2023 is celebrated as one of the best years for video game releases but also one of the industry’s worst years for developers. Thousands of layoffs happened across various companies which led to many talented artists, programmers, designers and more losing their jobs. However, the headaches won’t be over in 2024 as games industry leaders believe that this year will be “the year of closures” for studios.
Multiple leaders in the games industry recently spoke in private to GamesIndustry.biz, sharing their thoughts and concerns about what 2024 might bring for developers. Unfortunately, it’s just more bad news. “If 2023 was the year of layoffs, 2024 will be the year of closures,” said one CEO. “Not just developers, but publishers, media, service companies…there are just too many unprofitable businesses in games. We’re looking at up to two years of pain.”
The unnamed CEO continued:
“Too many games were green lit in 2020 and 2021. We need to get to pre-pandemic levels in terms of the release schedule, and that’s probably going to take two years. You can already see publishers signing fewer games. That’s happening everywhere. The stores are saturated, not just Steam, and the games just aren’t delivering the levels they were.”
A lot of factors seem to be involved in the slow deterioration of the games industry, which still stands as the largest industry in entertainment. For some reason, though, keeping a job is still an issue that companies can’t seem to solve. According to GamesIndustry.biz, many projects were greenlit during the pandemic that simply aren’t sustainable anymore financially while the downfall of several live service games might also lead to setbacks and possibly some hesitation from developers.
The over-saturation of the games market, meaning there’s just too many games released for consumers to realistically play or keep up with, is also a major factor in this. This possibly leads to a knock-on effect where developers are spacing games far out to get a fighting chance at a decent player base, inevitably leading to delays and that’s bad news for investors. There’s also the matter of ballooning budgets for AAA games which actually cost more than big studio movies in Hollywood at this point.
To get to the bottom line of the article’s concerns, it seems like industry leaders are telling players to brace for studio closures en masse this year. Layoffs are one thing but entire studio’s shutting its doors is a major problem, not just for games development but for the industry as a whole.