2023–2024 video game industry layoffs

Beginning in 2023 and continuing into 2024, the video game industry has experienced mass layoffs. Over 10,000 jobs were lost in 2023, and an additional 10,800 jobs were lost in 2024 from January to June. These layoffs had reverberating effects on both established game development studios and emerging companies, impacting employees, projects, and the overall landscape of the gaming industry. The layoffs caused several video games to be canceled, video game studios to be shut down or divested from their parent company, and thousands of employees to lose their jobs.

Most of the job cuts occurred in North America and Europe, with video game industry in the United States being the most affected, followed by Canada, United Kingdom and Poland. Over 30 video game development studios laid off their entire staff and shut down. A new survey by the International Game Developers Association (IGDA), based on 2023 data, suggests a global unemployment rate of 4.8% within the game industry. Some industry experts believe that the rate in the United States could now be twice as high.

Executive Director of Circana (The NPD Group), Mat Piscatella suggests that the most optimistic projection indicates a potential decrease of about 2% for American video game industry in 2024. However, a more pessimistic perspective could see a decline of around 10%, with the possibility of an even greater downturn if conditions worsen significantly. According to a report by DDM Games, the industry is currently in a "reset phase." Companies are restructuring their operations through closures, layoffs, and divestitures. The pandemic-induced growth surge has subsided, leading to a need for recalibration.

Causes
The layoffs were not a singular event but rather the culmination of several converging factors. The COVID-19 pandemic unexpectedly fueled a surge in video game demand. This led companies to make ambitious investments in acquisitions, mergers, and staff expansion, anticipating sustained growth. However, as the world reopened and the market returned to pre-pandemic trends, the rapid growth proved unsustainable, and companies found themselves with bloated operational costs, necessitating cutbacks.

Rising development costs
The cost of developing AAA games has steadily climbed in recent years due to several factors. The increasing complexity of game design, the adoption of advanced technologies to create "visually stunning" experiences, and rising player expectations for expansive and cinematic content all contributed to this cost inflation. This put immense pressure on company budgets. The global economic slowdown in 2024, coupled with rising interest rates, made it more challenging for companies to secure funding. This limited their ability to invest in new projects and maintain existing ones, further contributing to the need for workforce reductions.

According to a report cited by the Competition and Markets Authority (CMA), development budgets for AAA video games have surged in recent years. While AAA releases previously had budgets ranging from $50–150 million, games set for release in 2024 or 2025 are now seeing budgets of $200 million and higher. Some franchises, like Call of Duty and Grand Theft Auto, have budgets exceeding $300 million and $250 million, respectively. Additionally, according to the CMA, one major publisher mentioned that a single AAA game could have development costs between $90–180 million and marketing budgets ranging from $50–150 million. For certain franchises, such as one cited by the CMA, combined development and marketing costs reached $660 million and almost $550 million, respectively. Activision noted the increasing need for multiple studios to meet the demands of annual Call of Duty releases, leading to greater reliance on outsourcing. According to Bloomberg, video game executives anticipate a trend towards big-budget games that take fewer risks and rely on well-established intellectual properties (IP), especially as game development costs continue to rise. Martin Sibille, Vice President at Tencent Games and a former EA executive, highlighted the increasing difficulty in taking risks within the industry.

Rising development costs have prompted video game publishers to either cancel or delay their games and lay off development teams. The Embracer Group notably announced the cancellation of 29 titles. Microsoft Gaming canceled Odyssey, a game Blizzard Entertainment had worked on for over 6 years, and laid off some of the same staff who had worked on Odyssey. Sony canceled a live service game from Naughty Dog and London Studio, resulting in layoffs at both studios. Electronic Arts canceled an untitled Star Wars game by Respawn Entertainment, indicating a shift in focus away from licensed titles towards live service games and original IP. Ubisoft canceled three previously unannounced games in January 2023, citing dismal financial results from the previous quarter.

Some of the newly founded AAA game development studios, such as Ridgeline Games and Deviation Games, closed down before even releasing their first video game. Ridgeline Games, founded in 2021, shut down just three years later in 2024. It was previously led by game director Marcus Lehto, who made a decision to leave Ridgeline Games. EA laid off the entire team on February 29, 2024. Deviation Games shut down on March 1, 2024, just four years after its establishment in 2020. The studio co-founder, Jason Blundell, left the company in 2022, and the studio canceled its new AAA live service game in 2023. Less than two years after the studio was opened, Prytania Media closed Crop Circle Games, citing "changing consumer tastes" and "economic conditions changing due to the pandemic." Smilegate Barcelona, the studio established in 2020 to develop an open-world AAA console title, shut down just 4 years after its establishment.

