NetEase-Owned SkyBox Labs Slashes Workforce Due To 'Unprecedented Challenges'

Canadian game developer SkyBox Labs has laid off 25 employees, becoming the latest studio affected by the sweeping economic difficulties plaguing the gaming industry.

In a statement shared on LinkedIn last week, SkyBox said: “Today we informed our studio that we made a reduction to our staff at SkyBox.”

“In total, 25 people from our studio have been affected. Despite all our best efforts, we are not immune to the unprecedented challenges that have impacted so many companies in the industry.”

See Also: NetEase To Close Ouka Studios, Developer Of Visions Of Mana: Report

SkyBox Labs has contributed to significant co-development projects. Halo Infinite, Minecraft, and Fallout 76 are among the titles it developed. The recent layoffs come less than two years after Chinese gaming giant NetEase Inc (NASDAQ:NTES) acquired the studio.

Despite the backing of a major publisher, SkyBox's struggles reflect a broader trend in the industry. Nowadays, developers face a combination of rising production costs, increased competition, and evolving market demands.

“Every impacted employee will be fully supported through severance, extended benefits, career transition services, and connection to other resources to provide them with the assistance they require during this difficult time,” the company promised.

Industry-Wide Pressures

Numerous studios, both large and small, have been forced to adjust. The post-pandemic environment is marked by rising costs and shifting consumer expectations.

Game development timelines have become longer, production budgets have skyrocketed, and monetization strategies have come under intense scrutiny.

SkyBox and other studios specializing in co-development must maintain profitability while navigating the demands of larger publishers. This adds yet another layer of complexity.

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