Patch Notes #2: How does the game industry survive beyond 2025?

We’re back, and I mean that in a very literal sense. We’ve just returned from Gamescom 2024 where this (rather fatigued) editor had a wonderful time catching up with old faces and new.

Most of our week was spent flitting between the business areas, chatting all things video games with developers, publishers, studio leaders, and pretty much anybody PR would let us in a room with. Our ongoing Gamescom coverage is right here, so do tuck in.

Outside of the show, the flags were cracking, the bratwurst was sizzling, and the Kolsch was flowing. I know, because that’s pretty much all I could hear from my hotel room in Alter Markt. Yes, I chose to slap myself in the middle of a market square bustling with interlopers whose sole purpose in life was to prevent me from sleeping. Yes, it was a colossal mistake. Yes, I resent everyone involved. Will I learn from that fatal error and book a room in a more sedate location next year? Look, I’ll give it a shot.

Mistakes are opportunities for growth, and that rather fortuitously brings me onto the subject of this edition of Patch Notes: how can the game industry learn from its own repeated failings to ensure we don’t just ‘survive until 2025,’ but thrive in the years beyond?

It’s a question I desperately needed to answer heading to Gamescom. I’d seen the phrase ‘survive to 2025’ tossed around on social media, and it seems to imply all the industry needs to do is collectively endure until the turn of the year. At that point, I suppose, the chaos that has dominated the news cycle since 2023 (layoffs, funding woes, and studio closures) will dissipate into the aether.

A warm sun will rise on a rejuvenated industry, ushering in a new era of stability and prosperity. Those who remain will breathe a collective sigh of relief, safe in the knowledge that, this year, things will be different. It feels like optimism bordering on willful disbelief.

Many of those I spoke with at the show agreed. There was a sense the industry too often surrenders itself to a vicious cycle of growth and collapse perceived as unavoidable. It isn’t–but only if we learn, and I mean really learn, from our mistakes. To help us do that, I collected reams of advice from industry experts that might hopefully allow us to break the cycle.

The view from the show floor: Long term survival will demand creative clarity, frequent reality checks, and the slow demise of capitalism

“If the question is ‘what do we do about capitalism?’ then you’re into a very different set of economic, philosophical, and political issues,” says Ustwo Games lead producer John Lau.

He suggests the industry needs to address the “incentivization structures” that are currently in place on a commercial level in order to survive. It’s a big ask, but on the upside, building incentivization structures is exactly what developers do for a living.

“What is it we can do to identify where things aren’t working and then slowly chip away at those things? If that feels too big, I would say it’s about understanding you are at the mercy of these forces,” he adds. “You cannot ignore them. You cannot ignore the fact you’re in a commercial industry. Therefore you must educate yourself. One has to build commercial literacy–among colleagues and co-workers.”

Building literacy means fully engaging with the issues that have smashed through the industry like a wrecking ball. Burying our heads in the sand is no longer an option. “You can’t just say ‘hey, look, I’m an artist. I’m making art. I’ve got big ideas.’ Yes, that’s fantastic. But the image of a game developer as a lone artist [is outdated],” he continues.

“If that’s what you’re doing, you are leaving yourself incredibly vulnerable to these flawed, dysfunctional structures. You have to understand the commercial environment you’re working in is part of the problem–as much as [the creative question of] ‘how do I make a person feel this way?’”

Hooded Horse chief product officer Ashkan Namousi says longevity is rooted in sustainable business practices. It’s a soundbite we’ve heard often. Mainly when companies are punting thousands of workers out of the door in pursuit of “sustainable growth.” But for Namousi, a sustainable enterprise is one governed by leaders who aren’t over-zealous, under-prepared, and dancing to the intoxicating tunes of external stakeholders.

“It’s about always focusing on effectiveness and cost effectiveness, and trying not to get carried away with unfettered creativity and ambition–without reflection and without control,” he says. “[That ambition] is constantly fed into by other stakeholders who want a stake in what you do. They almost way you to say ‘I need $20 million,’ because they think if you’re going to have 400 percent ROI, so they’d much rathe go in with $20 million than $2 million so they can take a bigger share of revenue, they can have a bigger buyout, they can get the IP–all that jazz.

“Focus on being effective and creating new ideas for you and your company. Stay focused on ‘what is the kind of game you’re making? What is the target audience?’ Don’t just take any deal that comes your way. Believe in your creative vision and the potential of the game. You also need to have a reality check. What happens if it doesn’t [find success]?”

Image via Gamescom

If we don’t knock it out of the park and haven’t prepared accordingly, the cycle will repeat. Atari CEO Wade Rosen believes its almost human nature to lean into the perceived inevitability of it all, but feels we can dismantle the wheel by fighting that urge.

“It’s knowing [you should] stash some cash away for a rainy day and not just immediately plow it back into development or projects and assume that’s going to project into the future. It’s really looking more to the future than the past, and understanding that the past is not the most accurate predictor–especially the short term past,” he says.

“It’s realizing that when things are good, they’re not always going to be good. And when they’re bad, they’re not always going to be bad. And having enough cash in the bank to survive those downturns without having to drastically cut teams, but that also means having the discipline to not drastically increase teams as well.”

Money is the problem, then? Or at the very least, how it’s perceived and distributed across the industry. Glowmade co-founder Jonny Hopper says we need to be “realistic” about spending, especially when–as was the case during the pandemic–it feels like investing massive sums of cash is the golden ticket to exponential growth.

