The industry is eating itself.

[SvennoJ]

pokoko said:

You've failed to establish a problem. If there are too many studios for the market to support then a bunch of studios failing is how the market adjusts.

Tens of thousands of restaurants fail every single year and tens of thousands more will open.

In 2024, the games industry saw a significant number of layoffs, with reports estimating that around 14,800 to 16,000 jobs were lost.These figures indicate a substantial increase compared to the previous years, with many sources citing the number of layoffs in 2024 as exceeding those of 2023.

It's a 'problem' when the market shrinks, or rather the profit margins. Justified or not, people are losing their jobs.

In 2024, the global video game market generated approximately $187.7 billion in revenue.This represented a 2.1% year-over-year increase and reflected a recovery following a period of market stagnation.

Still not keeping up with inflation and that's only revenue, mostly supported by mobile phone games revenue growth. 

The market for non mobile games is still shrinking. Although it's mostly console gaming revenue that's shrinking, PC is also still growing. Maybe Switch 2 can compensate for the decline of XBox. 

Anyway it's mostly the profit margins that are shrinking, hence AAA games are on decline.