Making Videogames Was the Dream. Mass Layoffs Are the Current Reality.

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[00:00:18] [SPEAKER_04]: Welcome to Tech News Briefing. It's Monday, September 9th. I'm Zoe Thomas for The Wall

[00:00:23] [SPEAKER_04]: Street Journal.

[00:00:25] [SPEAKER_04]: Wi-Fi on planes often isn't very good. Sometimes it's so slow you can barely load a webpage.

[00:00:33] [SPEAKER_04]: But other times, you can stream a movie. So what gives? The WSJ tested Wi-Fi on over

[00:00:39] [SPEAKER_04]: 50 flights. We're going to tell you why internet speeds can vary so much and why things

[00:00:45] [SPEAKER_04]: could soon be getting better.

[00:00:48] [SPEAKER_04]: And then, downsizing in the video game industry has grown rampant. Our reporter Sarah Needleman

[00:00:54] [SPEAKER_04]: will tell us why and what that means for workers who thought they had found their dream jobs.

[00:01:04] [SPEAKER_04]: But first, our senior personal tech columnist Joanna Stern went on quite a journey this

[00:01:10] [SPEAKER_04]: summer. All to test in-flight Wi-Fi. She also enlisted the help of Wall Street Journal colleagues

[00:01:16] [SPEAKER_04]: on their summer travels. Together, they gathered data about internet performance on over 50

[00:01:22] [SPEAKER_04]: flights across eight airlines. And Joanna is here to tell us why some in-flight Wi-Fi

[00:01:28] [SPEAKER_04]: is far superior to others. So Joanna, there are a few different ways planes get the internet.

[00:01:34] [SPEAKER_04]: One is 3G, which some of us will remember having on our cell phones in the mid-2000s.

[00:01:40] [SPEAKER_04]: How does this type of connection work?

[00:01:42] [SPEAKER_03]: When we first started getting in-flight Wi-Fi over a decade ago, this was the type of technology.

[00:01:48] [SPEAKER_03]: It was using an antenna on the plane to connect to a cellular network on the ground and then

[00:01:53] [SPEAKER_03]: it was broadcasting that signal using Wi-Fi through the airplane cabin. And here's the

[00:01:59] [SPEAKER_03]: crazy thing I learned when reporting this story. There are still many planes, 1,380

[00:02:06] [SPEAKER_03]: planes in the US and Canada that still use this type of technology. So what happens is you get

[00:02:14] [SPEAKER_03]: on a plane, you log onto Wi-Fi or you sign up for the Wi-Fi and you just figure, okay, I'm going to

[00:02:19] [SPEAKER_03]: you know, get it doesn't say what kind of Wi-Fi you're going to get. I'm just going to be able to

[00:02:23] [SPEAKER_03]: get my email and stream and do normal internet things. But it turns out you're actually connecting

[00:02:28] [SPEAKER_03]: to this really old technology. But then you might get on another plane and it might be okay, you

[00:02:33] [SPEAKER_03]: might actually stream and you might be able to send email and work in Google Docs and maybe do

[00:02:38] [SPEAKER_03]: Slack. And that's because it's using newer technology.

[00:02:41] [SPEAKER_04]: So this air to ground connection is not great. What have some airlines done to improve that?

[00:02:47] [SPEAKER_03]: So what companies decide to do is they decide to move to geostationary satellites. And this is

[00:02:54] [SPEAKER_03]: connectivity powered by satellites over 20,000 miles out. The good experience you ever had on

[00:03:00] [SPEAKER_03]: in-flight Wi-Fi was some sort of geostationary satellite. But here's where it gets more

[00:03:04] [SPEAKER_03]: complicated again. All the US airlines have different tech providers of this geostationary type

[00:03:11] [SPEAKER_03]: of tech. There's one called IntelSat, there's one called ViyaSat, there's one called Panasonic you

[00:03:16] [SPEAKER_03]: might have heard of. And all of them, they are different companies and they have different

[00:03:20] [SPEAKER_03]: antennas, different radio frequencies and different satellite technologies. Which means that you've got

[00:03:26] [SPEAKER_03]: all these different airlines and not only are they all using different types of technology, but even

[00:03:31] [SPEAKER_03]: some of the planes they have are using different technologies. So some might be using that old air

[00:03:36] [SPEAKER_03]: to ground cellular stuff, some might be using that geo stuff, some might be using an older form of geo

[00:03:41] [SPEAKER_03]: stuff versus a newer form of geo stuff.

[00:03:45] [SPEAKER_03]: So is Wi-Fi on flights going to get better? Is there good news?

