Understanding the Ongoing Reset in the Games Industry

The video‑game sector is in the midst of a profound reset, a theme that dominated the opening keynote at Gamescom Dev. The talk was delivered by Amir Satvat, who until recently served as business‑development manager for Tencent and now operates as a general partner at 1Up Ventures. Satvat is also the founder of the ASGC, an organization that offers career guidance and support to job seekers in the gaming field. In his extensive address he unpacked the statistics behind the wave of layoffs, the geographic shift of employment, the concentration of revenue among a handful of titles, the evolving nature of game work, and the strategic adjustments the industry must make to navigate the current turmoil.

Satvat began with a sobering update on job cuts. In December he had told GamesIndustry.biz that he expected roughly 7,500 redundancies in 2026, down from about 9,200 in 2025.

After the massive layoff cycles this year, he revised that forecast to 14,666, a figure that nearly matches the 2024 peak of 15,631. By August 11, more than 10,140 layoffs had already been announced for 2026—already surpassing the total number for the entire previous year. Despite the headline numbers, the overall headcount in the industry has barely moved in recent years. Satvat cited compelling research from the Game Industry Coffee Chat (GICC) that estimates roughly 750,000 people are employed directly or indirectly in gaming, a number far higher than the often‑cited figures.

He explained that the under‑count stems largely from a lack of awareness about the scale of employment in China. Even with the ongoing cuts, the sector has experienced a modest net gain of less than one percent since 2022. Prior to that, from 2017 to 2022, the industry added about 150,000 jobs, reflecting a period of explosive growth. A key trend over the past half‑decade has been a geographic transition.

"Headcount is moving from North America to essentially everywhere else," Satvat noted, driven not only by lower labor costs but also by government incentives and the availability of talent. More than two‑thirds of the layoffs he tracked have occurred in North America, amounting to roughly 25,000 positions—about 15 % of the regional workforce.

California bore the brunt, accounting for over half of all layoffs in a 12‑ to 18‑month window. Conversely, other regions have seen net job gains. In the Asia‑Pacific region, employment rose by 10 %, fueled by a 12 % increase within China. Europe’s employment numbers have remained essentially flat.

This uneven distribution raises a puzzling question: why are layoffs soaring while the industry continues to grow? Satvat answered that growth is increasingly concentrated in a shrinking pool of titles. "Fifty to sixty percent of revenue now comes from just the top twenty games." On mobile, user acquisition is becoming more costly, pushing developers to focus on monetising existing players.

On PC, a mere 79 titles generate 80 % of total playtime. While headline revenue looks healthy, the underlying metrics reveal a more fragile picture.

Satvat identified 21 pressures confronting the sector, ranging from post‑pandemic over‑hiring and shifting player habits to longer development cycles and rising production costs. The two he finds most threatening are discoverability pressure and AI uncertainty. He warned that no clear solution exists for either, and failure to address them could undermine all other strategic efforts.

The geographic shift remains the single biggest driver of change, according to Satvat. He highlighted a surge in game‑related academic programs in the United States—around 400 colleges now offer credentials in games and interactive media, and completions have quadrupled over the past 14 years. Yet the probability of a new graduate landing an entry‑level gaming job is a mere 4 % over a twelve‑month period. Globally there are about five job seekers for every opening; in North America that ratio climbs to 11:1.

A seniority squeeze is also evident. The average experience required for a given role has risen by three years, squeezing early‑career candidates who previously could secure positions with little to no experience.

Meanwhile, opportunities for senior developers are dwindling; after age 50 (or equivalent experience) the hiring rate falls back to 4‑5 %. In terms of role composition, engineering, data analytics, production, and marketing now account for roughly 70 % of open positions.

For the first time in four years, game design has dropped out of the "big four" categories. Writing, QA, and recruiting have also seen their share of openings decline. Networking has become a decisive factor: candidates with any connection to a hiring manager or recruiter are twenty times more likely to be hired.

Satvat urged job seekers to secure even one or two years of experience, which boosts the odds of landing another role from 4 % to 30 % within a year of unemployment. He outlined several structural shifts shaping the industry. Console revenue growth is increasingly derived from deeper engagement with existing customers—through premium releases, higher‑priced subscriptions, and similar tactics—rather than expanding the player base.

Rising hardware costs will further limit audience growth, prompting a move away from the traditional model of driving sales through exclusive, graphics‑intensive titles toward more accessible experiences. China’s market, meanwhile, is expanding at a staggering pace.

It contributed 42 % of global PC‑revenue growth, and WeChat mini‑games now boast over 500 million monthly active users. With more Chinese students entering college each year, an additional ten million potential PC users are expected annually.

This creates both opportunity and competition: developers outside China can tap into a market whose tastes are similar to other regions, while Chinese studios will increasingly challenge global players. Satvat pointed to user‑generated‑content platforms such as Roblox and Unreal Engine for Fortnite (UEFN) as growth vectors, but cautioned that revenue on these platforms remains highly concentrated among a few creators. Competition on distribution platforms is also intensifying; Steam saw about 12,000 new releases in the first half of 2026, a 19 % year‑over‑year increase.

However, only roughly 3 % of those titles (around 600) achieved a peak concurrent user count of 100 or more, indicating that the perceived flood of games does not translate into a proportional rise in meaningful competition. Funding conditions have deteriorated sharply. Global startup financing fell from $9.9 billion in 2021 to $2 billion in 2023, and private‑equity and venture‑capital inflows dropped from $12.1 billion to $2.7 billion.

Satvat attributes part of the decline to a mismatch between investment vehicles and the inherently unpredictable nature of game returns. Permanent AAA positions have contracted dramatically.

When Satvat began tracking roles in 2022, about half of all openings were in AAA studios; today that share has slipped below one‑third, while external development and contract work now represent 10‑15 % of openings. The remainder consists of indie teams, tools, and service providers. Satvat believes the most promising opportunities lie in the middle ground between solo indie creators and massive publishers, as the power balance shifts.

He stresses that the industry will not revert to a pre‑crisis "normal" but will evolve into an as‑yet‑undefined new state. Players have always valued social interaction, yet modern audiences now expect short‑form content and early community involvement.

Satvat advocates for transparent development processes, flexible pricing (with many games priced under $30 or even $10), and better treatment of game workers. He estimates that roughly 120,000 years of cumulative game‑industry experience have been lost since 2022, and recommends improving off‑boarding practices and ongoing professional development to stem the bleed. Education reform is also on his agenda: candidates should be given realistic expectations about job prospects and receive training that equips them for careers beyond gaming. Over 60 % of people assisted by ASGC this year found employment outside the sector.

Finally, Satvat outlined where he believes the next bets should be placed: - Large, engaged ecosystems that foster creation, participation, and lasting player relationships; - Short, focused AA and indie titles that cater to players with limited time and budgets; - Regions such as APAC, Eastern Europe, and Latin America where talent, cost structures, and growth intersect; - Tools and service partners that empower smaller teams to compete; - Community‑centric strategies using Discord, streaming, and group chats, even for single‑player experiences. He warned of two undesirable futures: one in which mature IPs are hoarded by financial entities for extractive revenue, and another "small‑ball" scenario where a fragmented landscape of tiny studios and AI‑driven content creates even fewer stable opportunities.

The preferred outcome, he argues, is a disciplined ecosystem of smaller, financially sustainable firms that can deliver profitable games without needing blockbuster sales. Such a shift, he believes, will lay the groundwork for a healthier, more resilient gaming industry moving forward.