Behind the screen:video game developers facing greed and ignorance

Saving kingdoms on the brink of collapse. Survey vast, shimmering fairytale lands. Serve as a forest ranger with only the soothing voice of your walkie-talkie for company. These are just some of the possibilities that make a videogame experience such a breath of fresh air. Unfortunately, the other side of this industry is not as happy as we might think. The anxiety-inducing climate we seek to escape when embarking on a new adventure doesn’t spare the little hands that bring these worlds to life. It’s with this in mind that we’re launching a series of three articles to put the spotlight back on some of the things that all too often mar the videogame industry. In this first article, we take a global look at the industry. Between the explosion in production costs, mass lay-offs, developers’ feelings about exacerbated capitalism and the ubiquitous decisions made by executives blinded by a short-termist way of thinking, there’s a lot to cover.

This article was written with the collaboration of numerous anonymous sources working at the heart of the video game world and is therefore ideologically marked.

Point’n Think

State of the industry

It’s no secret that the video game industry is a huge moneymaker. We’re talking about a sector worth 177 billion dollars worldwide, and representing 5.5 billion euros in sales in France. In 2019, we could observe that total revenues from video games were more than twice the combined sales of the film industry, which was then at 42.5 billion, and music, which was just over 20 billion annually. These stratospheric figures were maintained over the following years, aided by the COVID-19 crisis which forced millions of people to be confined to their homes for several weeks or months, depending on the country. As you can imagine, when you’re stuck between four walls, you need to find a way to kill time, and video games were a natural response to this need. It was against this backdrop that the incredible and almost improbable success story of Animal Crossing was born, with 45 million sales at 60 euros each, greedily lining the pockets of the small video game craftsman.

While we might have expected a drop in sales once we returned to life as it was before, this was not to be. The video game industry continues to flourish. In 2023, we counted over 3.2 billion gamers. That’s a record, and we saw revenues of $187 billion in the last fiscal year. And yet, you’ve surely not missed the rumblings that the crisis is hitting hard, and that this is the reason for the increasing number of layoffs and studio closures among the major groups. In 2022, the industry recorded a record 8,500 redundancies. In 2023, this record was broken by almost 25%. And in the first half of 2024, more than 10,000 jobs were cut. At the same time, a number of titles have underperformed their publishers’ expectations, such as Alan Wake 2 and Final Fantasy VII Rebirth. Many other games in development were simply cancelled. This is the case for Square Enix, which has agreed to a dry loss of around 140 million euros due to the abandonment of numerous projects, in order to refocus its development pipeline on licenses that are part of its intellectual property portfolio.It is highly likely that layoffs and project cancellations will continue, even if a slowdown is to be expected given that almost all companies have closed their 2023/2024 fiscal year. There is an obvious and troubling contradiction between this human reality and the accounting heights reached.

The end of the COVID-19 pandemic is a potential explanation for these job-cutting decisions, but we shouldn’t sweep under the carpet the evolution of consumer patterns, gamer behaviors and preferences, as well as the increase in unmet economic forecasts, competition and production budgets. For many, 2023 and early 2024 are a videogame orgy. We’re inundated with excellent new releases, to the point where it’s almost impossible to keep up, even for someone who makes a living from video news. Alan Wake 2, Armored Core VI, Baldur’s Gate 3, Resident Evil 4, Diablo IV, Final Fantasy XVI, Final Fantasy VII Rebirth, Stellar Blade, Dragon’s Dogma 2, Hi-Fi Rush, Hogwarts Legacy, Marvel’s Spider-Man 2, Starfield, Star Wars Jedi: Survivor, Super Mario Bros Wonder, The Legend of Zelda: Tears of the Kingdom, Phantom Liberty, Shadow of the Erdtree make up an endless avalanche of big productions colliding with each other in a window of less than eighteen months.

