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 very 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 for job seekers in the industry.

In his extensive address he unpacked the data behind the wave of layoffs, the geographic shift of talent, the concentration of revenue among a handful of titles, the evolving nature of employment in games, and the strategic adjustments the industry must make to survive the current turmoil. Satvat opened with a sobering update on job cuts.

In December, he told GamesIndustry.biz that he expected roughly 7,500 redundancies in 2026, down from about 9,200 in 2025. After the massive layoff cycles that unfolded this year, he has revised that forecast to 14,666 – a figure that nearly matches the 2024 peak of 15,631. As of 11 August, more than 10,140 layoffs have already been announced for 2024, eclipsing the total number of cuts recorded for the entire previous year.

Even with those headline‑grabbing numbers, the overall headcount in the sector has remained relatively stable. Satvat cited research from the Game Industry Coffee Chat (GICC) that estimates roughly 750,000 people are employed directly or indirectly in gaming worldwide – a far larger figure than most industry reports cite. He explained that the discrepancy often stems from a lack of awareness about the scale of employment in China, which accounts for a substantial portion of those jobs.

The net effect, according to Satvat, is that the industry has actually added a modest amount of staff since 2022 – less than one percent growth overall. This is a stark contrast to the explosive expansion that took place from 2017 to 2022, when about 150,000 net jobs were created over five years.

One of the most significant trends over the past half‑decade has been a geographic transition. "Headcount is moving from essentially North America to essentially everywhere else," Satvat observed, noting that the shift is driven not only by labor‑cost differentials but also by government incentives and the availability of talent in other regions. Two‑thirds of the layoffs he has 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 North American cuts during a 12‑ to 18‑month window. By contrast, other regions have seen net job gains.

In the Asia‑Pacific (APAC) market, available positions rose by 10 %, propelled by a 12 % increase in China. Europe’s employment numbers have essentially plateaued. Why are so many jobs disappearing when the industry is still growing?

Satvat argued that growth is now concentrated in a shrinking pool of titles. "Fifty to sixty percent of revenue is generated by the top twenty games," he said. On mobile, user acquisition has become increasingly costly, pushing developers toward monetizing existing players.

On PC, a mere 79 titles account for 80 % of total playtime. The surface‑level revenue figures look healthy, but a deeper dive reveals a much tighter market.

Satvat enumerated twenty‑one pressures confronting the sector, ranging from post‑pandemic over‑hiring and evolving player habits to longer development cycles and rising production costs. The two he highlighted as most critical were discoverability pressure and AI uncertainty.

"No one has a master plan for solving either of those challenges," he warned, and failure to address them could undermine all other efforts. Geographic transition, however, remains the single biggest driver of change.

Satvat pointed out a surge in game‑related degree programs across U.S. colleges – about 400 institutions now offer credentials in games or interactive media, and completions have quadrupled over the past fourteen years. Yet entry‑level opportunities are dwindling.

In the United States, the chance of landing a gaming job within a twelve‑month period sits at roughly 4 %. Globally, there are about five applicants for every opening, and the ratio climbs to 11‑to‑1 in North America. Seniority dynamics are also shifting. 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, senior‑level openings are scarce; once a professional reaches the equivalent of 50 years of age or experience, their employment prospects drop back to a 4‑5 % chance. The sweet spot now lies between roughly five and twenty years of experience, where candidates remain highly employable. In terms of job categories, the traditional "big four" – art and animation, engineering, production/project management, and game design – historically accounted for about 70 % of openings. Recently, game design has slipped out of that core group, being replaced by marketing roles.

Simultaneously, demand for business intelligence, data, and analytics positions has risen, while writing, narrative, quality assurance, and recruiting have seen their share of openings decline. Networking has become a decisive factor in hiring.

"You are twenty times more likely to get a job if you have any connection to the hiring manager or recruiter," Satvat emphasized. He also stressed the value of gaining practical experience: securing just one to two years of work raises the odds of landing another gaming role within a year from 4 % to 30 %. Satvat outlined several structural shifts reshaping the industry. Console revenue growth is increasingly derived from deeper engagement with existing customers – through premium releases, higher‑priced subscription tiers, and similar tactics – rather than from attracting new players.

Rising hardware costs will further constrain audience expansion, prompting a move away from the traditional model of luring consumers with exclusive titles and cutting‑edge graphics. Instead, developers will need to make games more affordable and accessible.

China’s market, meanwhile, is expanding at a breathtaking pace. It contributed 42 % of global PC‑revenue growth, and the WeChat mini‑games ecosystem boasts over 500 million monthly active users.

