FromSoft Raises Salaries Against Industry Trend of Layoffs

FromSoftware's Counter-Move: Salary Hikes Amidst Industry Layoffs

While the gaming industry grapples with widespread layoffs in 2024, FromSoftware, the celebrated creator of Dark Souls and Elden Ring, has taken a different path. The studio recently announced a significant salary increase for new graduate hires.

FromSoftware's Graduate Salary Increase: A 11.8% Boost

Starting April 2025, new graduate hires 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 its commitment to a rewarding work environment that fosters employee growth and contributes to the creation of emotionally resonant and valuable games. This salary increase directly reflects this commitment.

In 2022, FromSoftware faced criticism regarding relatively low salaries compared to other Japanese studios, despite its global success. The reported average annual salary of ¥3.41 million (approximately $24,500) was noted by some employees as insufficient to cover Tokyo's high cost of living. This adjustment aims to align FromSoftware's compensation with industry standards, mirroring similar increases at companies like Capcom, which is boosting starting salaries by 25% to ¥300,000 by the start of its 2025 fiscal year.

Japan's Gaming Industry: A Contrast to Western Layoffs

The global gaming industry experienced a tumultuous 2024, with unprecedented levels of layoffs affecting thousands of employees at major companies like Microsoft, Sega of America, and Ubisoft, despite record profits. Over 12,000 jobs were cut worldwide, surpassing 2023's total of 10,500. While Western studios cited economic uncertainty and mergers as reasons, Japan largely avoided this trend.

This stability in Japan is largely attributed to strong labor laws and corporate culture. Unlike the "at-will employment" prevalent in the US, Japan's worker protections and limitations on unfair dismissal create significant barriers to mass layoffs.

This trend of salary increases extends beyond FromSoftware. Sega implemented a 33% wage hike in February 2023, followed by similar increases at Atlus (15%) and Koei Tecmo (23%). Even with lower profits in 2022, Nintendo committed to a 10% pay raise. These moves may be a response to Prime Minister Fumio Kishida's push for nationwide wage increases to combat inflation and improve working conditions.

However, challenges remain. Long working hours, often exceeding 12 hours a day for six days a week, are common, particularly impacting vulnerable contract workers whose contracts may not be renewed without being classified as layoffs.

In conclusion, while 2024 saw record-breaking global layoffs in the gaming industry, Japan's approach, including salary increases and stronger labor protections, has so far shielded its workforce from the worst of the cuts. The long-term sustainability of this approach amidst escalating global economic pressures remains to be seen.