Why did all gaming companies go a HUGE hiring spree during COVID?

DR3AM

Dreams of a world where inflated review scores save studios
Gaming was at an all-time high because people couldn't do anything else besides game, watch TV and have sex (either of the two major forms of individuals that occur in many species and that are distinguished respectively as female or male especially on the basis of their reproductive organs and structures).

We all knew that it would not last but somehow all these publishers decided to hire anyone who applied. Not only that, but some of the gaming vets also started to create their own studios as well. 3-4 years later, we have all these layoffs and studio closers because things have gone back to normal. In addition, whichever genres were popular years ago, has no market anymore. Just look at Concord.
 
(either of the two major forms of individuals that occur in many species and that are distinguished respectively as female or male especially on the basis of their reproductive organs and structures).
Ice Cube Reaction GIF
 
Isn't the short answer, due to Covid, they expected more people to stay home, therefore having more time to play games, therefore the greater chance to cash in on the lockdowns?
 
All of tech over-hired during COVID it wasn't exclusive to the games industry - Twitter, Facebook, Microsoft, Google, AWS - pick tech company and they over-hired
 
They had loads of zero interest finance available to them and thought their stuck-at-home audience was going to be their hostage forever.

Same as asking: why did all the sailors get blind-drunk when we offered them free beer?
 
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Gaming was at an all-time high because people couldn't do anything else besides game, watch TV and have sex (either of the two major forms of individuals that occur in many species and that are distinguished respectively as female or male especially on the basis of their reproductive organs and structures).

We all knew that it would not last but somehow all these publishers decided to hire anyone who applied. Not only that, but some of the gaming vets also started to create their own studios as well. 3-4 years later, we have all these layoffs and studio closers because things have gone back to normal. In addition, whichever genres were popular years ago, has no market anymore. Just look at Concord.
Because western buisnesses only care about short term profits not long term healthy companies like their eastern counterparts. Nintendo, Capcom, Mihoyo, Shift Up, Pearl Abyss, etc. didn't overhire during the pandemic, and they have not had to have any huge headcount reductions.
 
Gaming was at an all-time high because people couldn't do anything else besides game, watch TV and have sex (either of the two major forms of individuals that occur in many species and that are distinguished respectively as female or male especially on the basis of their reproductive organs and structures).

We all knew that it would not last but somehow all these publishers decided to hire anyone who applied. Not only that, but some of the gaming vets also started to create their own studios as well. 3-4 years later, we have all these layoffs and studio closers because things have gone back to normal. In addition, whichever genres were popular years ago, has no market anymore. Just look at Concord.

Most of these larger businesses are run by professional managers, or industry vets who learned the professional management doctrine. This is what people are taught in MBA programs. One of the core tenants is when you're doing well, you go all-in and invest, expand, and make bigger plans because you may not get another shot to do so in the future. Publicly traded companies are often not allowed to build up a huge war-chest of cash to help them survive tough times. Investors want to get paid ASAP and don't care about the long term health of the company.

Part of that professional management doctrine is that professional managers and executives are not supposed to fear/avoid downsizing and layoffs in the future. You're supposed to be able to put your feelings aside (assuming you have some to begin with) and do whatever is optimal for the business. I didn't go to business school, but I made the move from being a SME into a Management role about 6 years ago. One of the first challenges I had to face was reducing the headcount of my department, which meant I had to lay off one of the guys I was closest to at my company. We had been work friends for 10 years. That was the challenge of being a manager - could I set my emotions aside and do what the math said was best for the business? It sucked, but I did it, and it was the right thing for the business. I still feel guilty about it to this day.

Only private businesses run by leaders who are interested in building something sustainable and stable are able to architect their companies in such a way that it's in-line with our natural emotions. I always think of Erik Wolpaw:
"In 2004, Wolpaw was diagnosed with ulcerative colitis. Expecting his condition to require a departure from the company, he spoke with managing director Gabe Newell, who surprised him by offering an extended leave with pay. "Your job is to get better," Newell said. "That is your job description at Valve. So go home to your wife and come back when you are better."​
That's what a privately run company with a caring leader can do. Big companies just don't work that way, so we shouldn't expect them to. I got a job working for a small privately held company in 2007, and I'm still there for exactly this sort of reason. They don't look at me as a slot on an Org chart - they look at me the person first, and value me for what I am able to contribute to the business.
/soapbox

With video games, it's just unreasonable to expect a major hardware OEM or publisher to be anything other than a publicly traded company. As such, they have to play by the professional management doctrine. Their purpose is to maximize value and/or dividends for shareholders. They're not in business to build and support a tribe.
 
