Game Over? Think again!
"‘Gaming is dying.’ So claim the dimwitted cretins, year after year. But beyond their doom and gloom lies a reality far more fascinating and resilient.
Layoffs. Unfinished games. Cancelled releases. Microtransactions, remakes, remasters. Strikes, greedy corporations, bad game quality. ‘Gaming has a serious problem,’ ‘Why can we not have nice things?’ ‘The gaming industry is in trouble,’ ‘in decline,’ ‘it’ll destroy itself!’ ‘Game Over for the Industry!’
Man, can we pause the game here for a moment?
“Every year, without fail, dimwitted cretins produce a litany of videos 'Gaming is dying'.”
Totally agree. So many Youtubers shouting GAME OVER for the industry. But it’s not as grim as the clickbait suggests. I can tell you those rather one-sided headlines make you depressed for nothing.
Most people just have this mindset where they easily gravitate towards negativity - so l want to shed some positive light on an industry that I myself work in, asking myself:
Are these pain points really symptoms of an industry dying?
Or just growing pains?
Well, the gaming industry is not dying, or destroying itself – it’s actually leveling up!
As an ex-product manager and still working with developers today, I’ve been up close with those challenges:
Releasing unfinished software? Been there, done that.
Feeling the reverberations of layoffs? Been there, done that.
Witnessing a gaming giant scoop up an indie gem? Been there, done that.
I also remember when games were just one-and-done releases. Glitches were expected and accepted. But times had changed. Enter software-as-a-service, where you don’t own, but rent a software. And with it, the way we used to develop games changed as well. From traditional, polished game launches, we've shifted to a quicker agile release model, refining things post-launch based on player feedback. Fast forward to today, and we see early access, remakes, remasters, big corporations on a shopping spree, and high-budget releases that sometimes miss the mark.
So, I get the frustrations. But it’s also very tempting to cherry-pick the flaws and predict a gaming apocalypse. So time to zoom out and look at the bigger picture:
In the ‘70-’80s, Arcades were the first consumer-facing platform that introduced video gaming. They were coin-operated machines, where players inserted coins in exchange for time in a game. Btw, this was the precursor to modern microtransactions. All leading Pacman to over 3.5B in revenue, and Space Invaders to over 2.7B in revenue.
The '80s saw home consoles like Nintendo and Atari coming along, leading to the boxed revenue model - which meant people made single purchases of physical game copies.
Then the digital transformation kicked in. Physical copies were out, and digital storefronts were in. Big names created their own online platforms, pushing the Digital Revenue and Distribution model. Thanks to this digital shift, microtransactions returned, with DLCs, loot boxes, and mobile game introducing the free-to-play/pay-to-win business model.
And with streaming services, the gaming industry adopted the subscription revenue model, with the likes of PS Now and Xbox Game Pass.
Lastly, the games-as-a-service model comes along, with forever games backed by microtransactions, all pointing to cloud-based subscriptions.
With every transition from one business model to another, there was always a chorus in the background singing the same "doom and gloom" song. The Arcade operators bashed the boxed revenue model; traditional retailers bashed digital distribution (What if servers go down? What happens to unboxing a new game?); and as cloud gaming gains traction, digital storefront traditionalists cry “What about latency? Or data usage?”
You see, some things, never change. But one thing is always changing: The industry. So, before you hit that next clickbait video declaring the 'end of gaming as we know it,' take a step back, breath, zoom out and remember that industries are constantly in flux.
It's not about a descent into chaos, but an evolution. And judging by the Lindy effect (the idea that the longer something has been around, the longer it’ll stay around), the gaming industry is a resilient animal. Even with shifts in development models, game quality, or rise of subscription services, the industry's got some serious staying power, with highs and lows. And with every low, we discover new ways to play that we never considered before.
Take the battle royale genre for instance. A few years ago, who would've thought that 100 players jumping out of a plane or bus fighting to be the last one standing would be such a hit? Critics labeled it as just a 'fad' or a 'bad change' from conventional gaming. But titles like 'Fortnite', 'Apex Legends', and 'warzone' stand testament for how this reshaped the gaming culture.
All this was not a drift away, but an exploration of new uncharted territory. Anyways, it seems that another uncharted territory are “stock values”, as some use it as a metric for the state of an industry.
“EAs past year in share value, it's kind of wacky and it drops a lot and it rises but it definitely doesn't show consistent growth like investors would want, here's take two and here's Ubisoft. It's just going down.”
Ok. Let me continue. Roblox stocks are tumbling. Unity is taking a nose-drive. Tencent could do better. But on the flipside, Nintendo is quite alright, Sony's stock is climbing, EA seems doing just fine, of course. Take-Two Interactive is rising. Even though some gaming companies experience dips, their stock value don’t reflect the overall health of an industry, especially when other companies are having success.
Reception of a game releases, management decisions, global economic factors, wars and pandemics and interesting retirements all influence a company’s stock value, but using that metric as a gauge for an entire industry? That’s a no-go. A yes-go would be to zoom out again, and see that global data tells a different story. From 2018 to 2026, gaming revenue jumped from 121.5 billion to a projected 500 billion. 2023 alone promises to make 333 billion USD. Growth is widespread: Cloud Gaming is expanding and so is VR gaming. Downloads and Mobile games are surging. This doesn’t shout decline. It shouts we the consumers are behind these booming numbers.
