Microsoft announced significant company-wide layoffs on July 3, impacting its games business. With in-development titles like Rare’s Everwild and The Initiative’s Perfect Dark reboot getting cancelled, Microsoft's cuts have generated a lot of attention and discussion online. One of the industry professionals to lament Microsoft’s decision is EA Japan’s general manager Shaun Noguchi. In his personal comments, which he insisted "do not represent the position of EA," Noguchi criticized overseas companies’ increasing tendency to prioritize short-term results to please shareholders, and spoke out against games being cancelled after many years of development.
These gaming layoffs also saw the closure of Perfect Dark developer The Initiative, and the cancellation of an unnanounced MMORPG at the developer of The Elder Scrolls Online. Overall, Microsoft cut around 9,100 employees. For perspective, Microsoft had around 228,000 employees worldwide as of June 2024, according to official data.
In a memo shared with affected staff, Microsoft Gaming CEO Phil Spencer talked of “focusing on strategic growth areas” and “removing layers of management to increase agility and effectiveness.” Talking about games in particular, he added that “our platform, hardware, and game roadmap have never looked stronger. The success we're seeing currently is based on tough decisions we've made previously. We must make choices now for continued success in future years and a key part of that strategy is the discipline to prioritize the strongest opportunities.”
Microsoft’s reasons for the cuts are framed as restructuring to streamline management and, when it comes to games, to focus on the strongest titles. Commenting in Japanese on this reasoning via X, Noguchi said:
“The word ‘restructure’ contains positive connotations such as rebuilding or boosting efficiency, and tends to be used in a comparatively vague way overseas. However, in Japan 'restructure' is very directly perceived as meaning ‘layoffs’ and its significant impacts are more strongly perceived. Particularly in recent years, foreign-affiliated firms have increasingly demanded short-term results for large-scale investments.”
Noguchi explained that this results in many cases in which “a change in direction is made to meet shareholder expectations before sufficient time has been invested. I perceive this reported incident (Microsoft’s recent layoffs) as something that occurred within such a structure.”
While EA also has a history of laying off workers overseas, mass layoffs of the kind seen in game companies abroad rarely happen in Japan. This is due to the country’s labor laws making it impossible to lay off employees instantly or at short notice. Companies are more likely to gradually decrease their workforce, for example by not renewing the fixed-term contracts of their temporary workers, and by offering financial incentives to permanent employees to encourage them to resign voluntarily. When Final Fantasy Brave Exvius developer Gumi faced financial difficulties back in June last year, for example, it offered buyouts to employees in Japan to encourage them to resign (source: Automaton).
Less scrupulous ways of laying off staff in Japan do exist, however. These include the use of ‘expulsion rooms’ — a passive-aggressive method that basically aims to bore employees into quitting by putting them in a room and giving them nothing to do (note that ‘non-performance of work tasks’ could potentially be used as justification to cut any severance pay when the employee eventually leaves). Bloomberg alleged that Bandai Namco used the ‘expulsion room’ method to try to cut 200 employees last October.
EA Japan’s general manager Noguchi expressed sympathy for the Microsoft employees impacted by the recent layoffs. “The game industry is held up by every single creator and member of staff who diligently develops games on the ground. As someone in the same industry, I feel deep pain regarding this decision.”
Regarding the cancelled games, Noguchi described it as “truly regrettable” both for the developers who have spent years working on titles that will never get released, and the players, who have no chance to experience said games.
However, sometimes games get stuck in “development hell” and in some cases, it might be best for companies to cut their losses. Announced in 2019 and 2020 respectively, both Everwild and the Perfect Dark reboot had been in development long before then. Asked by X user Tayetalks about whether games under development for a long time with no end in sight should continue to be supported or be cancelled, Noguchi replied:
“This is just my personal opinion but if a game was in development for 7~10 years, canceling feels like the worst move. That’s a decade of work, potentially a quarter of someones (sic) entire career completly (sic) lost. Even if the final product isn’t what people originally expected, I think it still deserves to ship. Something is better than nothing for both the team and for the players. But also, don’t announce games when they’re still half baked,” adding that “hype with no follow through burns trust both for fans and the studio.”
Co-creator and designer of the original Xbox, Seamus Blackley, expressed similar sentiments in a post addressing the cancellations on Bluesky: “Think of the number of great games that had troubled development histories. All of them? Now consider how often executives cancel troubled games. Smooth development comes only when you take no risks. Greatness comes only when great risks are braved.”
Verity Townsend is a Japan-based freelance writer who previously served as editor, contributor and translator for the game news site Automaton West. She has also written about Japanese culture and movies for various publications.