Consumer shift
The escalating expenses associated with video game development have prompted major gaming companies like Sony and Warner Bros. Games to pivot towards creating mobile and live service games. Layoffs and studio closures have also impacted successful live service game companies, such as Epic Games and Bungie. Several live service games launched in 2023 shut down within months, affecting developers and publishers alike. These games, which employ a substantial portion of the industry workforce and generate significant profits, have faced challenges including rising development costs, user fatigue with monetization, and revenue declines post-COVID-19. Additionally, trends like battle royale games are maturing, and expanding franchises to mobile platforms does not always yield expected returns. Sony's entry into live service gaming has encountered significant challenges and delays, resulting in the postponement of several major live service titles.

Although live service initiatives are becoming more popular, 68% of producers say their pipelines cannot support these kinds of projects. Furthermore, 53% of major studios expect difficulties in handling their technical debt. 88% of developers questioned said they are looking into integrating new tools into their workflows due to the steep rise in game production expenses and complexity. The market is nearing saturation, leading to increased competition for player time and higher user acquisition costs.

Post-pandemic slowdown
The first few months of the COVID-19 pandemic brought about a sharp increase in revenue for the gaming sector worldwide as people looked for indoor entertainment. According to IDC, in 2020, revenue from mobile games climbed by 32.8% to $99.9 billion, while expenditure on digital PC and Mac games increased by 7.4% to $35.6 billion. The amount spent on home console games increased significantly as well, reaching $42.9 billion, up 33.9%.

In the ensuing years, this growing pattern abruptly stopped. Revenue growth from mobile gaming fell by 15% in 2021, and then fell even further in 2022 and 2023, to -3.3% and -3.1%, respectively. Sales of PC and Mac games saw a brief rise of 8.7% in 2021, a drop of 1.4% in 2022, and a rebound of 2.1% in 2023. Similarly, after a surge in 2020, console game spending plateaued in 2021 with growth at 0.7%, followed by a decline of 3.4% in 2022, before returning to growth at 5.9% in 2023.

The new trend in video game industry, metaverse, has led many investors and companies to believe that it is the future of the gaming industry. Companies like Meta and Microsoft have made significant investments in this space. The Metaverse has encountered challenges impacting investor expectations. Meta reported significant operational losses of $13.72 billion in its Metaverse division in 2021, raising concerns among investors. Meta's acknowledgment that full realization of Metaverse products may take another 10 to 15 years tests investor patience with its long-term horizon. Inflation and economic uncertainties have affected consumer behavior, delaying the adoption of Metaverse-related technologies like headsets. Meta revised its monthly active user targets downward from 500,000 by the end of 2022 to 280,000, disappointing investors with lower-than-expected engagement.

Mergers and acquisitions
One of the primary reasons for layoffs in the video game industry is mergers and acquisitions. Video game companies believed that the significant growth witnessed during the pandemic would continue afterward, leading many firms to explore mergers and acquisitions. Between 2020 and 2024, 16 out of the 22 most expensive video game acquisitions in video game history occurred, with major players such as Microsoft, Sony, Embracer Group, Tencent, Take-Two Interactive, and Electronic Arts each making at least one acquisition.

After several acquisitions, Embracer Group announced that they will undergo a significant restructuring of the company, including the closure of studios, layoffs of employees, and cancellation of dozens of video game projects. Embracer Group faced a setback when a $2 billion deal with an anonymous partner fell through, later revealed to be Savvy Games Group. Savvy, owned by Saudi Arabia’s sovereign wealth Public Investment Fund, had already invested $1 billion in Embracer. Following the deal's collapse, Embracer announced a restructuring, including shutting down or selling studios and pausing game development. The reasons behind the deal's collapse remain undisclosed, but it was intended to establish Savvy as a major player in the gaming industry. Embracer CEO Lars Wingefors had previously faced criticism for accepting investment from Savvy due to concerns about human rights violations by the Saudi government. After several restructuring programs, Embracer Group reduced its headcount by 4,532, closed or divested 44 internal and external studios, and decreased the number of game projects by 80.

