The game industry is broken – can we fix it?

The gaming industry has seen a significant downturn, with nearly 60,000 jobs lost over the past five years. Budgets and schedules for game development have become increasingly out of control, and a number of development studios have closed their doors. Despite predictions of growing revenues for the industry, the situation on the ground is dire. In Edge magazine's cover story, nine industry experts were consulted to discuss potential solutions to this crisis.

One of the primary issues identified is the scale of the problem. Amir Satvat, who has been tracking layoffs in the games industry since 2022, estimates that over 14,500 workers will lose their jobs this year, bringing the total for the past five years to more than 58,000. However, there is a silver lining: Satvat's data also suggests that between 18,000 and 25,000 people are gaining new jobs in games each year.

This has led to a modest overall growth in the industry, but Satvat believes that the current contraction is inevitable.

Turning to possible solutions, Satvat points to Japan as a potential model. Unlike many Western companies, Japanese game developers maintain high staff retention rates and tend to work with smaller, more efficient teams. Satvat also notes that executive salaries in Japan are much more modest, suggesting that this could be another factor contributing to the lower number of layoffs.

In contrast, the gaming industry in North America and Western Europe has been particularly hard hit. California, in particular, has seen a large number of layoffs, with one US state accounting for a significant portion of the problem. Epic Games CEO Tim Sweeney has confirmed that the industry is indeed experiencing a crisis, lamenting that it is "the worst videogame crash, or disruption, that we've seen since the 1980s."

Sweeney attributes the multi-faceted causes of the crisis to a combination of external challenges and internal industry dysfunctions, including the persistent rise in the cost of making triple-A games.