I honestly tend to agree with this.
I still think something like DQ11 looks fine, even if its much cheaper to develope than cutting edge realism chaseing in terms of graphics.
You can make great games, that dont require massive amounts of focus on the graphics, as long as everything else is pretty good.
Stuff like Xenoblade 1,2,3 ect still look fine to me.

Is it dated compaired to say Allan Wake 2, SM2, GoW, ect ect.
Yes? but does it matter? not really.

This is part of why nintendo makes so much money.
They dont spend it on voice overs, alot of games dont have characters talk, but make small noises ect, and rely on text subtitles.
They dony spend tons of graphics, mocap ect, actors (voice or not).
They dont even sell their hardware at break even points, they sell old tech for profit, when they sell them.

They make much more profit that way.

About the Layoff stuff.

There were rumors of Toys for Bob, closeing down a few weeks back.

Then we they are spinning off from xbox to go independent.

I think this is a case of MS guys being "the good guys", and being like, the direction and profit margins vs costs/renvue arn't doing it for us, we're shutting you down. And the guys at Toys for bob, basically talking them into just letting them go, and have a try at going at it themselves.

Hopefully it goes well for them.

Yeah a nicer way to cut stuff for sure. Imagine if all the dead studios from ea were allowed to just go on their own way. 

Also Nintendo games aren't the only ones like you mentioned. Tons of indies are better looking than AAA games. 

Amongst the mass layoffs happening
Retro studios is hiring for product testing

https://mynintendonews.com/2024/03/02/retro-studios-is-now-hiring-for-a-product-tester/

I'm going to guess that Metroid Prime 4 won't need to sell 10 million to break even. 

I think part of the issue is the price of games has gone down, drastically, since the 1980s and 1990s. In the early 1990s, I spent over 100 USD (about 200 USD today) on a single game - granted, it was an import (Final Fantasy 4 wasn’t available in my country until much later). But games were regularly priced highly in the 1990s. Nowadays, I’m rarely spending over 30 USD - much lower than what I (or my parents) spent on games in the 1980s and 1990s, even before factoring inflation.

But I think people buy a lot more games now. Back in the 1980s or 1990s, it was exceedingly rare to own more than 12 games for an active generation (unless you had siblings), people would trade them around. nowadays, people seem to own dozens of games (I buy about a 1-2 dozen a year, most of them on sale and indie titles).

Well, except this guy:

He had 97 of them.

That was MS as a whole. Not their entire gaming division. Only official number we have was 60 employees from 343. All of Bethesda’s studios combined have 2,000 employees.

Xbox didn’t lose 10,000 employees last year because they don’t even have that many employees lol.

Blizzard alone has more employees than Xbox Game Studios and Bethesda combined. 

I think their concern is this is the mid-point of the PS5 and should have been the peak year, but they missed their sales target by a huge number, and so looking at that profit margin ... it's underwhelming to them if that is the peak of the PS5 or near the peak I think. 

The problem is those profit margins will get pushed even slimmer in the coming years as game costs continue to rise. Like I said, it's in their own leaked budgets, Spider-Man 2 (300 million) cost as much as Spider-Man 1 (180 mill) did + an additional high budget $100+ million dollar game like Ratchet & Clank: Rift Apart (120 mill) combined. 

So that means in a period of about 6 years, they've gone from $180 million being good enough for a Spider-Man game to the sequel costing ($300 million) as much as what used to be two large budget games for them. 

That probably also means like the next God of War or Last of Us or Horizon game is going to cost $350-$400 million potentially if they want to go even higher with the graphics.

That's really your problem, they are looking down the road and seeing budgets that are skyrocketing every 5-6 years and they're already not happy with the profit margins of today, in the future it will get worse. 

I've got to be honest too, Spider-Man 2 looks fine, but it doesn't to me look like something that blows away the PS4 generation of games, sure it looks better ... but like almost double the budget better? Nah. If that's all $300 million gets you, what is the spend for a game that's a notch or two beyond that? Probably $400-$450 million+. 

Now suddenly for one game you are paying what you used to pay for like 3 big budget games only a few years ago. Can people understand why that is scary even to Sony? 

Yeah, and there are ways to handle that without layoffs. Beyond game price hikes, you could try to keep the prices stable for longer and aim for more evergreen titles. You could also finds ways to encourage higher ownership percentages to be more like Nintendo in that regard.

The issue is that layoffs are not a long term solution nor something fans like to see.

Kotaku actually had a good article on the Sony leak from last year that revealed what Insomnaic/Sony are thinking, I'd reccomend reading it to anyone who really wants to understand what is happening:

https://kotaku.com/what-hacked-files-tell-us-about-the-studio-behind-spide-1851115233

Key points:

- Spider-Man 2 went over budget, was supposed to cost $270 million ended up being north of 300 million

- Internally Insomniac/Sony are extremely worried about rising costs, trying to figure out how to make blockbusters more like assembly line production (that sounds ... not great).

- Cinematic cut scenes cost a fortune.

- Here's a telling bit straight from the article quoting Insomniac themselves:

“We have to make future AAA franchise games for $350 million or less,” reads one slide from a “sustainable budgets” presentation earlier this year. “In today’s dollars, that’s like making [Spider-Man 2] for $215 million. That’s $65 million less than our [Spider-Man 2] budget.” Another slide puts the problem more starkly: “...is 3x the investment in [Spider-Man 2] evident to anyone who plays the game?”

There it is, Insomniac themselves even wonders if spending 3x the budget is something even that noticeable to gamers. It looks to me like $300 million is the budget range where even Sony is saying "holy shit, we need to draw the line here".

- Another point, they basically are talking about how they're under extreme pressure from Sony to cut costs, will be cutting the costs on future Ratchet & Clank and New IP titles, but it's still not enough and they had to lay people off from the Wolverine and Spider-Man 3 teams:

A more recent presentation in November points to potentially more drastic cuts. “Slimming down Ratchet and cutting new IP will not account for the reductions Sony is looking for,” reads a PowerPoint note attributed to Insomniac head Ted Price. “To remove 50-75 people strategically, our best option is to cut deeply into Wolverine and Spider-Man 3, replacing lower performers with team members from Ratchet and new IP.​”

This is exactly what I've been talking about for a while. People who naively think budgets could just go from $150 mill to $300 mill to $450 mill ... no problems don't have any business sense at all. $300 million it seems like is an emergency budget point even for Sony. 

Japan has laws against laying off people just because your company didn't make as much profit as you wanted to.

What this mainly looks like to me is shareholders not seeing the growth they expected, and regretting the investments they made in anticipation of that growth, such as hiring more people.

Maybe some companies actually went negative, but we're seeing several reporting net earnings.

I also think some are piggy backing off this trend and taking the opportunity to lay off people admidst all the others, since they won't get any particular negative publicity for being part of the norm.

So tl;dr,
- The games industry didn't grow much lately. (Part of which can be atrributed to over ambitious development costs.)
- Shareholders sacrificing employees to maximize profits.