I’m a fan of transparency. Because as the big newspaper says: “Democracy dies in the darkness.” There is an analogy here to the gaming industry, where we have the feeling that things are becoming too quiet. I guess it’s time for me to make some noise and rant because we are losing voices in our industry.
In the past we have had many people who were way too loud and willing to be heard. Trip Hawkins and John Riccitiello loved to offer witty criticism of their rivals. Nintendo’s Satoru Iwata didn’t mind saying he chose Sony’s Kaz Hirai for “arrogant“, saying that the console wars are over.
For better or worse, the industry’s villains were like James Bond villains, telling us exactly how they were going to kill the good guy before failing to do exactly that.
We definitely don’t need a lot of noise. It’s fun, but it often feels like politicians are having fun, and we’ve had enough of that. Nevertheless, we need dialogue to make the industry better. We need maps and lighthouses Adam Boyes he told me when he started his consulting firm fixing gaming companies. I will miss Ted Price, CEO of Insomniac Games, announcing his retirement this week. Price was the only CEO to give Trump the rhetorical middle finger in his first presidency when Trump made the announcement Travel ban for Muslims. Who will do something like this in the next four years with Ted gone?
Now that the industry may be facing tariffs on gaming consoles, the industry is too quiet. Big Chinese companies will of course pull out because they don’t want to risk the wrath of Trump or Elon Musk, who control the MAGA hordes that have taken back the government. Tim Sweeney of Epic Games found that the major platform companies that pretended to be Democrats are now giving Trump donations and are now posing as Republicans in hopes of keeping the government away from issues like antitrust enforcement. Who will scream at Trump that doubling the prices of gaming consoles through tariffs will destroy the gaming industry? Sure, that CTA made his voice loud And on this point, one thing is clear at CES: I don’t think the tech or gaming industries are going to champion the cause and make noise.
I felt like I received a wealth of data this week from some people who didn’t enlighten us because they worked at the biggest companies in the industry. They are simply committed to transparency.
Some examples. Aamir Satvatthe ever-zealous advocate for gaming jobs, predicted based on his data that we may see 9,800 layoffs in 2025. That sounds terrible, but it prepares us for what lies ahead, and it’s a relief compared to the roughly 15,000 layoffs in 2024. His data has revealed an uncomfortable reality: There is ageism in hiring patterns in the gaming industry.
Matthew Ballanother solo watcher and CEO of Epyllion, published 223 slides in Early Access about the state of the gaming industry. He pointed to it 10 drivers that helped gaming grow over a decadeeight initiatives that failed to sustain growth, 15 challenges the industry still faces, and 11 potential growth drivers that could reignite growth. The insights helped us see the path ahead.
In another extensive part of the data treasure, the Game Developers Conference released its annual State of the Industry Report, based on a survey of 3,000 game developers. It turns out that game developers have an increasingly negative attitude towards generative AI compared to last year. They fear that jobs will be lost as a result. Union sentiment is still at 58% in favor, a sign that people are not happy. However, they are more likely to work out of fear of being laid off, with one in 11 game developers being laid off in 2024.
ChainPlay noted that 93% of GameFi projects – Web3 or blockchain games – are dead and the value of their tokens has collapsed 95% from all-time highs. ChainPlay examined 3,279 Web3 gaming projects and found that most of them were dead and trading at 5% of their peak value. Nevertheless, there are survivors. On average, 316 new projects launch each year, but 262 projects disappear, suggesting that a significant number of them are struggling to stay afloat for more than a few months. Still, this is no way to start an industry as there are so many scams on the way to convince mainstream consumers to join in.
The few Web3 gaming survivors who are making real games may soon have a real chance as the market of Web3 gamers grows. DappRadar reported this week that the number of unique active wallets in Web3 gaming increased 421% year over year to 7.4 million daily wallets. And while investment in blockchain games fell 38% to $1.8 billion in 2024 compared to 2023, there are real and entertaining Web3 games like Off the Grid and Telegram titles that resonate with audiences find.
This is all insightful data from relatively small companies. But where is all the great information from the biggest companies in the industry?
One of the sad realities is that big companies are punished for their transparency. Electronic Arts announced this week that it would miss its December quarter profit targets because Dragon Age: Veilguard and FC 25 Soccer fell short of expectations. As a result, EA’s market value in stock trading fell by $4 billion. That was the equivalent of maybe four Ubisofts. But don’t feel sorry for EA, because the company can say that a big game is coming and it will win back these four Ubisofts in no time. If you look at an earnings report these days, you’ll notice that companies rarely point out the number of games sold. Compare that to movies where you get box office receipts but also estimates of how much those movies cost to produce.
I’ve seen large companies pull people off our stages at our events because they didn’t want to risk talking too much. Nintendo and Sony aren’t saying much other than what they have to say in earnings calls. And since Microsoft swallowed Activision Blizzard, we’ve lost detailed information about the results of one of the industry’s largest companies in earnings calls. These days, these companies rarely host press events where people can ask questions.
They’re targeting consumers “directly” in canned video announcements as we’ve lost the in-person venue of E3. At E3, I was sad to see company CEOs holding press conferences where they never answered questions. And now I’m just lucky to get interviews with these CEOs. I was sad to see David Haddad resigns from the top games job at Warner Bros. He was a statesman of gaming – of which there are simply too few these days – and he was always happy to come to our events and express his views.
Social media has also taught us to be calm. If you argue with players that your game is really good and they feel like it isn’t, you will lose that argument. So why bother? When social media is full of misinformation, toxicity, justified whining, and unfair criticism, it seems pointless to express your point of view there. Nobody wants to argue with the entire internet. Game officials don’t want to take the risk of saying something that could be taken out of context or distorted after repeating.
But in gaming, as in any other industry, good data means power. Satvat’s data suggests that in a year or two, we could potentially be back in the gaming industry’s talent wars, which would be beneficial for job seekers. I think the gaming industry needs to pool its considerable resources and make its voice heard in places like Washington DC and in front of consumers. She needs to strengthen the Entertainment Software Association and advocate for it like no one else does.
Ball surprised people by noting that Roblox, with nearly 400 million monthly active users, has more players than almost the entire triple-A ecosystem and outperforms core competitors like Steam or PlayStation.
And yet Roblox generates only a fraction of the hourly revenue of competing platforms and publishers, and as Epic Games’ Tim Sweeney pointed out, Roblox has almost no clout when it comes to outdoing Apple and Google, whose fees are 30% through game sales They mostly generated profits of more than $20 billion on their platforms. For this reason Sweeney works tirelessly to achieve antitrust victories against Google and Apple on behalf of game developers, as he noted in a press event where he announced the addition of third-party mobile games to the Epic Games Store. But all too often Sweeney finds himself alone. Companies like Roblox and Microsoft do not lend a voice to antitrust law.
We all know that transparency continues to decline as the gaming media also goes under. Game Informer has closed. GamesIndustry.biz, one of our competitors at GamesBeat, lost its long-standing lead over the holidays. If a journalist leaves the industry, it means we lose thousands of stories about games over time. When I attend industry events, I see more YouTubers than journalists.
We are being replaced by developers who have a more authentic approach to players, but are often paid by the very people they communicate information through. I can tell you: If the gaming industry is not healthy, it will not support gaming media. And if gaming media disappears, the industry will go dark.
So my message is simple. Build a lighthouse in your part of the industry and create a map. They know we’re going to need it, and we’re going to need thought leadership. Ultimately, these 15 challenges that Ball pointed out will destroy this business if we don’t have clear thinking and bold communication.
Source link