Several studios and publishers under Embracer Group, Sega and Microsoft Gaming have either opted to spin off from their parent companies or have been compelled to be sold off, resulting in mass layoffs. On February 29, 2024, Microsoft Gaming studio Toys for Bob revealed their decision to spin off from Activision and operate as an independent studio, while expressing openness to collaborating with both Activision and Microsoft on future projects. Embracer Group announced plans to divest Saber Interactive to a private firm for $500 million. On March 28, 2024, Take-Two Interactive announced its intent to acquire Gearbox Software from Embracer Group for $460 million. On the same day, Relic Entertainment was sold by Sega to an unspecified investor, and Thunderful Group sold Headup Games to Microcuts Holding. Headup Games was initially acquired by Thunderful for €11 million in 2021.

Russian invasion of Ukraine
In February 2022 the Russian Invasion of Ukraine caused an exodus of Russian studios and developers, many of which became established in Cyprus. By April, 42% of Russian developers had either already left the country or made plans to leave in the next few months. Russian developers outside the country have reported difficulty in getting projects funded by publishers, as trust is low. The online games market in Russia suffered an 80% decline that year, and the market collapsed in both Russia and Belarus. Many western video game companies ceased operating in Russia, and all major Russian video game trade shows- many of which had not been held since 2019 due to the pandemic- were discontinued. This included IgroMir and Comic-Con Russia as well as several e-sports events.

Vladimir Putin made a series of edicts over the following two years with the aim of revitalising the Russian games industry; these were ridiculed by outside observers as ineffective and impossible to fulfill. These included  effectively legalizing piracy, and orders to create a "Russian Electronic Arts", a game engine to compete with Unreal, and the creation of a game console on par with the Playstation 5 and Xbox in only three months. Kommersant reported that such a project would take a decade, and others have noted that restrictions on importing chips to Russia would make that even more challenging. Techdirt questioned how well Putin understands the game industry given that he was 71 years old at the time of the console order.

Game development has continued within some Ukrainian studios during the war, though blackouts have of course disrupted operations. Nordcurrent's Dnipro office has continued development even after a bomb detonated fifty meters from the building and shattered the windows. Aurum Dust is a studio composed of a mixture of Ukrainians and Russians who are against the war, and has continued working together despite the fighting.

Other factors
The organization with the highest amount of layoffs in the first year was Unity Technologies, with 2,900 jobs lost across several rounds; a significant proportion of the 16,000 losses sector wide by January 2024. The majority of these occurred in the wake of a controversial pricing change termed the "runtime fee". The policy caused community backlash and a developer boycott. A number of studios announced that they were moving away from the engine permanently in the wake of the decision, and tools were developed to assist in porting existing projects away from Unity. The incident ultimately resulted in the resignation of Unity CEO John Riccitiello, as well as the leader of their engine division, Unity Create chief Marc Whitten.

January
On January 17, 2023, Unity Technologies laid off 284 employees as part of a reassessment of objectives, strategies, goals, and priorities in response to current economic conditions. According to the company's CEO, John Riccitiello, the layoffs aim to address overlap and shelve certain projects to ensure the company's future strength.

On January 31, 2023, as part of larger Microsoft job cuts, 343 Industries laid off 95 employees following "disappointing" launch for Halo Infinite's multiplayer mode. Bethesda Game Studios was also reportedly affected by the Microsoft layoffs.

March
On March 1, 2023, Gameloft announced that it will shut down its Budapest, Hungary studio and lay off its entire staff in Hungary, which includes around 100 developers. In a statement, Gameloft stated that the company found the decision to close the studio “difficult” and clarified that Gameloft was “working to find the best possible solution for the employees concerned.”

On March 29, 2023, Electronic Arts laid off 6 percent of its workforce as part of a strategic shift to reevaluate its investment strategy and reduce office space, according to a blog post by EA CEO Andrew Wilson. The layoffs were aimed at moving away from projects that did not contribute to EA's strategy, reviewing its real estate footprint, and restructuring some teams. While specific departments affected by the layoffs were not mentioned, efforts were made to provide opportunities for affected workers to transition onto other projects where possible.

May
On May 3, 2023, Unity announced plans to cut roughly 600 jobs, approximately 8% of its workforce. Additionally, Unity intends to reduce its global network of offices over the next few years from 58 to fewer than 30.

