Understanding the Ongoing Reset in the Games Industry

The video‑game sector is currently 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 the business‑development lead at Tencent and now holds a partnership at 1Up Ventures. Satvat, also the founder of the ASGC (a career‑support organization for aspiring game professionals), used the platform to unpack a wealth of data surrounding the wave of layoffs that have swept the industry, the geographic redistribution of talent, the increasing concentration of revenue among a handful of blockbuster titles, and the evolving nature of employment within the sector. He concluded with a set of recommendations aimed at steering the industry through this turbulent period.

Satvat opened with stark figures. In December, he told GamesIndustry.biz that he anticipated roughly 7,500 redundancies in 2026, a modest decline from the estimated 9,200 cuts in 2025. However, after witnessing the scale of this year’s layoffs, he revised his forecast upward to 14,666, a number that closely mirrors the 2024 peak of 15,631. As of 11 August, more than 10,140 job cuts have already been announced for 2026—already eclipsing the total for the entire previous year.

Despite the headline‑grabbing layoffs, the overall headcount in the industry has remained relatively stable over the past few years. Satvat referenced research from the Game Industry Coffee Chat (GICC) that suggests the sector employs about 750,000 people directly or indirectly, a figure far higher than the commonly cited numbers. He explained that the discrepancy largely stems from a lack of awareness about the scale of employment in China, where a substantial portion of the workforce is based.

The net effect, according to Satvat, is a modest increase in total employment—under 1 % growth—from 2022 to the present. While this is a small uptick, it contrasts sharply with the explosive expansion that occurred between 2017 and 2022, when the industry added roughly 150,000 jobs. A key trend driving this shift is geography.

"Headcount is moving from North America to virtually everywhere else," Satvat observed, noting that companies are motivated not only by lower labor costs but also by government incentives and the availability of talent in new regions. More than two‑thirds of the layoffs he has tracked have taken place in North America, accounting for about 25,000 eliminated positions—roughly 15 % of the continent’s gaming workforce. California bore the brunt, with over half of all North American cuts occurring there over a 12‑ to 18‑month window.

Conversely, other regions have seen net job gains. In the Asia‑Pacific (APAC) market, employment rose by 10 %, driven largely by a 12 % increase in China.

Europe’s job count has remained essentially flat. One puzzling paradox is that layoffs are happening even as the industry continues to grow.

Satvat attributes this to the fact that growth is becoming increasingly concentrated in a shrinking pool of titles. "Fifty to sixty percent of revenue now comes from just the top twenty games," he said.

Mobile developers struggle to acquire new users, shifting their focus to monetising existing players, while on PC a mere 79 titles generate 80 % of total playtime. In other words, headline revenue looks healthy, but the underlying distribution is highly skewed.

Satvat enumerated 21 pressures confronting the sector, ranging from post‑pandemic over‑hiring and shifting player habits to longer development cycles and rising production costs. He singled out two challenges as especially critical: discoverability and the uncertainty surrounding artificial intelligence.

"No one has a master plan for solving either of these," he warned, adding that failure to address them could undermine all other efforts. Geographic migration, however, remains the most powerful catalyst for change. The speaker highlighted a surge in game‑related academic programs across the United States—about 400 colleges now offer credentials in games and interactive media, and completions in these fields have quadrupled over the past 14 years.

Yet the influx of graduates collides with a shrinking pool of entry‑level positions. Satvat noted that in the U.S. the probability of landing a game‑industry job within a 12‑month period is a mere 4 %, and globally there are roughly five applicants for every opening; in North America the ratio balloons to 11 to 1. A related squeeze is occurring at the senior level.

The average required experience for a given role has risen by three years, making it harder for early‑career candidates to compete for positions that previously demanded little to no experience. Meanwhile, opportunities for veteran developers taper off sharply after about 15‑20 years of experience, with the hiring rate dropping to 4‑5 % for those over 50. When it comes to the types of roles being advertised, the traditional "big four"—art and animation, engineering, production/project management, and game design—still dominate roughly 70 % of openings.

However, game design has slipped out of the top four, replaced by marketing. Additionally, demand for business intelligence, data, and analytics specialists has risen, while roles in writing, narrative, quality assurance, and recruiting have declined as a share of total openings. Networking has become a decisive factor in securing employment.

"You are twenty times more likely to be hired if you have a personal connection to the hiring manager or recruiter," Satvat emphasized. He also urged job seekers to acquire practical experience, noting that just one to two years of work raises the odds of landing another role within a year from 4 % to 30 %.

