So... everyone is saying that the game industry is in the worst place it has ever been.
We’re all just here trying to “survive to 25”.
Studios with decades of experience are shutting down overnight left and right.
Games 2 weeks away from being released are canceled with full teams just being cut.
It’s bad out there… real bad.
You can’t go 2 days without some bad news.
However, I think we’re poised for a MASSIVE revival.
Here's how I think it all goes down…
Let’s pretend you are one of the 30,000 people who lost their job in the last 24 months.
First of all - Holy crap this sucks. This really sucks.
You worked your entire life to get into your dream job. Found a place that would let you work where you want, paid you what you were worth and gave a sh*t about you as a human.
Everything was on the up and up.
You had to pinch yourself every morning to make sure it was real.
Off in some distant land totally unconnected to you a group of people that rhymes with Shembracer went MASSIVELY over their skis, bought way too much at stupidly high valuations, lost a giant deal at the last minute then had to start cutting immediately. This started a domino effect that we’re still reeling from years later.
At the same time, COVID happens. People can’t leave their house. Spend all their time and money playing video games. Execs see the numbers GO UP! (good right?) They love that sh*t. Money is FREE. Salaries inflate beyond any measure that is sustainable. Everything is awesome.
All while this is going on, Apple/Google/Facebook make a ton of privacy changes effectively killing mobile game companies ability to attribute spending back to their UA campaigns. This effectively kills mobile F2P overnight. 10 years of best practices are thrown out the window. 1000s of dead games lie in the streets.
“Mobile is dead” is a phrase you hear over and over at shows for the next 18 months.
Then regular life returns to normal, people’s video game spending shifts to travel(we can leave our houses again!) and food/housing budgets as inflation spikes off the charts.
Oh sh*t. Unfettered growth is not sustainable. You mean hiring people at $350,000 base pay was going to backfire? Who knew? Apparently not a lot of the “smartest” people in the industry.
You are now just 1 of 30,000 insanely talented people without a job. No fault of your own.
When you’re at the bottom, the only place is to go up right? right?
What happens next? How does this turn around?
Glad you asked.
First. Let’s look at what has been working very recently.
In the last year+ we’ve seen some gigantic games come out of seemingly nowhere.
Here are a couple of quick case studies:
Balatro - Developed by 1 person with a very specific vision. He’s been sharing his game development blogs and the game didn’t change that drastically after some of the initial prototypes. He found a blend of Poker, Roguelike, amazing battery efficiency on the SteamDeck and quirky style at a no brainer price point. Sells millions of copies. This game would have never been green lit at almost every “major” publisher.
Peglin - Small team. Quirky takes on known genres. Peggle+Slay the Spire. Found a style that worked and built it slowly over time out in the open. Made the game in a “low risk” environment and didn’t go full time as devs until the game was already selling. They set themselves up for success by going at it slowly and very intelligently.
Palworld - Smallish team. Had already shipped a game. Had a base engine. Asked themselves, what if Pokemon had guns in it? Boom. A rule of thumb is that it takes 3 games for a team to gel together in one genre. Your first game is likely not going to work, but you’ll learn a ton in the process.
Animal Well - A guy from “outside” the industry creates his own publishing company because he was tired of seeing crap get released. Partners with a 1 man dev shop, gives him time and money to do things right. Out pops a quirky little metroidvania that hits #1 on Steam on day 1.
What do these games have in common?
Small Teams - Each game was made with a very small team in comparison to the mega hits out there. Palworld was the largest of my examples and they were tiny.
Reduced Risk - Games were made over longer periods of time, giving space for the ideas to breathe and be refined on much lower budgets.
Genre Blending - Find something that has worked before. Improve, Iterate, Release. Everything’s a remix
What happens next?
The size of teams is going to shrink. You’ll need to do more with less, but you might have more time to do it.
Teams are going to start shifting to Web Development as the primary platform for distribution.
We’re tired of writing 30% checks to the likes of Apple/Google to not support us, create deployment headaches effectively gatekeeping processes and slowing down releases.
Sites like Pogo.com have been quietly serving their core audiences for decades with great success that no one is paying attention to.
Sites like Poki.com have been amassing an audience of 60M+ monthly active users directly targeting Gen Alpha. Who will all have credit cards in ~4 years.
Browsers like Raybrowser.com are starting to emerge that are directly catering the gaming audience.
Hardware is getting better to the point where installing things “locally” will no longer make sense.
There are a lot of dead soldiers on the shore of “cloud gaming”, and all that foundation is now finally being realized with advances in hardware, tech and connection speeds.
Here at Iron Fox Games? We initially poised ourselves as a Mobile development shop, as that’s just what we did for 15 years prior. Now 90% of all our revenue is coming from web game development. I see that going very close to 100% over the next 12-24 months and beyond.
There will be some smart money that will see all these highly talented people sitting around, will have been smart with their cash reserves they built over COVID, recognize that with all these game cancellations means there will be giant holes in content slates in the next 10-18 months and will start deploying it across these opportunities.
All this is laying a framework for the following:
Small game teams will form out of the ashes of all these layoffs.
Budget and salaries will right-size making these intelligent bets for investors to lay down.
Distribution channels will continue to broaden as more people move to browser based gaming across the globe and PC gaming continues to thrive with things like the Steamdeck.
Unique blends of ideas/genres that havent been mashed together before will start to emerge.
The death of big budget games will continue as the appetite to spend $200M on a game will be smaller and smaller.
Smart companies will want 10 $20M, or 100 $2M games instead.
These doors are now open.
There are talented people who continue to love building games. Consumers are still going to want to play games and spend on them.
Staff is now more available than ever before, there is a giant content gap coming in the very near future, and distribution channels are becoming more developer friendly.
We are going to see some of the most profitable, creative, riskiest games we’ve ever seen start to trickle out in the next 18-24 months.
Setting up a renaissance.
I hope I’m right.
This is an industry I love and has been my career for the last 17 years.
We’ve been through bad times before. The early 80s, the internet bubble, 2008 GFC.
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