On May 23, 2023, Sega announced it will lay off 121 employees at Relic Entertainment. In a statement, Sega stated that it is restructuring the studio to focus on core franchises.

June
On June 21, 2023, Niantic announced the layoff of 230 employees and the closure of its Los Angeles studio. The company discontinued support for NBA All-World and ends production on Marvel: World of Heroes, focusing its efforts on its flagship game, Pokémon Go. CEO John Hanke attributed the organizational changes to a challenging market environment, citing a global economic slowdown and increased competition in the mobile game market.

August
On August 31, 2023, Volition was shut down following Embracer Group's failed $2 billion deal. Embracer Group's growth strategy was disrupted when a partner, Savvy Games Group, backed out of a $2 billion deal in May. Savvy, owned by Saudi Arabia’s sovereign wealth Public Investment Fund, serves as an investment vehicle for the gaming industry. Following the deal's collapse, Embracer initiated a restructuring, including studio closures and a pause in game development. Prior to the termination, Savvy had already invested $1 billion in Embracer, enabling its expansion through acquisitions of companies.

September
On September 17, 2023, Ubisoft announced the closure of Ubisoft London as part of efforts to "enhance efficiency and streamline operations." According to VGC, this move impacted 54 employees.

On September 28, 2023, Epic Games announced a layoff affecting 16% of its workforce, or around 830 employees. The news was initially reported by Bloomberg before Epic Games published its internal memo online. CEO Tim Sweeney explained in an email to staff that the decision was due to the company's ongoing financial situation, stating that they had been spending more money than they were earning. Sweeney expressed optimism about navigating the transition without layoffs but acknowledged that it was unrealistic in retrospect."

October
On October 31, 2023, Bungie announced layoffs affecting approximately 100 employees. Alongside the layoffs, the company also disclosed the delay of two upcoming titles: Marathon and the expansion for Destiny 2: The Final Shape. According to Bloomberg, the layoffs occurred several weeks after a meeting where executives revealed that Bungie's revenue was 45% lower than projected. During the meeting, CEO Pete Parsons attributed the revenue shortfall to Lightfall.

November
On November 7, 2023, Ubisoft announced a total of 124 layoffs, as reported by IGN. The layoffs affected primarily administrative and IT workers, with 98 of them based in Canada. This reduction represents approximately 2% of the company's Canadian workforce. Among those affected were employees from the Hybride VFX studio.

On November 13, 2023, Amazon Games announced the elimination of over 180 jobs in its Amazon Games division. The restructuring involves closing down parts of the business related to streaming and supporting third-party games, including the Game Growth and Crown Channel initiatives. Christoph Hartmann, vice president of Amazon Games, emphasized that the decision was the result of extensive deliberation and planning for the company's future.

On November 14, 2023, Digital Bros announced a 30% reduction in its global workforce. The decision is driven by a strategic shift towards prioritizing "high-quality and long-standing successful titles." The restructuring will primarily impact the studios, with around 30% of the global workforce expected to be affected.

On November 29, 2023, Unity Technologies announced the layoff of 265 employees, constituting 3.8% of its workforce. The layoffs are part of a "company reset," as reported by Reuters. All 256 affected workers were from Unity's Wētā Digital division, acquired in a $1.6 billion deal in 2021. Additionally, several Wētā FX tools and 275 employees were included in the acquisition. In total, Unity has laid off more than 1,100 people in 2023.

December
On December 11, 2023, Free Radical Design was closed as part of Embracer Group's restructuring plans following the failed $2 billion deal, leading to the layoff of 80 employees.

January
At the beginning of the year, Unity Technologies, Twitch, Playtika, and Discord each announced separate layoffs affecting 1,800, 500, 400, and 170 jobs, respectively. Unity attributed its layoffs to a restructuring aimed at refocusing on its core business for long-term profitability. Twitch's CEO mentioned that despite paying out over $1 billion to streamers the previous year, the company's size didn't align with its growth trajectory.

On January 22, 2024, Riot Games announced a significant restructuring, leading to the layoff of 530 employees, which accounts for about 11% of the company's total workforce. The company also shut down Riot Games' indie publishing label, Riot Forge. The decision was made as part of Riot's strategy to refocus on fewer, high-impact projects, aiming for a more sustainable future.