Because company has a certain DEI quota to fill in 2020-2024, your company need to have an x amount of people with x skin color.

If they failed to do that, Sleepy Joe is gonna visit their HQ personally, beat up their CEO and then cut all blackrock funding
 
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Not a game industry specific issue. All of tech industry did this. There were financial incentives to do so and remote work made hiring more qualified people easier than ever.
 
Surge in demand, lots of ESG money, the realization that forced transitioning to remote working due to circumstance hurts productivity, all propped up by the belief that constant market expansion was possible.

Classic bubble conditions.

Not a complicated set of circumstances to grasp.
 
They had a ton of money that could not be invested the same way as usual, but still needed to be invested somewhere to keep on track that artificial "growth" indicator. So they invested in the only thing that could still somehow work "from home" which was everything related to computer science, information system, development etc...
 
Lots of grant money and the fear that work from home would hurt productivity, so overhire to compensate.

I guess.
 
TLDR version, they bet on Covid ushering in a new reality where people were stuck mostly indoors and tried to position video games on the entertainment frontline. And when that failed to materialize as any 10 year old would have have predicted, we're now 3 years into all the layoff course corrections. Naturally, the people who made these decisions in the first place are all still gainfully employed or earn enough to navigate a downturn while the creative trench workers suffer, as capitalism demands.
 
Business was booming, money was cheap to borrow and no one knew exactly how long the whole pandemic would go on, companies decided they'd rather be ready for "the new normal" instead of being caught off guard and not being able to meet demand.

Also hiring people is temporary, once the circumstances changed they could always just fire them, as they are doing now. You think the people in charge of these big corporations give a shit? It's basically just numbers of a spreadhseet to them. Even the PR cost is negligible, at the end of the year Geoff will make a sad remark about the layoffs at TGA...then go on to promote and advertise games from these companies for 3 hours lol.
 
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It's math and finance basics, actually

Example:
Company has 10 employees, doing maintenance for a game that has 1000 players per hour. Covid comes, the player count goes to 10k per hour and 10 employees are not enough, so company gets to 100 employees to get the % equal as before

Covid goes out and the player count drops to 2000. Not only the 100 people are way too much, but having 20 people, which could be a % scale, also doesn't make much sense since the tools changed and got more automated. Also prices for taxes, employees, machinery and software got more expensive. Company can only get so much money or they will have backlash
 
To maximize sucking money out of the payroll subsidy schemes. It wasn't 100% in most places so you're still gambling that the workers will add some value (improve productivity and quality, get game out sooner). Imho most lost that gamble.
 
In part due the Great Resignation. Once COVID hit and people was forced to stay at home they started valuing things like having some kind of land where to walk, grass to step on, an extra room to break from being with everyone else, etc. So, many seniors quit their jobs and moved from cities to suburbs and even farther areas. They started looking for jobs that could be made remotely, and companies obviously noticed they could hire extremely talented people from different countries, no longer restricted by geography. So, not only gaming companies, every IT company hired fast and furiously.

Now, add that people confined in their homes needed a way to escape reality and found gaming the perfect excuse, and gaming companies just went full in, knowing that they could make good numbers even if that trend was short-lived.
 
Why not? There was a surge in comsumption that could signal a big growth in the industry. It was a bet, like all businesses make all the time.

There is 0 incentive to not play aggressively when hiring when you take into account that talent is scarce (at least good talent) and you are not obligated by law to pay severances (at least in the US). So if you have 200 employees and you can hire 100 more, even if it's just for a year, and later let go 100 employees you just need to keep the best 200 (by whatever metric they decide to use) even if they are not the 200 original ones.

In any case, hiring is better than not, even if you are sure it won't last for both the business and the employee. Those employees got 1 year experience or whatever and 1 year of paid employment, even if it didn't last forever or a long time.

In my country companies are obligated to pay severance aligned to the time they served in the company. That makes companies to be more conservative with their hiring decisions and while it's good for the employee to leave with some extra money, it really makes it hard to grow your teams for short spurs.
 
All the technology companies were stockpiling developers, so anyone could get a job, even if they didn't do anything. It's basically bloat, now many are being fired because there's no need for it all. And it's not about "AI" either.
 
Companies were making more money, so they hired more people, then they thought they would make the same amount of money after COVID... turns out people running those multi million and billion $ companies didn't realise that COVID profits/revenue were a unicorn.

Now the shareholders are crying and really want those numbers back, but they won't because COVID unicorn money making doesn't exist anymore.
 
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