The video game sector witnessed the “darkest year” in 2024 | technology

The video game sector witnessed one of the worst years in its history at the industrial level in 2024, as this year included waves of employee layoffs and studio closures, coinciding with the tenth edition of the Video Game Awards ceremony, which will be held Thursday in Los Angeles, according to Agence France-Presse.

“Free fall”

In a post on the Blue Sky social media platform in December, Mike Bethell, who heads a small British studio, said that “behind the scenes, the video game industry is particularly bleak,” adding that “our system is in free fall.”

He continued, “Our darkest hours have turned into the darkest two years,” according to the French newspaper.

According to statistics from the Game Industry Lay Offices website, in 2024, no less than 14,500 employees were dismissed in this sector around the world, compared to 10,500 in 2023.

Many studios have closed their doors. In early December, the giant French company Ubisoft announced the closure of its branches in San Francisco and Osaka. Firewalk, an American studio affiliated with Sony that was behind the commercial failure of Concord, faced the same fate in October.

While the market is still growing with revenues of $187.7 billion in 2024, according to Newso, studios and publishing companies have been facing a significant decline in investments for two years, with money being transferred to other sectors such as artificial intelligence.

In light of this crisis, the main players in the sector are seeking to diversify, by turning to cinema (Nintendo with the movie “Super Mario Brothers”, which is the second biggest success at the box office in 2023) or series such as “Falout” and “Secret Level.” The trigger.

Sudden successes and disappointments

While some major games in the sector have survived, such as the latest game from “Call of Duty,” which achieved “the best start for a version of the series,” according to its publisher, Activision Blizzard, many games that were highly anticipated recorded disappointing sales, such as the second part of the series. “Final Fantasy 7” and “Star Wars Outlaw”.

“It is difficult for new games to prove themselves in an already established market,” while a handful of games (Fortnite, Minecraft, and GTA 5) monopolize gamers’ time and money, Nikko Partners analyst Daniel Ahmed told Agence France-Presse. .

Games created by modest studios that were not highly anticipated, such as “Baworld” and “Hilldivers 2,” have achieved successes.

The most popular game this year was from China, which is “Black Meth: Wukong,” which achieved amazing success.

Shadow of China

Daniel Ahmed said, “According to our estimates, the game has sold more than 25 million copies in the world, 70% of which are in China.”

This game, adapted from the sixteenth-century Chinese novel “Journey to the West,” which is expected to become this year’s best-selling game, marked a “big moment” for the sector in the country, according to Ahmed.

China, which is improving its position in the field of mobile games and free-to-play games, benefits from lower development costs compared to the United States and Europe, in addition to being home to giant companies in the field such as Tencent and NetEase.

China represents about a quarter of the global market, with about 722 million players.

Ahmed says, “We are still at the beginning of this big rush from Chinese studios to launch big-budget games. We will see more of them in the coming years.”

2025: Will this be the end of the bleeding?

Medcap Partner analyst Charles-Louis Blancad believes that “2025 is supposed to be a year of recovery for the sector,” anticipating “the end of the bleeding” in studios.

He believes that “the companies that will survive will benefit from a better competitive environment” after the large number of issuances over the past two years, according to the Frenchman.

The expected release next year of the devices that will succeed the “Nintendo Switch,” in addition to the “GTA 6” game that will be released in the fall of 2025, is supposed to bring a large percentage of people back to video games and give an impetus to the sector.