Splash Damage, a longtime name in multiplayer game development, has announced it is initiating a company-wide consultation process that could lead to job reductions across all roles. The UK-based studio, previously known for its work on well-known franchises, described this move as a difficult but necessary step to adapt to ongoing industry challenges. The workforce now faces a period of uncertainty, with management emphasizing a commitment to handle the situation with transparency and support. Several employees are preparing for possible transitions as the studio seeks stability after parting ways with Tencent and the cancellation of major projects.
Past developments around Splash Damage have frequently involved shifts in ownership and project focus. Earlier coverage suggested optimism when Tencent acquired the studio, intending to support its creative ambitions. However, layoffs and project cancellations followed the recent management change, contrasting with initial expectations of growth and fresh investment. The cancellation of Transformers Reactivate and little news about new ventures have contributed to widespread concern about job security among staff. These events reflect a broader trend in the gaming industry, where economic pressures have led multiple studios to similar outcomes.
Why Did Splash Damage Begin the Consultation Process?
The studio said the consultation process is required as they confront ongoing difficulties in the market. Splash Damage stated,
“This was a difficult step for us to take, but we believe it is necessary so Splash Damage can remain agile and adaptable in what has been a very challenging market.”
The company’s leadership underlines the need to consider every available option to retain staff and notes that the consultation adheres to UK law, granting employees the chance to understand their situation and seek alternatives to redundancy.
What Do Employees Face During Consultation?
Under UK employment regulations, a consultation period must occur before layoffs become official. This process provides employees with the right to insight and participation in potential resolutions, giving those at risk of redundancy more time to prepare. While such consultations do not always avoid layoffs, they extend a degree of support and communication to staff. Splash Damage assured its workforce of continued guidance, noting,
“We know that this kind of change is emotionally tough, and we will do what we can to guide our people through this process with honesty and care.”
What Impact Have Recent Cancellations Had?
The company has faced significant setbacks, such as the cancellation of Transformers Reactivate—an action game announced at The Game Awards 2022. This followed the earlier shutdown of its Stadia-exclusive Outcasters, which compounded the studio’s struggles to maintain its position in a crowded market. With little public communication about Project Astrid, a survival game collaboration with streamers Shroud and Sacriel, employee morale and confidence in future projects remain low. These difficulties have amplified the pressures brought on by an industry marked by contraction and restructuring.
The situation at Splash Damage exemplifies broader industry instability faced by many studios, especially those reliant on large-scale collaborative projects. Retrenchments have become increasingly common as companies respond to shifting market expectations and investment fluctuations. Outlet changes, such as the move from Tencent to private equity ownership, often bring about new operational priorities and additional scrutiny on project viability. Legal frameworks, like mandated consultations in the UK, offer some safeguards for workers but rarely change underlying economic realities.
Monitoring developments like Splash Damage’s consultation process is useful for professionals in interactive entertainment. Awareness of the risks facing even established studios helps potential employees and partners calibrate their expectations in an unpredictable market. For companies, the focus on open communication and supporting affected staff can minimize uncertainty and preserve organizational morale as shifts unfold. As the workspace continues to shift, understanding the legal and business frameworks at play can help those in the industry navigate career and business decisions more confidently, regardless of company size or reputation.
