Investment Downturn Grips Games Industry, Impacting Developers Severely
The global video game industry, once a thriving hub of innovation and creativity, is facing a significant downturn in investment, leading to widespread layoffs and project cancellations. This has had a devastating impact on game developers, particularly those in the middle-sized market.
Shrinking Investment Landscape
Over the past 18 months, a combination of factors, including the economic downturn and the ongoing games industry crisis, has created a “perfect storm” (as described by GI.biz). Investors and publishers are exercising extreme caution before committing to new projects, leaving many developers struggling to secure funding.
Mid-Tier Developers Bear the Brunt
Mid-tier developers, who typically target budgets of around £5 million, have been hit particularly hard. According to Craig Oman, CEO of Flaming Fowl, publishers are either seeking low-budget projects for a few hundred thousand pounds or high-profile blockbusters in the £20-40 million range, leaving mid-tier games in a funding limbo.
Layoffs and Project Cancellations
The investment downturn has forced many developers to make drastic cuts. Flaming Fowl, for instance, has laid off more than half of its staff and put its promising strategy game Ironmarked on hold. Other studios, such as Telltale Games and Stadia Games and Entertainment, have also announced massive layoffs.
Painful Losses
The layoffs and project cancellations have had a profound emotional impact on developers. Oman expresses his distress over the pain experienced by his team: “It’s been difficult… I just hope they all find work quickly, because that’s the really painful thing.”
A Different Era
Oman, who previously worked at Lionhead Studios, notes that the current industry environment is far different from when he was laid off in 2016. Back then, crowdfunding was a viable option, but Oman believes that is no longer the case: “I’d say it’s nearly impossible today.”
Long-Term Consequences
Industry leaders predict the downturn could last for up to two years. If this proves true, the damage to the games industry could be long-lasting. Oman warns that the loss of projects, studios, and talent could drive developers to more stable industries.
Hope Amidst the Darkness
Despite the challenges, there are signs of resilience and determination within the industry. Flaming Fowl hopes to revive Ironmarked through a Steam Wishlist campaign, showing that developers are willing to find innovative ways to bring their projects to life.