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The Video Game Industry Is Not Equipped to Handle What Comes Next

IbizaPocholo

NeoGAFs Kent Brockman

It has been an ominous month for the video gaming industry. AI infrastructure is bodying the consumer technology world. Another multi-million-dollar live-service game failed to meet its mark while Sony appears to be rebuilding themselves entirely in that image. Not only is Microsoft singularly focused on AI integration, but as I wrote this, the heads of Xbox abruptly announced their departure and replacement with reps from the AI wing of the company.

All of these dramatic pivots occur in the shadow of inconvenient player trends. More players are playing fewer games. The games they do play are years old. Landing a "forever game" is obviously lucrative to the company behind it, and why Sony is wagering they'll nail at least one for themselves, but it's a formula that can only shrink the industry.

So why, when the population has never been more immersed in gaming, with even a third of octogenarians hitting Candy Crush, is success so sluggish? Taste and preferences differ across demographics and geographies. Impassioned fans from European rail-sim lovers to Latin fighting game communities make do even when the larger industry doesn't provide. Those hungry for more deck builders, 4X games and turn-based RPGs will find something to eat.

But the biggest gap between cultures is time, not space. There we see devastating stagnation. The youngest players are burning unsupervised hours on Roblox. The oldest are in Odinsleep until a single-player blockbuster catches their eye. The middle of the pack, getting the hang of disposable income, are discovering other ways to spend. The biggest players in the industry are still waiting for this entire bloc to gravitate toward the next Fortnite or Grand Theft Auto, but year after year this just looks more like wishful, harmful thinking.

Through the '90s, the video game industry very intentionally tried to narrow its players down to adolescent males, a controlled demographic that made marketing much easier. Movies, music and television did not do this beyond specific programs, because they knew their business relied on having something to sell to everyone.

It's no coincidence that the video game industry found its biggest successes when the facade slipped. The Sims, Pokémon, and the DVD capabilities of the PlayStation 2 were boomtowns, made up of people who did not previously see themselves as the primary audience for games and gaming hardware. The biggest disruptors of the last decade weren't fantasy RPGs or open-world shooters but Minecraft and Pokémon Go.

Gaming started to broaden its horizons, even if the dude-focused marketing divisions remained entrenched for years. If there is a crash on the horizon, it's likely Nintendo will be the ones walking away from it the least scathed (again). Games like Mario, Zelda and Mario Kart truly are widely beloved across generations, demographically pliable. The company has long understood the importance of trying to redefine what the experience of playing a game can be.

"If we continue to coalesce around the four or five genres, then we won't get the new players because those people have already said we're not interested in your genres," former Sony Interactive Entertainment Chairman Shawn Layden said back in 2023. "Don't kid yourself that someone who's said 'no' to Call of Duty for the last 15 years is going to start suddenly saying 'yes' to Call of Duty."

It is worth mentioning that sales for Call of Duty, one of gaming's evergreen cash cows, slipped last year.

The current youth, opting for Roblox and Five Nights at Freddy's lore, are agnostic to the graphics-pushing that once defined industry progress. The people going to concerts, exhausted of being online but still enjoying posting, are compromising with the cruddiest flashcard digicams the 2000s had to offer. The fans who once reliably showed up for every new salvo in the AAA console war are now busy booking colonoscopies.

As gaming rigs return to the $6,000 range, the island of high-performance players will recede to the peninsula of 30,000 or so people who unironically have "XxX" in their username. The biggest gaming companies are placing unsustainable bets that rely on each one of these kinds of players showing up and subscribing to a singular vision of gaming. These are growing pains maturing at the worst possible time. But it's the result of intentional decisions, not inevitable fate.

If this industry wants a future for itself, it needs an ecosystem that everyone can participate in for the long haul, from first steps to one foot in the grave. That requires an inclusive approach that is very alien to its foundations. Those players will need a way to discover more than the next live-service game, finding the gaming equivalent to Sesame Street, Smiling Friends, and Saturday Night Live all on the same idiot box. Edutainment and courtroom dramas alike. The player base is huge. Bigger than ever. Ever growing. They won't all fit into the next Fortnite.
 
