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, a former business‑development lead at Tencent who has recently become a general partner at 1Up Ventures. Satvat is also the founder of the ASGC, an organization that assists job seekers in the gaming field, and he used the platform to unpack a wealth of data surrounding the wave of layoffs, the geographic redistribution of talent, the concentration of revenue among a handful of titles, and the broader structural changes the industry must embrace to survive the present turmoil.

Satvat began with the stark reality of job losses. In December, he told GamesIndustry.biz that he anticipated roughly 7,500 redundancies in 2026, a drop from the 9,200 projected for 2025.

After witnessing the massive layoff sprees of 2024, he revised his forecast upward to 14,666, a figure that sits just shy of the 2024 peak of 15,631. By August 11, more than 10,140 layoffs had already been announced for the current year—already exceeding the total for the entire previous year.

Even with those numbers, the overall headcount in the industry has remained surprisingly stable. Satvat cited research from the Game Industry Coffee Chat (GICC) that estimates about 750,000 individuals are employed directly or indirectly in gaming, a far higher figure than most industry reports suggest.

He explained that the discrepancy often stems from a lack of awareness about the scale of employment in China, where many roles are not captured by conventional metrics. The net effect, according to Satvat, is that the industry has actually experienced a modest increase in employment since 2022—under 1% growth—but it is still growth. Prior to 2022, however, the sector saw a dramatic expansion, adding roughly 150,000 jobs over the five‑year span from 2017 to 2022.

A key driver of this shift has been geography. "Headcount is moving from North America to virtually everywhere else," Satvat observed, noting that the migration is motivated not only by lower labor costs but also by government incentives and the availability of talent in other regions. More than two‑thirds of the layoffs he has tracked have occurred in North America, amounting to about 25,000 positions—roughly 15% of the workforce there.

California bore the brunt, accounting for over half of those cuts within a 12‑ to 18‑month window. Conversely, other parts of the world have seen net gains. In the Asia‑Pacific region, job openings rose by 10%, driven largely by a 12% increase in China.

Europe’s employment numbers have essentially plateaued. One puzzling paradox is why layoffs are rampant despite overall industry growth. Satvat attributes this to the fact that growth is increasingly concentrated in a shrinking pool of titles.

"Fifty to sixty percent of revenue now comes from just the top 20 games," he said. On mobile, user acquisition has become prohibitively expensive, pushing developers toward monetizing existing players. On PC, a mere 79 titles account for 80% of total playtime. The headline revenue figures look healthy, but a deeper dive reveals a much more uneven landscape.

Satvat enumerated 21 pressures reshaping the industry, ranging from post‑pandemic over‑hiring and shifting player habits to longer development cycles and rising production costs. The two he finds most alarming are discoverability challenges and the uncertainty surrounding artificial intelligence.

He warned that without solutions to these problems, the entire industry could be undermined. Geographic transition, however, remains the most powerful catalyst for change. Satvat highlighted a surge in game‑related degree programs across U.S. colleges—about 400 institutions 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 bleak: only a 4% chance of securing a gaming role within a 12‑month period, and globally there are roughly five applicants for every opening. In North America the ratio is even steeper at 11:1.

Senior‑level positions are also feeling pressure. The average experience required for a given role has risen by three years, squeezing early‑career candidates who previously could land jobs with little to no experience.

Meanwhile, opportunities for senior developers (those with 20‑plus years of experience) have dwindled to a 4‑5% share of openings. The sweet spot now lies between roughly 3 and 15 years of experience, where employability is highest.

The composition of open roles is shifting as well. Historically, the "big four" categories—art and animation, engineering, production/project management, and game design—accounted for about 70% of vacancies. Recently, game design has slipped out of that core group, being supplanted by marketing roles. At the same time, demand for business intelligence, data, and analytics positions has risen, while writing, narrative, QA, and recruiting have seen their share shrink.

Networking has become a decisive factor in hiring. "You are twenty times more likely to get a job if you have a personal connection to the hiring manager or recruiter," Satvat noted.

