I sure do love the smell of industry layoffs in the morning.
Once again, the Embracer Group finds itself in the headlines, following the complete shutdown of Volition due to the disastrous Saints Row reboot, one of many commercial flops made in collaboration with Sweet Baby Inc.
Additionally, they suffered a massive $840 million loss after offloading Gearbox Software to Take-Two Interactive in a fire sale.
Recently, Embracer has come under fire for laying off 4,500 employees in a single year, as its struggling subsidiaries face declining sales. This backlash comes amid growing consumer resistance to purchasing games seen as politically driven or infused with DEI (Diversity, Equity, and Inclusion) agendas under the guise of “entertainment.”
While we’ve had to bid farewell to Piranha Bytes due to Embracer’s mismanagement, it appears another one of their studios is now facing a similar fate. Lost Boys Interactive, a support studio for titles like Diablo 4, Tiny Tina’s Wonderlands, and PlayerUnknown’s Battlegrounds (PUBG), has been hit with a significant round of layoffs.
A total of 139 employees were let go, and considering the studio previously had around 200 employees, approximately 69% of their workforce has been laid off. This is yet another example of Embracer’s ongoing struggles in a volatile industry, oversaturated with employees but lacking in genuinely enjoyable games.
Lost Boys Interactive CEO Shaun Nivens called the decision to lay off employees “difficult” and claimed it was made “only after considering all other options.” Founded in 2017, Lost Boys primarily provided support work for larger studios, many of which were forced to outsource development due to their own inefficiencies.
In 2022, Lost Boys was acquired by Gearbox Entertainment, itself a subsidiary of the Embracer Group. This acquisition helped the studio expand its team and contribute more meaningfully to projects like Tiny Tina’s Wonderlands, though it’s likely this expansion has stretched their resources too thin, leading to their current challenges.
Borderlands 3 was commercially successful, but a critical failure, especially among long-time fans like myself who were flabbergasted by its dogshit story narrative intertwined with diversity and inclusivity initiatives that even saw the censorship of the staple “midget” enemies as the word is now considered derogatory.
The storyline, penned by Sam Winkler, took established characters and ruined them, incorporating what felt like a forced quota for queer representation and homosexual romance which tainted the Jakobs brand. Winkler was also responsible for New Tales from the Borderlands, a monumental commercial failure that was likely the final straw to Gearbox’s eventual sale to Take-Two by Embracer.
Adding to the backlash, Tiny Tina’s Wonderlands faced even more criticism than Borderlands 3.
Tiny Tina’s Wonderlands was promoted as a standalone title, distinct from Tiny Tina’s Assault on Dragon Keep, the DLC expansion for Borderlands 2. However, it served as a spin-off from the mainline series and was released less than three years after Borderlands 3.
Given the short development window, even with reused assets and foundational elements, it was unlikely that a fully realized new game could be produced in such a limited timeframe. This raised questions about whether the game had enough depth to stand on its own. It didn’t.
Tiny Tina’s Wonderlands was promoted as a major DLC expansion but was marketed as a standalone game with a $60 price tag. Despite sales “surpassing” Take-Two’s expectations, the game was poorly received critically, criticized for its uninspired content and the continuation of the same outdated “wholesome” cringe humor that plagued its brief and forgettable story.
To exacerbate the situation, Gearbox introduced DLCs, which were almost referred to as PLC (Post Launch Content) due to their minimal scale, similar to Borderlands 2’s “Headhunter” Packs. These so-called expansions, which could be completed in less than an hour, were marketed as substantial additions, further alienating the game’s dedicated fanbase.
Lost Boys Interactive however didn’t make the final cut amongst the deal between Embracer and Take-Two Interactive when they sold Gearbox at a massive loss from their original purchase price of 1.3 billion.
It’s unclear whether Embracer intended to retain Lost Boys Interactive as a wholly owned subsidiary or if Take-Two was simply disinterested in the third-rate support studio. Given that Take-Two recently reduced its global workforce by 5%, it’s unlikely they would want to take on additional burdens.
This marks the second round of layoffs at Lost Boys Interactive in just eight months. Back in January, the studio announced it had laid off “some” employees to navigate industry challenges. However, it appears the games they were working on have struggled in a declining market.
The company maintains that it will continue to provide full development services to its existing partners and clients and claims that ongoing projects won’t be affected by the latest cuts, though this is questionable. Even the most inefficient development studios, regardless of their staffing practices, face productivity issues when they cut nearly 140 people, which constitutes over two-thirds of their workforce.
The rationale behind staffing a support studio with such a large number of people is unclear, but it could be linked to tax benefits associated with diversity and inclusion hiring practices. As for Lost Boys Interactive’s current projects, it’s likely they will continue to support Crystal Dynamics, which seems to have avoided Embracer’s recent round of layoffs, unlike Eidos Montreal. Crystal Dynamics is probably working on a new installment in the Tomb Raider franchise, especially since Embracer acquired the IP and the studio from Square Enix, which is grappling with its own financial difficulties due to its focus on Western social and diversity initiatives.
