The games industry has had a rough year, and the numbers back that up. Xbox’s new CEO Asha Sharma announced 3,200 layoffs and four studio departures when she took over, promising a “return of Xbox” that came with the cuts. Bungie, EA, PUBG Productions, Take-Two, Warner Bros., Epic, and many others followed with their own rounds of job losses.
But there is one corner of the business that has mostly avoided the headlines: Japan. The Japanese video games sector has weathered the storm better than the West, according to Amir Satvat, who runs the ASGC Games Industry Layoffs Tracker since 2022. His tracker shows that 57,628 jobs were lost across the whole industry between 2022 and 2026. In 2026 alone, 96 percent of all the jobs lost in the video games industry were in North America and Europe.
Satvat spoke with Edge magazine, whose interview was republished by the Knowledge newsletter. His central argument is simple: Japanese studios stay healthy because they keep their teams small, pay their leaders modest salaries, and refuse to chase the live-service blockbuster trend.
The Numbers Behind the Layoffs
The scale of the Western losses is hard to miss. Satvat estimates there was a 12-to-18-month period where over half of global layoffs occurred in California alone. He told Edge that for game developers based in North America or western Europe, working in a traditional triple-A studio, “this is as bad as the ’83 crash.”
Epic’s Tim Sweeney commented that “this is the worst videogame crash, or disruption, that we’ve seen since the 1980s.” Satvat notes that Japan’s biggest studios have shown real resilience through the crunch, suggesting the current model isn’t working.
The difference in how studios handle cuts matters. In Japan, the typical process is to target contractors based outside the country rather than local workers. Satvat describes it as a move to “protect core staff in Japan.”
What Makes Japanese Studios Different
Satvat points to three main factors that set Japanese studios apart:
- Smaller teams. Japanese studios tend to be much leaner than Western counterparts.
- Reasonable executive pay. Leaders earn two or three million dollars, not 30 million.
- Specialized focus. They avoid chasing trends like live-service blockbusters.
He notes that the region isn’t “a utopia.” But the numbers are striking. Everyone calls out Nintendo, but Satvat points to Konami and Capcom as examples of companies with staff retention of 97 percent plus.
“Notable here is the $38.6m salary awarded to EA boss Andrew Wilson last year. Take-Two’s Strauss Zelnick earned $42.1m in 2022 – which has almost certainly increased since then. Both companies laid off staff this year,” Satvat said.
The comparison is stark. Japanese studios keep nearly all their staff while Western leaders collect tens of millions in compensation.
The Companies Holding Up
Capcom is one example of a Japanese studio thriving despite the broader downturn. The company has released games like Pragmata, Resident Evil Requiem, and Onimusha this year.
Nintendo is also holding steady. The company consistently breaks sales records, illustrating the region’s resilience.
Koei Tecmo is explicit about its approach. The studio states it believes in smaller titles to fuel its continued successes.
The Pay Gap Between Regions
The disparity in executive compensation is a major part of the story. Satvat cites Andrew Wilson’s $38.6m salary at EA and Strauss Zelnick’s $42.1m at Take-Two, noting both companies laid off staff this year.
The gap between Japanese leaders and Western ones is wide. Japanese leaders earn two or three million dollars, Satvat says, while Western executives earn 30 million or more. The contrast between Japanese studios and Western ones is striking. One region holds onto its people while the other cuts thousands. One pays its leaders modest sums while the other hands out tens of millions. One chases trends while the other stays specialized.
What Western Studios Could Learn
Satvat’s message is blunt: the current model isn’t working. The Western pattern of large teams, high executive pay, and trend-chasing live-service blockbusters is unsustainable, he argues.
He offers a practical takeaway. Smaller teams, more reasonable executive payments, and a focus on specialist subjects will be more beneficial than the current model.
The contrast between Japanese studios and Western ones is striking. One region holds onto its people while the other cuts thousands. One pays its leaders modest sums while the other hands out tens of millions. One chases trends while the other stays specialized.
Satvat’s tracker tracks layoffs, not the industry’s overall health. But the resilience of Japan’s biggest studios suggests a path forward. Smaller teams, reasonable pay, and focused development might just be the way to weather the downturn.
The year has been grim for many. The contrast with Japan offers a lesson in how to survive.
Source material: “Why do Japanese studios suffer fewer layoffs? Because they have smaller teams and don't pay their execs $30m, says one expert,” Eurogamer.
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