laid off.” Because of the shame and stuff that comes along with it.

And so numbers may be even higher than we think.

CHAKRABARTI: So Dianna, does the industry, from the point of view of the workers, does it feel different now than it did when you first dove into it that 15-ish years ago?

LORAA: I think so. It definitely, bigger budgets, a lot more expectations, games as a service. Slash live service games where, you know, instead of just having a standard one game, your game that comes out. Remember, if we want to go back to Super Mario Brothers, you have that one game, one and done. But now you have these games that are, like, multi-yeared, sometimes have 10-year plans.

So the expectation of an exponential growth, it makes it so that the games like last longer, productions last longer, things cost more money. The tech gets fancier. So you need to have, you need to have the hair that looks like it’s real and it’s blowing in the wind. Expectations in the gaming industry are definitely higher.

So that’s where you have like this, you have this sort of this disconnect of we have, where they’re saying, “Record profits, lots of money is being made, lots of money being made.” But then, however, it’s also supposed to be super volatile and their investments in NFTs, Bitcoin, Metaverse, and so the companies are hiring out to build out these industries, those particular industries, the cost that it makes these games, like these are blockbuster games that tends to a hundred million dollars.

LORAA: Yeah. Wow. It’s a lot different.

CHAKRABARTI: We have about a minute before our break and after that we’re going to get a really deep business analysis of what’s going on here. But, Dianna, I imagine that a lot of listeners gamers or not right now are just being like, meh.

There’s like tech layoffs going on, all over different parts of the tech industry, and as a gamer, as long as the game comes out and I can play it, so what’s the big deal? Churn is churn. What do you, what would you say to that?

LORAA: I would say that’s an unfortunate thing. I think that, you have it’s an unfortunate thought process.

You have a situation where these games are being made under, Iin some cases, duress. We need to have some form of a unification. I’m very vocal about talking unionization. The industry is still very young. We need to have some form of protections. Because I personally don’t feel comfortable playing games where I know that people, the people who made it, are under duress.

CHAKRABARTI: Interesting. Again, it seems to me that there’s a relationship to the entertainment industry as a whole, right? Because we just experienced months long strikes, right? In Hollywood. Yeah. For people just trying to put their foot down and say, “Enough is enough.” So looking at how that’s playing out at the, in the video game industry is what we’re doing this hour.

And when we come back after the break, we’re going to hear from a senior reporter who’s taken many deep dives into the business of gaming. So that’s when we come back.

This article was originally published on WBUR.org.