“Certainly, when you’re [a small studio] money is terrifying. I think you need to get comfortable with that,” he adds. “What’s happened is, we’ve seen some really big players–and COVID started it because there was massive demand–send money flooding [into the market]. Everyone was sat at home playing games, and suddenly there was loads of money and loads of demand.”

Hopper feels we’re now in a period of “readjustment,” but reiterates we have to learn from that era of flagrant, unadulterated spending to avoid falling back into old habits when the good times come around again. When investors are whispering sweet nothings in your ear, promising you the world and decadent amounts of ROI, it’s vital to remember precisely what you set out to achieve.

“Have clarity about your vision,” says Rebellion art director Ryan Greene, explaining how to stay on the straight and narrow during production. “Know what you want to make. How much time it will take to make. And the person power you’ll need to make it. Make the game you can make, and not necessarily the game you want to make. It takes a lot to do that. To really distill the soul of your game and then focus on it. Don’t get distracted by other stuff.”

Words to live by? We’ll let you decide.

Status Report: The headlines that matter

Microsoft and Activision Blizzard accused of ‘bad faith bargaining’ by Raven Software union workers // Microsoft’s merger with Activision Blizzard turned into something of a PR nightmare. The company had to defend itself against accusations of rampant monopolisation from regulators and convince the masses that a $68.7 billion splurge would be a Very Good Thing. The 1,900 layoffs that followed probably didn’t do the company any favors in that regard, but the labor neutrality agreement it signed with Communications Workers of America in 2022 was a clear and obvious win. It has enabled multiple unions to arise unimpeded within Microsoft’s hallowed halls, but are those developers actually being heard? The unionized workers at Activision Blizzard subsidiary Raven Software would say ’no,’ and have now filed a complaint with the National Labor Relations Board expressing as much. Is Microsoft about to turn a huge win into a colossal loss? Let’s wait and see.

Animal Crossing: Pocket Camp is shutting down in November, then reopening as a paid game // How very Nintendo. As you’d expect from a company that seems to operate on a different wavelength from the rest of the industry, the Super Mario maker is shutting down Animal Crossing: Pocket Camp in November–but only to relaunch the mobile title as a paid app. The premium version will support save data transfer so players can protect their delectable homeware collection, cherished bells, and insurmountable debt. Whether by hook or crook, you’ve gotta pay Mr. Nook.

Black Myth: Wukong has sold 10 million copies worldwide // Shifting 10 million copies would be a startling achievement for any studio. But moving that many copies in one week when you were, until recently, a relatively unknown indie developer that had previously launched a grand total of zero titles? Utter madness. For context, it took Starfield around two weeks to attract 10 million players, and that was a first-party Xbox Game Studios title that debuted on Game Pass. Sony’s latest and greatest Marvel’s Spider-Man 2 reached 10 million sales in around four months. Welcome to the big leagues. Now, if only Black Myth developer Game Science would address those workplace toxicity allegations.

Feature Creep: Originals and interviews for the discerning reader

Star Wars Outlaws lead actor Humberly González made her character a ‘dreamer’ // In one of our many Gamescom 2024 interviews, Game Developer senior editor Bryant Francis met with veteran Ubisoft voice actor Humberly González to discuss her starring role in Star Wars Outlaws–including how her earnest performance resulted in some characterisation tweaks. 

Firaxis’ big swing with Civilization VII? Convincing players to actually finish their games // Fewer than 50 percent of players completed their games in Civilization VI. it’s a statistic that haunted developer Firaxis, pushing it consider how it can bump those rookie numbers up with the sequel. One tactic? Bottle the unadulterated fun of exploring a brand new world and sprinkle it everywhere. Another? Tweak pacing by implementing a new age system. One more? Reveal that metric to a reporter so they’ll stick it in a headline and make your players feel deeply ashamed. That last one is on me. 

‘A rising tide floats all boats’: Xbox on the universal benefits of accessible design // This interview with Xbox senior accessibility product manager Kaitlyn Jones and principal designer Chris Kujawski was a personal highlight of Gamescom 2024. The console maker has been leading by example in the accessibility space for years, and it was fascinating to learn more about its broader design philosophy when it comes to developing inclusive hardware like the recently announced Xbox Adaptive Joystick. 

Community Chest: Industry experts share their wisdom

Iterative narrative design for video games–an indie approach // We’ve all heard the phrase ‘kill your darlings,’ but what if killing them also flatlines your workflow? Expert Game Developer blogger Leander Burger discusses how to avoid that undesirable outcome by explaining how they quickly and effectively iterate on narrative content.

Book Excerpt: Animal Crossing tracks the rise of the original cozy life sim // What’s better than playing Animal Crossing with a nice mug of tea? What about learning how your favorite slice-of-life simulator was wrestled into being (ideally with a nice mug of tea)? In this excerpt from Boss Fight Books’ recent release, video game preservationist and historian Kelsey Lewin tells the story of how a mundane-sounding game full of bug-catching, letter-writing, and furniture-collecting became one of Nintendo’s most-loved franchises.

Gamescom 2024: a record-breaking year for the world’s largest games event // Intrepid Omdia analysts George Jijiashvili and Liam Deane once again ventured to the booth-strewn metropolis of the Koelnmesse in search of meaty insights and hot takeaways. Their read this year? Global publishers are flexing their muscles, AI is becoming increasingly visible, and event attendance was through the roof. 

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