2023 was a tumultuous year for the video game industry. Microsoft bought Activision Blizzard King for $69 billion in the biggest gaming acquisition in history, actors authorized a strike over threats of the use of artificial intelligence and more than 10,000 game developers were laid off.
Halfway through 2024, the job losses have continued, already topping last year's numbers with more than 11,000 layoffs so far, according to a report from Variety.
"What was a pretty historic, pretty remarkable period of growth has kind of turned into a very equally remarkable, dry spell," said Scripps News producer Matt Picht.
Picht is the producer and host of "Next Level," Scripps News' documentary series about the intersection of video games and society.
He says that even though the gaming industry has grown over the past couple years, the price of games hasn't really kept up with the pace of inflation — or the expectations of new investors.
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Analysts at the video game industry data company Newzoo told Scripps News: "While the unfortunate reality is that periods of growth and shrinkage are cyclical to many industries, the scale of job losses in games last year and this year is worsened due to circumstances unique to the industry."
Some of those circumstances include: compared to the pandemic, fewer people are playing games at home; Game companies oftentimes scale down teams after launch; and most notably, while the gaming industry has seen "double-digital growth since at least 2012," every company is now downsizing at once.
Newzoo analysts predict more cancellations to come for several games in development, and Picht expects the quality of games to change as well.
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"There are still companies making these kind of big 'Triple A' single-player extravaganzas, really huge games that, people can really sink their teeth into," said Picht. "But that's more and more expensive to make. and harder and harder to get a return on."
Some of the companies facing layoffs include Activision Blizzard and Xbox — both owned by Microsoft — Playstation, EA, Riot Games, Twitch and most recently, Take-Two Interactive, which is developing the next installment of the highly-anticipated "Grand Theft Auto" game.
"The more churn we see, the more studios that get shuttered and developers that have to go find work elsewhere and teams that get blown apart and picked back together with different people and stuff like that, the harder and harder it is for those kinds of experiences to make it to market," said Picht.