Has Video Game Investment Reached Its Lowest Point, and Is a Recovery Imminent?

Following a tumultuous 2023 and a rocky start to 2024, concerns about the industry's future are widespread. However, a panel at Reboot Develop Blue 2024 posited that the industry has hit its lowest point and is poised for a rebound. The panel, moderated by Shum Singh, featured industry veterans Jonas Antonsson, Anders Leicht Rohde, Jussi Tähtinen, and Antonio Pašalić, who collectively boasted over two decades of experience in the industry. They noted that the industry has undergone significant growth and transformation during their tenure, with the PC segment now surpassing consoles in terms of market share. However, the current layoffs and studio closures, with over 15,000 job losses announced to date, have sparked concerns about the industry's future. While some territories, such as the USA, are experiencing particularly challenging conditions, the panelists emphasized that the situation is not uniform across all regions. For instance, Denmark is witnessing a significant number of layoffs and studio closures, resulting in a substantial waiting list of unemployed professionals and new graduates seeking employment. Conversely, Serbia is experiencing a surge in investments, with its local gaming industry undergoing rapid growth. The panelists also touched on the topic of new independent studios emerging, founded by individuals affected by the layoffs. The discussion then shifted to the potential consequences of the current situation, including the impact on job desirability and the potential for new talents to seek more secure opportunities. However, the panelists also highlighted the cyclical nature of the industry, citing past examples of companies emerging from challenging periods to become dominant players. The question of whether the industry has reached its lowest point and is ready to recover was a recurring theme throughout the discussion. While some companies have reached historically low market valuations, the panelists believed that this could present opportunities for investment. They noted that major game publishers, such as Ubisoft and Asian companies, possess significant cash reserves, and that the issue may not be a lack of funds, but rather a fear of making mistakes. The panelists also discussed the potential impact of AI on the industry, with some expressing concerns about job security and outsourcing. However, they generally agreed that AI would likely be used to simplify processes and create new job opportunities. The conversation also touched on the importance of protecting and supporting independent game development, with the panelists emphasizing the need for improved discoverability and curation in the market. They noted that the lack of these elements is a significant issue, with over half of the revenue generated by six-year-old games. The panel concluded with a discussion on the future of the industry, including the potential for new technologies and innovations to drive growth. They also highlighted the importance of embracing a more rational approach to business, rather than relying on external investment theses or analytics. Ultimately, the panelists expressed optimism about the industry's future, with some believing that the independent game development sector is poised to make significant contributions to the market's growth.