The Impact of Live Service Game Closures on the Gaming Industry

In recent weeks, several live service games have been shut down, sparking concerns about the future of the model. However, according to industry experts, this trend is not unique and is instead a natural part of the market's evolution. Karol Severin, senior analyst at Midia Research, attributes the closures to the market's adjustment to a new supply and demand equilibrium. "The current macroeconomic conditions are more adverse, leading companies to cut expenditure and focus on profitability," he explains. "This means that riskier projects are being reevaluated, and some live service games are being shut down as a result." Oscar Clark, CEO of Fundamentally Games, agrees that the closures are a normal part of the market's cycle. "Many games struggle to find and satisfy their audience, and some may suffer from internal issues," he says. "It's sad for the developers and players, but ultimately, no one wins when a game is released that isn't sustainable." The online and live service space is highly competitive, with thousands of games vying for players' attention. Dr. Serkan Toto, CEO of Kantan Games, notes that Sony aims to generate 50% of its gaming revenue from PC and mobile by 2025, with many of these titles likely to be free live service games. One of the key challenges facing live service games is the competition for players' time. Severin explains that live service games are heavily dependent on time spent in the game, which is correlated to in-game spend. "Games companies don't just compete with other games for this time; they compete with music services, video streaming services, social media, and sports," he says. To succeed, live service games need to offer a unique experience that resonates with players. Clark stresses the importance of creating a game that has a regular cadence of interesting events, promotions that add value for the player, and a solid structure of missions, challenges, and narratives. "Cosmetics only work when players already care about showing them off," he adds. "Instead, focus on meaningful progression, game lore, and social expression through play." Severin warns that smaller companies may struggle to break through unless they can find their "superfan niche." "Developers need to understand what gamers are doing across different entertainment formats and sectors, beyond gaming," he says. "Companies that simply gather games-related insights only get one part of a much larger picture to inform their strategy." Despite the recent closures, industry experts believe that live service games will continue to evolve and thrive. Clark notes that live ops is a positive force for creating sustainable game studios and lasting player experiences. "Let's not be fooled into thinking that some live ops games being shut down is evidence of a bad or declining model," he says. "All games have a lifecycle, but with live ops, we can sustain and grow an audience for longer and more sustainably if we do it right." Toto concludes that the industry is still in the early stages of a live service gaming revolution. "There are still many lessons to be learned, users to get accustomed to this new style of play, and business models to be refined," he says. "A lot more live service games will be closed, but this will be part of our industry going forward."