Online gaming industry looking at layoffs, hiring pause after 28% GST move

Bellwethers of the Indian gaming industry have grown their headcounts by nearly 30 percent over the last 12 months, shows data put together for Moneycontrol by specialist staffing firm Xpheno.

More importantly, statistics showed that nearly a fifth of the additions have happened over the last three months, implying the hiring action is almost in line with what it was earlier in the year.

“The hiring activity over the last three months has not significantly dropped or spiked. This goes to show that the sector is playing it cautiously and has not gone into a hiring pause or freeze during this period,” said Kamal Karanth, co-founder of Xpheno.

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On the other hand, the current active talent demand from the major Indian gaming firms is just under 90 job openings, a significant drop from the mid-three-digit figures that prevailed on Xpheno, which is predicting a hiring slowdown or pause in the near term.

A similar trend was seen on the job portal foundit (previously Monster APAC & ME), where the active talent demand has dropped by 22 percent. The most affected job profiles are quality assurance (QA) testers and product managers.

Moneycontrol reached out to at least six online gaming firms with queries concerning their hiring outlook for the next six months, but none of them had responded at the time of publishing this article.

Silver lining

According to a TeamLease Digital report, currently, 50,000 individuals are working directly in the gaming industry, with 30 percent being programmers and developers.

Further, close to 100,000 new jobs were estimated to be created in the sector by FY23 and this was projected to increase by 50 percent, taking the industry's overall growth trajectory to more than 113 percent by 2025.

While the online gaming industry may be seeing a scenario of layoffs and hiring freezes in its immediate future, there are ample opportunities for candidates in the industry to shift to other firms and sectors.

Talent movement patterns at Xpheno show a lot of lateral movement within the sector and to e-commerce and IT service players. Xpheno’s Karanth said the relevance of the skills from the gaming sector is high for app-based product and service ventures.

He added that IT service enterprises' needs will lead to talent absorption from the gaming sector. “While overall IT hiring is at a moderately low pace, the IT services sector will stand to gain from any exodus of talent from the gaming industry,” he added.

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Industry experts say professionals from the gaming industry possess a wealth of expertise in creating immersive and interactive digital environments, which aligns well with the goals of the virtual reality (VR) and augmented reality (AR) industries.

According to an analysis by market research firm MarketsandMarkets, the demand for talent with metaverse knowledge is expected to be highest in the consumer vertical followed by the commercial vertical. The metaverse market for the consumer vertical held a significant market share of 50 percent in 2022. It consists of gaming, social media, sports, live entertainment and concerts.

These technologies have applications beyond gaming, ranging from virtual training simulations for various industries such as healthcare, aviation and manufacturing, to enhancing remote collaboration and communication.

“The skillset of game developers and designers could be repurposed to create innovative and practical VR/AR experiences, contributing to the advancement and wider adoption of these technologies across diverse sectors,” said Sekhar Garisa, CEO of foundit.

This cross-pollination of talent could accelerate the development of more sophisticated and meaningful VR/AR applications, ultimately enriching user experiences and expanding the utility of these technologies beyond the gaming realm, he added.