On January 25, 2024, Microsoft Gaming underwent a substantial restructuring, resulting in the layoff of 1,900 staff. Additionally, the President of Blizzard Entertainment, Mike Ybarra, and Blizzard's co-founder and chief design officer, Allen Adham, departed from the company. As part of the restructuring, Microsoft Gaming canceled Blizzard Entertainment's game Project Odyssey and laid off major teams working on Overwatch 2. Microsoft Gaming Studios such as Toys for Bob and Sledgehammer Games reportedly experienced a loss of over 30% of their staff due to layoffs. The majority of those laid off were from Activision Blizzard.

On January 29, 2024, Eidos-Montréal laid off around 97 staff members as part of the ongoing restructuring within the Embracer Group. Additionally, the company reportedly canceled its new Deus Ex game, which had reportedly been in development for two years. Eidos-Montréal cited the global economic context, industry challenges, and the comprehensive restructuring announced by Embracer as reasons for the impact on their studio.

February
On February 27, 2024, Sony Interactive Entertainment announced the layoff of 900 employees across various studios. The company attributed the decision to restructure operations in response to the evolving economic landscape and changes in product development, distribution, and launch strategies. Layoff timelines will vary by location. Additionally, PlayStation's London Studio will be closed entirely.

On February 28, 2024, Electronic Arts (EA) announced the layoff of 670 staff members. EA's CEO, Andrew Wilson, outlined the company's focus on owned IP, sports, and massive online communities as part of its business advancement. Additionally, EA shut down Ridgeline Games and canceled a Star Wars single player game developed by Respawn Entertainment. These cuts included 23 jobs at Respawn that were announced in March 2024.

March
On March 8, 2024, Sega of America laid off 61 employees across its Q&A and localization departments. On March 28, 2024, Sega announced significant layoffs impacting Sega Europe, Creative Assembly, and Hardlight. Sega Europe's CEO, Jurgen Post, informed employees via email about the reductions and the sale of Relic Entertainment, responsible for Company of Heroes and Dawn of War. Approximately 240 positions across Sega Europe, Creative Assembly, and a limited number at Hardlight are affected. Notably, developers Sports Interactive and Two Point Studios were not mentioned in the announcement. Jurgen Post announced the sale of Relic Entertainment as part of Sega's restructuring efforts. He confirmed that the studio will be transitioning to operate independently, marking its departure from Sega. Post expressed Sega's support for Relic during this transition and wished them success in their future endeavors. One week later, Relic laid off over 40 employees.

That same day, Embracer Group CEO Lars Wingefors announced the conclusion of the company's restructuring program, which resulted in 1,400 job losses and three studio closures. Wingefors stated that Embracer has no plans to sell more of its businesses after selling Gearbox Software and Saber Interactive.

April
On April 16, 2024, Take-Two Interactive announced plans to lay off 5% of its workforce and cancel several video game projects. The company cited a cost-reduction plan, anticipating total charges of $160 million to $200 million. These measures are expected to be largely implemented by December 31, 2024. Previously, Take-Two Interactive stated that they were working on "significant cost reductions" but stated they had no current plans for layoffs.

May
On May 1, 2024, Bloomberg reported that Take-Two Interactive plans to shut down two studios as part of a mass layoff announced the previous month: Roll7 and Intercept Games. Additionally, Take-Two has laid off the "vast majority" of Private Division's teams in Seattle, New York, Las Vegas, and Munich.

On May 7, 2024, Microsoft Gaming closed four studios: Tango Gameworks, Arkane Austin, and Alpha Dog Games. Additionally, Roundhouse Studios will be merged into ZeniMax Online Studios. According to Microsoft Gaming, this action is part of a broader "reprioritization of titles and resources" within Microsoft's gaming division. The goal is to concentrate on high-impact titles and to increase investment in their portfolio of games and new intellectual properties. The closure of these studios has resulted in the cessation of development for certain games and the reassignment of some teams to other projects within Bethesda and ZeniMax.

On May 16, 2024, Gameloft laid off 136 developers in Romania. On the same day, Phoenix Labs laid off over 100 developers and cancelled all other projects in development. The company wrote in a statement that it did so to "focus on our best-in-class live service titles, Dauntless and Fae Farm, and serving their communities."

June
On June 3, 2024, Avalanche Studios Group announced that they will be laying off 50 employees, approximately 9% of the company's workforce, and closing their studios in New York and Montreal. Avalanche stated that this decision is "necessary to ensure a stable and sustainable future."

