FromSoft Raises Salaries Against Industry Trend of 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 explores 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 numerous video game companies implemented layoffs in 2024, FromSoftware, the celebrated developer behind titles like Dark Souls and Elden Ring, has taken a different path. The studio recently revealed an 11.8% increase in starting monthly salaries for new graduate hires, raising the figure from ¥260,000 to ¥300,000, effective April 2025. In a press release dated October 4, 2024, the company stated its commitment to fostering a supportive work environment that values employee well-being and contributes to the creation of emotionally resonant and valuable games. This salary increase is a key element of that commitment.

In 2022, FromSoftware faced criticism for comparatively lower salaries than other Japanese game studios, despite its international success. The previously reported average annual salary of approximately ¥3.41 million (roughly $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 benchmarks. This follows a similar trend set by Capcom, which plans a 25% salary increase for new graduates, bringing their starting salary to ¥300,000 by the start of the 2025 fiscal year.

A Divergent Path: Western Layoffs vs. Japanese Stability

The global video game industry experienced a turbulent 2024, marked by unprecedented levels of layoffs. Thousands of jobs were cut by major companies in restructuring efforts. However, this trend largely bypassed Japan. Over 12,000 game industry employees worldwide lost their jobs in 2024 alone, with companies like Microsoft, Sega of America, and Ubisoft implementing significant reductions despite record profits. This surpasses the 2023 total of 10,500 layoffs. While Western studios often cited economic uncertainty and mergers as justifications, the Japanese gaming sector adopted a different strategy.

Japan's robust employment landscape is largely attributed to its strong labor laws and deeply rooted corporate culture. Unlike the "at-will employment" prevalent in the United States, Japan provides substantial worker protections, creating legal hurdles for mass layoffs. The principle of unfair dismissal significantly limits arbitrary terminations.

Many major Japanese companies, mirroring FromSoftware's actions, increased starting salaries. Sega implemented a 33% raise in February 2023, while Atlus and Koei Tecmo saw increases of 15% and 23%, respectively. Even with reduced profits in 2022, Nintendo 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. Reports indicate that many Japanese developers endure demanding work schedules, often working 12-hour days, six days a week. Contract workers, in particular, remain vulnerable due to the potential for non-renewal of contracts without formal layoff procedures.

While 2024 witnessed record-breaking global layoffs in the video game industry, 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.