2023 proved to be a challenging year for the video game industry. Microsoft made headlines by acquiring Activision Blizzard King for a whopping $69 billion, marking the largest gaming acquisition in history. Additionally, actors went on strike due to concerns about the use of artificial intelligence, and over 10,000 game developers were laid off.
As we reach the midway point of 2024, the trend of job losses continues with over 11,000 layoffs reported so far this year, surpassing the numbers from the previous year. According to a Variety report.
“What was once a period of significant growth has now turned into a noticeable downturn,” noted Scripps News producer Matt Picht.
Picht, the producer and host of “Next Level,” Scripps News’ documentary series focusing on the impact of video games on society, highlighted the fact that while the gaming industry has expanded in recent years, the pricing of games has not kept pace with inflation or the expectations of new investors.
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Analysts at Newzoo, a video game industry data company, shared with Scripps News that the cyclical nature of growth and decline is a common occurrence in many industries. However, the scale of job cuts in the gaming sector in recent years is exacerbated by unique industry-specific circumstances, including reduced home gaming engagement post-pandemic, downsizing of teams post-game launch, and simultaneous downsizing across the industry despite years of sustained growth.
Anticipating further cancellations of games in development, Newzoo analysts also forecast changes in game quality. Picht echoed this sentiment, noting that the production of large-scale, single-player games (known as ‘Triple A’ titles) has become increasingly expensive and challenging to profit from.
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Picht pointed out that as studios like Activision Blizzard, Xbox, Playstation, EA, Riot Games, Twitch, and recently Take-Two Interactive (developers of the upcoming “Grand Theft Auto” game) face layoffs, the landscape becomes increasingly challenging for innovative gaming experiences to reach the market.
“With more studios closing, developers seeking new opportunities, and teams being reshuffled, it becomes increasingly difficult for these immersive gaming experiences to come to fruition,” Picht concluded.