On June 4, 2024, Behaviour Interactive announced it would be laying off up to 95 developers, primarily at its Montreal studio, as part of new "structural changes" aimed at pursuing a "clarified vision."

On June 11, 2024, Sumo Group announced that they are restructuring and laying off 15% of their staff, approximately 250 employees, across their locations in Canada, the UK, Poland, the Czech Republic, and India.

Major studio and publisher closings

 * Alpha Dog Games
 * Arkane Austin
 * Campfire Cabal
 * Crop Circle Games
 * Daedalic Entertainment (development division)
 * Deviation Games
 * Double Loop Games
 * EA Chillingo
 * Free Radical Design
 * Galvanic Games
 * Industrial Toys
 * Intercept Games
 * Little Red Dog Games
 * London Studio
 * One Player Mission
 * Pieces Interactive
 * Piranha Bytes
 * Pixelopus
 * Ridgeline Games
 * Roll7
 * Smilegate Barcelona
 * Tango Gameworks
 * Threshold Games
 * Threaks
 * Ubisoft London
 * Versus Evil
 * Volition
 * Wimo Games

Studio and publisher divestitures

 * Toys for Bob - spun off from Activision in February 2024.
 * Saber Interactive - sold by Embracer Group to Beacon Interactive in March 2024.
 * Relic Entertainment - sold by Sega to Emona Capital in March 2024.
 * Headup Games sold by Thunderful Group to Microcuts Holding in March 2024.
 * Gearbox Software sold by Embracer Group to Take-Two Interactive in March 2024.

Media outlets
Some media outlets compared the 2023-2024 layoffs to the video game crash of 1983, when the US video game market collapsed due to an oversaturation of poorly made, low-quality games, causing the video game industry to enter a recession for two years. This has sparked discussions about a potential "second video game crash." Windows Central's article titled "Embracer Group is a prime example of bad consolidation" criticized Embracer Group for its frequent layoffs, studio closures, and personnel cuts. The closure of Volition Studios, layoffs at Lost Boys Interactive, and the shutdown of Free Radical Design are highlighted as notable incidents.

Publishers
Both Microsoft and Sony have acknowledged that the current approach cannot continue and are exploring alternative business models. Microsoft Gaming CEO Phil Spencer addresses the stagnation in the gaming industry, recognizing its repercussions on job cuts and the challenging decisions faced by companies. He underscores the importance of industry expansion for long-term sustainability, advocating for a shift towards enlarging the player base rather than solely concentrating on extracting revenue from existing players. By prioritizing the growth of Xbox through attracting new players and nurturing creators, Phil aims to guarantee enduring strength and prosperity for the platform and the industry overall.

When asked about the gaming layoffs, Phil Spencer addressed both the broader industry trend and the unique aspects related to Xbox's current business. Spencer expressed concern over the lack of growth in the industry, highlighting the pressure on publicly traded companies to show growth to investors. This scrutiny often leads to cost-cutting measures when revenue growth is stagnant. Spencer emphasized the need for the industry to focus on regaining growth to ensure job security and career opportunities for professionals. Regarding Xbox's strategy, he discussed the importance of exclusivity and expanding the player base by making games available on multiple platforms. Spencer stated that every decision made by Xbox is aimed at strengthening the brand in the long run, even if not everyone agrees with those decisions. Spencer also touched on the evolving nature of Xbox, stating that the brand is moving away from traditional exclusivity models to adapt to the preferences of younger audiences. Spencer emphasized that Xbox aims to be a platform where players can find the games they want, regardless of the device they use, aligning with the accessibility and cross-platform trends seen among younger gamers.

Sony Interactive Entertainment chairman Hiroki Totoki stated that he acknowledges the need to manage development costs better in PlayStation studios, recognizing industry-wide challenges like rising expenses and lengthy schedules. Totoki emphasizes sustainable profitability and transparently addressing challenges while highlighting the significance of first-party titles achieving growth across platforms.

Wes Keltner, CEO of Gun Interactive, expressed concern about the shrinking space for creative and innovative ideas from small game development teams. Keltner noted a lack of funding for indie projects, leading to promising ideas being abandoned at the prototype stage. Keltner highlighted the trend of mergers and acquisitions (M&A) leading to larger studios but diminishing creative freedom. He emphasized the notion that risk is a driving force behind creativity in the gaming industry.