This traffic jam of releases, each more exciting than the last, can only lead to inevitable failures. No one can invest between 60 and 80 euros minimum every two weeks to enjoy all the adventures developers have to offer. And yet, despite an accumulation of commercial failures, the industry continues to demonstrate its power. Nvidia has become one of the biggest, most powerful and most important companies in the world in recent months, thanks to the rise of AI. So much so that, at least temporarily, it has overtaken Apple and Microsoft with a market capitalization of $3,335 billion. The Redmond-based company, meanwhile, made the biggest technology acquisition in history, buying Activision Blizzard for the princely sum of $70 billion. This purchase cost nine times what Amazon spent to acquire MGM, the production studio best known for the James Bond film saga, and represents twice the value of streaming music leader Spotify. The global economic situation, however, tarnishes the picture. If we’re talking about $187 billion in revenues generated in 2023, versus $190 billion at its peak in 2021, taking into account the impact of inflation, the drop is actually greater. With 2021 generating around $213 billion at 2023 prices, the market has shrunk by $26 billion in real terms, or 12%. While we obviously remain on colossal figures, we must understand that capitalist logic does not tolerate decline. In fact, to be honest, it doesn’t tolerate stagnation either. Growth is the only thing that counts, even if the sums pocketed are already staggering. We’re right at the heart of the myth of infinite growth. But this model, which society is trying to impose on us as the only one possible, is far from working. In fact, it’s in the process of crushing everything around it, with the exception of a privileged few.

What we need to understand is that the crisis is real, but not everyone experiences it in the same way. A studio owned by a major publisher or manufacturer can survive the commercial failure of a game, or at least the failure to meet sales targets. Our business models are designed to bring in massive amounts of money from online games, enabling us to develop adventures that aren’t necessarily profitable, but which help build a brand image. The crisis we’re talking about doesn’t have the same impact on smaller structures. An independent studio that releases a production every three years, if it finds itself in a situation where sales are lower than planned, will have no choice but to close down or lay off part of its workforce in order to survive. This is an aspect that should not be overlooked, and one that explains the closure of many teams. This is why even moderately-sized companies can find themselves in situations of precariousness and instability. That said, it’s important to bear in mind that for companies like Xbox, Take Two or PlayStation, we’re mainly dealing with market players who are exploiting this crisis. Their margins are falling, even if this is not specifically due to a drop in revenues, but rather to an increase in expenses. When it comes to such financial entities, it’s important to bear in mind that doing worse than the previous year, or stagnating, is not acceptable. In other words, 3 billion in profits were made in the previous fiscal year, and to make 3 billion again would be seen as a failure. You have to do better, even if it’s only by a few million euros, because shareholders are looking for the infinite growth mentioned above.

The way this is perceived by video game workers is that there’s an aspirational effect. These big companies see that we’re normalizing layoffs, because small groups have no choice and won’t do otherwise, because that’s what keeps them from filing for bankruptcy. It’s a golden excuse to jump on the bandwagon and cut jobs by raising the spectre of the financial crisis, even though the heads of these huge structures were announcing record revenues just a few weeks before. The captains of these ships just realized that this was the right time to cut costs and increase their colossal margins even further. The signal this sends out is worrying, as it shows that the investors who landed in the industry a few years ago were well aware that the margins available were much larger and more secure than in other sectors, notably the film industry. A little before, and during COVID, there was this feeling that video games were a world of exponential growth and a safe bet. This kind of financing can be seen in small companies such as Dear Villagers or large groups such as Nintendo, which received funds from Saudi.

Meanwhile, the economic crisis has hit hard, making margins less certain and making it impossible to know which projects will make money. The promised oasis has begun to dry up, and many studios without patrons will need to be on their toes in the years to come.

A precarious sector?

It’s hard to imagine a situation in which it will be possible to overcome this. It’s a situation that’s distressing a number of developers, because the only way out would be to imagine a world where investors accept that working hands don’t make as much money as they did ten years ago, and that we now have to deal with this reality.

Nobody’s going to say that, because it’s capitalism, because we’re going to get screwed.

Anonymous source

The only line of sight for the people in charge is to imagine that we’re going to go from restructurings to redundancy plans to new economic strategies, all aimed at achieving a new golden age of profitability for video games. It’s terrifying, because it’s not impossible that, in the coming decades, we’ll just be witnessing a spectacle of investors chasing a carrot they’ll never catch. Unfortunately, making an ambitious video game, or even one that meets the criteria of the general public, takes more and more time and more and more people. For some years now, we’ve been talking everywhere about the explosion in costs, and a large part of the reason for this is the increase in the number of people needed to bring a project to fruition. Of course, not all the workforce is made up of salaried employees – freelancers are not uncommon – but the idea remains the same. In layman’s terms, the budget for a video game is mainly salaries, although you mustn’t forget the cost of rent and the various bills to keep the premises running.

