Wage Increase Amid Downturn: FromSoft Bucks Layoff Trend

FromSoftware's recent announcement of increased starting salaries for new graduates 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's Counter-Move to Industry Layoffs: A Salary Increase

FromSoftware Raises Starting Salaries for New Graduates by 11.8%

While numerous video game companies implemented layoffs in 2024, FromSoftware, the celebrated creator of Dark Souls and Elden Ring, has taken a different path. The studio has significantly increased the starting salaries for its new graduate hires.

Beginning April 2025, new graduate employees will receive a monthly salary of ¥300,000, a substantial 11.8% increase from the previous ¥260,000. In a press release dated October 4, 2024, FromSoftware stated their commitment to "creating value and inspiring joy" through their games, and that this salary increase reflects their dedication to a supportive and rewarding work environment.

In 2022, FromSoftware faced criticism for relatively lower salaries compared to other Japanese game studios, despite its international success. The reported average annual salary of approximately ¥3.41 million (around $24,500) was noted by some employees as insufficient to cover Tokyo's high cost of living.

This adjustment aligns FromSoftware's compensation more closely with industry standards, mirroring similar moves by companies like Capcom, which is raising starting salaries by 25% to ¥300,000 by the start of the 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

The global video game industry experienced a turbulent 2024, with unprecedented levels of layoffs. Thousands of jobs were cut by major companies undergoing restructuring, notably in North America and Europe. However, Japan largely avoided this trend.

Over 12,000 game industry employees worldwide lost their jobs in 2024, with companies like Microsoft, Sega of America, and Ubisoft making significant cuts despite record profits. This surpasses 2023's total of 10,500 layoffs. While Western studios cited economic uncertainty and mergers, the Japanese approach differed.

Japan's stable employment landscape is largely attributed to its robust labor laws and corporate culture. Unlike the "at-will employment" prevalent in the US, Japan's worker protections and restrictions on unfair dismissal limit arbitrary terminations.

Many major Japanese companies, like FromSoftware, increased starting salaries. Sega's 33% wage increase (February 2023), Atlus's 15%, Koei Tecmo's 23%, and Nintendo's 10% hike (despite lower 2022 profits) are examples. These increases may be partly in 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 challenges. Long working hours, often exceeding 12 hours daily for six days a week, are common, particularly for vulnerable contract workers whose contracts may not be renewed.

While 2024 witnessed record-breaking global layoffs in the video game industry, Japan largely avoided the worst of the cuts. The future will reveal whether Japan's approach can continue to protect its workforce amidst growing global economic pressures.