2023 was a terrible year for the gaming industry

The year 2023 has been a fantastic year for video games. Yes, I know. Let's momentarily set aside the headline, shall we? I want to elaborate on it. Just three months after the release of The Legend of Zelda: Tears of the Kingdom, which garnered one of the highest Metacritic ratings of all time, it was surpassed by Baldur's Gate 3 by a single point. We witnessed a remake of the greatest horror game of all time, Resident Evil 4, somehow managing to surpass the original. We are currently immersed in the joy of Starfield. We are still satiated by Street Fighter, Metroid Prime, Sea of Stars, Final Fantasy, Armored Core, and Dead Space. We have Spider-Man, Super Mario, Mortal Kombat, and Assassin's Creed yet to come. We have grown so fatigued from the abundance of exceptional games that we have collectively decided that Diablo 4 is dreadful. It has been a good year for video games. A superb year. A challenge to the finest years such as 2020, 2013, and 1998. However, it has been a challenging year for the gaming industry.

When we say that this year has been great, we specifically mean that excellent games have been released. The aforementioned list speaks for itself, and that's before delving into the lesser-known but incredibly special indie experiences like A Space for the Unbound, Paranormasight, or Goodbye Volcano High. However, gaming is not only about the games that happen to be released within any given 12-month period. And so far, this year has been absolutely devastating.

Baldur's Gate 3 is the highest-rated game of the year. It is fantastic, mainly because Larian had the time to perfect every detail of the game, including a long and comfortable early access phase. In the week when it was enthusiastically received and Steam numbers were on the verge of breaking records, BioWare announced mass layoffs. All departments of BioWare were affected, including senior writers and creators of iconic characters beloved by fans, who were dishonorably let go. This highlighted that Baldur's Gate, despite its grandeur, was the exception rather than the rule. The previous two games in the series were developed by BioWare (one of the laid-off employees wrote the original Baldur's Gate), and Larian built upon BioWare's pioneering decisions regarding the importance of characters and narrative drama to develop the third installment.

Elsewhere, Microsoft and Sony engage in a constant back-and-forth, publicly saying one thing while privately expressing something else. This fundamental acquisition of Activision Blizzard is not being questioned in court because it harms the employees, who will have fewer job opportunities after the layoffs (or, as unfortunately often happens in the gaming industry, following harassment incidents). It is also not about the fact that huge conglomerates tend to destroy smaller creative studios in favor of more manpower. Tony Hawk's Pro Skater, Crash Bandicoot, and Spyro the Dragon have all been sacrificed to the almighty dollar in recent years. No, Sony is attempting to stop the acquisition because it deems Call of Duty so crucial to the foundation of gaming that Sony cannot thrive without this game. We have reduced the most important concern of employee welfare in our time to a battle over who gets to profit from the war game.

Amidst all this, over a thousand employees were laid off at Microsoft, with 343 and Bethesda being the most affected. Sega also laid off 121 employees due to "external factors" shortly after acquiring Angry Birds developer Rovio for $775 million (and almost immediately reviving it to use as a grotesque microtransaction-filled phoenix). In fact, Kotaku notes that a total of 1,600 employees were laid off between Unity and EA, while Firaxis, Take-Two, CD Projekt Red, Riot, and FaZe Clan have also reduced their workforce. Embracer, whose acquisition-heavy strategy has not yielded immediate results, is now pulling the plug to minimize losses. Despite the (relatively) stable economy and the overall increase in video game revenue, companies continue to implement job cuts.

In a certain way, it is an inevitable endpoint. While the gaming industry may generate higher profits than movies, television, and music, it also has a much longer development cycle. Between Red Dead Redemption 2 and Grand Theft Auto 6, assuming optimistically that it will be released next year, eight albums by Taylor Swift and 15 Marvel movies have been released, while Rockstar has developed only a single game. Rockstar has the advantage of, well, being Rockstar. GTA 6 will be a huge success and will recoup its costs both through a successful launch and through enormous profits over time from GTA Online. Other studios are increasingly copying this model with long development cycles focusing on premium experiences and hyperrealism, but they don't earn as much money as Rockstar in the long run.

And that only concerns the studios. That's before we even get to the layoffs in game journalism and the cancellation (and likely permanent demise) of E3. A robust press that doesn't serve as an extension of public relations is more important than ever as we see layoffs and harsher working conditions, yet it is increasingly disappearing. Meanwhile, E3 was once the central event of the year, a core representation of what gaming was all about. But nowadays, with longer development cycles, cost-cutting on both sides, and studios wanting to control the narrative with their own shows (even at the expense of airtime for smaller studios that are vital to the ecosystem), E3 has been deemed unnecessary and replaced by the more commercially oriented Summer Game Fest.

We've had great games this year, and we should celebrate them. I hope that we'll look back on this year, especially with so many big titles still to come, and remember it as unforgettable. But more than that, I hope we don't look back on this year as the foundation of gaming's decline. I enjoy the games of 2023, but I still worry about where we're headed.