Canadian developer East Side Games Group has announced a 20% reduction in its workforce as it attempts to “transform ESGG into a leaner, stronger, and more focused company, well-equipped to tackle the challenges and opportunities that lie ahead.”

"We firmly believe that the steps we are taking now are crucial for the long-term success of ESGG,” said CEO ESGG Jason Bailey. “While this decision was not made lightly, it is a necessary one as we work to create a leaner and more adaptable organisation."

Based in Vancouver, Canada - a hotbed for the creative industry, and a frequent shooting location for all manner of film and television productions - East Side Games has capitalised on the local talent pool and Vancouver’s rich heritage in the world of television, making its name partly with the release of games based on existing IPs such as The Office, Archer, and It’s Always Sunny in Philadelphia.

The strong performance of East Side Games’ portfolio led to record revenue of $116.3 million CAD ($85.5 USD) in 2022, however the company has seen significant declines in 2023 so far. The developer reported a 32% quarter-on-quarter decline in revenue in Q1 2023, with ARPDAU declining from $1.04 to $0.95 despite relative stability in terms of daily active users.

Delayed decline?

The company also announced its intention to buy back over four million shares earlier this month, suggesting a shift in company strategy going forward. Despite the declines, the company also remained optimistic about its future, with two major releases in 2023, Milk Farm Tycoon and Doctor Who: Lost in Time offering opportunities for future growth.

It’s worth noting, however, that these layoffs do suggest some struggles with the company, or else a lower than expected return on its latest titles. However, it’s worth considering the continued normalisation of the industry following the so-called “Covid boom” - while 2022 proved to be a record year for East Side Games, many companies within the industry, including some of its biggest players, reported significant declines. It’s possible that this decline is simply a delayed response for the company, and this reduction could be an attempt to maintain profitability as it continues to navigate the ever-changing gaming landscape.