Shuhei Yoshida, a former PlayStation executive, thinks the recent wave of layoffs in the gaming industry happened because companies overestimated their growth during the pandemic. He explained to Whatculture Gaming that these cuts are a correction to the overly optimistic predictions many companies made when gaming boomed during lockdowns.
He explained that the surge in the gaming industry during the COVID-19 pandemic was fueled by excessive optimism. With people stuck at home, video games became a simple and affordable form of entertainment, leading to rapid growth. This attracted a lot of investment, causing publishers to overextend themselves by hiring too many employees and funding projects that weren’t necessarily viable.
As a long-time follower of the industry, I saw a big surge in demand during Covid, but once that died down, things really changed. The people in charge realized growth wasn’t going to keep skyrocketing – it settled back into a more normal, steady pace. Basically, after a couple of years of huge gains, things just leveled off.
He also pointed out the widespread layoffs have been disheartening. Even so, Yoshida is still hopeful about the future of the industry.
He pointed out that we often focus on layoffs, but not on overall hiring. Even after layoffs, many companies still have a growing workforce, suggesting they tend to add employees during prosperous times.
It’s unclear if recent comments from Yoshida are accurate, but many game studios have announced layoffs in just the past month. This includes Behaviour Interactive (the makers of Dead by Daylight), Iron Galaxy Studios, and Polyarc Games (Moss). Epic Games also had significant layoffs, impacting over 1,000 employees, likely due to decreasing player interest in Fortnite.
Yoshida was a long-time employee at Sony, starting with the original PlayStation team in 1993 under Ken Kutaragi. He primarily worked with Sony’s internal game developers, but later shifted to supporting independent developers. He said this change happened because he didn’t agree with the direction then-CEO Jim Ryan was taking. Yoshida eventually left Sony in January 2025.
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2026-05-01 22:41