Bandai Namco Holdings, the renowned video game publisher, is reportedly downsizing its workforce following the cancellation of several game titles due to disappointing market demand, according to sources familiar with the situation.
Headquartered in Tokyo, the company is adopting a traditional Japanese strategy for workforce reduction, which involves assigning employees to what are known as “expulsion rooms.” In these settings, workers do not have assigned tasks, creating an environment that encourages voluntary departures. As of April, approximately 200 of Bandai Namco Studios’ 1,300 employees have been moved to these rooms, with nearly 100 having already resigned. More resignations are anticipated in the near future, insiders indicated.
These “oidashi beya,” or expulsion rooms, are a tactic used by some Japanese corporations operating under stringent labor regulations. Employees placed in these rooms typically have no work to do but are aware that their lack of activity could negatively impact their severance compensation when they eventually leave the organization. Many utilize this time to seek new employment opportunities.
Bandai Namco, however, has stated that its intention is not to drive employees out of the company.
A spokesperson for Bandai Namco remarked, “Our decisions to discontinue games stem from thorough evaluations of our circumstances. While some employees may have to wait for their next project assignment, we do continue to provide new opportunities as they arise. There is no specific organization like an ‘oidashi beya’ at Bandai Namco Studios designed to pressure individuals into resigning.”
Founded in 1980 with the launch of the iconic Pac-Man arcade game, Bandai Namco has a rich legacy in the gaming industry. Its current portfolio includes popular titles such as Dragon Ball and Gundam.
Similar to its industry peers, Bandai Namco is now facing pressures to reduce expenses and adapt to a decline in gaming engagement post-pandemic. The company has particularly felt the impact in the smartphone and online gaming segments, prompting a reevaluation of its game lineup that has led to significant financial write-downs totaling JPY 21 billion ($141 million or approximately Rs. 1,185 crore) over the last three quarters.
Earlier this year, the company discontinued the smartphone game Tales of the Rays and announced plans to take down the high-profile online game Blue Protocol in January. Furthermore, it has opted to either cancel or pause development on several projects, including games featuring popular anime characters like Naruto and One Piece, as well as a title commissioned by Nintendo.
Competitor Square Enix Holdings has similarly canceled several underperforming smartphone games, while Sony Group discontinued its online game Concord merely two weeks after its debut.
Recently, an anonymous website surfaced, alleging that Bandai Namco is employing various strategies to encourage employees to leave. Although the company is aware of the site, a representative stated that the information presented is inaccurate, declining to provide further details.
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