The answer: worker rights and employment protections.

This is the best summary I could come up with:

Typically, layoff season arrives around Christmas: a flurry of pink slips, empty desks, the anxieties of the newly unemployed, all so companies can cut costs and fatten up bottom lines just before the calendar year ends.

Matanle outlines a historic picture not of innate employment rights but one in which Japanese courts, at key moments, such as 1975’s Nihon Shokuen Seizō case, ruled in favor of workers and unions.

Should a Japanese company be found to break the law by, say, reducing its workforce to cynically juice the numbers of a quarterly report, dismissed employees are liable to be reinstated.

Finally, there are haken, dispatch workers or “hired guns,” says Colin Williamson, lead tech artist at 17-Bit who has worked in Japan for 15 years including a stint at Square Enix in the aughts.

Serkan Toto, a veteran analyst of the Japanese games industry based in Tokyo, points to the country’s long-term shrinking population (down 837,000 in 2024) as an additional factor that could theoretically benefit workers by pushing up demand for their services.

The actions of Embracer’s C-suite and those at video game companies couldn’t stand in sharper relief to the famous words of Nintendo’s Iwata who, just over a decade ago, said, “I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.” These are the words Miyazaki was referencing when he spoke about avoiding layoffs at FromSoftware: it is not just the angst, nervousness, and worries of an endemic layoff culture that affects work but also the practicalities of securing alternative employment, drawing focus away from the task at hand.

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