The year 2024 began with a burst of job losses in Quebec video games. The last year did not generate the expected revenues for this highly globalized industry, which should however return to growth in the coming months.
With US$184 billion in annual revenue, 2023 was a year of zero growth for the video game sector. This is after a year 2022 when revenues generated by the entire sector stood at US$183 billion, down compared to the previous year for the first time in 10 years.
The trend should reverse. The specialized analysis firm Newzoo has just published its most recent forecasts and anticipates revenues of US$189.3 billion in 2024, then US$197 billion in 2025, the year when the decline suffered over the past two years would finally be erased. .
“The expected rebound should be significant,” predicts Newzoo video game analyst Tom Wijman. “One of the drivers of this recovery is the growing base of owners of PlayStation 5 or Xbox Series consoles, from Sony and Microsoft, which should restore momentum to massively multiplayer online gaming platforms as well as their existing game catalogs . » These platforms, like the very popular Fortnite, continue to attract not only new players, but also new partners. The Walt Disney Company announced last week a US$1.5 billion partnership with Epic Games, creator of Fortnitethanks to which it will associate its own brands with that of video games.
Like many video game enthusiasts and professionals, Newzoo is also eager to see Nintendo unveil the details of the console which should replace the Switch, which is currently 7 years old and whose sales have slowed considerably in recent months. Rumors of a console with the same power as its rivals from Sony and Microsoft and the same portable format as the current Switch will boost sales, believes Tom Wijman. “The video game world is eager to know more about this new console,” he assures.
A simple adjustment
Why then, if optimism reigns in the industry, have we seen announcements of job cuts in recent months?
Is it the fear of a global recession caused by inflation and high interest rates? Not necessarily. The popularity of video games, unlike other consumer sectors, does not necessarily evolve in line with the broader health of the economy. It is therefore not fears of a recession that are dampening investment.
As proof, the PwC firm pointed out last summer, sales of games and consoles exploded during the enormous financial crisis of 2008. And as fears of a recession in 2024 seem less and less founded, they do not do not explain the layoffs of recent months.
At the Quebec Video Game Guild, we put everything into perspective. First, around 400 positions have been eliminated in the province in recent weeks. This is a very small proportion of the approximately 15,000 jobs there at the end of 2023. It is obviously heartbreaking for the dismissed employees, but Jean-Jacques Hermans, general director of the Guild, is reassuring. “A good portion of these people are easily replaced; we see on the studio websites that they continue to actively hire,” he says.
In fact, these cuts signal a restructuring of the workforce following mergers and acquisitions between large foreign publishers. This is the case for Eidos and Rovio, in particular. Other publishers have instead wanted to eliminate positions that were no longer required given the completion of particular projects, adds Mr. Hermans.
“That being said, the overall industry is restructuring after the excesses of the pandemic period, and we are in Quebec still well beyond the employment figures preceding 2020,” he adds.
The Director General of the Guild specifies that job losses in the North American technology sector outside of video games should cause much more concern. Digital giants and several other technology companies have effectively slashed tens of thousands of jobs in recent months, and they are promising to use more automation as well as artificial intelligence applications to reduce their labor costs. of work.
The Video Game Guild promises a modest return to growth for its sector over the coming months, but which will continue into the following year. “The 2025 horizon seems more realistic for a return to sustained growth,” predicts Jean-Jacques Hermans.