Canada’s video game sector has unlocked a new level: Layoffs.
Driving the news: Acclaimed video game developer Eidos Montreal is laying off 124 workers and cancelling the release of an upcoming game that’s been in the works for seven years and has cost the studio hundreds of millions of dollars to develop. The company already laid off at least 75 employees in each of the last two years.
Eidos has been a Canadian success story in the video game space since 2007, producing popular games like Deus Ex and Marvel’s Guardians of the Galaxy.
Zoom out: The video game industry as a whole is in a rough spot right now. Since 2023, the sector has grappled with weaker demand for games and higher costs to produce them. Dozens of studios have been shuttered and tens of thousands of workers have been let go.
One survey found that over 25% of people in the industry have been affected by layoffs in the last two years. In Canada, studios like Ubisoft and BioWare have let go of hundreds of workers across the country and closed down entire offices.
Why it matters: Canada has become one of the top countries in the world for video game development. The industry’s downturn is bad news, not just for the Canadians getting laid off, but for the economy as a whole.
In 2024, the video game industry contributed $5.1 billion to Canada's GDP, roughly a third of what the auto manufacturing industry was worth in 2022.
Our take: A good chunk of these layoffs has to do more with overhiring during the pandemic video game boom than a lack of demand for gaming. The video game sector still brings in more revenue than the film and music industries combined.—LA