The current youth, opting for Roblox and Five Nights at Freddy's lore, are agnostic to the graphics-pushing that once defined industry progress. The people going to concerts, exhausted of being online but still enjoying posting, are compromising with the cruddiest flashcard digicams the 2000s had to offer. The fans who once reliably showed up for every new salvo in the AAA console war are now busy booking colonoscopies.

This is the main aspect. and it's really pretty true. all my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
 
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People want to play with others, and have an experience that doesn't cater to toxicity for their hobby anymore. Sure there are people who love that hyper competitive aspect, but the masses see gaming as entertainment or a replacement for tv / media and playing and laughing with friends is what they seek not sweaty, cheating, communities. All the games mentioned and others offer multiple ways to enjoy the games outside competitive.
 
This is the main aspect. and it's really pretty true. all the my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
And that's why everyone is desperate to have a live service game or 2 hit. The industry is moving to where players are.
 
But the biggest gap between cultures is time, not space. There we see devastating stagnation. The youngest players are burning unsupervised hours on Roblox. The oldest are in Odinsleep until a single-player blockbuster catches their eye. The middle of the pack, getting the hang of disposable income, are discovering other ways to spend. The biggest players in the industry are still waiting for this entire bloc to gravitate toward the next Fortnite or Grand Theft Auto, but year after year this just looks more like wishful, harmful thinking....

wrong. i'm not in odinsleep. i'm replaying older games, many of which are still more enjoyable than anything now being released...

otherwise? correct...
 
This is the main aspect. and it's really pretty true. all the my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
Yeah, my son and his friends only care about Minecraft and Fortnite. They don't even care about GTA VI
 
As gaming rigs return to the $6,000 range, the island of high-performance players will recede to the peninsula of 30,000 or so...

Dave Chappelle Omg GIF
 
The fault comes in one word "woke". The industry wants to appeal to a target audience which doesnt exist. The majority of gamers are tired of girly stories and character. Just look at all the main AAA games and most of them focus on writing empowered female and racialy diverse characters, and the stories that come out of these things are sooo boring and predictable. You can already tell how everyone behaves and reacts... all very polically correct. They are making games for no one so no one buy thems... the same is happening with "AAA" movies
 
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There's too many games, with both the number of releases having multiplied compared to the past, plus the already existing library of old games. And then, half of the population are playing the same top titles with their friends and the other half are on their own niche among hundreds.

Gone are the times when just one release was an event, gone are the times when a new gen of consoles came with great leaps in visual quality. Games aren't a novelty anymore, just another form of entertainment among many. Nowadays you have two choices, you either slowly carve out your own niche, or you make a gamble with a big release.
 
Yet a lot of GAF seems to think it's completely irrational.
It's because its a bunch of middle aged dudes here who think Video Game companies need to keep making physical media when every other form of media has abandoned it so they can display their piles of landfill waste as it's some achievement. They also like to argue about their plastic boxes that even the said companies don't care about "Console Wars" anymore. It won't be long until those plastic boxes go away either.

Gaming is completely DEAD from what it used to be and it isn't coming back.
 
The fault comes in one word "woke". The industry wants to appeal to a target audience which doesnt exist. The majority of gamers are tired of girly stories and character. Just look at all the main AAA games and most of them focus on writing empowered female and racialy diverse characters, and the stories that come out of these things are sooo boring and predictable. You can already tell how everyone behaves and reacts... all very polically correct. They are making games for no one so no one buy thems... the same is happening with "AAA" movies
Yes, it has to do with being "Woke". And I am sure they are making games to makes sure no one is going to by them.

Good lord.
 
This is the main aspect. and it's really pretty true. all the my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.

But why gaming companies should only be focusing on broke kids?

We (people that were growing up with SNES/PlayStation) maybe are old (30+) but we certainly have a lot more money to spend on our hobbies. I personally think this is the best demography to target, good AAA and AA games will sell, and we will still buy games until we are ~60s or something.