Gaining even a year or two of experience can boost a candidate’s odds of landing a new role from 4% to 30% over a year. Satvat also described broader structural shifts.

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 will further limit audience growth, prompting a move away from the traditional model of attracting users with exclusive, graphically intensive titles. Instead, developers will need to focus on accessibility, recognizing that many potential players cannot afford high‑end consoles.

China, meanwhile, is emerging as a powerhouse. The country contributed 42% of global PC‑revenue growth, and WeChat’s mini‑games boast over 500 million monthly active users. With more Chinese students entering higher education each year, the market could see an additional 10 million new computer owners annually.

This presents both opportunity and competition: while foreign developers can tap into a market whose tastes are not drastically different from elsewhere, Chinese studios are rapidly scaling and will likely intensify global competition. Satvat identified promising growth avenues such as large user‑generated‑content platforms like Roblox and Unreal Engine for Fortnite (UEFN). However, he cautioned that revenue on these platforms is heavily concentrated among a small elite of creators.

The competitive landscape is also intensifying. Approximately 12,000 new games were released on Steam in the first half of 2026, a 19% year‑on‑year increase. Yet only about 3% of those titles (roughly 600 games) achieved a peak concurrent user count of 100 or more, suggesting that the apparent flood of releases masks a more modest level of true competition. Funding conditions have grown harsher.

Global startup financing for games plummeted from $9.9 billion in 2021 to just $2 billion in 2023, and private‑equity and venture‑capital inflows fell from $12.1 billion to $2.7 billion over the same period. Satvat attributes part of this decline to a mismatch between traditional investment models and the inherently unpredictable nature of game development, which rarely delivers the predictable cash‑flow projections that financiers favor.

Even within established AAA studios, the employment model is changing. A few years ago, a significant portion of development work was outsourced to external studios and contractors, but this was often downplayed publicly. Today, the data is transparent: AAA roles have dropped from roughly half of all job listings in 2022 to under one‑third now, while external‑development and contract positions now represent 10‑15% of openings. Satvat believes the most fertile ground lies in the middle tier—between solo indie creators and massive multinational publishers.

He envisions a future where disciplined, smaller teams with tighter budgets focus on niche audiences, leveraging external development and contracting to stay agile. He warned that a return to a "normal" state is unlikely. Instead, the industry is evolving toward an as‑yet‑undefined new equilibrium. Player expectations have shifted dramatically over the past two decades, with modern audiences accustomed to short‑form social media content.

Long, sprawling experiences must now be marketed differently, and community engagement needs to start early in the development cycle rather than being an afterthought. Pricing models are also in flux, with a growing emphasis on lower‑price points ($30 or less, even $10 or less) to capture price‑sensitive consumers. Satvat stressed the importance of improving working conditions for game developers, citing poor off‑boarding practices and a lack of continuous professional development as factors driving talent away.

He estimates that roughly 120,000 years of cumulative game‑development experience have been lost since he began tracking the sector in 2022. Education reform is another priority. Satvat advocates for programs that not only inform students about the slim odds of entering the industry but also equip them with transferable skills. Over 60% of ASGC‑assisted individuals this year found employment outside of gaming, underscoring the value of broader training.

In terms of where to place the next strategic bets, Satvat outlined several recommendations: - Invest in large, engaged ecosystems that foster creation, participation, and lasting player relationships. - Focus on shorter, high‑quality AA and indie titles that cater to players with limited time and disposable income. - Target growth regions such as APAC, Eastern Europe, and Latin America, where talent, cost structures, and market expansion converge. - Develop tools and services that empower smaller teams to produce competitive games.

- Prioritize community building through platforms like Discord, live streams, 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, leading to increased ownership concentration; and another he termed "small ball," where the market fragments into countless tiny entities driven by UGC and AI, making it harder for developers to achieve sustainable growth.

The scenario he hopes for is a balanced ecosystem of disciplined, smaller firms that can address the challenges he outlined while still delivering compelling experiences. By redefining success—shifting from the pursuit of massive sales to profitability at lower revenue thresholds—these firms could create a healthier, more resilient industry that ultimately benefits both creators and players.