The video game industry is facing its biggest crisis in years.
The bankruptcy of Madrid studio Tequila Works was one of the surprises of the day, but it will not take anyone who follows current events in the industry by surprise. The fate of the team that brought us exceptional games like Deadlight or Rime is just one of the many downfalls we’ve seen lately in the video game sector.
Change of directive. Last week, the company saw a change in its board of directors, with Terence Mosca taking over as CEO and founders Raul Rubio and Luz Sancho leaving their positions. A year ago, the studio published Songs of Nunu in collaboration with League of Legends creators Riot Games. They had several more projects planned, and it was the cancellation of two of them that led to Tequila’s bankruptcy.
Domino. The chaos began in early October, when the layoff of some employees led to the cancellation of one of the games published by Riot Games. The announcement was made via a Linkedin post and was the latest in a domino of layoffs that began at Riot Games itself, which in January shuttered its own Riot Forge, a label that produced Tequila games and focused on the League of Legends spin-off. At the same time, 11% of the workforce, 540 jobs, was reduced.
“Long-term market conditions.” Tequila blames these conditions for the studio’s closure in a statement signed by Terence Mosca. It also said they are “proud of what we have achieved together” and that “we are doing everything we can to offer support and guidance to our teams during these challenging times.” Tequila Works informs us that it will not be making any statement on this matter other than this statement. We’ve also reached out to former studio executives and will update this post if we hear from them.
Bad times for Spanish industry. Tequila’s bankruptcy is a particularly significant event considering that they are signatories to two of the best-selling Spanish video games in history: Deadlight (4,900,000 copies) and Rime (4,000,000). But this is no doubt not an isolated incident: after Tencent announced in March 2022 that it would acquire part of Novarama, the Spanish studio behind the popular Invizimals franchise, the studio closed. These are just a couple of names: the coordinator of the Spanish Video Game Union mentioned other studios such as Smilegate Barcelona, and ERES such as Codigames or Pendulo Studios. A recent study by Devuego in May showed that more than half of the people laid off in this sector in our country are still unemployed.
13,000 layoffs worldwide. These are the ones that are roughly quantified on the Game Industry layoffs website, which already includes recent events such as those of NaturalMotion, Cryptic Studios or Tequila Works itself. 2024 was an absolutely devastating year for the industry (10,500 layoffs were recorded in all of 2023, and 8,500 in 2022), with mass layoffs as impressive as those at Microsoft (no exact numbers, but about 4,000) . sector-related layoffs), Sony (900 layoffs) or EA (650 workers). The situation of deep crisis arose due to post-pandemic excesses and excessive investments, the balance of which is now being restored.
Title | Tequila Works
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