FromSoft Bucks Recession with Salary Hikes

FromSoftware's recent announcement of increased starting salaries for new graduate hires stands in stark contrast to the widespread layoffs impacting the gaming industry in 2024. This article delves into FromSoftware's decision and the broader context of industry-wide job cuts.

FromSoftware's Counter-Move: Salary Hikes Amidst Layoffs

FromSoftware Boosts Starting Salaries by 11.8%

While 2024 has witnessed significant job losses across the video game sector, FromSoftware, renowned for titles like Dark Souls and Elden Ring, has taken a different path. The studio recently implemented a substantial 11.8% increase in starting monthly salaries for new graduate hires.

Beginning April 2025, new graduate employees will receive ¥300,000 per month, up from ¥260,000. In a press release dated October 4, 2024, FromSoftware stated its commitment to "stable income and a rewarding work environment" to support its employees' dedication to game development. This salary increase reflects this commitment.

In 2022, FromSoftware faced criticism regarding relatively lower wages compared to other Japanese studios, despite its international success. Reported average annual salaries of approximately ¥3.41 million (roughly $24,500) were noted by some employees as insufficient to cover Tokyo's high cost of living.

This salary adjustment aims to align FromSoftware's compensation with industry benchmarks, mirroring similar moves by companies like Capcom, which is implementing a 25% starting salary increase (from ¥235,000 to ¥300,000) by the start of its 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

The global video game industry experienced unprecedented layoffs in 2024, with major companies shedding thousands of jobs due to restructuring. However, this trend largely bypassed Japan.

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

Japan's stable employment landscape is largely attributed to robust labor laws and established corporate culture. Unlike the "at-will employment" prevalent in the United States, Japan's worker protections and limitations on arbitrary dismissals create significant barriers to mass layoffs.

Several major Japanese companies, mirroring FromSoftware's actions, increased starting salaries. Sega implemented a 33% increase in February 2023, while Atlus and Koei Tecmo raised wages by 15% and 23%, respectively. Even with lower profits in 2022, Nintendo committed to a 10% pay raise. These increases may be a response to Prime Minister Fumio Kishida's push for nationwide wage hikes to combat inflation and improve working conditions.

However, challenges remain within the Japanese industry. Reports indicate that many Japanese developers work excessively long hours, often 12-hour days for six days a week. Contract workers, in particular, face vulnerability due to the potential non-renewal of contracts.

While 2024 set a grim record for global video game industry layoffs, 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.