FromSoft Bucks Industry Trend, Raises Salaries Amidst Layoffs

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 the industry's current challenges.

FromSoftware's Counter-Move to Industry Layoffs

FromSoftware Boosts Starting Salaries by 11.8%

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

Beginning April 2025, new graduates will receive ¥300,000 per month, up from ¥260,000. In a press release dated October 4, 2024, 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 element of this commitment.

In 2022, FromSoftware faced criticism regarding relatively lower compensation 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 aligns FromSoftware more closely with industry standards, mirroring similar moves by companies like Capcom, which is increasing starting salaries by 25% to ¥300,000 by the start of its 2025 fiscal year.

Western Layoffs Contrast with Japan's Relative Stability

The global gaming industry experienced unprecedented layoffs in 2024, with thousands of job losses at major companies like Microsoft, Sega of America, and Ubisoft, despite record profits. Over 12,000 jobs were lost worldwide, exceeding 2023's total of 10,500. While Western studios often cite economic uncertainty and mergers as reasons, Japan presents a contrasting picture.

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 legal barriers to mass layoffs, including unfair dismissal laws, significantly limit arbitrary terminations.

Furthermore, many major Japanese game companies, including Sega (33% increase in February 2023), Atlus (15% increase), and Koei Tecmo (23% increase), also implemented salary increases. Nintendo, despite lower profits in 2022, committed to a 10% pay hike. These actions may be partly in response to Prime Minister Fumio Kishida's push for nationwide wage increases to combat inflation and improve working conditions.

However, the Japanese industry isn't without its challenges. Long working hours, often exceeding 12 hours daily for six days a week, are common, particularly impacting vulnerable contract workers whose contracts may not be renewed without being officially classified as layoffs.

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