Former PlayStation executive Shuhei Yoshida believes that the massive layoffs seen throughout the gaming industry in recent years is a direct result of optimism that companies were feeling during the Covid-19 pandemic, when the industry saw immense growth. Talking to Whatculture Gaming, Yoshida said, “The shutdowns and layoffs and the cancellations are the result of these adjustments from the misjudgment that many companies made.”
“I think it was super optimism of the time during Covid-19,” he explained. “The industry grew so much because [people] had to stay at home, and video games were the easiest and cheaper way to be entertained. So they saw this huge increase in growth of the industry, and many investors poured money into the sector, so these publishers over-hired, over-invested. They hired too many people. They invested in projects that they shouldn’t have.”
“And when that additional demand subsided after Covid, the people running these companies saw the reality, that the industry went back to the original steady growth cog, that means that the growth became flat after a couple of years.”
He went on to note how the sheer number of people being laid off has been “really sad.” Despite this, however, Yoshida remains optimistic about the health of the industry in the future.
“People don’t talk about the number of people hired into the industry,” he said. “When you look at the number of people working at these companies even after layoffs, you might see the number of people is still growing. Meaning that these companies tend to hire when things are good.”
While it’s difficult to gauge whether Yoshida’s thoughts have much merit to them, many studios have announced new rounds of layoffs in the last month alone. Among these have been Dead by Daylight developer Behaviour Interactive, Iron Galaxy Studios, and Moss developer Polyarc Games. Epic Games also saw major layoffs affecting over 1,000 of its workers thanks to declining interest in Fortnite.
An industry veteran, Yoshida had worked for Sony since 1993, when he joined the initial PlayStation team under Ken Kutaragi. While he spent much of his time at the company working with first-party development teams, he would eventually move over to handling the company’s indie development support teams – a move which he noted was due to his disagreements with at-the-time Sony Interactive Entertainment CEO Jim Ryan. Yoshida ultimately left the company in January 2025.
