It is with a heavy heart that we cover this part of the industry, but it’s important news to get to gamers and gaming company shareholders alike. This week we learned of two significant layoffs at Sega and Epic Games.
Sega is canceling their once upcoming live-service extraction shooter Hyenas ahead of its originally expected launch, citing lower profitability in Europe. Creative Assembly’s Hyenas was meant to be a smaller preview of Sega’s new “Super Game” strategy they began to detail in a previous earnings call; it seems that strategy needs some altering to say the least. In addition to canceling Hyenas, Sega also mentions the elimination of “some unannounced titles under development” as well.
Sticking with the unfortunate theme, in a recent email to Epic employees, Tim Sweeney shared that Epic Games would be laying off around 16% (over 800 members) of Epic’s staff, divesting Bandcamp, and spinning off most of SuperAwesome. He went on to state, “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators.” Amidst these layoffs, it’s hard not to blame Epic’s continued investments into their PC storefront and Steam competitor Epic Games Store. Based on publicly posted data from 2021, the Epic Game Store lost $181 million in 2019 and was projected to lose another $273M and $139M in 2020 and 2021, respectively. While we don’t have updated numbers, Epic has continued to give away free games regularly, in hopes of swaying PC players over from Steam – there’s a very good chance that they are still losing a significant amount of money on those deals.
Our hearts go out to those affected by the layoffs at Sega and Epic and we hope they’re able to land new, exciting roles sooner than later.
Image from: Sega
