If you've been following the latest showcases or just the Sony main YouTube channel alone you can clearly see a massive problem, there are too many games. 

I know too many games sounds like a good problem to have but not when they fail en masse and studios implode, the great rated AA and indies suck gamers away from the big AAA and the industry buckles. 

Are we fucked after GTA6?

Are you being legit? No hyperbole? (Part II.) I feel like 2023 discredits your thesis… there were five games to sell over 10mil copies (Hogwarts, TotK, BG3, SMWonder, SM2), console sales figures exceeded expectations (e.g., NSW outperformed their 15mil fiscal forecast by nearly 1.5mil), etc.

4 months ago would you have said Borderlands 4 and The Outer Worlds 2 will be lucky to break even? Things are different now, it's not 2023 anymore. 

The problem here isn’t weak sales figures; it’s the inflated dev budgets. If Borderlands 4 sold 10mil copies, the average price spent by consumers would need be $30, which noting how Borderlands games quickly sell for very cheap, 10mil copies wouldn’t even be a guaranteed success. I mean…it’d be likely, but the point should be clear. (Also, weak sales figures aren’t necessary a consequence of a bloated market. Sometimes games are just unappealing. Borderlands 4, in particular, hasn’t caught my eye all too much, though I’m very far from the target demographic.)

Honestly, I'm kind of happy AAA game prices are going up, because it should give AA games higher chances of success.

The large amount of games isn't really a big problem so far, because the industry is huge these days. PC, Playstation, and Switch are massive, and the Switch 2 is guaranteed to follow suit. Subscription services are reasonably big as well. The rise of China as a market should also help absorbing the increased numbers of relevant releases. I don't think the output is disproportionately high yet.

I somewhat agree, but there's also a very obvious shift we can see right now, towards more single-player games and coop focus. Developers seem to have understood, at long last, that certain genres and spaces are oversaturated. I was pleasantly surprised at the single-player focus on this year's Summer Games Fest, it's been a long time since I was excited about events such as this. 

@Kyuu: Your first sentence is important, the bigger studios are pricing themselves out of the race in many cases. Look at Owlcat Games and their reveal of "The Expanse: Osiris Reborn", for instance, a proven AA studio with a couple of hits under their belt, making a bigger and bolder adventure in a more established space, and selling it for 50$. I think it's a great move, and I think it could be a smash-hit, in no small part due to its potential value-per-dollar offering. We'll see how it plays out, but we are actually seeing some signs of healthy industry habits returning at some junctions right now - let's cheer them on. 

It's funny, the industry seems to be doomed either way according to people, whether they have too few or too many games.
No, "too many" is a good thing. Some of them will fail or meet with less than a stellar reception , of course, but that's how the market is supposed to work. The best will rise up and survive.
The industry is also somewhat unique in that products will sell over an extended period of time. They don't really expire as such, or go out of fashion. In fact, most games are at their best a year or two after their launch, with all the patch fixes and DLC.

Too many games, yeah, last year had almost 19k new releases, that means it had on an average week more games released than the N64 had in its lifetime crazy to think that way.

Also gamers tend to be heavy focused about AAA.'s failures and AA or indies winners. The number of indie games/studios failing every week is insane and so many closed down while nobody here can name one of the studios games.

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.