FromSoft Boosts Pay Amid Layoff Trends

FromSoftware has announced a significant increase in the starting salaries of new graduate hires, a move that stands in stark contrast to the widespread layoffs affecting the gaming industry in 2024. Let's delve into FromSoftware's decision and the broader context of layoffs within the gaming sector.

FromSoftware Counters Layoff Trend with Salary Increase for New Hires

Starting Salary for New Hires at FromSoftware Increased by 11.8%

Amidst the concerning trend of layoffs in the video game industry this year, FromSoftware, renowned for titles like Dark Souls and Elden Ring, has made a bold move. The company has announced a substantial increase in starting salaries for new graduate hires, effective from April 2025.

New graduates will see their monthly starting pay rise from ¥260,000 to ¥300,000, marking an impressive 11.8% increase. In a press release dated October 4, 2024, 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."

Previously, FromSoftware faced criticism in 2022 for offering wages that were relatively low compared to other Japanese game studios, despite its global success. The average annual salary at FromSoftware was reported to be around ¥3.41 million (approximately $24,500), which some employees argued did not adequately cover the high cost of living in Tokyo.

This salary adjustment is a step towards aligning FromSoftware's compensation with industry standards, following a trend set by other companies such as Capcom, which will increase its starting salaries by 25%—from ¥235,000 to ¥300,000—by the beginning 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 as part of restructuring efforts. However, Japan has largely managed to avoid 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 implementing significant cuts despite reporting record profits. The total number of layoffs in the global gaming sector has already surpassed the 2023 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 reductions, Japanese game companies have taken a different approach.

Japan's stable employment landscape can be attributed to its stringent labor laws and long-standing corporate culture. Unlike the "at-will employment" system in the United States, which allows companies to dismiss employees for almost any reason, Japan has robust worker protections. Companies face legal barriers to mass layoffs, including the principle of unfair dismissal, which limits arbitrary terminations.

Furthermore, like FromSoftware, many major Japanese companies have increased their starting salaries. For example, 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 increases align with Japan’s Prime Minister Fumio Kishida’s push for wage hikes across the country to address rising inflation and improve working conditions.

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

While 2024 has set a grim record for video game industry layoffs globally, Japan has largely managed to avoid the brunt of these cuts. Moving forward, the gaming community will be watching closely to see if Japan's approach to combating widespread layoffs can continue to protect its workforce, especially as global economic pressures mount.