Why do more and more people have to work on video games? That’s the question many are tempted to ask, and it’s not uncommon to see it on social networks. All areas of production require infinitely more care than in the past. While it’s true that the race for graphics takes up a lot of effort and resources, other aspects of a game are increasingly demanding. From the various conversations we’ve had with developers, there’s also been an explosion in game design costs, particularly with the democratization of open worlds. If you want to make a game that takes place in a vast, ultra-detailed zone, then you have to hire an armada of level designers to design the whole thing. You need to adapt enemy AI to more potentially different situations. The games themselves require an enormous amount of work, despite what you might think. When a studio creates four different character types with just as many skill trees, all this has to be coded, designed and balanced. The same goes for sound design. We now need people who specialize in the use of middleware. These are things that weren’t done before, but which make a huge contribution from an artistic point of view. The spatialization of sound is something we’ve all become accustomed to, without really realizing the work involved. This increase in costs, which is like a sword of Damocles hanging over the heads of creative people, is multifactorial and cannot be summed up in graphics alone.

Games are no longer produced in the same way as they were in the 90s. These days, we’re increasingly turning to specialists in user experience (UX). Large organizations like Ubisoft, for example, have entire laboratories dedicated to UX. It’s all a huge payroll for people doing work we didn’t think necessary fifteen years ago. To take the case of Ubisoft again, even a small project has to go through the laboratory to check the ergonomics of the proposal. It’s very complicated to pass judgment on all this, because there’s artistic value in it. Ergonomists make things infinitely more intuitive than in the past. This is also why we now have a grammar that has been democratized, right down to key mapping. So we find ourselves in a situation where it’s hard to deny the necessity of all the new aspects of modern development, but on the other hand, this is also what explains the explosion in budgets. It’s like a snake biting its own tail. The desire to reach an ever-widening audience, and even to potentially increase revenues through microtransactions, requires greater investment than in the past. All of which illustrates investors’ quixotic quest, for unless they turn back the clock on virtually every aspect of game creation, it will be impossible to regain the margins of yesteryear.

Reading this, you’d think it would be easy to find a job in the video game industry. After all, if we need more and more people, it’s because the job offer is strong. On the French market, even if you come from a school specializing in video games, and therefore benefit from a highly prestigious training program, it’s still very complicated to find a place in the video game industry. Of course, not all professions are equal when it comes to these difficulties. The Producer or Video Game Project Manager can easily find a position, and earn a more than reasonable salary. We’re talking about 50,000 euros a year in the Paris region. For a Junior Game Designer, even from a top school, the situation is somewhat different. Salaries are lower. We’re talking about 1,600 to 2,000 euros gross at the start of their career. They also find it extremely difficult to find work. It’s not uncommon to find ourselves in rather bizarre situations, with studios working exclusively with fixed-term contracts and/or freelance workers. This creates insecurity not only for the studio, but also for the individual worker who, even with an internship and no guarantee of employment, may find himself taking on the role of lead level designer for six months, before making way for another intern. The feeling of insecurity is therefore quite high, even if in France we are protected by the labor code, so no one is afraid of unexpectedly leaving with their belongings ten minutes after arriving at the office. Even so, redundancies are a subject that occupies the minds of French workers on a massive scale.

It’s hard enough to find a job despite good training, but there are also things inherent in you that can prevent you from seizing an opportunity. It’s not uncommon, for example, for people with strong accents to be turned away at interview, even though the applicant will never have to use anything other than their mother tongue. Having a country or northern accent can also prove prohibitive, we’re told. Stories like this are legion in the French sector. Talented people are often forced to change careers for all the reasons we’ve mentioned. Purely artistic positions are often the most precarious. It’s hard to find work, let alone a stable position. For some time now, there has also been a growing comparison with AI, always to the disadvantage of the human worker, whose productivity will inevitably be inferior to that of this new kind of tool.

