The shorter answer is “diplomatically but honestly”. The longer answer “with a good answer you’ve prepared and practiced ahead of time”.
In order to understand what kind of answer you want to give, it helps to understand what question the interviewer is actually asking. The interviewer isn’t actually asking why you left your last job, the interviewer is looking for reasons why they shouldn’t hire you. They want to make sure that, should you be hired, you aren’t going to cause trouble for the company. The specific dealbreakers that the interviewer is looking for with this question are usually outright lying, trash talking your former employer, or an angry/bad attitude.
I shouldn’t have to tell you why lying is a dealbreaker - I don’t think anybody wants to work with a liar. Big lies like why a candidate left a former job at an interview are often found out pretty quickly - the game industry is pretty small. It isn’t difficult to find somebody in the grapevine who is a candidate’s former coworker, and nobody likes working with a jerk. If a candidate answers this question with an eyebrow-raising answer in an interview, we can often do a quick reference check to see if they were telling the truth.
If a candidate trash talks one former employer, then the interviewer can immediately imagine the candidate eventually leaving the interviewing company and trash talking them as well. Nobody likes having their dirty laundry aired, especially if the candidate isn’t necessarily a good one. If the candidate has a bad attitude at the interview about this, it’s easy to imagine them having a bad attitude while working with the team. Nobody wants to put up with that.
Your best bet is to have an answer prepared - a diplomatic, but honest one. The least eyebrow-raising answer is “I was part of a larger layoff”, since that speaks to circumstances and not necessarily personal performance. Inability to work with somebody can be described as a “bad fit” - you were looking for X, while they were looking for Y, so you found it better to mutually part ways. If the prior job loss is due to performance reasons, you should make careful preparations about how you want to discuss it. You can say something like “In retrospect, I realize that my skillset wasn’t suited to the former role. That led to friction on the team and ultimately to my dismissal. I’ve since learned and grown significantly and believe that I am a much better fit today for this position”.
Don’t just think about how you’d answer the question - prepare for it beforehand with someone you trust to give honest feedback. Take their feedback to heart and improve your answer. Make sure that you’re ready to give it when asked - the delivery is almost as important as the content. If you come across as nervous while giving your answer, it may not seem genuine to the interviewer. You know they’ll ask, so practice it.
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