Video game publisher Bandai Namco Holdings is cutting jobs after canceling several games due to weak demand, people familiar with the matter said.
The Tokyo-based company is taking a traditional Japanese approach to downsizing and sending workers to rooms where they have nothing to do, pressuring them to leave voluntarily, said the people, who asked not to be named to discuss private information. Bandai subsidiary Namco Studios has moved about 200 of its approximately 1,300 employees to such rooms since April, and nearly 100 have quit, the people said. More are expected to leave in the coming months.
Similar oidashi beya, or “exile rooms,” are sometimes used by Japanese corporations in a country with some of the world’s strictest labor laws. Workers are typically not assigned work-related tasks, but are left with the knowledge that their performance will give managers ammunition to cut severance pay when they quit. Many employees use their time in such facilities to find other work.
Bandai Namco has stated that its goal is not to force employees out of the company.
“Our decision to suspend games is based on a comprehensive assessment of the situation. Some employees may need to wait a certain amount of time before being assigned to the next project, but we continue to work on assignments as new projects become available,” said a Bandai Namco representative. “Bandai Namco Studios doesn’t have an organization like ‘oidashi beya’ to put pressure on people to leave voluntarily.”
Bandai Namco is a well-known name in the gaming industry, dating back to the 1980 release of the Pac-Man arcade game. Current games include Dragon Ball and Gundam.
Like its competitors, the company is now under pressure to cut costs and adapt to the reduced time users have for gaming after the pandemic. Smartphones and online gaming bore the brunt of the cooled sentiment, forcing Bandai Namco to review its game lineup, leading to a ¥21 billion ($141 million or roughly ₹1,185 crore) write-down in the three quarters to December.
Over the summer, the company further shuttered its Tales of the Rays smartphone game and said it would shut down its big-budget online game Blue Protocol in January. It was also decided to either cancel or suspend the development of several games, including the anime characters Naruto and One Piece, as well as a project commissioned by Nintendo.
Rival Square Enix Holdings has also canceled numerous loss-making smartphone titles, while Sony Group pulled the plug on online game Concord just two weeks after its launch.
An anonymous website launched last month claims that Bandai Namco is using various methods to convince people to leave. The company is aware of the website, but the information is not accurate, the spokesman said, declining to elaborate.
© 2024 Bloomberg LP