Game developers face mass layoffs

By Baek Byung-yeul

A massive layoff is looming large over the game industry as Nexon and other game companies are moving to let a lot of workers go to bolster their worsening bottom lines amid deteriorating business conditions, according to industry officials, Monday.

In the second quarter of 2019, 15 game companies among 35 listed firms saw their operating profits plunge, three times more than that of 2013. The operating profit of the so-called big three ― Nexon, Netmarble and NCSOFT ― also decreased by more than 10 percent in the second quarter year-on-year.

“Korean game companies have been facing many unfavorable business conditions as their products have been banned in China for almost three years, and most of their new games have failed to draw attention from gamers. Due to the sluggish economy, gamers in their 30s and 40s, a major profit source for game companies, are not opening their purses as well. In such a situation, it is evitable for them to restructure their manpower,” an official at a mid-tier game company said.

“Due to a lack of feasibility, some game companies have halted game development projects and relocated staff to other departments. Also, growing competition with games from overseas game makers have made it difficult to do business,” he said.

A gamer working for a major industry player wrote an article in an online community noting that his company recently started to carry out a reshuffle, reducing its manpower.

“After our game went bust, my team was also disbanded. They (the management) asked me to work hard for the rest of my days at the company. Thanks for the compensation money,” the gamer posted the message on Blind, an anonymous chat app for employees, saying mass layoffs at the company had begun.

Nexon, one of the largest game companies here, is also rumored to be considering dismissing employees. Its union held a rally in September, urging the company to come up with a stable and secure employment plan.

Nexon recently decided to stop developing “Peria Chronicles” which the company had invested more than 60 billion won ($50 million) in for eight years. Nexon's union presumed that about 200 employees at the company are set to lose their jobs.

An industry official said there should be more exceptions to the 52-hour maximum workweek> He said the 2018 policy shortening the workweek from 68 hours to 52 has hindered companies from meeting deadlines for new games and burdened them with additional labor costs.

“Of course the 52-hour workweek is a welcoming move for us because employees in the game industry had to work long hours to develop new games. However, given that game developers are required to provide seamless services to players around the clock, improvements or support measures should be provided as necessary,” the official said.