Kids and young adults are not interested in paying for games...
 
But why gaming companies should only be focusing on broke kids?

We (people that were growing up with SNES/PlayStation) maybe are old (30+) but we certainly have a lot more money to spend on our hobbies. I personally think this is the best demography to target, good AAA and AA games will sell, and we will still buy games until we are ~60s or something.

Kids and young adults are not interested in paying for games...

But they aren't just focusing on them. They're still very much doing all the other categories.


A lot of GAF have just managed to convince yourselves that they are putting all of their attention onto GAAS etc because they dared to try and develop a few.
 
Since the 70s, game developers are used to have every few years big changes in game development, either in tools or in the platforms where games are played.

Devs will adapt and will use this on their advantage to develop better games and faster, which will be way better than the result of a player inputing a "make GTA8 set in Pakistan" prompt.

Kids and young adults are not interested in paying for games...
Gaming is completely DEAD from what it used to be and it isn't coming back.

Wrong, money spent in games has been growing since the 70s and it's in all time highs.

Same goes with the amount of great games (judging by objective metrics like reviews, not your personal taste) released every generation or year.
 
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This is the main aspect. and it's really pretty true. all my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
I agree but do you still play the same games you did when you were 7? Those kids will grow up and I'm sure they will play something new. What that is I don't know.
 
But why gaming companies should only be focusing on broke kids?

Kids and young adults are not interested in paying for games...

It's not that they don't have money. They simply don't care for cinematic AAA single player open-world narrative games. And certainly, they don't care about graphics (raytracing, yeah right)
 
But they aren't just focusing on them. They're still very much doing all the other categories.


A lot of GAF have just managed to convince yourselves that they are putting all of their attention onto GAAS etc because they dared to try and develop a few.

Yes, but we see how destructive this strategy have been for Sony studios...

They don't get that all those gacha games, Fortnite and Roblox are so massive because they are free. And even if you make F2P game competition is so strong that your project is still way more likely to fail than to achieve success (Highguard).
 
But why gaming companies should only be focusing on broke kids?

We (people that were growing up with SNES/PlayStation) maybe are old (30+) but we certainly have a lot more money to spend on our hobbies. I personally think this is the best demography to target, good AAA and AA games will sell, and we will still buy games until we are ~60s or something.

Kids and young adults are not interested in paying for games...

I stopped reading at " broke kids " that's a pretty daft statement.

I'm sorry your parents hated you but, All kids are not some parentless street rats. Parents do buy things for their kids and give them allowances.
 
Yes, but we see how destructive this strategy have been for Sony studios...

They don't get that all those gacha games, Fortnite and Roblox are so massive because they are free. And even if you make F2P game competition is so strong that your project is still way more likely to fail than to achieve success (Highguard).

Yes well it's not necessarily going to be easy to produce a hit.

That doesn't mean it isn't rational for them to try given the large, long term profits that are potentially there to be found.
 
Since the 70s, game developers are used to have every few years big changes in game development, either in tools or in the platforms where games are played.

Devs will adapt and will use this on their advantage to develop better games and faster, which will be way better than the result of a player inputing a "make GTA8 set in Pakistan" prompt.


Wrong, money spent in games has been growing since the 70s and it's in all time highs.

It's not that they don't have money. They simply don't care for cinematic AAA single player open-world narrative games. And certainly, they don't care about graphics (raytracing, yeah right)

But it's not kids that are paying for them, unless they steal money from their parents (or parents give them money).

Gen Z was raised on Minecraft, no wonder they don't care about graphics. But market for "old fucks" that care about this stuff is still massive and will be big for the next few decades. Unless of course game makers will completely abandon us.

I stopped reading at " broke kids " that's a pretty daft statement.

I'm sorry your parents hated you but, All kids are not some parentless street rats. Parents do buy things for their kids and give them allowances.

Right now even young adults are broke once they pay for rent and groceries...

I know some kids get money, I worked at retail store at some point and sometimes sold PaySafe cards to children that had surprisingly large amounts of cash... But what % of children gets money like that to spend on bullshit in current economy?
 
