In the ever-shifting landscape of video game development, stability seems increasingly elusive. On July 22, 2025, UK-based studio Supermassive Games—renowned for atmospheric horror titles like Until Dawn and The Quarry—announced another round of layoffs, affecting up to 36 employees.
A statement from Supermassive Games. pic.twitter.com/Vom1CSGYGs
— Supermassive Games (@SuperMGames) July 22, 2025
This move comes amid a delay for their upcoming sci-fi horror game Directive 8020, the next installment in the Dark Pictures Anthology series, now pushed from a planned Halloween 2025 release to the first half of 2026. The studio cited the need to “adapt our team structure to better align with the changing and ever-evolving environment” in the industry.
This isn’t Supermassive’s first brush with downsizing; just last year, they laid off around 90 staff members, reducing their workforce by about a third from an estimated 350 employees in 2023.
The title card for The Quarry – YouTube, 2K
While Little Nightmares III, another project under Supermassive’s belt, remains on track for its 2025 launch, the layoffs and delay raise questions about the studio’s future output and the human cost of these decisions.
Reactions on X have been swift and sympathetic, with users lamenting the ongoing “crash” in the video game sector and expressing concern for affected developers.
Supermassive Games LAYOFFS: Video Game Industry CRASHING!
WATCH: https://t.co/2PGIDpF8Du pic.twitter.com/yZO436Zy26— Smash JT (@SmashJT) July 24, 2025
Other posts highlighted the irony of relying on AI for quality assurance amid job losses, underscoring fears that technological advancements are accelerating the trend.
A Wave of Layoffs Sweeping the Industry
Supermassive’s troubles are symptomatic of a larger issue plaguing the video game industry. Since 2022, an estimated 35,000 jobs have been lost, with 2025 alone seeing around 3,563 to 4,000 layoffs as of mid-July.
A screenshot from the trailer for The Quarry – YouTube, 2K
The pace may be slowing compared to 2024’s staggering 14,600 cuts, but the damage persists, affecting major players and indie studios alike. Just this month, Microsoft announced up to 9,000 layoffs across its Xbox divisions, including the closure of studios like The Initiative and cancellations of projects such as Perfect Dark. Electronic Arts (EA) followed suit in April with over 300 redundancies, impacting teams at Respawn Entertainment.
Other notable cuts in 2025 include Unity’s 1,800 layoffs, PlayStation Studios’ 900, and smaller entities like People Can Fly and Jagex.blog.
A screenshot from Until Dawn – YouTube, PlayStation
A Wikipedia compilation of the 2022–2025 layoffs paints a grim picture, attributing the surge to post-lockdown overexpansion, rising development costs, and economic pressures like inflation and high interest rates. The Game Developers Conference (GDC) 2025 State of the Industry report revealed that 11% of developers were laid off in the past year, with narrative roles hit hardest.
Overall, 41% of developers reported being impacted by layoffs, either personally or through team reductions.
Underlying Causes and Industry Reactions
The root causes are multifaceted. Ballooning AAA game budgets—often exceeding $200-300 million—coupled with underperforming live-service models and a slowdown in consumer spending have forced companies to retrench.
A screenshot from the trailer for The Quarry – YouTube, 2K
The integration of AI and machine learning has sparked debate. While some developers view generative AI positively in some surveys, concerns about job displacement loom large. A Kidscreen report highlighted that 30% of developers believe AI tools are doing more harm than good, potentially exacerbating layoffs.
LinkedIn analyst Amir Satvat offered a glimmer of hope, suggesting hiring rates may finally be catching up to layoffs in 2025, potentially signaling stabilization after 34,000 total cuts over 2.5 years. However, with tech-wide layoffs reaching 80,000 in 2025 so far, the gaming sector’s recovery remains uncertain.
Implications for the Future of Gaming
These layoffs aren’t just numbers—they erode talent pools, stifle innovation, and contribute to burnout in an already high-pressure field. For Supermassive, the cuts could impact the quality of future horror experiences, a genre where narrative depth and atmospheric design are paramount. Broader implications include a potential shift toward indie developers, who appear more resilient amid the chaos, carving paths for emerging talent.
More layoffs for Supermassive Games. And yet the indie devs are still carving the path for up and coming game devs.
Out with the old and in with the new. https://t.co/VoUL7jiWdm
— Spatial Spandex (@SpatialSpandex) July 22, 2025
Calls for unionization and better regulations echo across X, with users urging systemic change to protect workers.
Supermassive Games Confirms Layoffs With 36 People Let Go, Directive 8020 Delayed Into 2026 @kingdavidotw all these layoffs is ridiculous, since AI a lot of people are losing their jobs. https://t.co/EQniSTxhgp
— ChildofGodGaming (@COG_34215) July 22, 2025
As one post poignantly stated, “All these layoffs is ridiculous, since AI a lot of people are losing their jobs.” The industry must grapple with these challenges to foster sustainable growth.
A screenshot from the trailer to Little Nightmares 3 – YouTube, IGN
In conclusion, Supermassive’s layoffs are a microcosm of a sector in flux, where economic realities clash with creative ambitions. As 2025 unfolds, the hope is for fewer cuts and more support for the developers who bring our favorite worlds to life.
How do you feel about these Supermassive layoffs? Sound off in the comments and let us know!
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That “broader turmoil” has been going on for years now. Progressives pushing out real creatives, overpriced games nobody wants to buy, unsustainable business practices that were going to fall apart as soon as the economy simply *started* to sour, and scummy practices involving digital-only sales.
This isn’t the beginning of anything. It’s the final phase of that industry crash I keep talking about here and elsewhere.
These companies really need to do community outreach to inquire what kinds of things are “deal-breakers” for customers so they’ll know what to avoid in terms of narrative content, DRM, etc.
Please keep an eye on this Marvin and let us know with an article if any of these companies ever try reaching out to the gaming communities to get meaningful feedback on things.
Until that happens, it’s probably an overall good thing to see the industry down-size. To an overwhelming degree, many of these companies don’t seem to have a clue what gamers want, etc. and we need a 1983 style video game industry crash to jettison the stuff we don’t like.
The KNOW what men want from games. But, they refuse to give it to us. Because woke. The woke-mind-virus destroys its host.
I expect better than this from That Park Place. You can’t discuss the Supermassive situation without pointing out that they went woke by shoehorning an ugly black woman as the lead for their new game (with an ugly black man as the second character), and are now going broke because no one wants to play it. We come here to get the real story, and you’re not giving it to us.
The story is the same. The AAA gaming industry went full-on DEI, firing Whitey. And their games flopped, so they’re firing all the DEI, too.
The AAA gaming industry staff are now DEI activists. These purple hair losers and Sweet Baby Inc weirdos are so useless that they are easily replaced by Gen AI, and one of the cheaper models, at that.
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