Inside Bandai Namco’s Employee Isolation or “Expulsion Rooms”

Image Credit: Bandai Namco

Bandai Namco has recently come under scrutiny following reports that it has been using “expulsion rooms” and canceling several high-profile game projects. These decisions have not only caused concerns about the company's financial health and future direction, but about internal company practices and the way they treat all of their employees in general.

Financial Setbacks and Project Cancellations

Bandai Namco has been navigating a difficult financial period, recently reporting a dramatic 96.5% drop in income. This decline is primarily due to several titles underperforming compared to the runaway success of Elden Ring. While games like Dragon Ball Sparking! Zero and Armored Core 6 delivered somewhat strong performances, the company has faced significant setbacks in other areas, prompting a reevaluation of its project portfolio. In response, Bandai Namco canceled at least five major titles, including an anticipated collaboration with Nintendo. These cancellations, while maybe necessary to some extent, have not sat well with fans or employees, many of whom had invested substantial time and energy into these now-shelved projects.

This shift in focus towards higher-quality, but fewer, titles has come at a clear cost. While Bandai Namco aims to refine its game development strategy, the slamming-on-the-breaks cancellation of key projects has left a wake of frustration among both players and the development teams involved.

Expulsion Rooms???

The most contentious issue facing Bandai Namco right now is the alleged use of “expulsion rooms.” In Japan, these spaces, called oidaishi beya, are used to isolate employees and pressure them to resign voluntarily. Rather than being formally laid off, employees are assigned no meaningful work, leading to a stifling, demotivating environment that often pushes them to quit.

Reports suggest that Bandai Namco has placed approximately 200 workers in these rooms, with about half already choosing to resign. Though the practice is technically legal in Japan, it has been widely criticized. These rooms serve as a passive-aggressive method to reduce staff without the need for direct layoffs, and they highlight a cultural tendency in some corporations to encourage voluntary resignations through indirect means.

Bandai Namco, however, has publicly denied the use of such rooms. The company claims that any perceived downtime for employees is simply a waiting period between assignments. Despite these reassurances, the controversy continues to draw attention to how Bandai Namco manages its workforce during times of restructuring and financial strain.

Impact on Company Culture and Talent Retention

The fallout from these practices has serious implications for Bandai Namco’s workplace culture. Game development often relies on collaboration and creative synergy, and the introduction of expulsion rooms risks undermining the trust and morale necessary for this process to thrive. Isolating employees in this way sends a clear message that they are expendable, demotivating the workforce and harming productivity across the board.

There is also the risk of a talent drain. As news of these practices spreads, Bandai Namco may struggle to attract and retain the skilled developers it needs to maintain its position in the highly competitive gaming industry. With other major companies like Square Enix, Capcom, and FromSoftware all competing for the same talent pool, Bandai Namco’s reputation as an employer is now at stake. Any damage to its image could have long-lasting effects on its ability to deliver high-quality games, potentially stifling innovation and growth.

Bandai Namco’s Path Forward

As Bandai Namco continues its internal restructuring, the challenges it faces are obviously pretty significant. The financial struggles, combined with controversial workforce practices, have overshadowed some of the company’s recent successes. If Bandai Namco wishes to maintain its standing in the gaming industry, it will certainly need to reassess its approach, both in terms of game development and employee management.

I think that directly addressing the disconnect between leadership and the workforce will be key to the company’s recovery. Bandai Namco’s leadership must take steps to rebuild trust within the organization while ensuring that future projects meet the high standards players expect.