Game developers
In response to layoffs in the gaming industry, developers expressed a mixture of frustration, disillusionment, and concern about the future. Many felt blindsided by the layoffs, especially when they were told the reasons were related to underperforming games or unsustainable costs. Some developers pointed out the disconnect between management decisions and the realities of game development, such as over scoping projects or investing in risky technologies without clear strategies. There was also criticism of how layoffs were handled, with some developers feeling that companies prioritized executive salaries and unnecessary expenses over investing in game development.

There were instances where studios spent extravagantly on events or office perks shortly before laying off a significant portion of their workforce, leading to feelings of betrayal among employees. Developers highlighted broader industry trends contributing to the instability, such as the increasing reliance on outside investors and shareholders who prioritize short-term profits over long-term sustainability. The pandemic exacerbated these issues but was not solely responsible for the ongoing wave of layoffs. Overall, developers expressed deep concern about the future of the industry and the toll these layoffs were taking on morale and creativity. Many feared that the current instability could have long-lasting consequences for both individuals and the industry as a whole.

At Game Developers Conference 2024, Epic Games staff organised a "GDScream", where a large number of developers gathered in a park to scream at the sky in "a moment of pure catharsis". The trade show more broadly featured many speeches from award winners about the state of the industry.

Dinga Bakaba, the studio head of Arkane Lyon, publicly criticized Microsoft Gaming executives for their decision to close several studios. He emphasized the importance of taking care of artists and entertainers in the video game industry, highlighting that their role is to create value for corporations.

Unionization
Unions are relatively rare in the video game industry. But after several public scandals involving abuse, sexism, layoffs, and overwork, some game workers have developed a keen interest in organization in the last few years. After starting the process in April, employees at Sega of America's Irvine, California headquarters filed to become unionized with the Communications Workers of America on July 10, 2023. In July, the union election was successfully won by the Allied Employees Guild Improving Sega (AEGIS), with 91 votes in favor and 26 votes against. More than 200 positions in a range of areas, such as marketing, games as a service, localization, product development, and quality assurance, will be covered by the union.

On October 6, 2023, Over 100 developers at Avalanche Studio Group unionized. After experiencing layoffs, some workers at CD Projekt Red formed a union on October 9, 2023. According to the union, these layoffs caused significant stress and insecurity among workers, leading to the need for better protection and representation. The union aims to provide more security, transparency, and a stronger voice for workers in times of crisis, believing that mass layoffs pose a threat to the gaming industry and that unionizing is crucial for preserving its potential. The union said its priority was to give CD Projekt Red staff a voice in company decision-making, with a view to increasing employment stability. It also wants to help workers’ voices be heard on working conditions “in the long run.”

On December 5, 2023, 300 Quality Assurance workers at ZeniMax Media announced that they were organizing a union. Additionally, a labor neutrality agreement was announced in June 2023 by Microsoft and the Communication Workers of America (CWA). Under this deal, Activision Blizzard employees were entitled to freely form a union, and Microsoft promised to acknowledge and support that union. On March 8, 2024, 600 workers from Activision's Q&A team joined CWA, establishing the largest game developer union in North America.

Growth
Despite the layoffs, studio closures, and cancellations of video game projects, as well as high inflation, the video game market continues to remain robust. Many investors and industry analysts believe that the video game industry will recover in 2025 with major releases like Grand Theft Auto VI, Monster Hunter Wilds, 2XKO, Death Stranding 2: On the Beach, Pokemon Legends Z-A, and others. Investors also expect Nintendo to release its new hardware, which will boost video game sales and revenue. Executive Director of Circana (The NPD Group), Mat Piscatella, stated that consumer demand remains strong, but consumers are under pressure due to economic challenges. Some parts of the industry are already growing and in a healthy position, like mobile, and Piscatella believes that other segments will follow suit in 2025.

According to a PwC report, the global gaming industry is expected to reach a value of $321 billion by 2026. Deloitte predicts that the share of theatrical box office revenues from video game intellectual property (IP) will double by 2025. Additionally, most major video streaming platforms are expected to include shows based on popular games. Another report by GlobalData suggests that the video games market could become a $300 billion industry by 2025. Factors contributing to this growth include mobile gaming and innovative offerings. Bain & Company predicts that global gaming revenue could surge by over 50% in the next five years.