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, a nonprofit that offers career guidance and support for people seeking jobs in games. In his wide‑ranging address he unpacked the data behind the wave of layoffs, the geographic shift of talent, the concentration of revenue among a handful of titles, and the evolving nature of work in the industry. He also offered a roadmap for how the sector can adapt to the current turbulence. Satvat opened 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 the previous year. After the massive layoff sprees that unfolded in 2024, he revised that forecast to 14,666, a figure that sits just below the 2024 peak of 15,631. By August 11, more than 10,140 layoffs had already been announced for the year—already eclipsing the total number of cuts recorded for the entire 2025 calendar year.

Even with those headline‑grabbing numbers, the overall headcount in the industry has remained remarkably stable. Satvat cited research from the Game Industry Coffee Chat (GICC) that estimates roughly 750,000 people are employed directly or indirectly in games worldwide, a number far higher than the conventional industry‑wide employment figures. He explained that the discrepancy largely stems from a lack of awareness about the scale of Chinese employment in games. The net effect, he noted, is that the sector has actually seen a modest increase in staff since 2022—less than one percent growth, but growth nonetheless.

Prior to that, between 2017 and 2022, the industry added about 150,000 net jobs, reflecting a period of explosive expansion. A major driver of change over the past five years has been a geographic transition.

"Headcount is moving from North America to essentially everywhere else," Satvat said, attributing the shift not only to lower labour costs but also to government incentives and the availability of talent in new regions. More than 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 layoffs in a 12‑ to 18‑month window. Conversely, other regions have posted net gains. In the Asia‑Pacific area, jobs rose by about 10 %, driven largely by a 12 % increase in China. Europe’s employment numbers have essentially plateaued.

One puzzling paradox is why layoffs are happening while the industry’s revenue continues to grow. Satvat explained that growth is increasingly concentrated in a shrinking pool of titles. Around 50‑60 % of total revenue now comes from the top 20 games. On mobile, user acquisition has become extremely costly, pushing developers to focus on monetising existing players.

On PC, just 79 titles account for 80 % of total playtime. In other words, headline revenue looks healthy, but the underlying health of the broader ecosystem is fragile.

Satvat identified 21 pressures weighing on the sector, ranging from post‑pandemic over‑hiring and shifting player habits to longer development cycles and rising production costs. He singled out two especially daunting challenges: discoverability and the uncertainty surrounding artificial intelligence. "No one has a master plan for solving either of those, and failing to address them could sink everything else we discuss," he warned.

The most significant catalyst for change, however, remains the geographic shift. He also highlighted a surge in game‑related academic programs in the United States—about 400 colleges now offer credentials in games and interactive media, and completions have quadrupled over the past 14 years. Yet the job market for fresh graduates is grim: only a 4 % chance of landing a game‑industry role within a year, and globally there are roughly five applicants for every opening. In North America the ratio worsens to 11‑to‑1.

Senior‑level opportunities are also tightening. 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, openings for developers over the age of 50 have dropped back to around 4‑5 % of total roles. The sweet spot now lies between roughly five and twenty years of experience, where employability is highest.

Regarding job categories, the traditional "big four"—art and animation, engineering, production/project management, and game design—have historically accounted for about 70 % of openings. Recently, game design has slipped out of that core group, replaced by marketing. Roles in business intelligence, data, and analytics have grown, while positions in writing, QA, and recruiting have shrunk.

Networking has become a decisive factor: candidates with any connection to a hiring manager or recruiter are twenty times more likely to secure a role. Gaining just one or two years of experience can boost a job‑seekers odds from 4 % to 30 % over a twelve‑month period.

Satvat outlined several structural shifts shaping the future of gaming. Console revenue is now driven more by deeper engagement with existing customers—through premium releases and higher‑priced subscriptions—than by attracting new players.

Rising hardware costs will further limit audience expansion, prompting a move away from the classic model of selling consoles via exclusive, graphically‑intensive titles toward more accessible experiences. China, meanwhile, is exploding as a growth engine.

It contributed 42 % of global PC‑revenue growth, and WeChat mini‑games boast over 500 million monthly active users. As more Chinese students attend university, an additional ten million potential PC owners are expected each year.

This creates both opportunities for foreign developers—because Chinese gamers share similar tastes to other markets—and heightened competition from an ever‑expanding pool of Chinese studios. User‑generated‑content platforms such as Roblox and Unreal Engine for Fortnite (UEFN) represent promising growth areas, though Satvat cautioned that revenue on those platforms remains highly concentrated among a few creators. Competition among releases is intensifying: roughly 12,000 new titles launched on Steam in the first half of 2026, a 19 % year‑on‑year increase.

However, only about 3 % of those games (roughly 600) achieved a peak concurrent user count of 100 or more, indicating that the bulk of releases have minimal market impact. Funding has dried up dramatically. Global venture capital for game startups fell from $9.9 billion in 2021 to $2 billion in 2023, and private‑equity inflows dropped from $12.1 billion to $2.7 billion over the same period. Satvat attributed part of the decline to a mismatch between traditional investment vehicles and the inherently unpredictable nature of game development and returns.

Permanent AAA positions are also disappearing. 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 contracting now make up roughly 10‑15 % of the market. The remaining opportunities lie with indie developers, tool providers, and service companies, with the most fertile ground found in the middle ground between solo creators and large publishers. Satvat concluded that a return to a "normal" pre‑crisis state is unlikely.

Instead, the industry is evolving toward a new equilibrium that has yet to be defined. He stressed the importance of early community engagement, flexible pricing (many games now succeed under $30, even $10), and better treatment of workers—citing an estimated 120,000 years of experience lost from the sector since 2022 due to poor off‑boarding and limited career development. Education reforms are also needed. Programs should be transparent about the slim odds of securing a game‑industry job and should equip graduates with transferable skills.

Over 60 % of ASGC‑assisted individuals found employment outside of games this year. Satvat advocates for smaller, tighter‑budget teams that target niche audiences rather than chasing mass‑market hits. He recommends betting on: - 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 spending power; - Regions such as APAC, Eastern Europe, and Latin America where talent, cost, and growth intersect; - Tools and service partners that empower small teams to compete; - Community‑first approaches via Discord, streaming, and group chats, even for single‑player experiences. He warned of two undesirable futures: an "extraction" scenario where mature IPs are bought by financial firms and stripped for profit, and a "small‑ball" scenario where the market fragments into countless tiny entities, driven by UGC and AI, making it harder for teams to achieve continuity.

The preferred outcome, he believes, is a disciplined ecosystem of smaller, sustainable studios that can thrive on modest revenues while delivering quality experiences. In that world, success is measured not by multi‑million‑unit sales but by profitability at lower scales, paving the way for a healthier, more resilient industry.