The wave of layoffs that has swept the global gaming industry is also impacting the Korean game industry. The large-scale restructuring that began in North America and Europe is now leading to job insecurity at domestic game companies, creating a sense of tension throughout the industry.
One in 10 developers laid off… Narrative writing takes the biggest hit.
According to the ‘2025 State of the Game Industry’ report released by GDC (Game Developers Conference) on January 29, 11% of developers experienced layoffs in the past year, with the narrative field being the hardest hit at 19%. In contrast, the business and finance field was relatively less affected at 6%.
The survey polled over 3,000 game developers across 86 countries, with 58% of respondents coming from the US, 7% from the UK and 6% from Canada, reflecting a predominantly Western demographic.
The report found that 41% of respondents reported being affected by layoffs, with 29% witnessing the layoff of a direct colleague and 18% witnessing the layoff of a developer from another team. Additionally, 4% experienced layoffs due to studio closures.
Reason for restructuring? “22% restructuring, 18% profit decline.”
The most common reason for layoffs was restructuring, cited by 22% of developers, followed by decreased revenue (18%) and market or industry changes (15%). Notably, 19% of developers said they weren’t even given an explanation for their layoffs.
The main reason is that global gaming companies, which had aggressively recruited employees to capitalize on the contactless nature of the pandemic, have shifted to austerity measures in response to the economic downturn. Indeed, major global gaming companies such as Microsoft (MS), Riot Games, and Ubisoft have recently implemented large-scale layoffs to reduce costs.
Investment surge… More than half of developers are relying on their own funds.
The difficulty of attracting investment is also severe. According to the report, 56% of developers reported that they were developing games with their own funds, clearly demonstrating the difficulty of attracting external investment.
Publishing contracts and project-based funding accounted for 28%, while government subsidies, venture capital, and joint development agreements each accounted for 15%. In particular, 32% of venture capitalists responded that their efforts were “not successful at all,” demonstrating a deteriorating investment environment.
The continued high interest rate environment is interpreted as a sharp decline in investment sentiment toward the gaming industry. With more than half of developers having to fund their projects solely through their own funds, without external investment, concerns are rising that this could lead to a reduction in development scale and a decline in quality.
PC platform dominance… Mobile decline also contributes to the employment crisis
In terms of platforms, the PC’s overwhelming dominance was confirmed. According to the report, 80% of developers are developing games for the PC platform, a trend attributed to the popularity of portable PCs like the Steam Deck.
The mobile game market, once known as the “goose that lays the golden eggs” for driving the growth of the entire game market, came in second with 38%, but this figure fell by 7 percentage points year-on-year, facing an unprecedented slowdown in growth.
The market size, which had expanded explosively in the early 2020s thanks to the pandemic, entered a period of stagnation starting in 2024, and as of 2026, major countries are recording negative growth or experiencing a clear shift in market share to PCs and consoles, leading to a clear phenomenon of “negative growth and structural restructuring.”
As a result, the gaming industry, once hailed as a “dream job,” is facing a severe hiring crisis. The mobile gaming market, which has driven growth for years, is reaching saturation, forcing companies to undertake large-scale workforce restructuring to “cut costs” and “improve their structure.”
As AI adoption accelerates, workforce replacement becomes a reality. “We won’t be hiring new hires.”
As game companies, feeling the burden of labor costs, are fully introducing generative AI into their development processes, the reduction in staff in simple graphic work, QA (quality assurance), and translation positions is also accelerating.
In fact, last year, large North American game companies reduced their tester workforce by more than 30% by introducing AI-based QA automation tools, and large Chinese game companies NetEase and Tencent actively introduced AI into their original production processes, reducing outsourcing costs by more than 40%.
Ubisoft and Sony are introducing AI-based automated playtesting systems to catch bugs and balance changes tens of thousands of times faster than humans. The QA workforce has been reduced by approximately 50% compared to 2024, and the structure has been reorganized so that only the most sensitive areas that AI cannot detect are inspected by a minimal number of personnel.
In Korea, as AI is being used to create card illustrations and character skins for mobile games, the hiring of new low-level artists, previously referred to as “dot artists” or “coloring assistants,” is virtually halted.
Concerns that “AI is going beyond assisting people and is wiping out certain professions altogether” are now commonplace in the industry. In reality, the workforce needed in development is shifting from “directors who can draw” to “directors who can evaluate and modify AI output.”
This ultimately leads to warnings that it could deprive junior developers of growth opportunities and, in the long run, lead to a depletion of human resources in the industry.
The Korean gaming industry is no exception… Concerns about a potential hit to small and medium-sized indie developers.
The restructuring trend in the global gaming industry is having a direct and indirect impact on the Korean game industry. As more and more domestic developers face the fallout of contracts with overseas publishers or fail to attract investment, job insecurity is becoming more apparent.
Small and medium-sized indie game developers, particularly those with limited financial resources and human resources, are inevitably hit hard by the global market downturn. Studios that had been developing games with the goal of entering overseas markets are frequently forced to halt projects or downsize due to funding cuts.
The GDC report highlights the growing reliance on self-funding and the difficulty in attracting external investment, a reality not unlike the reality faced by domestic developers. With venture capital investment in the gaming industry plummeting in Korea, many developers are either pursuing projects with their own funds or downsizing.
“Ecosystem-Level Measures Needed” for Small and Medium-Sized Indie Game Developers
Experts predict that employment instability in the global gaming industry will be difficult to resolve in the short term. As long as the high interest rate environment persists and investment sentiment does not recover, game companies’ conservative workforce management is likely to continue for the foreseeable future.
Accordingly, voices are emerging in the domestic gaming industry calling for ecosystem-level measures. These include strengthening policy support for small and medium-sized and indie developers, expanding retraining programs, and building global networks to minimize talent drain and maintain industry competitiveness.
Game industry insiders are unanimous in their call, saying, “We need to take preemptive action before the global restructuring repercussions begin to fully manifest in Korea,” and “In particular, we need to establish practical government support measures and an incubation system for well-funded publishers to prevent indie game developers from leaving the industry.”
