FromSoft Raises Salaries Against Industry Trend of Layoffs

FromSoftware's recent announcement of increased starting salaries for new graduate hires stands in stark contrast to the widespread layoffs sweeping the gaming industry in 2024. This article explores FromSoftware's decision and the broader context of the industry's current challenges.

FromSoftware Counters Layoff Trend with Salary Increase for New Hires

FromSoftware Raises Starting Salaries by 11.8%

While 2024 has seen significant job losses across the video game industry, FromSoftware, the celebrated developer behind titles like Dark Souls and Elden Ring, has taken a different path. Effective April 2025, the company will increase the starting monthly salary for new graduate hires from ¥260,000 to ¥300,000 – a substantial 11.8% increase. In their October 4, 2024 press release, FromSoftware stated their commitment to "stable income and a rewarding work environment" to support their employees' dedication to game development. This salary increase is a key step in achieving that goal.

In 2022, FromSoftware faced criticism regarding relatively lower wages compared to other Japanese game studios, despite its international success. Previously reported average annual salaries of approximately ¥3.41 million (around $24,500) were noted by some employees as insufficient to meet Tokyo's high cost of living. This salary adjustment aims to align FromSoftware's compensation with industry standards, following the lead of companies like Capcom, which will increase starting salaries by 25% to ¥300,000 by the beginning of the 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

2024 has witnessed unprecedented levels of layoffs in the global video game industry, with thousands of jobs lost at major companies like Microsoft, Sega of America, and Ubisoft, despite record profits. The total number of layoffs in 2024 has already surpassed 2023's total of 10,500, and the year is not yet over. While many Western studios cite economic uncertainty and mergers as reasons for these cuts, the Japanese game industry has largely avoided this trend.

Japan's comparatively stable employment landscape is attributed to its robust labor laws and corporate culture. Unlike the "at-will employment" prevalent in the United States, Japan's worker protections and restrictions on unfair dismissal create significant barriers to mass layoffs.

Furthermore, mirroring FromSoftware's actions, several major Japanese companies have also implemented salary increases. Sega's 33% wage hike in February 2023, Atlus and Koei Tecmo's 15% and 23% increases respectively, and Nintendo's 10% pay raise in 2022, even amidst lower profits, demonstrate a broader trend. These increases may be a response to Prime Minister Fumio Kishida's push for nationwide wage increases to combat inflation and improve working conditions.

However, this doesn't mean the Japanese industry is without its challenges. Reports indicate long working hours, often exceeding 12 hours a day for six days a week, are common. Contract workers remain particularly vulnerable, as contract non-renewal, while not technically a layoff, can still lead to job insecurity.

In conclusion, while 2024 has set a grim record for global video game industry layoffs, Japan has largely weathered the storm. The future will reveal whether Japan's approach can continue to protect its workforce amidst growing global economic pressures.