The video game industry is a dynamic and ever-changing landscape, which has demonstrated its near-unshakable economic stability in times of crisis on several occasions. Economic recession, massive inflation, a global pandemic: more than ever, gamers are turning to entertainment to escape from everyday life and relax. However, the actual video game industry paints a contradictory picture. The media sheds light on the implausible state of the industry, exploring the dichotomy between massive commercial success and simultaneous mass layoffs. What is going on?
The Flip Side
The contrasting realities within the video game industry are puzzling. On the one hand, there are resounding successes that generate unprecedented revenue and captivate millions of players around the world. These mega-successes, often fueled by franchises and live service models, create an illusion of unbridled prosperity within the industry. However, the cheerful façade of success quickly crumbles when confronted with the brutal reality of layoffs. Even though some companies celebrate massive profits and player engagement, others are forced to implement mass layoffs, leaving talented professionals out of work.
So what is the reason for this divide? Some blame the concept of live-service games, which have become a driving force behind the industry’s financial success. Historically, the video game industry has been rather stable and predictable over the past twenty years; consoles were renewed every five years, computer game enthusiasts were able to keep their systems up to date with drivers and separately purchased parts, and the big studios released an AAA game every year. The COVID-19 pandemic caused many critical electronic components to run out of stock, stores closed: the cycle was broken, and a new system was put in place. With virtual reality and live-service games, a revolution has set in. Since then, the live-service model has been king. Games such as Fortnite, Apex Legends and Genshin Impact have proven that continuous content updates and purchases in-game can keep players engaged and generate ongoing revenue streams, allowing certain titles to remain relevant for years to come and contributing to the overall growth of the industry.
However, the very nature of live-service games, with their constant need for updates and maintenance, also puts immense pressure on development teams. This perpetual cycle can lead to burnout and ultimately downsizing within studios.
Working Under Pressure
Another prevalent and well-known problem is the crunch culture within the video game industry. The demand for continuous updates and the pressure to meet deadlines often result in exhausting working conditions for developers. Burnout culture has serious consequences for employee well-being and can contribute to high turnover rates within the industry.
Another aspect that is often overlooked is that video game technologies are constantly updating and require a lot of refinement from production teams. However, overworked employees find it more difficult to keep their heads above water and seek out opportunities for continuous professional development. Big cities are full of candidates who are fresh graduates, up-to-date on new techniques and technologies, and motivated to work. The pressure to keep up the pace is high, but unfortunately not sustainable in the long term.
Moreover, despite the massive financial gains made by some companies, others are resorting to layoffs as a cost-saving measure. Employees are being laid off, and job offers are dwindling. An article by GameIndustry.biz written by Sophie McEvoy mentions that more than 6000 jobs were lost or eliminated in 2023 alone, either due to mass layoffs or studio closures. Some the biggest cuts have been made by Unity (game engine), which laid off more than 900 employees between January and May 2023, and Epic Games (Fortnite, Unreal Engine), which let go of over 800 employees in September alone. This paradox raises questions about the industry’s priorities and its treatment of the talent responsible for creating its resounding successes.
What We’re Hoping For
The apparent contradictions within the video game industry demand a thorough examination of its business models, corporate strategies, and ethical considerations. Striking a balance between commercial success and the well-being of those who contribute to it is essential to fostering a sustainable and ethical gaming ecosystem, and protecting the reputation of studios. As the industry continues to evolve, addressing these issues will be critical to creating an environment where developers and players can thrive.
To go further:
- Review: Fortnite explained to parents
- Review: Apex Legends explained to parents
- Test: Genshin Impact Explained to Parents
References:
What the hell is going on with video games? | Analysis – Gamesindustry.biz
Photo highlighted by Bert Christiaens.
