Layoffs Hit Tech, But FromSoftware Hikes Salaries

FromSoftware's recent announcement of increased starting salaries for new graduates stands in stark contrast to the widespread layoffs sweeping the gaming industry. This article explores FromSoftware's decision and the broader context of the 2024 gaming industry downturn.

FromSoftware's Counter-Move to Industry Layoffs

FromSoftware Boosts Starting Salaries by 11.8%

While 2024 has seen significant job cuts across the video game industry, FromSoftware, the developer behind acclaimed titles like Dark Souls and Elden Ring, has taken a different path. The studio has implemented a substantial 11.8% increase in starting salaries for new graduate hires.

Beginning April 2025, new graduate hires will receive a monthly salary of ¥300,000, up from ¥260,000. In a press release dated October 4, 2024, FromSoftware stated that this increase reflects their commitment to a stable and rewarding work environment that fosters employee development and contributes to creating emotionally resonant and valuable games.

In 2022, FromSoftware faced criticism for relatively lower wages compared to other Japanese game developers, despite its international success. Previously reported average annual salaries of around ¥3.41 million (approximately $24,500) drew attention to the disparity between compensation and the high cost of living in Tokyo.

This salary adjustment aligns FromSoftware's compensation more closely with industry standards, following the lead of companies like Capcom, which will increase 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 video game industry experienced unprecedented layoffs in 2024, with thousands of jobs lost at major companies like Microsoft, Sega of America, and Ubisoft, despite record profits. The total surpasses 2023's 10,500 job losses, and the year isn't over yet. While Western companies cite economic uncertainty and mergers, the Japanese gaming industry presents a contrasting picture.

Japan's stable employment market is largely attributed to its robust labor laws and corporate culture. Unlike the "at-will employment" prevalent in the United States, Japan's worker protections create significant barriers to mass layoffs. The principle of unfair dismissal limits arbitrary terminations.

Furthermore, many major Japanese game companies, mirroring FromSoftware's actions, have increased starting salaries. Sega's 33% wage increase in February 2023, along with similar increases from Atlus (15%) and Koei Tecmo (23%), illustrate this trend. Even with lower profits in 2022, Nintendo implemented a 10% pay raise. These actions may reflect Prime Minister Fumio Kishida's national push for wage increases to combat inflation and improve working conditions.

However, challenges remain. The Verge reports that many Japanese developers work excessively long hours, and contract workers face vulnerability due to the potential non-renewal of contracts without formal layoff classification.

Despite 2024's record-breaking global layoffs, Japan's gaming industry has largely avoided widespread job cuts. The long-term sustainability of this approach, especially amid escalating global economic pressures, remains to be seen.