From the Atari Shock to a Modern Crisis: Analyzing Mass Layoffs in the Post-Pandemic U.S. Video Game Industry

Since 2023, the video game industry (VGI) has faced a severe workforce reduction marked by widespread layoffs, studio closures, and project cancellations, with the United States being the most affected nation. This study employs comparative analysis to investigate the underlying drivers of this layoff crisis, drawing parallels with the 1983 Video Game Crash (Atari Shock) to identify historical commonalities and contemporary divergences. Using a three-level framework, it analyzes macroeconomic shifts (e.g., monetary policy changes), industry dynamics (e.g., management inefficiencies, rising costs), and project-level risks (e.g., failed live-service transitions, imitative design) to interpret systemic vulnerabilities through established theories in business studies, project management, and game development. Notably, the industry's resilience—rooted in globalized production networks and diversified revenue streams—has averted systemic collapse, instead containing the crisis as a supply-side turbulence.