Closures refer to the business/developer shutting down operations on either the title (if it’s live service) or the company themselves. In the past few years, studio closure has been pretty common. From Volition developed Saints Row to Telltale Games, layoffs and losses in the gaming industry have led to popular studios not only axing employees but firing staff as well. This can be deadly for the future of gaming which is why industry experts believe that 2024 will be the year of closures since there are “too many unprofitable businesses in video games.”
At this point, it is not even about the concept, execution, or features of a video game. For example, titles like Final Fantasy 16, Sunset Overdrive, and Hi-Fi Rush were good titles but failed to raise enough profits for the studios to justify their development. Profits for most companies are at an all-time low and there are several reasons for that. One of the biggest ones is gaming subscriptions are on the rise. Players prefer to ‘borrow’ from the subscription, install it, and play it on the cloud rather than purchasing the title.
Another reason why is that live service games are dominating the plane. There are set comforts people have settled into. Leaving that comfort to spend money and purchase a new game can be difficult for lots of people. This might eventually lead to closures and 2024 might showcase a great number of those. Once it happens, it will be tough for the industry to recover since most of the developers will be out of the market making it hell for new and old companies to churn out video games.
Did Covid-19 Have Anything to Do with The Layoffs and Closures
The COVID-19 Pandemic had tons to do with most industry developers closing up shop for good. We saw more than 10,000 developers losing jobs during and after Covid. As the pandemic hit, a plethora of ongoing and new projects were either scrapped or left unfinished. This led to tons of losses resulting in studio shutdowns.
Industry experts claim that these two years (2024 and 25) will be extremely difficult for people associated with gaming. Not just the developers but the publishers, media, and other service companies are under fire. Experts claim that there are “too many unprofitable businesses in video games.” And the added factor of so many disappointing game releases simply added fuel to the fire. That is why you see the publishers signing fewer titles and the online stores with catalogs entering a saturation period. Experts also have a hard time predicting the layoffs because these are not the ‘typical’ ones that happen once in a while like a cycle.
Industry leaders are quite concerned about the turnout of titles these coming years. Due to the decrease in the quality and quantity of video games, we might see a ‘gameflation’ somewhere in the future. We do not know what holds in store for 2024. We have already started badly as Riot Games; the developer behind Valorant and League of Legends has laid off most of their staff. Gaming industry layoffs might turn things worse than they already are with no sign of things getting better.
