Japan’s Video Game Makers Get a Pay Raise, But Is It Enough?

Japan’s Video Game Makers Get a Pay Raise, But Is It Enough?

Working in the video game industry is not easy. Conditions are improving, but for a long time there has been pressure to launch games on time. This can mean overtime and the dreaded “crisis” to get games out on time.

Here in Japan, the developers aren’t just hard at work. They are also earning less than their counterparts in the United States. Bandai Namco, Capcom and Koei Tecmo, three of Japan’s biggest game developers, are trying to change that, albeit slowly.

Beginning April 1, the beginning of the Japanese fiscal year, Bandai Namco awarded all employees an average increase 50,000 yen and increased the company’s monthly base salary to 290,000 yen. Koei Tecmo, creators of Ninja Gaiden, did the same by increasing base salaries by 23%. The increase takes effect on June, with wages increasing retroactively from April. That means entry-level employees will now earn at least ¥290,000 per month.

Capcom, the company behind Resident Evil and Monster Hunter, is increasing your average base salary by 30% and introducing a bonus system that, depending on the company, is “more linked to the commercial performance of the company.” The inference is that pay at Capcom appears to be moving away from a seniority-based system still prevalent at many Japanese companies.

These are great companies coming off great years: Bandai Namco’s earnings they’re up; koei-tecmo aware a 20% increase in sales year over year; and Capcom revenue has also jumpedthanks to big hits like Resident Evil Village, after a series of profitable years.

The pandemic has been especially beneficial for game companies, as people spend more time at home and find things to do. If they had not been profitable, would wages have increased? In any case, the raises are long overdue.

Base salaries, although improved, are still lower than in Japan. national average of 4.89 million yen. They are also significantly less than the average video game industry wages in the US, which, according to ZipRecruiter, they sit on a little over $50,000 (¥6.4 million) a year. According to the Gaming Industry Career Guide, even entry-level game programmers in the US earn $44,000 (¥5.6 million). With the weakening yen showing no signs of stopping its slide, Japanese gaming industry wages look even more lackluster.

For decades, wages and prices have been stable in Japan. According Reuters, that is beginning to change. Prime Minister Fumio Kishida has called on companies to raise wages, and the higher wages are part of the country’s plan to hit 2% inflation, which would keep pace with the rising cost of imports.

There could be another all too familiar incentive for the games industry to raise wages. The last December, Reuters reported that lawmakers are planning huge tax breaks for companies that raise their employees’ pay.

Without higher salaries, even if they can only grow gradually, the Japanese games industry could struggle to stay competitive globally, especially as international companies like China’s Tencent increasingly fund new studios and buy established ones.

This makes it even more imperative for Japanese companies to raise wages. Video games are a global form of entertainment, and if domestic companies can’t attract and retain skilled game creators, they could experience an exodus of employees to foreign rivals settling in Japan and abroad. Without change, a brain drain from the Japanese gaming industry is a real possibility.

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