Our Industry Needs a Change

The video game industry is going through unprecedented times. During the pandemic, video games saw record profits which lead to mergers and acquisitions at a level we’d never seen before. But with every up, there’s a down, and I think we can all recognize that the current state of things is not sustainable.

Back when I first entered the industry in 2005, there were many more games that fell into the category of “mid-market” games. These were games that had a bit more of a budget compared to indie, but nowhere near the budgets of AAA games, usually with an MSRP (manufacturer’s suggested retail price) of thirty to forty dollars. They were small but good games, focused on a couple interesting gameplay ideas, and the entire studio built the game around those simple but innovative features. These were lower risk propositions for the studios and publishers, and if it earned three to four times what it cost to make it, it meant you could create another game while still making a small profit.

But in the mid 2000’s, our industry shifted towards a hits-driven philosophy: big gambles for bigger profits. These products had $100M+ budgets with tight deadlines, and studios needed to get bigger to match—even outsourcing to other studios around the world so the sun would never set on development. And the financial expectations from those games were in the billions. Which isn’t too surprising, given that you need to target a return that large if you want to secure enough money to make a future title while also generating enough profits for shareholders.

When a studio no longer answers to themselves, priorities shift. Goals shift, and the risks shift too. When enough studios start doing this, the entire industry shifts, and that can only last for so long. It’s hard to make a hit game every single time; very few of us are able to hit home runs every time we step to the plate. What happens when you target a $1B+ return and only hit $750M? You have to shave costs or your stock dips. You still gotta make those dividend payments, right?

So you cut what costs the most: people.

How can this be fixed? I don’t know, I’m just a CEO running a small fourteen-person studio. But I do honestly think we need to see mid-market games come back. We need smaller teams, making smaller games that are inherently lower risk, even as they include novel ideas. We need to see small but good games come back into the marketplace.

And here’s something you probably won’t hear a AAA studio head say: it’s okay if players stop playing your game to go play something else. It’s okay to spend time making new content that will entice them to come check it out again. Maybe some percentage will never come back, and that’s okay too. A model like that is fine, and can be sustainable if risk is low. Most importantly, it can also be sustainable for your team, and can be a big step towards combating crunch and burnout.

The path we embark on as developers has a much larger impact than just money. We’re affecting individual people, their careers, and what they love to do. Right now, it feels like we’re crushing passion and that’s the most dangerous aspect of this trajectory. If you fire, lay off and chase away passionate people, who are we left with? Who’s actually making the games we all love?

I’m not a thought leader in the space, but I can say this: all we’ll be left with is upper and middle management. And we aren’t shit if we don’t have passionate teams making what they love.

Wes Keltner
CEO & President, Gun Interactive