Quebec video game industry faces layoffs and uncertainty

Quebec’s video game sector is under pressure as studios in Montreal and elsewhere cut jobs, delay projects and adjust to weaker market conditions after the pandemicera boom. Microsoftowned Xbox recently announced thousands of layoffs across the company, including staff at Bethesda Game Studios in Montreal. Other major employers such as Epic Games and Ubisoft have also reduced head counts, adding to recent cuts at Eidos, Electronic Arts and Behaviour Interactive. Industry leaders say the slowdown reflects several forces at once: postpandemic overspending, higher living costs, rising hardware costs, reduced government tax support and growing competition from other forms of digital entertainment. The spread of generative AI is also adding uncertainty, though its impact on jobs remains unclear. Despite the downturn, some Montreal studios continue to grow. Red Barrels, the company behind the Outlast series, says it has expanded over the past several years and posted a strong year driven by sales of Outlast Trials. Still, many developers say the sector remains in a restructuring period, with limited visibility on what comes next.