The final couple of years have seen some blockbusters offers within the video games trade. Microsoft’s acquisition of Activision Blizzard is clearly the most important of all of them, however Sony’s buyout of Bungie is up there too, and even (comparatively) smaller offers, like NetEase’s buy of Quantic Dream or Nacon’s takeover of Daedalic, cannot be ignored. And whereas we on the surface can debate the relative deserves of this trade consolidation, GDC’s newest State of the Sport Trade survey signifies that it is making individuals who truly work within the enterprise a bit nervous.
In 2023, the primary yr builders have been requested their ideas about trade consolidation, 17% of respondents mentioned they believed “main acquisitions” like Microsoft’s takeover of Activision would have a optimistic affect on the trade. By comparability, solely 5% shared that opinion in 2024. The share who mentioned these acquisitions may have a unfavorable affect held roughly regular—43% this yr, model 44% in 2023—whereas those that really feel it is going to haven’t any significant affect both approach shrunk from 7% in 2023 to simply 2% in 2024.
That shift in perspective is comprehensible. 2023 was a brutal yr for layoffs within the video games trade, and 2024 has but to point out any indicators of being higher. A lot of these cuts have been laid on the ft of over-aggressive enlargement through the early days of the Covid-19 (after all, for probably the most half the executives who made these choices nonetheless have jobs) however one respondent identified the actual egregious case of Embracer Group, a Swedish holding firm that ballooned right into a gaming behemoth by means of a multi-year acquisitional rampage, solely to place lots of of individuals out of labor and shut a number of studios when a single funding deal—a really huge deal, sure, however nonetheless only one—fell aside.
“I feel the current Embracer fumbles sums it up,” one respondent wrote. “As soon as an enormous publicly traded firm buys up massive swaths of an trade, it is going to inevitably find yourself creating redundancies and putting revolutionary, extra ‘exploratory’ studios ready the place they’ll by no means be seen as worthwhile sufficient for shareholders.”
One other respondent shared related however extra pointed sentiments: “There’s a motive why antitrust legal guidelines have been put in place. Consolidation of wealth and energy inevitably breeds complacency and contempt for staff and shoppers alike by executives and shareholders.”
42% of respondents took a extra middle-ground strategy, saying main acquisitions may have a “combined affect” on the enterprise. Some survey respondents acknowledged that acquisitions are sometimes an general optimistic from a enterprise perspective, however are additionally not at all times nice for particular person builders or video games that do not have big audiences.
“Clearly, there have been a terrific many layoffs, and the centralization of media below massive umbrellas—as is going on with Disney as effectively—isn’t good for media as a result of it creates a sure sameness,” one respondent mentioned. “Many merchandise, all competing with the identical danger aversions and pillars of artistic values. Much less room for maverick upstarts and attention-grabbing one-offs.”
“It’s not nice from a contest standpoint,” one other mentioned. “Nevertheless, as a small firm simply making an attempt to make ends meet, there’s an attract in making oneself fascinating for acquisition, since it could possibly take stress off administration and become profitable points a decrease precedence within the brief time period.”
Others centered extra on the artistic affect of consolidation: One particular person predicted that “AAA and company gaming will ossify and a brand new wave of ‘triple-I’ indies will emerge,” resulting in a “design renaissance” within the not-too-distant future, whereas one other mentioned smaller studios getting snapped up by greater fish helps them “get a much bigger viewers and prevents franchises from disappearing.”
That brings to thoughts feedback by Xbox boss Phil Spencer, who mentioned within the wake of Microsoft’s acquisition of Activision Blizzard tha he is “all in” on the concept of bringing again outdated titles from Activision’s again catalog—a sentiment he’d expressed a pair years earlier, when the buyout was first introduced. How seemingly that’s to occur stays to be seen.
Concern in regards to the unfavorable affect of acquisitions and consolidation was additionally mirrored in a query about potential layoffs: Simply over one third of respondents mentioned they did not assume their firm would see layoffs sooner or later over the following yr.
Apparently, the survey additionally mirrored combined attitudes about what particular person builders can do to guard themselves from the unfavorable fallout of big-biz offers. 57% of respondents mentioned the trade ought to unionize, up barely from the 53% who have been favor of elevated unionization in 2023, however that help was decidedly break up alongside age traces: 72% of respondents aged 18-24 supported unionization, however that quantity declined steadily as age teams rose, to simply 29% help amongst these aged 55-64.