2023 was a turbulent year for the video game industry. Microsoft made a historic acquisition by purchasing Activision Blizzard King for $69 billion, marking the largest gaming deal ever. Additionally, actors went on strike due to concerns about the use of artificial intelligence, and over 10,000 game developers lost their jobs.
As we reach the midpoint of 2024, the wave of job cuts continues, surpassing last year’s numbers with over 11,000 layoffs already reported, according to a report from Variety.
“What was once a period of remarkable growth has now turned into a significant dry spell,” remarked Scripps News producer Matt Picht, who hosts the documentary series “Next Level” exploring the link between video games and society.
Picht pointed out that while the gaming industry has expanded in recent years, game prices have not kept up with inflation or investor expectations.
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Analysts from Newzoo, a video game industry data company, told Scripps News that the cyclic nature of growth and contraction is typical for many industries but the scale of job losses in the gaming sector is exacerbated by unique circumstances.
These circumstances include fewer people playing games at home post-pandemic, downsizing by game companies after launch, and a broad industry downsizing trend despite years of double-digit growth.
Looking ahead, Newzoo analysts anticipate more game cancellations and Picht predicts changes in game quality as the industry navigates these challenges.
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Picht noted the rising costs of developing large-scale single-player games, impacting the ability to generate returns. Companies facing layoffs include Activision Blizzard, Xbox, Playstation, EA, Riot Games, Twitch, and recently, Take-Two Interactive.
“The industry upheaval makes it increasingly challenging for these immersive gaming experiences to reach the market,” said Picht.
