The video games sector is suffering. Take-Two, the publisher of the very popular “Grand Theft Auto” (GTA) and “NBA 2K”, announced this Tuesday, April 16, the layoff of 5% of its staff, or several hundred people. An announcement all the more surprising as it takes place just a few days after the takeover of the Swedish giant Gearbox Entertainment, acquired for nearly 460 million dollars.
A tree that perhaps hides a forest. Because within the confines of the American giant, the time has come to save money. Thus, Take-Two’s board of directors “approved a cost reduction plan aimed at identifying efficiencies across its operations and improving the company’s margins, while continuing to invest to growth,” the company says.
The cost of the plan is estimated between $160 and $200 million. And according to information communicated by the group to the American market watchdog (SEC), certain projects have already been aborted.
An unprecedented crisis
Take-Two, however, is no exception. The situation of the company, which until now had more than 11,000 employees, is in reality following in the wake of its competitors. 1,900 positions cut at Microsoft, 1,800 at Unity, 375 at Amazon Games. In total, more than 10,000 job cuts would have been made in 2023. The year 2024 does not seem to be under better auspices: 255 companies in the sector have already laid off more than 74,000 people, according to the specialized site. Layoffs. fyi.
Talking about a crisis is therefore not excessive. It would even be one of “the most difficult that the industry has ever known”, confided Anne Dévouassoux, president of the National Video Game Union (SNJV) to our colleagues at West France. Faced with this decline, several possible explanations emerge. First, market saturation. Last year, some of the most important titles arrived almost simultaneously: The Legend of Zelda, Hogwarts Legacy, Diablo IV, Baldur’s Gate III, and even Final Fantasy.
Unsurprisingly, this risky sequence has its origins in the health crisis. During confinement, “there was an overconsumption of video games and the market was very dynamic in terms of sales” Anne Dévouassoux recently explained to West France. Problem: this enthusiasm has reinforced companies in the idea that they had to produce more, and faster.
GTA VI, eagerly awaited by players, even more so by the publisher
Second, the gradual end of “Whatever it takes” followed by the rise in electricity prices caused by the outbreak of war in Ukraine has significantly contracted household purchasing power. According to an Odoxa survey carried out this fall, leisure is the second category most affected by spending reductions: eight out of ten French people have cut back on this type of spending, and almost one in two French people “have it a lot do”.
But with the highly anticipated release of GTA VI next year, Take-Two hopes to replenish the coffers. Released in December, the trailer, which shows chases, yacht parties, and, for the first time, a female protagonist, was viewed more than 42 million times on YouTube in just seven hours… Enough give the publisher hope of obtaining a generous jackpot.