FromSoft Boosts Pay Amid Layoff Trend

FromSoftware has made a bold move by announcing an increase in the starting salaries of new graduate hires, even as the gaming industry faces widespread layoffs. This article delves into FromSoftware's decision and the broader context of layoffs affecting the gaming sector in 2024.

FromSoftware Counters Layoff Trend with Salary Increase for New Hires

Starting Salary for New Hires at FromSoftware Increased by 11.8%

While the video game industry grapples with layoffs in 2024, FromSoftware, the renowned developer behind hits like Dark Souls and Elden Ring, has chosen a different path. The studio has announced a significant boost in its starting salary for new graduate hires, effective April 2025.

New graduates will now receive a monthly starting salary of ¥300,000, up from ¥260,000—a notable 11.8% increase. In their October 4, 2024 press release, FromSoftware stated, "At FromSoftware, we strive to make games that convey emotion, create value, and inspire joy. To this end, we are working towards stable income and a rewarding work environment where our employees can apply themselves to development. This increase in base and starting salaries is one implementation of this policy."

In 2022, FromSoftware faced scrutiny for its relatively low wages compared to other Japanese game studios, despite its international acclaim. The average annual salary was around ¥3.41 million (approximately $24,500), which many employees felt did not adequately cover Tokyo's high living costs.

This salary adjustment aims to align FromSoftware’s compensation with industry standards, following in the footsteps of companies like Capcom, which will increase its starting salaries by 25%—from ¥235,000 to ¥300,000—by the start of the 2025 fiscal year.

Video Game Industry Layoffs Ravage the West, But Japan Stands Strong

2024 has been a challenging year for the global video game industry, marked by unprecedented layoffs. Major companies have cut thousands of jobs amidst restructuring efforts. However, Japan has largely avoided this trend.

This year alone, over 12,000 game industry employees worldwide have been laid off, with companies like Microsoft, Sega of America, and Ubisoft making significant cuts despite record profits. The total number of layoffs in the global gaming sector has already exceeded 2023’s total of 10,500 employees, and the year is not yet over. While Western studios often cite economic uncertainty and company mergers as reasons for these layoffs, Japanese game companies have taken a different approach.

Japan’s stable employment landscape is bolstered by stringent labor laws and a corporate culture that values long-term employment. Unlike the "at-will employment" system in the United States, which allows companies to dismiss employees for almost any reason, Japan's system includes protections against unfair dismissal, making mass layoffs more difficult.

Moreover, several major Japanese companies have followed FromSoftware's lead in increasing starting salaries. Sega raised wages by 33% in February 2023, while Atlus and Koei Tecmo increased theirs by 15% and 23%, respectively. Even amid lower profits in 2022, Nintendo committed to a 10% pay hike for its employees. These moves align with Prime Minister Fumio Kishida’s efforts to encourage wage hikes nationwide to combat rising inflation and improve working conditions.

However, the Japanese gaming industry is not without its challenges. According to The Verge, many developers in Japan endure long working hours, often working 12-hour shifts for six days a week. Contract workers, in particular, face uncertainty as their contracts may not be renewed without technically counting as layoffs.

As 2024 sets a grim record for video game industry layoffs globally, Japan's approach offers a beacon of hope. Gamers and industry watchers alike will be watching closely to see if Japan’s strategy can continue to protect its workforce amidst mounting global economic pressures.