FromSoft Bucks Layoff Trend, Ups Salaries

FromSoftware's recent announcement of increased starting salaries for new graduate hires stands in stark contrast to the widespread layoffs sweeping the gaming industry in 2024. This article explores FromSoftware's decision and the broader context of the industry's current challenges.

FromSoftware's Counter-Trend Salary Increase

FromSoftware Boosts Starting Salaries by 11.8%

While 2024 has witnessed significant job cuts across the video game industry, FromSoftware, the celebrated creator of Dark Souls and Elden Ring, has taken a different path. The studio has implemented a substantial 11.8% increase in starting monthly salaries for new graduate hires.

Beginning April 2025, new graduates will receive ¥300,000 per month, up from ¥260,000. In a press release dated October 4, 2024, FromSoftware stated their commitment to "stable income and a rewarding work environment" to support employee development. This salary increase is a key element of that commitment.

The company previously faced criticism in 2022 for comparatively lower wages than other Japanese studios, despite its international success. The reported average annual salary of ¥3.41 million (approximately $24,500) was noted by some employees as insufficient to cover Tokyo's high cost of living.

This adjustment aligns FromSoftware's compensation more closely with industry norms, mirroring moves by companies like Capcom, which is raising starting salaries by 25% to ¥300,000 by the start of the 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

2024 has been a turbulent year for the global gaming industry, marked by unprecedented layoffs. Thousands of jobs have been lost at major companies undergoing restructuring, particularly in North America and Europe. However, Japan has largely avoided this trend.

Over 12,000 game industry employees worldwide were laid off in 2024 alone, with companies such as Microsoft, Sega of America, and Ubisoft implementing significant cuts despite record profits. This surpasses 2023's total of 10,500 layoffs. While Western studios often cite economic uncertainty and mergers as reasons, the Japanese approach differs.

Japan's stable employment environment is largely attributed to robust labor laws and established corporate culture. Unlike the "at-will employment" prevalent in the United States, Japan's worker protections create legal barriers to mass layoffs, including safeguards against unfair dismissal.

Many major Japanese companies, like FromSoftware, have also increased starting salaries. Sega increased wages by 33% in February 2023, followed by Atlus (15%) and Koei Tecmo (23%). Even with lower profits in 2022, Nintendo implemented a 10% pay raise. These actions may be a response to Prime Minister Fumio Kishida's push for nationwide wage increases to combat inflation and improve working conditions.

However, challenges remain. Reports indicate that many Japanese developers work excessively long hours, often 12-hour days, six days a week. Contract workers are particularly vulnerable, as contract non-renewal avoids the technical classification of a layoff.

Despite 2024's record-breaking global layoffs, Japan's gaming industry has largely avoided the worst of the cuts. The long-term sustainability of this approach, especially given increasing global economic pressures, remains to be seen.