At the moment, job insecurity is becoming increasingly prevalent in France, creating a climate of great anxiety. If the management of a studio announces that it has something to say at the start of the following week, the first thought that strikes the troops is the probable implementation of a redundancy plan. This creates a profound sense of instability that makes it impossible to plan ahead. Our thoughts go out, for example, to the members of Team Jusant at Dont’Nod, who learned of the dissolution of their group just a few weeks after the release of the eponymous game, when they had already begun to think about their next project. The Artefact studio in Lyon is often referred to in our interviews as one of the most problematic in France, as it operates on a just-in-time basis, taking on interns and fixed-term contracts with little or no opportunity for long-term employment.

It’s a different story on the other side of the Atlantic for those working in larger studios. While it’s true that everything can come to a halt overnight, as there is no labor code as protective as in our country, those we spoke to were keen to express their gratitude and say how lucky they feel to be able to work in this industry. The situation of video game workers seems more enviable than in some cultural sectors. A Lightning artist has the virtual certainty of working serenely for several years on a big game, whereas for a film, even a blockbuster, the assignment rarely goes beyond a few months. The expertise and reputation acquired when you have the opportunity to work in an international company make it much easier to find a job in the industry if you are laid off, even if the idea of retraining is always in the back of your mind, but for different reasons than those mentioned above. In fact, the industry is polluted by managers who reached these positions of high responsibility only because it was a logical career move, and not out of any genuine desire to do so. The result is toxic project managers who gangrene small teams when they decide to see if the grass is greener elsewhere. It’s not uncommon to hear “That’s how we do it at Ubisoft/EA, so you’re going to listen to me.”

Managing the Covid crisis has obviously done nothing to improve the overall situation in the video game industry. This period of less than two years publicly displayed the blatant incompetence of a large number of decision-makers. In view of the explosion in content consumption in the face of confinement, it was decided to recruit en masse in order to flood the public with productions. This recruitment campaign was accompanied by a sharp rise in salaries on the North American continent. No one had the intelligence to realize that containment would only last for so long, and that the situation of 2020-2021 would never become the norm. In Canada, a senior developer is generally paid around $100,000/150,000 a year.

It’s huge for what we do. In fact, it’s too much. I’m not going to complain, because it allows me to pay for my house and my car… It’s really indecent when I think about it, even though I have a lot of expertise. We’re talking about this kind of salary even for developers at studios that haven’t delivered a single production in several years. And yet, the bonuses are pouring in. It’s fantastic from a personal point of view, but it makes you feel like you’re in the middle of an unstable financial bubble.

anonymous source

Perhaps this bubble will soon burst. At any rate, that’s the wish of a number of those involved, even if the result will be ugly and painful at first. It’s time to put reality back into people’s minds, both in the public and in the heads of decision-makers.

Between greed and ignorance

In March 2024, Swen Vincke, President of Larian Studios, explained to our colleagues at Eurogamer that almost all decision-makers don’t realize that making a game is a small miracle, and that it’s even more complicated to get them to accept that achieving critical and/or commercial success is even more incredible.

Greed has been fucking this whole thing up for so long, since I started. I’ve been fighting publishers my entire life and I keep on seeing the same, same, same mistakes over, and over and over..

Swen Vincke, Larian Studio CEO

As mentioned above, this lack of grounding in reality can also be found among project managers, who try to impose the only management methods they know at all costs, without taking into account the differences in context between a small and a large studio, or the fundamental differences between designing a single-player game and a multi-player game. Profit and profitability are the watchwords at the heart of more and more developments. Many developers approach the subject of mass redundancies with a deep concern for the future of the industry. Not because they’re afraid of being next in line, but because it poses a real problem for knowledge retention. That’s why it’s so hard to rationalize all these job cuts, especially with a player like Xbox, which went so far as to close Tango Gameworks, despite the critical success of Hi-Fi Rush. The fact that the workforce is clearly seen as something disposable and expendable is very negative, because we’re losing all the skills these people have acquired. Especially since it’s doubtful that developers over 50 who are fired overnight will want to return to the industry, given the working conditions. In the best-case scenario, they’ll set up their own small structure to continue creating, away from the hustle and bustle of shareholders.

