Revitalizing the Struggling Video Game Industry: Strategies for Recovery and Growth

Polygon’s Editor’s Letter is a column from me, Chris Plante, where I reflect on the video game and entertainment industries, their communities, and Polygon itself. New editions appear in the first week of each month.

Let’s start with a spoonful of sugar: making a video game has never been faster, cheaper, or easier than it is today. The internet’s got a smorgasbord of developer-friendly resources at our fingertips – videos, podcasts, Discord channels, and the like. And if you’re worried about fees, don’t be. Engine licensors have slashed the financial barrier to entry, and indie engines are also an option, some even free. When it’s time to publish, Steam and Itch.io are ready to host your game and convert it into cash, for a small fee, of course.

But, ironically, this democratization of game development is part of the problem. Over the past decade, video game developers have flooded the market faster than the industry could adapt. This, combined with the pandemic’s temporary spike in interest, has created a nightmarish economic scenario. Venture capitalists got caught up in imaginary “high-ceiling” opportunities in blockchain, esports, and VR, while established studios working on traditional, single-player experiences got overlooked. Then, with interest rates now stuck in orbit, average game studios or investors will be hesitant to borrow money to fund a new project.

So, what’s the forecast for 2024? I’m calling it: Cloudy with a Chance of Fucked.

Now, I have a pair of ideas to toss into the conversation.

First, I’m thrilled to see funds like Outersloth, a “recoup and share” approach from Among Us developer Innersloth. It’s a great idea, as long as the games actually make back their investment (a feat most games fail to accomplish).

Second, expertise is just as crucial as money. As investment becomes harder to come by, indie game studio heads need to learn the ins and outs of operating a business. We need better mentorship and training programs, and universities with game development degrees should make business a mandatory part of the curriculum. We can’t keep telling artists that a great idea is all they need; it’s not true.

And for AAA publishers, it’s time to break the cycle of scale. If the goal is to have the No. 1 game, I’ve got some terrible news: there’s only one No. 1 game, and there are a ton of studios. I see the Marvel Cinematic Universe formula in current AAA game development – executives addicted to past success, recreating facsimiles of exhausted franchises. It’s time for AAA publishers to accept that the old dominance won’t return. They must operate as part of the crowded ecosystem, not as an exception to it. That means making more and smaller games, diversifying portfolios, launching fresh IP, and pursuing underserved audiences.

Things are bad, and they could get worse. The boat is sinking, and it’s on fire. Someone grab a bucket, someone grab the extinguisher, and for all that’s good in the world, someone start thinking differently about where to sail this thing. Because if the industry doesn’t find smoother waters soon, this boat’s going under.