Japan's Game Industry Defies Global Layoff Trends: A Closer Look at the Unique Factors Shielding Workers

While the global video game industry has been plagued by mass layoffs, Japan's game studios have largely bucked this trend, offering their employees greater job security and even pay raises. This article delves into the intricate web of legal, cultural, and economic factors that have enabled Japan to maintain a more stable and worker-friendly environment in the gaming sector.

Weathering the Storm: How Japan's Game Industry Stands Firm Amid Global Layoffs

Robust Labor Laws: The Foundation of Japan's Worker Protections

Japan's employment laws provide a strong legal framework that safeguards workers, particularly in the game industry. Unlike the "at-will" employment doctrine prevalent in the United States, Japanese law makes it significantly more challenging for companies to dismiss employees. Employers must prove that the organization would face bankruptcy if they were to let go of workers, a high bar that has shielded many Japanese game developers from the mass layoffs seen elsewhere.This legal protection has had a tangible impact, with major Japanese game studios like Sega, Koei Tecmo, and Atlus all implementing substantial salary increases in recent years. Capcom, for instance, recently raised graduate salaries by 27.7%, describing it as an "investment in the people who support the future of the company." This commitment to workers stands in stark contrast to the global industry's trend of cost-cutting through mass layoffs.

The Ethical Accountability of Japanese Executives: A Divergent Approach

The divergence between Japanese and Western executives' approaches to managing their workforce also plays a role in Japan's more worker-friendly environment. Matanle, an expert on Japanese employment, suggests that Japanese organizations tend to be run with longer-term horizons, focusing more on the well-being of their actual employees rather than solely pleasing shareholders.This ethos is exemplified by the actions of industry leaders like FromSoftware's Hidetaka Miyazaki, who has vowed that as long as the company is under his responsibility, he will not allow the mass layoffs seen elsewhere. The famous words of the late Nintendo president Satoru Iwata, who emphasized the importance of retaining employees to foster creativity, further underscore this cultural difference.

The Nuances of Japan's Labor Market: Permanent, Temporary, and Contracted Roles

While Japan's game industry may offer greater job security for its permanent employees, the country's labor market is not without its complexities. Japanese studios often rely on contract and temporary labor, creating a two-tier system similar to that found in the United States.Permanent, or "seishain," employees enjoy the highest level of job stability, while those on temporary "keiyakushain" contracts face more precarious employment. Additionally, there are "haken" workers, or dispatch laborers, who are brought in for short-term projects and lack the same level of security as their permanently employed counterparts.This reliance on temporary and contracted labor can create a sense of instability, as workers may find themselves cycling in and out of projects without the same level of long-term investment from their employers. As one industry veteran notes, "The stability isn't there. Imagine going to work somewhere for six months, making a life for yourself with new colleagues, all to go away as soon as you leave. That must be tough."

Demographic Shifts and Language Barriers: Potential Boons for Japanese Game Workers

Alongside the legal and cultural factors shielding Japanese game workers, there are also some unique demographic and linguistic considerations that could further bolster their job security.Japan's shrinking population, with a decline of 837,000 people in 2024, could theoretically increase the demand for skilled workers, potentially strengthening their bargaining power. Additionally, the Japanese language, spoken by relatively few people outside of the country, may make certain roles less susceptible to outsourcing, as companies seek to maintain a workforce proficient in the local tongue.These idiosyncratic quirks of the Japanese game industry, combined with its distinct business culture and insular ecosystem, allow the country to march to the beat of its own drum, often diverging from global trends in the sector.

Navigating the Global Landscape: Challenges for Independent Japanese Studios

While permanently employed workers in Japan's game industry may enjoy a degree of stability, the country's independent studios are not immune to the pressures of the global market. Studios like 17-Bit, co-founded by industry veteran Jake Kazdal, find themselves competing for deals and funding in a challenging landscape, often relying on contacts with Western publishers.The recent acquisition and cost-cutting efforts of industry conglomerate Embracer Group serve as a cautionary tale, with Kazdal expressing relief that his studio narrowly avoided being absorbed, as "they're just trashing stuff, throwing people out left and right. It's a disaster."For these independent developers, the mantra is "survive 'till 2025," as they navigate the turbulent waters of a global industry that has not spared even the most renowned Japanese game studios from the threat of layoffs and restructuring.Despite the unique advantages afforded to Japan's game workers, the country's industry is not entirely insulated from the broader economic forces shaping the global video game landscape. The delicate balance between the stability of permanent employment and the precariousness of temporary and contracted roles remains a challenge that Japanese game studios must continue to navigate.