Covid helped creating a fake bubble and reality is kicking in. In addition we are probably going straight into one of the biggest economic criysis ever so I don't think this is exclusive to games.
The slowdown is not exclusive to games, it's pretty much across the board in the consumer discretionary sector.
Finally we'll go back to normal GPU prices
I sure hope so, but wouldn't hold my breath. Nvidia is the market leader and they're focused on their AI products. Until AMD or Intel can actually challenge them in the mid range GPU market, I don't see this changing.
Well, the industry has stagnated for years now. Years after year we are basically playing the same games just a bit better looking. Surprised the plateau didn’t come sooner.
Certainly have stagnated. The diminishing returns on graphical fidelity is being reached. Look at the credits of any game and just see how many assets need to be created and polished. Games have become incredibly visually striking, but it costs a lot to do so.
This is why I don't understand how people continue to argue that PS is going to stick to their traditional model. If they do they are dead in 10-15 years with the decline and shrinking margins. Obviously MS is further down this road but we have been told for over a decade that gaming is unsustainable as it is and would you look: sure looks like it will be unsustainable over the next decade if things don't change.
Playstation will stick around, but they won't be growing like they have unless they can get costs under control or significantly expand their market. This is probably the reason behind the GAAS push. They're also looking to bring their gaming franchises to other media and cash in on people who will never play games (see TLOU TV series). Shawn Layden was right, ultimately.
This. And slowdown is no decline. Even if it was a decline, it's still a multi billion dollar business.
It's a decline in real spending. This is a FT article so obviously the audience is investors who are looking for growth. Gaming as a form of entertainment is going nowhere, we aren't going to have another 80s industry crash. We are looking at a return to normal and sustainability after an incredible jump that happened since the pandemic. I'd argue this was overdue even prior to the pandemic. Near zero interest rates and the rise of F2P games really fueled this fire and resulted in a race to the bottom. Years ago a F2P game was an impossible thought, and nobody would be able to imagine a F2P game with visual fidelity like Genshin Impact. Now this model is expected, and people really don't have the capacity to pay a subscription for an MMO or live service game (despite being fine getting nickeled and dimed for DLC). How can any non-AAA game compete? And the AAA games that compete do so at significant cost.
Bullshit, we are going through a glut of good games.
I'd argue this is part of the problem with industry growth. It's twofold:
1. There are so many games being released now, and so many of them are actually really good.
2. With so many platforms having backwards compatibility and companies selling cheap digital games (and offering subscription services that offer excellent value) you are no longer locked into just playing what is being released now. You can look back and buy some of the best games of the past 10 years for pennies on the dollar, and those games will entertain you a long time.
When you have so many options but limited attention and money, there are going to be winners and losers. But with costs increasing so much and the gaming userbase not increasing as much, you have diminishing returns.
I just think the primary markets are already saturated.
Gaming and TV are not the same. The time and attention demands of most any console game make it a type of entertainment that suits only a certain demographic. So expecting it to have the same appeal as the thing that traditionally just sat burbling away in the living room is a mistake.
Folding in mobile gave the size of the gaming world a big boost primarily because it suited different usage patterns, and drew in people who would never otherwise bother with classic videogames.
Basically my take is that right now in 2024, in major markets like the US, anyone with an interest in videogames is already playing or is at least aware of the option to play already. I just don't see there being that many more people to sell to in the future!
New markets are obviously emerging globally, and I think serving their tastes and budgets is going to be increasingly important for growth.
Demographics will play a huge role in industry growth, it's the elephant in the room. I would argue saturation happened in terms of game releases. Companies are not only competing against other games being released around the same timeframe, but existing games from years ago that you can purchase cheaply. They're also competing against other forms of entertainment, and that is with a smaller pool of money considering inflation's effects on cost of basic needs. Publishers need to expand the market or find ways to reduce costs (they are doing the latter already).
The best selling games are 60+ hour experiences though.
Short 20 hour games don't sell like they did 20 years ago.
Somewhere along the way, gamers became sick. They started looking to maximize time spent vs cost of the game. Game development has become so expensive that AAA games are easier to continue working on and support (and sell DLC) rather than starting another from scratch. People seem to think they get more value simply because the game is longer.
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