Satvat outlined several structural shifts reshaping the industry. Console revenue growth is increasingly driven by deeper engagement with existing customers—through premium releases, higher‑priced subscription tiers, and similar tactics—rather than by expanding the player base. Rising hardware costs further pressure audience growth, prompting a move away from the classic model of attracting users with exclusive, graphically intensive titles toward a focus on accessibility and affordability.

China’s market, meanwhile, is expanding at a breathtaking pace. The country contributed 42 % of global PC‑revenue growth, and the WeChat mini‑game ecosystem boasts over 500 million monthly active users. With more Chinese students entering university each year, an additional ten million potential PC owners are expected to join the market annually.

This creates both an opportunity for non‑Chinese developers—given the similarity of gaming tastes across regions—and a competitive threat, as Chinese studios scale up and increase their global presence. Satvat identified large user‑generated‑content platforms such as Roblox and Unreal Engine for Fortnite (UEFN) as promising growth areas, but cautioned that revenue on these platforms remains heavily concentrated among a small elite of creators. Competition among developers is intensifying.

New releases on Steam reached roughly 12,000 in the first half of 2026, a 19 % year‑over‑year increase. However, only about 3 % of those titles—approximately 600 games—achieved a peak concurrent user count of 100 or more, suggesting that the apparent flood of new games does not translate into proportionate market pressure. Funding conditions have also deteriorated. Global start‑up financing fell from $9.9 billion in 2021 to $2 billion in 2023, while private‑equity and venture‑capital allocations dropped from $12.1 billion to $2.7 billion over the same period.

Satvat attributed part of this contraction to a mismatch between traditional investment vehicles and the inherently unpredictable nature of game development, which rarely delivers the kind of predictable, massive returns that financiers seek. He recounted his experience at Amazon, where the company favoured a handful of massive MMOs because they projected well on discounted cash‑flow models, whereas smaller, riskier titles were deemed unattractive. Perhaps the most visible change is the decline of permanent AAA positions.

When Satvat began tracking job data in 2022, roughly half of all openings were in AAA studios; that share has now fallen below one‑third. Conversely, roles in external development and contracting now account for 10‑15 % of the market, reflecting a broader shift toward more flexible, project‑based staffing. The remaining opportunities lie with indie developers, smaller studios, and providers of tools and services. Satvat believes the sweet spot will be the middle ground between solo indie creators and global giants, as the power balance in gaming continues to evolve.

He warned against assuming a return to a pre‑crisis "normal." Instead, he envisions an industry that is evolving toward a new equilibrium, though the exact shape of that future remains undecided. Player expectations have shifted dramatically over the past two decades, with modern audiences accustomed to short‑form social‑media content.

Long, immersive experiences must now compete with bite‑sized, instantly gratifying media. To stay relevant, developers need to involve players early in the development cycle, abandoning the outdated notion of keeping a game "behind the curtain." Community engagement, feedback loops, and transparent communication are becoming essential.

Pricing strategies are also in flux, with a growing share of revenue coming from games priced at $30 or less, and even $10 or less. Satvat called for better treatment of game workers, citing harsh off‑boarding practices and a lack of ongoing professional development as key drivers of talent loss. He estimates that roughly 120,000 years of cumulative industry experience have already exited the sector since 2022. Education programs must adapt as well.

Satvat advocates for curricula that not only inform students about the slim odds of securing a game‑industry job but also equip them with transferable skills. More than 60 % of ASGC‑assisted individuals this year found employment outside of gaming, underscoring the value of broader training. A shift toward smaller, leaner teams with tighter budgets is seen as a vital part of the solution. By targeting niche audiences rather than chasing mass‑market hits, developers can reduce risk and improve sustainability.

Embracing external development partners and contractors can further enhance flexibility. Satvat’s strategic recommendations for where to place the next bet include: - Investing in large, engaged ecosystems that foster creation, participation, and lasting player relationships. - Focusing on shorter, high‑quality AA and indie titles that cater to players with limited time and disposable income. - Targeting growth regions such as APAC, Eastern Europe, and Latin America, where talent, cost structures, and market expansion intersect.

- Supporting tools and service providers that enable smaller teams to produce competitive games. - Prioritising community‑centric approaches via platforms like Discord, livestreams, and group chats, even for single‑player experiences.

Satvat concluded that the industry does not have a predetermined destiny. The choices made now will shape its trajectory. He outlined two less‑desirable futures: one in which mature IPs are bought out by financial entities and stripped for extractive revenue, and another he termed "small ball," where the market fragments into countless tiny, AI‑driven projects with little concentration, making it harder for teams to achieve stability and growth.

His preferred vision is an ecosystem of disciplined, smaller firms that can address the challenges he outlined. As these firms grow responsibly, they can collectively sustain a healthier market that rewards profitability at lower sales thresholds, ultimately delivering a more resilient and vibrant future for the games industry.