The gaming industry has experienced its fair share of layoffs, with Dauntless developer Phoenix Labs being the latest victim. The layoffs come after the studio’s management team purchased it from Singaporean game company Garena in February 2022, which initially acquired Phoenix Labs in 2020. Polygon estimates that the move impacted around 30 people based on LinkedIn profiles, but the studio hasn’t confirmed how many employees were affected.
The Reorganization
Phoenix Labs explained that the affected workers accounted for 9% of its total employees. While the company was able to reassign many employees, some had to be laid off. The company is providing severance pay and benefits coverage, as well as job placement assistance to any affected employee. The studio noted that people from Montreal and some working remotely in the US have been let go.
Phoenix Labs’ Future Plans
Phoenix Labs has ten projects in varying stages of development, according to the company’s statements back in mid-2022, including the upcoming co-op farming game, Fae Farm. Phoenix Labs has announced that its monster-slaying RPG, Dauntless, has reached at least 30 million players.
Dauntless, a free-to-play RPG, gained traction, with comparisons to the Monster Hunter series. Since the release, the game has maintained a loyal fan base. The game emphasizes multiplayer gameplay, with players coming together to take down formidable creatures. In addition, developers are constantly adding new content and features to the game to keep it fresh.
Downtrend for Gaming Studios
The layoffs at Phoenix Labs come on the heels of similar cutbacks at major gaming companies like Take-Two and Amazon. Gaming companies also saw massive booms as technology improved and more people began staying home due to concerns surrounding COVID-19. At the time, the revenue growth was exceptional. For instance, gaming industry giant Tencent Holding saw its revenue grow by over 25% in Q1 2021 alone.
However, as COVID-19 vaccines became more widely available, people began going out more often, leading to a sharp decline in the industry’s growth. Additionally, a lack of blockbuster games overwhelming enthusiasm hurt the industry. As a result, many gaming companies experienced a significant drop in revenue and had to cut costs wherever possible, including laying off talented personnel.
Conclusion
Gaming companies have had to face challenging times in recent years, with the pandemic leading to significant revenue growth in the early stages. As the world started resuming activity, the trend reversed, with many companies, including Phoenix Labs, taking measures to survive. It’s uncertain what the future holds for the gaming industry, but with many companies struggling, it’s clear that changes are necessary to survive and thrive.