Creating a video game is an extremely complicated business. We talk all the time about talents and technical skills, but all too rarely about the abilities that develop during the creation of a title. Time spent on a project improves the management of production pipelines, as well as communications between different departments or mastery of the tools deployed. All this is acquired over time. That’s why a team is always much better in the home stretch than in the first few weeks, and why we often see sequels that are much better than the first opus if the bulk of the troops are retained. Each employee has become better in general, but also in his or her ability to work with partners. To lay them off is to lose that invisible factor that makes all the difference. The accumulation of precarious contracts and internships prevents the creation of any studio identity, and thus the perpetuation of shared know-how.

We realize that the objective is no longer necessarily to make a game that’s good or just profitable, but to make a product that achieves such a high rate of profitability that it allows a constant influx of investors to drive up the share price. This is where the logic becomes monstrous, because the aim is no longer to make money, but to bring in investments. We are no longer dealing with a logic of economic growth, but with a purely financial way of thinking. Executives who are enormously rewarded with shares have a vested interest in seeing their share price soar. What was originally a reward has become the objective. Capitalist logic would have it that shares reflect a company’s economic quality, but this is no longer the case. It just reflects the ability to make money from said stock. We’re in a completely abstruse world that no longer makes any sense, unless you look at it through the prism of the personal enrichment of top management and the biggest shareholders. There’s a feeling that we’re witnessing the end of the playground. The capitalist logic that has plagued most industries since the 90s has caught up with video games, and is hitting them hard.

It’s this dominant ideology that explains why, as the industry continues to explode with record sales and net profits, cutbacks are multiplying all over the world, while top executives are lining their pockets and leaving with indecent golden parachutes, even when they are publicly recognized as being devoid of any human qualities, or with annual salaries that would pay all the people made redundant for 5 years. It’s hard not to raise an eyebrow when Microsoft announces the dismissal of several hundred people during the integration of Activision, while Bobby Kotick walks away with a check for close to $400 million – almost double the development budget for The Last of Us Part II. Some developers confided in us that they have the impression that this mode of operation seems to be predominant in the West. Japan, which has its own negative aspects to deal with, such as the crunch culture or sexism in the office, fascinates video game workers in the way they think and manage growth. Capcom and Nintendo often came up in our discussions for their ability to reduce staff turnover and recruit intelligently, without falling into most of the traps that Western publishers have fallen into.

Where the situation often becomes unbearable for industry workers is that, in addition to suffering the greed and disconnection of their executives, they also have to deal with the intransigence of a public that knows next to nothing about the arcana of video game creation. Since the advent of the HD era, we’ve got players too used to more graphics, more resolution, more gigantic worlds and more things to do. More is always more, because we’ve reached a point where too much is never enough. It’s as if there’s a fear of getting bad publicity by releasing a big-budget game that lasts less than fifteen hours. The delusion of TV vendors to impose the idea that you can’t have fun without 4k and 60FPS has done enormous damage to the industry. People have absolutely no idea of the cost and impact on development when you have to achieve this kind of rendering on hardware that’s good but not really “high-end”. A PlayStation 5 or an Xbox Series X are fine machines, but contrary to what the ads would have you believe, Unreal Engine 5 runs very poorly on these two consoles. It’s very difficult to achieve the promised rendering. It’s a constant headache for developers. It’s time wasted to painstakingly achieve 4k with upscaling while trying to guarantee 60FPS. A large part of the video-game press doesn’t realize this, and is completely taken in by the manufacturers’ marketing. Just look at a site like JV.com, which puts CinemaScope bars as a negative for its Hellblade 2 review, without realizing that this saving of pixels on the screen is fundamental to the game’s final rendering. The artistic urge is there, but it’s also a way of getting around technical problems that diminish the overall visual rendering.

