What’s Happening in the Game Industry?

[Jarhead0331]

A crap load of lay-offs...could this possibly be driven by AI?

10,000 jobs in 2024...it's a massacre.

https://tech4gamers.com/ea-670-layoffs/?fbclid=IwAR3bsjr1f9DiWQkIv-9rJwRmK9ZoBv4le5Qzt2zrjBjjVFNw6FgkmoiIqd4_aem_ATFQUIDwohojjrvv9ml97kVa488k8-lg4ukSazyCAhq752nzMXXXljuxiqGn6gRBdOE

[Grim.Reaper]

I don't think the main reason is ai, not yet although a portion can likely be tied to some companies thinking that will indeed cover some of the losses.  Think it would be overly optimistic this early on with AI to impact that many jobs right now as ai potential not fully understood where it will lead.  From what I have read, the game developer industry has always shifted in cycles with this shift being larger for a couple of reasons.  First, the pandemic helped create a more engaged market as people had more time for gaming being locked up at home.  Saw revenue increase so companies assumed this would continue and staffed for it.  But even though gaming market is doing well, it wasn't necessarily meeting the projections which companies staffed for.  A lot of tech companies staffed up because of the remote working situation and higher demand for tech to support people being at home, but that subsided and now the correction across the tech industry, not just gaming.

Also think the general economy continues to be factor where inflation had an impact and the uncertainty of how good or bad the economy is, and the fact prices of a lot of stuff has gone up,  not to mention some of the world conflict and political situations.  Lastly, I think a number of these gaming companies grew through acquisition where it's not uncommon that eventually you figure out that you're over staffed because of redundancy and have to cut costs.  I have been through many acquisitions and those cuts usually come 1-3 years after the acquisition happened, not always right after it is announced.

With that said, I do think companies have high expectations for ai, just don't think we are fully there yet so I don't doubt it will be one a bigger factor some day.

Just my two cents...

[crowdrake]

people used to que up at midnight for the latest big game release like CoD, but we have to many now for the mania to takeover. they would do well now if they specialised in hardware like a full driving cockpit, or a helicopter. they need new ways to interest people. I think VR is great but its AR that will be next like your room being part of a horror game, the camera through pass is nearly good enough. imagine the latest movie in VR or horror game where skeletons are climing your cieling. its all possible already , they just need to get the idea. quest 3 is for the masses so its begun. watch this space

[Toonces]

^ That sounds really interesting, Crowdrake!

[ArizonaTank]

+1, Agree that it seems to be a combination of technology (AI primarily, but also remote work technology) and snap-back from COVID era build-up. Game sales really surged during COVID. I don't think it is just gaming, but computer related tech overall.

Also, you have big market guys like Jayme Diamond (JP Morgan Chase CEO) who have been beating 'we are heading into a recession' drum for a year. So nobody wants to get caught with their pants down. I get the sense that companies who are doing OK at the moment, are still slowing down hiring. But yet overall employment numbers are still good...go figure...

[al_infierno]

I don't think AI is really sophisticated enough to sustainably replace the people being laid off en masse - though that doesn't necessarily mean the executives aren't putting their eggs into that particular basket.

This might be an unpopular take, but I think this is the result of what the kids call "late stage capitalism." The C-suite guys at the top have no clue what goes into making a game, and the last thing in the world they're going to do is sacrifice their multi-million dollar bonus to keep talent and domain knowledge on board. But the sheets have to show growth, or at least the illusion of growth, so the next best thing is to cut a few million off the top by getting rid of those pesky peons.

When Nintendo faced financial difficulties, their CEO took a massive pay cut to keep their talent on board. It's extremely telling that none of these other companies do the same. The executives are the ones who shit the bed with bad business decisions - such as buying up little companies to look good for investors, then shut them down when they're not immediately profitable - but they keep getting fabulously compensated while the actual devs are thrown to the curb.

Just look at the salary and bonuses given to guys like Tim Sweeney. They could still get paid millions, take a relatively small pay cut, and keep employees on board.

Just my take.

EDIT: Before anyone takes what I said the wrong way, I am NOT suggesting capitalism is inherently evil.  I very much prefer it over the alternatives.  What I'm referring to is a fairly specific phenomenon where a company chases infinite growth to the point of it being unsustainable, and in that pursuit for further and further growth, the executives end up cutting corners and making decisions that are worse overall for the consumer -- e.g. switching to cheaper materials, laying off the experienced workforce and replacing them with cheap contractors, etc.

