The post-pandemic gaming industry
In the past two years, some gaming studios collapsed before players could experience a single one of their games.
Two weeks ago, Humanoid Origin, a gaming studio focused on a new “science-fiction universe” announced their closure. One of Netflix’s game studios, known only as team “Blue,” a studio “pursuing a big-budget multi-device strategy” shut down last month, according to Game File.
In 2022, the estimated number of layoffs in the gaming industry was about 8,500, according to a community-based tracking data sheet by technical artist Farhan Noor. And that number has only increased in the years followed, with there being about 10,500 layoffs in 2023, and about 14,000 layoffs so far in 2024.
Overall, layoffs are not a new factor in the industry. Typically, studios hire people to work on a game, but then fire them once the game is released, according to the nonprofit news organization the Conversation.
But this current round of layoffs is that previous cycle intensified, as companies expanded and increased their workforces to meet the increased demand for video games during the COVID-19 pandemic. But that increase did not last after COVID restrictions have largely faded, according to an emailed statement from Laine Nooney, an assistant professor of media and information industries at New York University, to Polygon.
Steven Atha, a USC alum and a level designer for the gaming studio Sentinel, said that turmoil in other industries, like “big tech” and “film and television,” might be intensifying these layoffs.
“[These] adjacent industries that would help, sometimes indirectly and sometimes directly, drive growth and opportunities and money into the games industry, are having their own problems, like the big tech industry… and film and television,” Atha said.
But layoffs are not the only way that companies have lost people. A month ago, all of the employees at Annapurna Interactive, the gaming publisher division of Annapurna Pictures and the publishers behind popular games like Twelve Minutes, Stray and Kentucky Route Zero, resigned, leaving the future of the games they had set to publish in uncertain territory.
What this means for players and developers
Because of these problems within the industry, many players have been left wondering about what the state of their favorite games will be.
Aria Acharya is a freshman game art major and a fan of indie games. There are a few games that she has wanted to play, but has been unable to due to them no longer being available.
“I think it’s really sad when developers or companies pull their games and players can no longer purchase it if they don’t already have it and it becomes a form of lost media,” Acharya said. “What if I randomly got into Minecraft Story Mode five years later, after it got pulled and after Telltale [the studio] got bankrupt? I would love to play Minecraft Story Mode. However, I could probably only watch a YouTube video on it or pirate it, and both of those are not good options.”
But it might not always end up that way. Going back to the mass resignations at Annapurna Interactive, USC professor Sanjay Madhav, who has worked on the games The Pathless and The Artful Escape which were published by the studio, said that developers with games set to be published by Annapurna should not be worried.
“If you’ve seen the public statement from Annapurna [on Bloomberg], they said they will still be honoring all their existing contracts,” Madhav said. “They’ve announced other things, like they’re working with Remedy Entertainment on sort of a multimedia project that’s going to include games, movies and TV shows.”
Games made unplayable
But for other companies, it might not be the same story. Many publishers have pulled their games from digital stores or have shut down game servers, preventing people from playing the games that they paid for.
For example, while they did provide refunds to players who bought the game, Firewalk Studios and Sony pulled their game Concord earlier this year after abysmally poor playership and sales. Many other games have shut down their servers this year as well, from console to mobile games.
This has left many players upset about what they feel are unfair actions by the companies.
Emma Higgins, a sophomore game development and interactive design major, thinks that companies removing their games is a lose-lose situation.
“I am very much a believer of games. You should be able to buy any game… When games aren’t available to buy, it also feels like [companies] are losing. They’re a, erasing their history as companies. And b, losing profit,” Higgins said. “I sometimes will want to play an old game, and I’ll be like I can’t, and then I’ll get very annoyed and that usually is when I turn to emulation. I’m not a fan of them delisting stuff from stores.”
Comparing publishers to self-publishing
Despite the uncertainty involved with publishers, Madhav said that going with a publisher has their own set of positives for developers.
“The benefit of that is they have expertise on publishing on all the platforms. They have established contacts on all the platforms so they can help with things like negotiating for being on Xbox Game Pass and things like that,” Madhav said. “And they have expertise in terms of the QA studios they work with. They have voice recording places they work with. So it’s very helpful to kind of provide this additional support to a small indie team that otherwise would be difficult.”
But there are other ways that developers can publish their games that will give them more control over the way the game turns out. Developer Steven Harmon self-publishes his personal games for free, and he finds that to be a more fulfilling experience.
“I’ve always thought that, if I’m doing it out of love, I want to make that separation versus a career, because I think when you make your hobby into a career, you do lose the love for it,” Harmon said. “To retain the love, I’ve made sure that my personal projects are free, which means I won’t become an overnight millionaire anytime soon, but it also means that I definitely care about the craft.”
But with self-publishing, it becomes harder for fans to find those games. Atha suggests that this problem can be solved if users were made more aware of built-in tools available on game storefronts like Steam that will help them find games that they might like.
“Everywhere that sells games has a page of games that came out within a window of time, where players can just look at what came out,” Atha said. “Also, there are just people on Steam called ‘curators’, who would put together lists of games… it’s games that they suggest that you play based on the topic or based on this one game if you’ve played it.”
Despite these problems, developers feel that the industry will eventually rebound and grow, even if it takes a while. Harmon said that it will take the industry hitting “rock bottom” for that shift to occur.
“It seems hopeless. It seems like things are just gonna get worse for the games industry. And for the next year, that probably is true,” Harmon said. “But generally, I have faith in my fellow artisans, my fellow designers, and developers.”