As college enrollment in China continues to rise, an additional ten million people each year are expected to gain access to personal computers, creating a massive new consumer base. Satvat sees a dual opportunity in China: developers outside the country can tap into a market whose tastes are not dramatically different from those elsewhere, while Chinese studios will become increasingly competitive on the global stage.

He warned that the sheer volume of studios in China has been underestimated and will have a transformative impact in the coming years. Regarding growth prospects, Satvat highlighted user‑generated‑content platforms such as Roblox and Unreal Engine for Fortnite (UEFN) as promising arenas, though he cautioned that revenue on those platforms remains highly concentrated among a small elite of creators. Competition is intensifying. In the first half of 2026, roughly 12,000 new titles launched on Steam – a 19 % year‑over‑year increase.

However, only about 3 % of those releases (around 600 games) achieved a peak concurrent user count of 100 or more, indicating that the apparent flood of new games does not translate into proportionally greater competition for player attention. Funding conditions have also deteriorated. Global venture capital for game start‑ups fell from $9.9 billion in 2021 to just $2 billion in 2023, and private‑equity investment dropped from $12.1 billion to $2.7 billion over the same period.

Satvat attributed part of the decline to a mismatch between the risk‑averse nature of most investment vehicles and the inherently unpredictable returns of video‑game projects. He recounted his experience at Amazon, where large‑scale MMOs were favored because they fit well into discounted cash‑flow models, whereas smaller, innovative titles struggled to attract financing due to their uncertain ROI.

Perhaps the most visible contraction is occurring in permanent AAA positions. A few years ago, roughly half of all tracked jobs were in AAA studios; today that share has fallen to under one‑third, while external development and contracting roles now comprise 10‑15 % of open positions. The remainder consists of indie developers, tool and service providers, and smaller studios. Satvat believes the greatest opportunities lie in the middle ground between solo indie creators and global giants, as the power balance in gaming continues to shift.

He predicts that AAA will retain relevance in scenarios where strong teams, iconic IPs, and efficient cost structures align – citing Nintendo as an example – but the overall mix of power is undeniably moving toward smaller, more agile entities. When asked when the industry will “return to normal,” Satvat responded that a return to the old normal is unlikely. Instead, the sector is evolving toward an as‑yet‑undefined new equilibrium.

He noted that player expectations have changed dramatically over the past two decades; modern audiences are accustomed to short‑form content on social media and may find a 120‑hour single‑player experience a mismatch for their consumption habits. To stay relevant, developers must involve players early in the development process, discarding the outdated notion of keeping a game hidden behind a curtain.

Community engagement, feedback loops, and transparent development pipelines are becoming essential. Pricing models are also shifting toward lower price points – many successful titles now sell for $30 or less, and even $10 or less – reflecting both consumer price sensitivity and the need for broader accessibility. Satvat called for better treatment of game workers, citing callous off‑boarding practices and a lack of ongoing professional development as major factors driving talent out of the industry.

He estimated that roughly 120,000 years of cumulative gaming experience have been lost since he began tracking these trends in 2022. Education reforms are also on his agenda. He advocates for programs that not only inform candidates about the slim odds of securing a gaming job but also equip them with transferable skills applicable beyond the industry.

More than 60 % of the individuals ASGC assisted this year found employment outside of gaming. Satvat views the shift toward smaller teams with tighter budgets as a potential remedy. By targeting niche audiences and embracing external development and contracting, small studios can create sustainable, profitable products without the pressure to chase blockbuster sales.

His strategic recommendations for the next wave of investment include: - Investing in large, engaged ecosystems that foster creation, participation, and lasting player relationships. - Supporting shorter, focused AA and indie titles that cater to players with limited time and discretionary spending. - Targeting growth regions such as APAC, Eastern Europe, and Latin America where talent, cost structures, and market expansion intersect.

- Backing tools and service providers that empower smaller teams to produce competitive games. - Prioritizing community‑centric approaches through Discord, streaming platforms, and group chats, even for single‑player experiences. Satvat warned of two undesirable futures. The first is an "extraction" scenario, where mature IPs are bought by financial entities and run solely for revenue extraction, leading to increased ownership concentration.

The second, which he calls "small ball," envisions a fragmented landscape dominated by countless tiny entities and UGC, exacerbated by AI, making it difficult for teams to achieve continuity and scale. His preferred outcome is an industry composed of disciplined, smaller firms that can address the challenges he outlined. As these firms grow responsibly, the market will naturally expand because players will continue to demand games.

Success would be redefined: profitability would no longer require multi‑million‑unit sales but could be achieved through lean development costs and focused audiences. A healthier, steadier ecosystem would, in Satvat’s view, position the industry for sustainable growth in the years ahead.