The Industry Is Crashing, but Video Games Aren't Going Anywhere

The games industry, as a whole, is not doing well right now. It's plain for anyone to see, from the smallest of indie developers to the biggest AAA studios. Even unrelated corporate brands like Dominos are swerving out of their lane to drop doom-laden takes hotter than any of their pizzas.

Between catastrophic layoffs (33% of US games industry workers lost their jobs over the past two years) and many existing professionals considering tapping out of the industry entirely, there is unquestionably something deeply wrong right now. Microsoft's 'reboot' of their Xbox division appears to be taking the form of them demolishing most of the veteran games studios they recently acquired. Sony has declared an end to physical media at the same time as deleting vast libraries of purchased movies from people's accounts and removing the option to purchase many of their older console titles.

Even Nintendo (the one relatively stable console manufacturer) has taken a hit from rising RAM costs, with the Switch 2 set to rise in price just before the holidays. Things are bad. Things are also likely to get worse before they get better. Not to downplay anyone's struggles in this intensely stressful time, but as easy as it is to embrace despair and declare the death of the entire medium, video games aren't going anywhere.

And especially not on PC, so long as we have any kind of open, global internet.

Crashing out

First, for those afraid of a repeat of the famous Great Games Industry Crash of '83, it's worth noting that was a surprisingly brief and localized event. Yes, America's games industry got the wind knocked out of it for a couple of years, but Europe and Japan continued largely unbothered. Secondly, such a crash (happening within a million-dollar industry run by a handful of retail-tied startups) could not happen again in this day and age, where we've got a multi-billion-dollar global business united by the internet, open storefronts and day-one translations.

But there is a crash happening. And it started years ago. Pre-pandemic, even, with major publishers and developers like Activision-Blizzard carving off vast chunks of their workforce long before CEOs started citing AI as the cause. The simple, sad reason is that the people with the money want exponential year-on-year growth, and games have historically been a field full of consistent, steady profit with the occasional breakout mega-hit. For those at the top, divorced from the concerns of regular people, AI looks like the potential to turn every dollar into a thousand, so that's where the investment goes.

There are pockets of good news and fresh growth. Even as the corporations pull up the ladder behind them, sales remain high. The money's still there, just not flowing where it should. New indie development funds like Outersloth (built on the breakout success of Among Us) are starting to spring up, and Vampire Survivors developer Poncle recently established a new publishing wing to "give something back to the indie community." While things are going to be precarious for studios mid-size or above, those able to move quickly are already laying strong foundations for grassroots sustainable game development.

Year of the Penguin

With the rise of the Steam Deck, Steam Machine and other such Linux-based gaming PCs, Microsoft's stranglehold on the platform is beginning to loosen, with the Proton compatibility layer now running many older PC games better than on modern versions of Windows. While it's still not quite as accessible as Windows, gaming-focused Linux distros such as Bazzite provide a relatively easy-to-use alternative operating system. Having set it up on my slightly aged gaming laptop recently, it now looks and behaves like a more powerful, more flexible Steam Deck. This is where the new, more sustainable PC age begins.

Yes, the price of high-spec gaming is increasing in significant ways, and even the Steam Machine has been hit by the rising price of RAM. Crimson Desert or Cyberpunk 2077 running at max settings with fully path-traced lighting will probably remain the domain of the fortunate or obsessive for years to come. But for most, this doesn't matter. At least, not enough to stop most people from having fun.

And let's not forget that it's not those glossy AAA games that fund the industry, only drive its leading edge further forward. The big money-makers are the likes of Roblox and Fortnite. We'll tackle the ethical hornet's nest of those two another time, but for now, consider that they're designed to scale down to run on mobile phones or lower. Outside of mobile, lower-spec handhelds like the Steam Deck and Switch 2 are the current baseline for mainstream games. Most titles today are designed to support them comfortably.

What about AI? While it's easy to read reports about thousands of games with machine-generated art, music, and writing slipping onto Steam and assuming that they're muscling out human creativity, those games have largely supplanted lazy asset flips and tend to sink like a stone when stacked up against anything truly human-made. It's a proven, statistical fact that having any kind of visible AI use tanks sales figures as the backlash only grows larger. So yes, AI's a problem, but probably not the existential threat (at least to games - the environment and economy are still at risk) that we once feared.

Rose-tinted goggles

Even VR, once the domain of enthusiasts with far more money than sense, has grown into a fertile playground for lower-budget gamers and tinkerers. Early headsets went for upwards of £1000 (even Valve's Index is still priced at an eyewatering £919 - hopefully the Frame is cheaper) but have fallen to prices equivalent to lower-end consoles, opening up a whole new universe of gaming options. The Quest 3S (one of the best all-in-one headsets, much as I dislike Meta) sees frequent discounts to as low as £250.

Assuming you've got a decent PC to pair a headset with, there's a library of thousands of games to pick from with a constant stream of official and unofficial releases increasing options daily. Some are Quest-native, but the majority can be streamed wirelessly from PC. Even if many of the big investors have pulled out of VR development (because the technology has proven to be a niche gaming item rather than their hoped replacement for smartphones), there's a whole galaxy of games there that most haven't even looked at yet.

Even with all of those signs pointing to a brighter tomorrow (and still a game-packed present), let's entertain the most apocalyptic scenario possible: That high-end gaming hardware becomes solely the domain of the super rich and games for such hardware all came from AI-boosted corporate walled gardens.

Bet on the underdog

If that comes to pass, will normal people stop buying and playing games? Well, did kids in poorer countries do that in the 90s, when all they had access to were bootleg systems like the Dendy? Absolutely not. There was still an audience ravenous for new experiences, and voids were filled, even in the days of custom silicon and writing esoteric code directly to metal, and we're long past that era.

It has never been easier to make, share, and sell a game that will run on a vast spectrum of hardware. From beginner-friendly setups like Game Maker (used for indie mega-hit Deltarune) to open-source frameworks like Godot to console-centric engines like Unity and Unreal. Even using specialist toolkits like RPG Maker or UZDoom, anyone with an interest in the medium can create something. Thanks to global storefronts like Steam and Itch, getting them into the wild and in front of an audience is more a challenge of marketing than clawing your way onto exclusive store shelves.

Older games also have lifespans measured in decades thanks to modders and ROM-hackers. Once purely the domain of the technologically savvy, countless thousands of mods are now available direct with one click thanks to the Steam Workshop and Mod.io, and even consoles are starting to get in on the goodness now, with classic Doom mods now playable on PlayStation and Xbox, and Baldur's Gate 3 bringing Withers' Big Naturals to current-gen TV-bound boxes.

There's no denying that things are bad now in the industry. What's happening right now will leave deep scars, and there will be talent lost, livelihoods ruined, and great works buried before release. It will take time, effort and more than a little luck to rebuild and replace what has been lost. But our roots have grown deep, wide and fiercely stubborn. Even in the absolute, most unlikely worst case scenario, video games are here to stay as a source of joy for countless millions and an artistic outlet for many more.

And we're here to keep covering them, whether or not colossal corporations care.