Why do Japanese studios suffer fewer layoffs? Because they have smaller teams and don’t pay their execs $30m, says one expert
Japanese video game studios have proven more resilient during an industry-wide period of mass layoffs, according to industry analysts. While Western studios have seen significant workforce reductions throughout the year—including 3,200 layoffs and four studio closures at Xbox, along with major cuts at Bungie, EA, PUBG Productions, Take-Two, Warner Bros., and Epic Games—Japanese developers have largely avoided similar upheaval.
An expert quoted in Edge magazine attributes this disparity to fundamental structural differences between Eastern and Western game development. Japanese studios typically operate with smaller team sizes compared to their Western counterparts, which may provide greater financial flexibility during economic downturns. Additionally, Japanese executives receive significantly lower compensation packages—reportedly around $30 million less than their Western equivalents—allowing companies to maintain more sustainable cost structures.
These differences suggest that the Japanese gaming sector currently enjoys better overall health than the Western industry. The contrast highlights how organizational structure and executive compensation practices can influence a studio’s ability to weather industry challenges. While layoffs do still occur in Japan, they appear far less frequent than the wave of cuts affecting major Western publishers and developers.