Mass layoffs in the games industry have reached Japan. Mobile developer Gumi has decided to cut roughly 11% of its 689 employees.

Japanese studio Gumi to lay off 80 employees after posting net loss of $37 million

  • Gumi will lay off 80 employees next month, according to the official announcement. The company described it as “voluntary retirement,” offering staff to file applications until July 5. It will spend around ¥100 million on severance pay and other packages.
  • Speaking of reasons for the job cuts, Gumi cited the underperformance of its latest mobile game, Aster Tatariqus, which “fell far short of expectations.”
  • It resulted in an annual net loss of ¥5.9 billion ($37.8 million). In the last quarter ended April 30, its operating loss doubled quarter-over-quarter to $13 million.
  • The Japanese developer said it will revamp its development strategy. It will stop making “risky” titles based on original IP, instead focusing on games with lower budgets and projects created in partnership with other brands.
  • According to Gumi, the changes are necessary to ensure “sustainable growth” for the company.
  • Kantan Games CEO Serkan Toto noted that such a situation is a “very rare case,” as “it is generally not possible to just fire employees in Japan.”

Founded in 2007, Gumi was originally known as Atmovie Pirates. In 2014, it was listed on the Tokyo Stock Exchange at a valuation of around $890 million. Shortly after its IPO, it cut about 100 jobs and has made several rounds of layoffs since then.

Gumi has several mobile games in its portfolio, including For Whom the Alchemist Exists (誰ガ為のアルケミスト) and the now closed Brave Frontier ($185 million in IAP revenue, according to AppMagic). It also operates the global version of Final Fantasy: Brave Exvius, which has over $625 million in IAP revenue on iOS and Android.

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