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I'll single-handedly save the gaming industry for free, you're welcome:
  • drop the high-budget games that take almost a decade to release
  • stop chasing graphics and high end everything
  • roll out cheaper hardware
  • lower game prices
  • keep physical around
  • have more digital sales more frequently
  • kill all woke/dei projects and fire the people that want it in the industry
*takes a bow
 
Great article, know exactly who you're making a game for, or you'll be increasingly making it for nobody.

We have growing backlogs and alternatives of titles that know who they were made for, you'll increasingly sell nothing if you try that weird catch-all "safe" shit (don't even drift a tiny bit), and just make audiences hate your company's carelessly unfocused arrogance of thinking target demographics don't exist.

Market is going to increasingly punish these companies until things like Concord become a normal regular occurrence.

Even Call of Duty who historically was laser pointed on its target audience started quietly drifting (fucking warzone's COVID era success' fault) in recent years, everyone fell for this absolutely insane bullshit. Their new games are still market-demographically confused and wobbly because of that.

Article is on point, these guys are not prepared for what's happening.
 
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This is the main aspect. and it's really pretty true. all my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
Your kids won't play those games forever you know. They will grow up one day - and usually that's more when you look for games like God of War.
 
But it's not kids that are paying for them, unless they steal money from their parents (or parents give them money).
Yes, obviously kids don't have money and are parents who pay for them. Always worked in this way. Part of Nintendo sales are because of that: their parents have to buy a game for the kid and know Nintendo are a safe bet. And then the kid ignores it and goes back to play Roblox in the tablet.

In case you didn't notice it, Minecraft, Fortnite and specially Roblex made a shit ton of money.

The thing is that the kids market is monopolized by these few games (plus a few more), so most top publishers know it and avoid that market.

Most publishers focus where they make more money and where more players are, which is the 25-45 range. Sometimes also try to appeal teenagers as long term investment (if they become fans of the IP will spend money on it in the future once they get money).
 
all gamers want is something to complain about, too many jagged edges here, the upscaling in this game just isn't fucking good enough... blah, blah path tracing blah blah native resolution

If the industry can keep tapping into the same moronic bullshit, they can keep making money


Hey, look, it's the latest thing to fucking complain about, and only < insert dollar amount >
 
Outside of insinuating that I need to schedule a colonoscopy, I think I'm missing the point. A crash is coming? That it?
It seems they point the article is making comes down to people not wanting to adopt anything new in terms of life service games and people just keep sticking with stuff like Roblox instead of the newer games. With the cost of development and the number of games not succeeding the industry is heading for a bad thing. Since it's Kotaku they say that the key to success is more diversity and inclusivity, but I guess they forgot Concord happened.
 
Yes, obviously kids don't have money and are parents who pay for them. Always worked in this way. Part of Nintendo sales are because of that: their parents have to buy a game for the kid and know Nintendo are a safe bet. And then the kid ignores it and goes back to play Roblox in the tablet.

In case you didn't notice it, Minecraft, Fortnite and specially Roblex made a shit ton of money.

The thing is that the kids market is monopolized by these few games (plus a few more), so most top publishers know it and avoid that market.

Most publishers focus where they make more money and where more players are, which is the 25-45 range. Sometimes also try to appeal teenagers as long term investment (if they become fans of the IP will spend money on it in the future once they get money).

I was pirating games when I was a kid/teenager.

I doubt most of that Minecraft/Fortnite money comes from people under 18.
 
Kids and young adults are not interested in paying for games...
They spend a lot of money on games though. Younger demographic spends a lot on in game items and in game currency.

And it's not like they're abandoning millennials and above. Most of the games that are released today are single player experiences.

I doubt most of that Minecraft/Fortnite money comes from people under 18.
But its still young people asking their parents, friends, families for v-bucks or robux gift cards for their birthdays. Publishers do not care who's bank account the money comes out of. They care about who's spending it.
 
