Virtuos, one of the largest game development support studios in the world, has initiated mass layoffs affecting up to 300 employees. The cuts represent approximately 7% of the company’s global workforce, which spans over 25 countries and includes more than 4,000 staff members.
The layoffs come on the heels of Virtuos completing work on high-profile projects including The Elder Scrolls IV: Oblivion Remastered. The studio has also been providing key development support for the upcoming METAL GEAR SOLID Δ: SNAKE EATER remake.
Industry sources point to several factors behind the downsizing. Virtuos reportedly exceeded quality targets on the Oblivion Remaster without securing a royalty agreement, operating solely on a fixed-fee basis. This approach may have strained the company’s finances despite delivering a high-quality product.
“They overspent on Oblivion, and their contract had no royalty or performance ties,” noted one industry observer familiar with the situation.
The cuts also fit the pattern for support studio business cycles. These companies often ramp up hiring for large projects, then cut staff after things wrap up and new contracts haven’t come in yet.
Broader industry trends are likely playing a role as well. The gaming sector has seen over 10,000 positions cut globally in 2024 alone, as publishers adjust to post-pandemic market corrections and reduced budgets.
Reports suggest Virtuos has also been increasing its focus on AI tools, with mandatory employee training in AI workflows. While this shift tracks with what’s happening elsewhere in the gaming world, it raises questions about potential automation of certain jobs.
Even with these layoffs, Virtuos is still a big name in game development. The studio works on tons of AAA titles every year, teaming up with publishers like Bethesda, Konami, Sony, and more on ports, remasters, art creation, and all kinds of technical services.
The positions affected reportedly stretch across several different offices around the world, though there aren’t a lot of details yet about which countries or departments are the hardest hit. Some reports suggest that teams on big ongoing projects like Metal Gear Solid Δ might not be feeling the impact as much.
Quality without reward
For support studios like Virtuos, the business model presents inherent challenges. Without royalty arrangements, exceeding quality expectations on fixed-fee contracts can actually hurt profitability, regardless of how successful the final product becomes in the market.
The situation at Virtuos shows just how unpredictable the current gaming industry can be, where project-based work means companies are constantly hiring and letting people go—and that affects thousands of developers each year.