[00:03:48] [SPEAKER_03]: The good news is that I have tested Wi-Fi that is better and it is in the air. I promise you I haven't

[00:03:55] [SPEAKER_03]: only tested it in my house, but some of this new technology which is based on low Earth orbit

[00:04:01] [SPEAKER_03]: satellites. So we have those geo satellites and now they're moving to lower down, lower Earth orbit

[00:04:07] [SPEAKER_03]: satellites are now providing the internet on planes. And this is not only faster, but the latency is

[00:04:14] [SPEAKER_03]: better. The speed in which it can send things is much better, which means apps like Google Docs or

[00:04:20] [SPEAKER_03]: Slack and even streaming perform better. So I tested this in two places. One, are you familiar with

[00:04:28] [SPEAKER_03]: Starlink?

[00:04:29] [SPEAKER_03]: Yeah, Elon Musk's satellite internet provider.

[00:04:32] [SPEAKER_03]: Exactly. Starlink is starting to come to planes. Here's the downside of it. It's happening right now

[00:04:38] [SPEAKER_03]: on smaller carriers. Hawaiian Airlines is one of the biggest ones, but I tested it on a smaller carrier

[00:04:44] [SPEAKER_03]: called JSX. And I tested it on a flight from Dallas to Houston and then Houston back to Dallas. And it was

[00:04:51] [SPEAKER_03]: fast. I'm talking really fast. And not only did I just use it on my laptop, because I wanted to really test

[00:04:58] [SPEAKER_03]: this stuff. I brought 10 different devices on board. So I was streaming on tablets, laptops, and

[00:05:03] [SPEAKER_03]: smartphones. And not only was I doing regular Netflix or YouTube streaming, but I was also video calling

[00:05:09] [SPEAKER_03]: with Earth and video calling with other people on the airplane. And all of this worked.

[00:05:15] [SPEAKER_04]: Interesting. Well, soon, hopefully we'll all be able to stream our Netflix and our conversations with our

[00:05:21] [SPEAKER_04]: bosses.

[00:05:22] [SPEAKER_04]: And this podcast.

[00:05:23] [SPEAKER_04]: And this podcast. Exactly. That was our senior personal tech columnist Joanna Stern. Thanks for joining us.

[00:05:30] [SPEAKER_04]: Thanks for having me.

[00:05:31] [SPEAKER_04]: Coming up, after decades turning their passions into careers, many in the video game industry are struggling

[00:05:38] [SPEAKER_04]: with the new reality of mass layoffs. We'll have more on that after the break.

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[00:06:26] [SPEAKER_04]: Like film, sports and music, the video game industry is a tough one to break into. But for those who did, gaming,

[00:06:35] [SPEAKER_04]: which has seen steady growth, offered pretty reliable work. That is until recently. The number of layoffs in

[00:06:42] [SPEAKER_04]: 2024 has already topped those from the previous two years. That's turned a dream job into a nightmare scenario for

[00:06:50] [SPEAKER_04]: many. Here to tell us more is our reporter Sarah Needleman. So Sarah, give us a sense of how it is right now for

[00:06:57] [SPEAKER_04]: people working in the video game industry.

[00:06:59] [SPEAKER_01]: These are people who have put in some cases decades of experience into the field and they're getting let go, maybe

[00:07:07] [SPEAKER_01]: find another gig and then six months later lose that one. So it's a really brutal market right now. One of the ones I

[00:07:14] [SPEAKER_01]: spoke to is a recruiter who specializes in recruiting software developers for making games. And certainly he's out of work

[00:07:21] [SPEAKER_01]: because nobody's hiring. He and others have said they've just put out dozens and dozens of resumes and are just not

[00:07:28] [SPEAKER_01]: getting offers back. It's just incredibly cutthroat right now.

[00:07:31] [SPEAKER_04]: Can you tell us about someone who's been in the video game industry their whole career who's now dealing with this?

[00:07:36] [SPEAKER_01]: Tal Rainey is an example of someone who has been in gaming pretty much since he got out of college. He rose from quality

[00:07:43] [SPEAKER_01]: assurance tester to lead producer over the past two decades. It was really a dream job for him. And last fall he got laid off

[00:07:52] [SPEAKER_01]: from Epic Games, the company that makes Fortnite. And he did get hired relatively fast by an indie game studio a couple

[00:07:59] [SPEAKER_01]: months later and then he got laid off again. Now he said he's pretty worried that if he even does get another job that

[00:08:05] [SPEAKER_01]: he'll lose it again.

