FromSoft Boosts Pay Amid Layoff Trend

FromSoftware has taken a bold step against the backdrop of widespread layoffs in the gaming industry by announcing an increase in the starting salaries for new graduate hires. Dive into the details of FromSoftware's decision and understand the broader context of layoffs affecting the video game sector in 2024.

FromSoftware Counters Layoff Trend with Salary Increase for New Hires

Starting Salary for New Hires at FromSoftware Increased by 11.8%

As the video game industry faces a troubling wave of layoffs in 2024, FromSoftware, renowned for its iconic titles like Dark Souls and Elden Ring, has taken a different route. The studio has announced a significant boost to the starting salary for new graduate hires, reflecting their commitment to fostering a supportive work environment.

Starting April 2025, new graduates at FromSoftware will enjoy a monthly starting salary increase from ¥260,000 to ¥300,000, marking an 11.8% rise. In a statement released on October 4, 2024, the company emphasized, "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, in 2022, FromSoftware faced scrutiny for its lower salaries compared to other Japanese game developers, despite its international acclaim. The average annual salary was reported at approximately ¥3.41 million (about $24,500), which many felt did not adequately cover the cost of living in Tokyo.

This salary adjustment aligns FromSoftware more closely with industry standards, following the lead of companies like Capcom, which plans a 25% increase in starting salaries—from ¥235,000 to ¥300,000—by the start of the 2025 fiscal year.

Video Game Industry Layoffs Ravage the West, But Japan Stands Strong

The year 2024 has seen an alarming rise in layoffs within the global video game industry, with over 12,000 employees affected. Companies like Microsoft, Sega of America, and Ubisoft have made significant cuts, despite reporting record profits. This year's layoffs have already exceeded the total of 10,500 from 2023, and the year is not yet over. While Western companies attribute these layoffs to economic uncertainty and corporate mergers, Japanese game developers have taken a different path.

Japan's resilience in the face of these layoffs can be attributed to its robust labor laws and a deeply ingrained corporate culture that values job security. Unlike the "at-will employment" system in the U.S., which allows for easy dismissals, Japan's legal framework provides strong worker protections, making mass layoffs challenging due to principles like unfair dismissal.

In line with FromSoftware’s move, other major Japanese companies have also increased starting salaries. Sega, for example, 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 raises are part of a broader initiative encouraged by Japan's Prime Minister Fumio Kishida to combat inflation and improve working conditions.

However, Japan's gaming industry is not without its challenges. Reports from The Verge highlight that many developers work long hours, often up to 12 hours a day for six days a week. Contract workers face particular vulnerabilities, as their contracts might not be renewed without being considered layoffs.

While 2024 has been a year of significant layoffs globally, Japan has largely managed to avoid the worst of these cuts. As we look to the future, the gaming community will be watching closely to see if Japan's strategies can continue to protect its workforce amidst increasing global economic pressures.