FromSoft Boosts Pay Amid Layoff Trend

FromSoftware, known for its critically acclaimed games like Dark Souls and Elden Ring, has made a bold move against the backdrop of widespread layoffs in the video game industry during 2024. The company announced a significant increase in starting salaries for new graduate hires, effective from April 2025. Dive into the details of FromSoftware's decision and the ongoing layoffs affecting the gaming world.

FromSoftware Counters Layoff Trend with Salary Increase for New Hires

Starting Salary for New Hires at FromSoftware Increased by 11.8%

Amidst the troubling trend of layoffs in the video game industry this year, FromSoftware stands out with its decision to enhance compensation for new employees. Starting April 2025, the company will raise the starting monthly salary for new graduates from ¥260,000 to ¥300,000, marking an 11.8% increase. This move aligns with FromSoftware's commitment to creating an environment where employees can thrive and contribute to the development of emotionally engaging games. "At FromSoftware, we strive to make games that convey emotion, create value, and inspire joy," stated the company in their October 4, 2024 press release. "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, FromSoftware faced criticism for lower wages compared to other Japanese game studios, despite its international success. The average annual salary was reported to be around ¥3.41 million (approximately $24,500), which many employees felt did not adequately cover Tokyo's high living costs. This salary adjustment aims to bring FromSoftware's compensation more in line with industry standards, following similar moves by other Japanese companies like Capcom, which plans a 25% increase in starting salaries by the beginning of the 2025 fiscal year.

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

The year 2024 has been marked by significant layoffs across the global video game industry, with over 12,000 employees losing their jobs. Major players like Microsoft, Sega of America, and Ubisoft have conducted massive layoffs, even amidst record profits. The total number of layoffs in the gaming sector has already exceeded the 2023 total of 10,500, and the year isn't over yet. While economic uncertainty and company mergers are cited as reasons for these cuts in the West, Japan has largely avoided this trend.

Japan's stable employment landscape is supported by stringent labor laws and a corporate culture that values long-term employment. Unlike the "at-will employment" system in the United States, Japan's labor laws, including the principle of unfair dismissal, provide significant protections against arbitrary terminations. This has helped Japanese companies maintain stability during turbulent times.

In line with FromSoftware's strategy, several other major Japanese companies have also raised starting salaries. Sega increased wages by 33% in February 2023, while Atlus and Koei Tecmo raised theirs by 15% and 23%, respectively. Even Nintendo, despite lower profits in 2022, committed to a 10% pay hike for its employees. These adjustments align with Japan's Prime Minister Fumio Kishida's initiative to boost wages nationwide in response to rising inflation and improve working conditions.

However, Japan's gaming industry is not without challenges. According to The Verge, many developers work long hours, often up to 12 hours a day for six days a week. Contract workers face particular vulnerability, as their contracts may not be renewed without technically counting as layoffs.

As 2024 continues to set a somber record for layoffs in the global video game industry, Japan's approach to employee protection and salary increases offers a contrasting narrative. The gaming community watches closely to see if Japan's strategies can continue to safeguard its workforce amid increasing global economic pressures.