5.12.24

Two different people over the last few days have said something to me like, "Now that you're free and thinking about what you want to do next, maybe you can work on figuring out how to fix the games industry." 

And aside from being mildly flattered and simultaneously bemused and horrified at the idea that anyone could believe I would have (or want!) that level of influence on such matters... I keep returning to the idea, and it leads me to a question: 

What do we believe is wrong with the digital games industry currently?  

The Creators

This weekend there is much social media chatter about a couple of studios Microsoft acquired at some point and has recently shut down. (I’m being vague not because I do not know the details, the games, the decision makers, and people impacted, but because I don’t want to focus on this particular incident, but on the concept of a broader malaise.) This is an example of the gloom on the side of the game makers: We’ve had huge numbers of layoffs in the industry over the last 24 months, many more studios are struggling and will likely close their doors before this year is over. There’s a strong culture of fear in many places which makes people afraid to speak up or even commit to a particular course of action because they are worried about losing their jobs. “Just survive ‘till ’25” is a phrase I heard repeated so many times this spring that it was almost a rallying cry for this year’s Game Developer’s Conference.

So let’s agree that for people working in the games business, there’s a strong sense of fear and the worry that things have changed for the worse, and they aren’t sure how to find their footing again.

The Players

And then there are the players.

The current Player v. Industry dust-up involves the players of a game called Helldivers 2 who love the game but have given the publisher and the developer nonstop grief over many things, most recently some efforts to force players to use a Sony account system to log in and play the game.

Perhaps the players have legit beef in this case, perhaps there were good reasons (there usually are!) for forcing the use of a particular account or login system.

But again, the specific case here is less interesting than what I think could broadly be made as a true statement:

There is a deep sense of regular outrage and antipathy between players and the creators and publishers of the games they play.

The Investors

And then the investors are uncertain, many sitting on the sidelines. A few experienced VC groups have raised fairly sizeable amounts to restart investing after 18 months of caution. Investment IS returning to the sector, albeit slowly.

There are likely three big reasons for this: First, at the macro level, interest rates remain high. There are other places which are far lower risk to go get a return that outstrips inflation. Second, the industry is seen as being in a correction post-pandemic after 2020 highs for almost the entire sector. Third, at least a bunch of VC took a bath on Web3 gaming investment, AND are now watching companies they funded for seed rounds struggle to raise enough to bring whatever games they are working on to market; so many VC firms may feel burned by investments over the last few years.

Investment into the games industry remains depressed and uneasy.

Some Areas for Further Thought

I’ll take these three categories of malaise as a reasonable answer to the question, “What do we believe is wrong with the games industry?”

I want to think more about what solutions we can see that will bring about the kind of change folks want to see. But before wrapping up for the morning, I need to add two more observations and an exhortation:

First, I cannot help but see a bit of a backlash against the hugely expensive AAA products that dominate sales charts.

Of the games that are getting the most attention, few are big AAA $200M blockbusters. Consider this NTY article from this morning, in which almost every one of the games recommended are smaller indie projects.

Recently, Baldur’s Gate 3 absolutely swept the industry awards, for good reason. (Obviously I’m far from impartial to the success of this project, as I was involved however distantly.) But BG3 clearly delighted fans and critics the world over, and did very well for its creator, Larian. So there IS still appetite for giant, expensive games.

But there is also clearly a hunger for gamers (and creators, and investors) for smaller, lower risk enterprises.

Second, I think there’s value in zooming out from the games industry as a particular case study, and look at the broader relationship between consumers, the technology companies that provide them with content, and the workers who comprise those companies.

Noah Smith writes a provocative piece on the “death of the internet” in which he argues that people are increasingly turning away from content sources on the internet because the types of content there are increasingly low quality as a direct result of the need to drive profitability. (Cory Doctrow’s “Eshittification” of the net, “Slop” of AI generated stuff, disingenuous content posted by foreign agitators are the big three culprits in his mind.)

I’d like to think about all of this a lot more, but I see a couple of major social forces in play here:

First, employees and consumers alike feel hostile towards corporations right now. I think of this as an inevitable outcome of late-stage capitalism, in which the inherent profit motive of corporations is distasteful to folks who feel left out of the benefits of the system. This has little to do with gaming in particular, and everything to do with discomfort people who (mostly) don’t have capital feel towards a system working as designed.

The system isn’t built to make your life better, creators. The system isn’t built to delight you, consumers. The system is built to maximize return on invested capital.

Second, I think that in a world where the concept of community has largely unraveled, and there are few abiding family structures, social structures, or faith in religion or government to give people a sense of belonging… In this post-trust environment, many people may be desperate for smaller, trusted groups to feel a part of. This is a quest for identity at its heart for many.

People need purpose and a sense of belonging, and when the larger social super-structures no longer are great at providing this for many, this seems to force a splintering into niche communities.

 In a world where big structures aren’t working for many people, are they seeking out smaller communities, more niche experiences as a way of coping?