Your kids won't play those games forever you know. They will grow up one day - and usually that's more when you look for games like God of War.

You still need to have a game to cover that period of their lives. And if they continue (sticking with it rather than turning into SP core gamers) into more mature GAAS etc games as they become adults then you need to be able to target them during that phase as well.

You have to go to where the customers are, either way.
 
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This is the main aspect. and it's really pretty true. all my kids and their friends want is Roblox , Fortnite, FNAF, and tablet games like geometry dash. NO ONE ever talks about a God Of War or Halo.
eh, it's not so clear cut. I've seen plenty of people in their late teens, early twenties discussing games like Fallout and Mafia.

Also, one big advantage of single player games for parents is that it's much easier to curate them, whereas online stuff like Roblox and Fortnite is always subject to classical internet problems. I'd feel much more comfortable putting a kid up to play some platformer than Roblox.
 
This is always has been like that, kids back in the day didn't even know what framerate even meant and played what was popular at the time, those kids playing Roblox or whatever right now will grow and graduate to that kind of games to something else or move on entirely, but no one stick to the same forever, only exception to this day are the Star War fanboys grasping at whatever slop Disney serves them, but that's another thing not related to this

This push to GAAS will only last so much, it's like everything, it's go to novelty to mainstream, to dwindling or straight up fad
 
The Western AAA industry dug its own grave when it went full woke/DEI at the same time that it was being replaced by Fortnite and Roblox

In reality, Western AAA would have survived and been fine if they were still making games that the millennial gamers still wanted to play but they decided to make insane political propaganda instead. So the young people didn't even know AAA existed, but the older gamers were all fleeing en masse from garbage like Star Wars Outlaws and Dragon Age Veilguard

Which leaves Western AAA with no audience. Dead.
 
It is irrational to have every dev studio have a go at it. It's going to crash and burn entire companies unless they actually find a middle ground.
Wouldn't call it irrational. With the cost and time it takes to make a game, working on something that has regular revenue coming in over time is the most rational thing you can do. Very few games sell enough for the project to not just break even, but be profitable enough for the studio to be able to comfortably start work on their next project without having to lay off staff 2 years into it.

Same reason most tech moved to a SaaS model.
 
I'am simply getting priced out of the hobby, i will never pay 70/80 for a product that needs half a year of patches to be in an acceptable state, so i bid my time, wait a year or two and get the complete goty definitive edition for 25 on steam.
 
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As a PC gamer all my favourite games and genres are either growing or making a big come back and all the communities I'm part of are booming.

Is this all about console gaming dying and how could you not have seen this coming?
 
Yet a lot of GAF seems to think it's completely irrational.

Because it IS irrational in the exact same way someone blowing their entire mortgage payment on lottery tickets is irrational.

Sure, maybe that person will get a jackpot winning ticket. But the odds are most likely that they'll lose damn near everything, fail to break even, and then not have enough money to pay for their house.

Spending tens or hundreds of millions of dollars chasing a singular unicorn is a completely stupid business strategy, especially when one considers that the biggest GaaS games out there didn't chase the trends, they created them.
 
Wouldn't call it irrational. With the cost and time it takes to make a game, working on something that has regular revenue coming in over time is the most rational thing you can do. Very few games sell enough for the project to not just break even, but be profitable enough for the studio to be able to comfortably start work on their next project without having to lay off staff 2 years into it.

Same reason most tech moved to a SaaS model.
But where are these costs coming from? It's almost completely salaries and for whatever reason many of these studios decided to produce these game in areas with the worldwide highest salaries for game devs, artists, managers, marketing and all the other professions involved in creating games. The world is big and every other place is cheaper than California or the other gaming development hubs in the US. I would somehow understand it if these were the people with the most skills or talent but considerig how almost all of the games have been trash or mediocre at best in the last decade.... Their struggles with out of control budgets are 100% self inflicted and their solution of creating the next bit GAAS hit is just one big gamble. A gamble that only works as long as there is money to gamble with. That money is drying up and we see now ther consequence in form if layoffs and studio closures.
 
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