Why do layoffs, closures, and mergers continue in video games?

Today, we’re talking about the state of the video game industry, and it’s frankly all over the place. We’re not talking much about video games here DecryptionBut we should do more of it. Gaming represents a huge segment of the technology and media industries. Here in the United States, according to the Entertainment Software Association (ESA) — the major industry trade group — more than 212 million people played games last year, spending more than $47 billion on games and the content within them.

A lot of these games are announced here in June, which is a big hype season for the entire video game industry. We’re about to hear about a lot of really cool projects. After the next few days, almost every major playmaker will announce their roster for this year and beyond.

But behind the catchy ads and release dates, there’s something of a crisis: tens of thousands of workers in every part of the video game industry Laid off – temporarily laid off Since 2022. And this year alone, it happened actually Over 10,000 video game employees have been laid off, and we’re not even halfway through the year yet. Dozens of studios have closed, and countless projects have ended before we even hear about them.

It seems like a bleak time to be in the gaming industry, even though the art of video game design is booming. Large global publishers and small independent studios alike are facing these financial pressures, and it doesn’t look like they’re going to stop anytime soon.

So, if sales were so great, where did this enormous pressure on the company come from? How can the accounts go so badly if there is so much interest from consumers and players?

I called edge Video games reporter Ash Parrish is on the show to break this down and explain what’s happening in games and what these shifts can tell us – from a business, culture and labor perspective – about what might happen next.