Why Japanese Game Studios Are Avoiding the Layoff Crisis

While North American and Western European game studios have shed tens of thousands of jobs over the past three years, Japanese developers have remained largely stable, and an industry expert has a clear explanation for why the gap exists.

Ground Zero Is Not in Japan

Amir Satvat, a former Tencent Games business development director and inaugural Game Awards Game Changer, framed the current downturn in stark geographic terms in comments shared by PC Gamer. “I think this is as bad as the ’83 crash if you’re a game developer based in North America or Western Europe, in a traditional triple-A studio,” Satvat said. “That is ground zero for the destruction.” Japan, by contrast, tells a very different story. Satvat noted that companies like Nintendo, Konami, and Capcom maintain staff retention rates above 97%, a figure that would be unthinkable at many Western publishers right now.

Smaller Teams, Smarter Scope

According to Satvat, one of the core structural reasons Japanese studios have held up is that they never inflated their workforces the way Western studios did during the boom years. “My understanding is that, generally, Japanese teams tend to be much smaller and leaner,” he said, as reported by PC Gamer. “They didn’t get swept up in the live-service trend, or into these mega-blockbusters with 500-person teams.” That restraint in project scope meant Japanese studios did not need to execute painful mass cuts when market conditions tightened. Western studios, many of which hired aggressively during the pandemic and chased long-shot live-service models, found themselves dramatically overstaffed once player spending normalized.

The Executive Pay Gap

Satvat also highlighted a striking disparity in executive compensation between Japanese and Western studios. Japanese executives, he said, “still make great money, but it’s two or three million dollars, not 30 million.” That difference of roughly an order of magnitude means Japanese companies carry far less fixed overhead at the top, which reduces pressure to cut lower-level staff when earnings disappoint. The broader salary picture is more complicated, though. A 2019 CEDEC survey put the average Japanese game developer salary at around $37,000, well below the figures common in the United States, where a 2025 GDC Salary Report placed average industry pay at $142,000 across 500 respondents. Satvat did not address developer compensation directly, and the gap in pay at the worker level is a separate conversation from the layoff question.

Not a Perfect Picture

Satvat was careful to note that Japan is not immune to job losses. Mass layoffs have occurred at Japanese gaming firms in recent years, just at a much lower frequency and scale than what has played out in North America and Europe. The overall pattern, however, is clear enough to draw meaningful conclusions: a culture of staff retention, disciplined project sizing, and restrained executive compensation has given Japanese studios a buffer that their Western counterparts largely did not build.

Sources: PC Gamer