If the games industry really is heading for a crash, then so be it

The signs have been there for years, but it often takes a single article to drive the point home, assigning a sharp name to multiple trends that form a major threat. This is exactly what just happened with the gaming industry’s current state: we’ve all been reading dozens upon dozens of articles about the massive layoffs, the ballooning development budgets, the cancelled games, the rising hardware prices, the increasing cost of subscriptions and more – but very few, if any, media outlets dared acknowledge where all of these developments collectively point to: a crisis. Maybe not an existential one yet, but a crisis nonetheless.

Leave it to famous British magazine Edge, though, to call a spade a spade: its November issue focuses on all of the above, treating them as larger problem while making it perfectly clear that the games industry may very well be heading for a “Crash 2.0”.

This is exactly how yours truly was thinking about all of this for some time now: not just as a series of unfortunate outcomes related to ineffective strategies, but as the inevitable conclusion of almost 15 years of terrible executive decisions, corporate priority changes, creative cowardice and consumer market shifts that are all coming to a head now. Simply put: come 2027 or 2028, gaming may be in for a rude awakening and, most probably, a painful transition. We basically have no idea what comes next. Uncharted waters.

A number of problems made worse over time, a situation coming to a head

As the Edge article repeatedly notes, the headwinds the gaming industry already is and will be facing in the future are not caused just by hardware components getting absurdly expensive for both consumers and manufacturers or by development budgets getting out of hand. That would have been good news, actually, as it would have meant that the crisis is temporary and largely fixable.

No. The future of interactive entertainment is now threatened because practically all companies operating in this market became complacent, they focused on the wrong things, they failed to identify changes in consumer tastes and needs in a timely manner, the played it safe when they should have taken more creative risks… the list is long and varied – which is a problem in and of itself.

What is already happening, as a result, is this: the traditional gaming audience has hit a ceiling, while young and new players coming into the fold have a decidedly different consumer mentality. Games themselves are becoming more expensive to make without truly exploring the medium further and helping it evolve, while companies are focusing on subscriptions and in-game purchases as opposed to smart planning for actual game sales. All of this, and more, is forcing many people to think of the video games business model – in its current form, at least – as more or less unsustainable long-term.

A need for reinvention that far exceeds the commercial success of GTA VI

It’s clear that things need to change on a number of levels, in a number of ways. What is not clear is change to what ­(few people making these decisions have solid plans and a specific direction to follow), as well as how fast (so the games industry does not actually crash). But change they must, things, no matter how painful than process may prove to be – otherwise a whole ecosystem of products and services, built on the assumption that people will always be willing to routinely and generously pay for their gaming habit, may just implode.

Then again – based on its track record and past failures – maybe the gaming industry is not capable of saving itself. Maybe it can’t change enough, in a material way, in a timely manner, so as to avoid the Crash 2.0 the Edge article refers to as a distinct possibility. If that is true – optimists will disagree but, sadly, they rarely are the ones making crucial decisions – and an actual reset is needed, then maybe it’s just as well. So be it. When it comes to gaming, an entertainment medium whose very essence is made of curiosity and progress, a hard reset would be preferable to a slow death anyway.

Discussions about the looming threat of a possible Crash 2.0 are especially important to be held at this specific point in time: the upcoming release and initial commercial success of GTA VI over the next few months will create the illusion of a gaming market that does impressive numbers and generates a lot of profit. In reality, not only will that impression be false and not at all representative of where the games industry currently stands as a whole, but it will cost the rest of the market dearly in lost sales and invested time for months (if not for years assuming that GTA Online launches in 2027).

Unlike what some seem to think, behemoths like GTA VI do not “lift all boats” in a way that’s actually meaningful to the gaming industry at large: console sales will be boosted for a while, revenue records will draw the attention of media the world over, but they will not expand a market that needs to reinvent itself in order to survive. GTA VI will facilitate the transition of millions to a console generation that has almost run its course, GTA Online will continue generating insane profits for a handful of companies, but that’s about it. That’s not a long-term solution to a multi-layered problem. It is a patch, at best.

The games industry is facing real, structural, cultural issues that no one title, even a Grand Theft Auto, can address. To all the questions raised by Edge‘s article, “look at the numbers GTA VI is doing” should not and cannot be the answer. Here’s hope that, after the euphoria brought about by Rockstar’s latest has passed, this industry’s decision makers will take a long hard look at what’s over the horizon, realize that things just can’t work the way they used to anymore and accept that changes need to be made.

If decision makers act effectively, we won’t need another wake-up call like the Edge article or another GTA padding game sales numbers to save the day. Will they, though? We’ll just have to wait and see.