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Amazon is the latest company to cut jobs in the gaming industry

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  • Written by Tom Gerkin
  • Technology reporter

Image source, Amazon games

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Amazon is the global publisher of the online game Lost Ark

Amazon has become the latest company to cut jobs in the gaming industry, cutting 180 jobs amid restructuring.

The internet giant, which owns game streaming site Twitch, is shutting down its own channel on the platform after struggling to gain popularity.

These are the latest cuts to hit the gaming industry in 2023, which has seen around 6,500 jobs lost.

This comes despite a year that saw the release of successful games from series such as Zelda, Spider-Man and Mario.

In the past six months, gaming companies, including Fortnite maker Epic Games, Assassin’s Creed developer Ubisoft Montreal, and Pokemon Go maker Niantic have announced sales.

Amazon Games was founded in 2012, initially to make games for mobile devices, but has since branched out into larger titles including online games New World and Lost Ark.

In an email to employees seen by the BBC, Amazon said the cuts were part of restructuring efforts.

“After our initial restructuring in April, it became clear that we needed to focus our resources more on the growth areas with the highest potential to move our business forward,” wrote Christoph Hartmann, vice president of Amazon Games.

But he also said the company is hiring for other positions in its gaming division.

Impact of the epidemic

Christopher Dring, president of gaming news site GamesIndustry.biz, said job losses in gaming were a result of the mass hiring that occurred at the start of the pandemic in 2020.

“While people were stuck at home, they turned to video games, not only for entertainment but also to connect and play together,” he said.

“This caused a surge in toy sales – with sales rising by over 50% in the UK.

“Game studios were expanding and adding new teams, game developers were leaving their jobs to form new studios, and companies like Microsoft, Sony, Tencent, Embracer, Amazon, Take-Two, EA, etc. were spending billions of dollars to buy up companies.”

But when lockdowns ended around the world, sales began to slow, with rising inflation also contributing to the decline.

“Companies spent a lot of money during that period, costs went up, and now we are seeing a really painful ‘correction’ where companies have been able to get their costs under control.”

A banner year for gaming

The year 2023 saw many positive points for players, who had the freedom to choose the games they would play.

There were plenty of highly rated games to name, including Baldur’s Gate 3, Zelda: Tears of the Kingdom, and Spider-Man 2, while new entries in the Super Mario and Sonic the Hedgehog franchises received plaudits.

Not to mention surprise hits like Sea of ​​Stars, Hi-Fi Rush, and Dave the Diver.

For those on the outside, it’s difficult to explain why the gaming industry would see such job cuts during a period of critical acclaim – but for those on the inside it’s less surprising.

Mike Rose, head of Manchester-based games publisher No More Robots, said many companies were spending more money than they were making in sales and now needed to reduce their “burn rate”.

“We all knew this would happen,” he added. “All of these big studios have hired a ton of incredible talent during the pandemic, and their work is now starting to pay off — but… [sales] “Not as high as these people want.”

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