[00:08:07] [SPEAKER_04]: Like the tech sector, the video game industry hired a lot during the pandemic. How much of the situation is just a

[00:08:13] [SPEAKER_04]: correction from that?

[00:08:15] [SPEAKER_01]: That is definitely part of it. But one of the long term trends that's been happening is that games are getting much

[00:08:20] [SPEAKER_01]: bigger and the big franchises are the ones that players are gravitating towards. Developers continuously update these

[00:08:27] [SPEAKER_01]: games with more and more content. And that means people are sticking with just one or two games at a time. They're not

[00:08:34] [SPEAKER_01]: going from starting, finishing, moving on and picking up another one. And so there's less spending across the industry.

[00:08:41] [SPEAKER_01]: There's also more competition for people's attention. Platforms like Netflix, social media, these are all competitive

[00:08:48] [SPEAKER_01]: factors for the video game industry. So you combine these things together and we have a pretty difficult market.

[00:08:54] [SPEAKER_04]: You're actually reporting that consumer spending on games is forecast to grow 3.6 percent this year. I mean, how could

[00:09:01] [SPEAKER_04]: this affect hiring and layoffs?

[00:09:03] [SPEAKER_01]: That is some growth, but this comes after we saw spending shrink by 6.3 percent in 2022, which came after this

[00:09:12] [SPEAKER_01]: unprecedented growth during the pandemic. Then 2020, spending grew about 23 percent. This 3.6 percent growth this year

[00:09:20] [SPEAKER_01]: is really a pretty modest recovery considering what we've seen in the past. And companies are still being very

[00:09:26] [SPEAKER_01]: cautious. Companies are waiting to see how players will react to their latest releases. And we've seen a lot of games be

[00:09:33] [SPEAKER_01]: canceled. They just didn't take off. In fact, just the other day, PlayStation canceled a game called Concord just a few

[00:09:39] [SPEAKER_01]: weeks after launching it because it performed so poorly. The industry has focused a shift from emphasis on growth to

[00:09:44] [SPEAKER_01]: profitability and efficiency.

[00:09:46] [SPEAKER_04]: How did the people you spoke to say these layoffs compared to past layoffs?

[00:09:50] [SPEAKER_01]: They say it's different because the number of layoffs are higher, they're happening more frequently. And really what

[00:09:56] [SPEAKER_01]: it's different is that they're having a really hard time getting a new job. One of the people I spoke to said the last

[00:10:02] [SPEAKER_01]: time he had been laid off, which was back in 2003, he found a job pretty quickly. And now he's going on 18 months

[00:10:08] [SPEAKER_01]: without anything other than a freelance gig. And then you also have to keep in mind that game professionals could

[00:10:13] [SPEAKER_01]: potentially in past years, more easily transfer their skills to other areas within tech. But the problem right now is

[00:10:20] [SPEAKER_01]: that even tech companies outside of gaming are also doing layoffs. We just saw Intel have a huge amount of layoffs.

[00:10:26] [SPEAKER_01]: Amazon, Microsoft, Google, they've all had mass layoffs in just the past few years. And so there are fewer of those

[00:10:32] [SPEAKER_01]: opportunities as well.

[00:10:34] [SPEAKER_04]: What are their feelings about the games that they've worked on? How did the people you spoke with say they felt maybe

[00:10:39] [SPEAKER_04]: about going back and playing some of the games that they helped create?

[00:10:43] [SPEAKER_01]: One of the tough things for people who get laid off in gaming is they love playing games. It's a passion. Once you get

[00:10:50] [SPEAKER_01]: behind the scenes and you're involved in the making of games and promoting them, things like that from the inside, it

[00:10:54] [SPEAKER_01]: could be a little strange to then go back on the outside. And playing those games no longer is quite as fun. Things have

[00:11:00] [SPEAKER_01]: been tainted a little bit by the discomfort of the layoff. So some of the people I spoke to said that they were even big

[00:11:05] [SPEAKER_01]: fans of certain games and then went out of their way to work for companies that made some of their favorite franchises.

[00:11:10] [SPEAKER_01]: Now they've been let go and just picking up the controller again, just feels a little awkward and a little depressing.

[00:11:17] [SPEAKER_04]: That was our reporter Sarah Needleman. And that's it for Tech News Briefing. Today's show was produced by Zoe

[00:11:23] [SPEAKER_04]: Culkin with supervising producer Catherine Millsop. I'm Zoe Thomas for The Wall Street Journal. We'll be back this afternoon

[00:11:29] [SPEAKER_04]: with TNB Tech Minute. Thanks for listening.

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