I have been thinking about this a lot, both in general and since the post. I also have a background in business health and projections (albeit in a very different industry) so sometimes I like to take that and do something fun with it like look at gaming. I actually think there is a silver lining to all this, or at least hope for the future. If you look at ESA and all the companies engaging in these unsavory business practices, it is all the big corporate-owned producers. There is nothing existentially wrong or doomed with video games as a product, the problem comes from the (predatory) business practices these large corporations need to utilize in order for such a large organization to survive. Meanwhile, you have tons of smaller independent studios who are doing just fine. Mobius (run by Masi Oka from Heroes) is still afloat and recently even hired a new engineer. Mossmouth is a one-man project (though he collabs with other creators, too) and is still producing games (his most recent release getting 'Overwhelmingly Positive' reviews on Steam). Supergiant has grown over the years (still indie, though) and I remember something about them having the highest rated game of all time on console.
I should add that UFO 50 (Mossmouth) and Hades (Supergiant) regularly sell for $25 and that Outer Wilds: Echo of the Eye has a standard price of $15. I could buy all three for around the same price as the newest Doom game.
I think that right there is the future. Video games will continue to be viable, just not as these major multi-billion dollar affairs. The more sustainable options will be these smaller, less-expensive boutique operations. I hope those 1000+ laid off employees move on to coalesce into smaller teams and start their own development companies. It is just going to create more competition for Microsoft and accelerate their death spiral. I have a few potential future predictions.
1) Big industry becomes no longer a sustainable enterprise. They don't give up entirely, but their market base dwindles and the consumer experience will turn into something complete different than the indie scene (which will have more total consumers). However, even the viability of that is going to depend on how AI unfolds in general and the impact it has on the economy (namely people's disposable incomes). Personally, I don't think we're headed into a Skynet era that people are so worried about, but the impact over the next 5-10 years is going to be pretty significant. There is a lot working against big industry right now.
2) The big companies currently hold the licenses to a lot of franchises so they may attempt to kill access to these games and then put them by some kind of paywall so they can generate some passive income off of them without having any studios to support them. New piracy platforms (think Napster and BitTorrent) will emerge in response.
3) More boutique studios will emerge. It used to be that being indie, making something cool, then letting a corporation buy you out was a good business move. That is not the case anymore. The real talent at these places are the grunts in the trenches getting laid off, not the executive VP of anti-fun getting a bonus for pushing the layoffs. The smart move for the talent to think smaller and go to smaller operations. There will be more long term viability for the 'little guys' to stay 'little guys'.
4) As people shy away from the AAA studios, indie studios will start to thrive more and actually be able to compete better with AAA. Part of this is that indie studios are much better equipped to utilize geographic hybridization. They don't need to maintain a presence on the west coast to succeed. Indie developers are already spread out across the U.S. As California gets more expensive relative to the rest of the nation, that is going to put even more pressure on big industry that the indie scene won't have to deal with nearly as much. They will still probably tap into west coast talent for things like VO, but their core development can be completed divorced from that area.
5) Console gaming will go through a real rough patch. The war of X-box vs. Sony will end with no winners because the bottom will fall out both markets. However, because they still own the hardware side of things and will see money to be made there, they may engage in predatory practices with indie developers on licensing to increase their profits. There is a good chance this would backfire. Indie games tend to have lower hardware requirements. Consoles cost at least $500. You can buy a gaming laptop that can run pretty much any indie game for probably $300ish. Indie gamers are already biased towards PC gaming. PCs have better life cycles than console hardware. Distribution costs are the highest for console, next highest for Steam, and then finally there are the more consumer-oriented platforms like GOG. At the rate we're going, indie developers can afford to lose the console market, but the console market can't afford to lose titles. For their sake, I hope the console distributors figure that out. But, even if they do, it is going to be a more adversarial relationship with the studios due to the console distribution platforms always looking for a way to make more money.
6) Steam could go either way here. They used to be a more more gamer-oriented platform, but they have slowly been creeping away from that. My take is that they crossed the line over to the dark side once they established the Steam deck (which is even more expensive than a console). Their move with the class action waiver also knocked them down a few pegs. They aren't a lost cause, but I am not super optimistic about their future. FWIW, I stopped buying games on Steam years ago and now just do GoG. Frankly, the only thing I use Steam for nowadays is to chat with long time gamer friends from around the world (we have our own group chat there).
7) If this does happen and the consumer base shifts more to the indie market, then video game quality (i.e. all the release/support issues we complain about here
) will likely improve. Indie developers care more about releasing a polished product and continuing support after release. Terraria, for example, was released over 15 years ago and the development team is
still working on improvements for it. This also creates a greater potential for truly brilliant work. Smaller studios can afford to be niche rather than catering to the lowest common denominator. These are the spaces where innovation can really shine.
So, yeah, put on your poncho and prepare for the storm, but everything is going to be ok in the long run.