It’s important to understand that very few journalists help developers. Many of them are surprised and exasperated when they realize the extent to which those who pass on video game news are, for the most part, out of touch with the reality of development, and with what is and isn’t possible at the present time. Anyone seriously interested in videogame creation will tell you not to expect to get your hands on works with highly advanced gameplay mechanics with the rendering of the Matrix demo or Hellblade 2. Technologically, it’s not on the agenda until at least the next generation of consoles, and even then, it will be a challenge beyond the reach of most studios. That’s why there’s nothing more painful for a developer than to see the flood of insults that gamers can hurl at them en masse if there are occasional framerate drops or flickering 4k on the latest trendy production. One of our interviewees summed up his job as a perpetual quest for subterfuge to keep gamers’ illusions alive because of what sites like Digital Foundry have put in their heads, while the majority of people are quite unable to tell the difference between 4K and 1440p with the naked eye, or to observe the transition from 60FPS to 58. Even so, they’re hopeful that one day they’ll be able to enjoy the same leniency that Japanese studios enjoy.

The most important thing is gameplay. We have to stop this madness for photorealism, for wanting to make things ever more beautiful. The sheer amount of time spent on texture assets is becoming ubiquitous. Photogrammetry is excessively time-consuming. Animations, sound and sound spatialization. It’s a crazy amount of work. I think it’s going to get worse, and GTA VI is going to make it worse. People won’t realize that this game carries on its shoulders 8 or 9 years of suffering for 5,000 developers. These productions are no longer tenable.

Anonymous source

So what solutions are available to us? One of our contacts jokingly explains that, short of a communist revolution, he can’t see what would influence the industry’s current trajectory. On a more serious note, there is growing hope that even the biggest studios will see the return of smaller productions. Some teams are fortunate enough to have such large workforces that it would be quite possible to deliver quality projects every two or three years if everyone agreed to lower their scopes and put aside the culture of raw performance. The fact that Ubisoft is putting the spotlight on productions such as Assassin’s Creed Mirage or Prince Of Persia: The Lost Crown is a sign of this realization on the part of certain executives. In the same way, the arrival of Final Fantasy VII Rebirth in barely three years, because no financier forced Hamaguchi’s teams to abandon UE4 for a newer, flashier engine, suggests that change is still possible if the public continues to embrace this kind of proposition. Gamers need to be re-educated on the need for small games alongside a few big productions.

Without getting too politically militant, if we want to help workers in the video game industry, we need to extend this desire to all trades that suffer more or less from the same ills of ultraliberalism. However, if many of us would prefer to continue just positioning ourselves on social networks, then we need to understand what a development studio is. That’s the first condition for positioning ourselves properly. A studio is a business which, like any business, is run by bosses. The main point of vagueness in the world of video games is that, in many cases, the bosses are also artists. Leads are artistic figures and are perceived with a certain sympathy. When Edouard Leclerc appears on TV, no one is going to express any particular feelings – he’s a businessman like any other. On the other hand, when we see a Kojima, a Miyazaki or a Druckmann, we quickly brush aside the fact that they are also business leaders and focus solely on their role as great creators. That’s not to say that managers are necessarily bad people, but their status remains a factor to be taken into account.

This glorification therefore unconsciously leads to a constant defense of the interests of the bosses in our industry. When we see armadas of fans defending a studio body and soul, despite crunch cases or deleterious management, we are often witnessing an insidious protection of the people who manage and own these studios. There’s a kind of harmful amalgam between defending the interests of those who work within these structures and those who own them. This leads to the creation of a discourse that is totally unrepresentative of the reality of development teams, which are made up of social castes with divergent interests. If we bear this in mind, we won’t be thrown for a loop when we learn that Rocksteady volunteered to create a Game As A Service, because the studio’s bosses have economic and personal interests that are much closer to those of Warner’s financiers than those of the people who are going to kill themselves to make the experience playable.

The world of video games is not a world apart, and its inner workings do not distinguish it from the management of a supermarket. The same logic of profitability and gain applies, and the first victims are paradoxically the workers, without whom the industry would not stand or create any wealth. Let’s think about this the next time it occurs to us to publicly charge the developers as a whole when a game fails to live up to our expectations.

Sources

THE STATE OF THE VIDEO GAMES INDUSTRY: A SPECIAL REPORT

The Tremendous Yet Troubled State of Gaming in 2024

GDC 2024 State Of The Game Industry: Devs discuss layoffs, generative AI, and more