[ArizonaTank]

I don't think AI is really sophisticated enough to sustainably replace the people being laid off en masse - though that doesn't necessarily mean the executives aren't putting their eggs into that particular basket.
...

I agree and I don't agree...  I agree that AI isn't sophisticated enough (yet) to replace a good programmer. However, it is becoming a work leverage tool, that is starting to increase overall productivity dramatically.

So if you are proto-typing a game for example, you can have AI produce the proto-type 3D objects rather than hunt and peck for them on asset databases, or have your 3D artist whip them up for you. You can feed text into some very decent and near-perfect voice generators to produce dialog. Background art is a done with a few sentences. Developers can use AI to automate some of the development work to save time. If all of that saves 20%-30% of your effort on a proto-type, that is huge.

Sure, when it comes to moving to the actual game, you are going to want more human touch in all these areas for many reasons.   

I don't have direct experience in the gaming industry, but I can tell you for certain that AI is impacting other parts of the IT industry in just these sorts of ways.

But if productivity goes up, and sales start to flatten, somebody is going to lose their job.

[al_infierno]

I don't think AI is really sophisticated enough to sustainably replace the people being laid off en masse - though that doesn't necessarily mean the executives aren't putting their eggs into that particular basket.
...

I agree and I don't agree...  I agree that AI isn't sophisticated enough (yet) to replace a good programmer. However, it is becoming a work leverage tool, that is starting to increase overall productivity dramatically.

So if you are proto-typing a game for example, you can have AI produce the proto-type 3D objects rather than hunt and peck for them on asset databases, or have your 3D artist whip them up for you. You can feed text into some very decent and near-perfect voice generators to produce dialog. Background art is a done with a few sentences. Developers can use AI to automate some of the development work to save time. If all of that saves 20%-30% of your effort on a proto-type, that is huge.

Sure, when it comes to moving to the actual game, you are going to want more human touch in all these areas for many reasons.   

I don't have direct experience in the gaming industry, but I can tell you for certain that AI is impacting other parts of the IT industry in just these sorts of ways.

But if productivity goes up, and sales start to flatten, somebody is going to lose their job.

You're absolutely right, and I have pretty strong reason to believe I was laid off from my previous job due to the overhyping of AI -- in that case, I'm fairly certain the CEO where I worked was under the impression he could literally just replace workers with AI.

But yes, AI is extremely useful as a productivity tool.

[Grim.Reaper]

There is no doubt that AI will eventually have more of an impact on the technology industry (and other), not just game development and I am sure it will have a further impact on some jobs.  As previously mentioned, just don't think we are quite there yet and the main reason behind all the recent job loses.  Just think we are in a cycle of change like the past and just bigger because companies projected too much beyond reality and feeling the effects of all the mergers/acquisitions in the industry.  Too many bodies for the demand right now., typical leaders just not planning soundly:)

But with that said, no, I wouldn't be surprised if more and more jobs (not just game developers) are impacted by AI as it matures and the full potential is realized.  No idea how big it will be as this is another step in overall automation and technology evolution just like when robots were introduced to manufacturing and auto checkout for stores and such.  Although I am sure there has been impacts to jobs with the progression of technology, also seems jobs have been resilient by just changing focus and opening new opportunities in a lot of cases versus Armageddon happening to jobs overall.  Even with AI, opens up a ton of new job opportunities in data sciences, data analysis, etc.

Who knows, only time will tell....

[smittyohio]

As a software developer, I'm glad I'm nearing the end of my career.  I'd be a lot more worried if I were just starting out.  I don't think AI will ever replace developers, but it will almost certainly allow a smaller workforce to match today's productivity.  That said, the flipside of the argument is that businesses will see it more as an opportunity to enhance their products.  For example, I work for a company that uses IT very effectively to differentiate themselves from their competitors.  It is expensive and complicated, but the benefits are enormous.   If AI can help us continue with the same workforce, but be even more creative, then it's a win-win.  Sadly, I think a lot of companies in the beginning will see AI as a way to simply replace workers.   At least until a company like mine shows them they're doing it wrong.

[Grim.Reaper]

Yep, largely agree. Being a former developer myself, people have been taking about new tech replacing developers for the last 20 years and never has happened.  Don't expect it to ever happen, although roles and techniques might change.