So, with such booming numbers, why all the layoffs you ask? "They are doing a bunch of layoffs”, "Epic Games has laid off a significant number of its workforce,"
Ah yeah, layoffs. Let's look at a recent example. Epic Games.
"When you try to rationalize it, it sounds made up. It's 40 billion dollar valuation”
Eh…High valuation ≠ we’ve got money to spend.
That’s just flawed information. Just because a firm is valued at $40 billion doesn't mean it has $40 billion sitting in a bank account and is immune to layoffs.
"Their profit margins increase".
Same with profit margins. Even if profit margins are increasing, it doesn't mean absolute profit is. If a company earns more per item but sells fewer items, they can still earn less overall.
“Tencent, which is one of the biggest companies in the world”
Yeah, Tencent. Even though Tencent is a significant stakeholder in Epic, it doesn't mean they micro-manage operational decisions like hiring or layoffs. In fact, layoffs across the industry had more to do with a popping pandemic bubble and overambitious acquisitions. Overambitious, because companies were banking on a growing market. But, the bubble popped and reality hit. And it hit really hard. Consumer behavior shifted, and with it the focus of the companies.
So: Layoffs alone don't indicate an industry-wide problem. But rather course correction, recalibration, adaptation. Gaming IS a consumer-driven industry. We dictate with our wallets and our preferences, what companies need to adapt to. And because of constant adaptation, especially AAA game dev companies need to play it safe, sometimes more, sometimes less.
So, let’s talk about remasters, remakes and risks!
CoD = $300 million.
Cyperunk Phatom Liberty = $90 million.
GTA 5: $265 million.
GTA 6: A rumored $2 billion.
In development costs.
We all know that AAA game dev budgets are soaring due to several reasons, from marketing spends, to hiring more specialist, to bigger market needs and changing consumer behaviors and players expectations. Every decade, the cost of producing a game has been observed to increase by tenfold. And when dev costs go upwards, so do the financial risks. No dev wants to make such a hefty investment without some assurance of success. So companies play it safe. One play-it-safe strategy is (A) Ride the nostalgia wave – aka remasters and remakes. They usually guarantee success because of already established fandom. Hence the 90’s surge in shows like Stranger Things and games like FF 7 remake. But it has a dual advantage: It makes us older gamers happy, AND it also helps preserve older games. As hardware and graphics constantly evolve, most of the older games become simply unplayable, unless you get yourself a nice emulator from China. I like the uptick in remakes and remasters. I get an enhanced experience of my fav classic game, and studios get to cover dev costs quicker by pushing out remakes. An uptick in remakes and remasters doesn't signal the gaming industry's decline or a lack of innovation (I mean, the innovation part is coming from the indie game scene anyways). But with standout titles like Final Fantasy 7 Rebirth, Dead Space Remake, Metroid Prime Remastered, Persona 4, and Silent Hill 2, it's evident that while studios are reimagining classics, the quality remains top-tier. With Gothic Remake hopefully following suit.
And Resident Evil 4? It’s a remake that stands as the highest-rated games of this year. And even one of the lowest-rated games upon launch is making a comeback: Cyberpunk.
Oups. Did I just mention an unfinished game?
Well, let’s talk unfinished game releases - or shall I say - live-service games? Forever games? In any case, neither is a symptom of an industry in decline.
Today, terms like 'early access,' ‘beta’, 'live service games,' and 'unfinished games' often get mixed up. Though some studios might misuse 'early access' or 'live service' to release half-baked products, the core idea is promising: games aren't static anymore. Instead, they're dynamic, evolving with input from both developers and the community. The problem arises when the model is used more for revenue than player experience. So, in principle, that’s a really good concept. When you buy, you’re not buying the game as it is on Day 1. You’re investing in it, its roadmap and the future content. Value compounds over time. And with you investing in it, devs fund future developments based on player feedback. Sure, you choose to wait for a polished version, but you'd be skipping the chance to shape the game’s evolution firsthand. It's your call..
Now, what about “unfinished releases” like Cyberpunk? Or No-Mans Sky? AC Unity, Sonic Boom, Mass Effect: Andromeda, Fallout 76, Final Fantasy XIV, Battlefield 2042, Anthem, Rainbow Six Siege….yes, I can continue the list, but I won’t. Because many of them are making a great comeback, with Cyberpunk, RSix Siege and even Battlefield 2042 being on the Steam charts. It's proof that even rocky launches can turn around with time and effort. And then we have success stories from the get-go, games like Valheim, Subnautica, Factorio, The Long Dark, Vampire Survivors, and Hades all reflect the devs dedication and feedback from their communities. And a job done par excellence? After six years in development and three years in early access, Baldur's Gate 3 on release day was far from being an unfinished one. That prime example restored the standards on how to use Early Access and continuous development. It underscored what some releases, like Cyberpunk, initially missed: the essence of transparent communication and collaborative evolution with fans.
I have so much more to say, but maybe for another video. I am optimistic about gaming’s future. The gaming world's evolving and transforming, constantly, with highs and lows. And it's a ride. We moved from arcades, boxed revenue and digital distribution models to a mix of free-to-play and live-service games. And it won’t stop there. Yes, there will always be some companies pushing questionable monetary strategies, but others will know how strike a balance between healthy monetization and player experience. The beauty is: The power is in our hands anyways. We can always tell studios what we want with our wallets, and play what we love!
The story of gaming is far from dead or dying or destroying itself; it’s merely turning a new page. For the better.