Analyst Amir Satvat has pointed out notable differences in how Japanese and Western video game companies are performing. He attributes the success of Japanese firms like Nintendo, Konami, and Capcom to smaller team sizes, higher staff retention, and more moderate executive salaries. These companies have largely avoided the large-scale layoffs that have hit Western studios, with some Japanese firms reporting employee retention rates above 97%. In contrast, Western studios have faced a wave of job cuts, with over 10,000 developers losing their jobs in 2023 and an additional 40% more job losses expected in 2024. According to the ASGC Games Industry Layoffs Tracker, a total of 57,628 jobs were lost globally between 2022 and 2026, with North America and Europe accounting for 96% of these layoffs. Satvat described the situation as severe, drawing comparisons to the 1983 video game crash, particularly for developers in North America and Western Europe. The year 2024 was a turbulent one for the video game industry, marked by widespread layoffs, studio closures, and a return of toxic behavior in online player communities, similar to the Gamergate controversy of the past. Dozens of small studios shut down during the year, though the exact number is hard to determine due to the quiet manner in which many closures occurred. The industry also grappled with rising levels of harassment and heated debates over issues like representation and creative choices in games, adding to the challenges faced by developers and publishers alike. Japanese developers have increasingly turned to generative artificial intelligence (AI) to enhance their production processes. By 2026, 85.8% of Japanese game companies were using AI, up from 51% in 2024. Benefits reported include faster development cycles, lower costs, and improved efficiency. Additionally, 32% of video game companies have used AI to develop their own game engines internally, further reducing reliance on external tools. In terms of executive compensation, there is a stark contrast between the West and Japan. For example, EA’s CEO, Andrew Wilson, received nearly $40 million in the last fiscal year, while Nintendo President Shuntaro Furukawa earned $2 million. Satvat noted that Japanese executives generally earn significantly less than their Western counterparts. Western companies have encountered a range of difficulties, with several high-profile studios announcing layoffs and restructuring. Build a Rocket Boy faced new job cuts, and DON’T NOD announced a major restructuring that raises questions about its long-term survival beyond 2027. Microsoft also carried out significant layoffs, cutting 1,600 jobs and planning an additional 1,600 layoffs for the rest of the fiscal year. As part of this restructuring, Microsoft allowed four Xbox studios to leave the company and reorganized mid-level management, with major franchises like Minecraft and King now reporting directly to Xbox management. Xbox CEO Asha Sharma called the restructuring the most important in the company’s history, stating, "Our business is not viable today."