Survive until 25? We’re off to a rough start | The DeanBeat

Last year, the saying going around the game industry was Survive until 25. The hope was that things would get better after a very rough year for game layoffs and player doldrums. Now we might start thinking about Survive until 26.

So far this year, in the first month of 2025, we’ve had 19 game companies announce closures or layoffs, with a total of at least 500 lost jobs.

Just yesterday, Midnight Society shut down and canceled its Dead Drop game. That might have been foreseen, as Dr. Disrespect parted ways with the company he cofounded after allegations of inappropriate conversations with a minor from his time years earlier at Twitch. Dozens of jobs are affected.

We also saw an unspecified number of jobs affected by changes at Electronic Arts’ BioWare, which saw weaker than expected sales for Dragon Age: Veilguard. And Ubisoft had another layoff affecting 185 people across three studios. It’s still a troubled company and it still has more than 18,000 employees.

I don’t think this means we’re going to have as bad a year as we had in 2024, when there were more than 15,000 jobs lost in games. This year, game job resource champion Amir Satvat estimates we might lose another 9,800 jobs in 2025, but the hiring should come back into a better balance.

Sony just shuffled

its management for the whole corporation (Hiroki Totoki is the new CEO) and the PlayStation division (Hideaki Nishino will be the sole CEO). In the latter group, that means a financial guy is taking over, with a diminished role for the creative/developer exec, Hermen Hulst. I don’t interpret that as good news for game jobs.

Microsoft had a stellar lineup in the fourth quarter, with games like Stalker 2: Heart of Chornobyl, Microsoft Flight Simulator 2024, Call of Duty: Black Ops 6, and Indiana Jones and the Great Circle. But it had a weak quarter, and Indiana Jones only had about four million players, a relatively small percentage of its overall Game Pass subscribers.

Microsoft said its gaming revenue decline 7% in the fourth quarter (its second fiscal quarter ended December 31), which is typically the strongest quarter. Xbox content and services revenue grew 2%, driven by growth in Xbox Game Pass. Microsoft paid $75 billion for Activision Blizzard, acquiring Call of Duty in the deal. But to have that category grow only 2% in the very first quarter when Call of Duty became available on Game Pass? That’s not so good.

On top of that, Xbox hardware revenue declined 29% in the quarter compared to a year ago. That’s a steep decline that suggests Microsoft is due for a console renewal. But that console is nowhere in sight right now, and Microsoft’s leaked papers suggested that day isn’t coming until 2028.

Intel reported a loss for the quarter and lost its CEO Pat Gelsinger. Still, his replacements said they expect a breakeven result in the first quarter and they expressed confidence in the company’s 18a manufacturing process coming soon. Intel’s weakness has been to the benefit of AMD and Nvidia, but it’s not good for the U.S. to have such weakness in its biggest domestic chip manufacturer.

The bright side?

Are there good things happening? Yes. Some fundamental positive moves are happening with the restoration of gaming acquisitions and financings, according to Drake Star Partners.

Microsoft can still be viewed as a hero. In the first half of the year, it is launching Obsidian’s Avowed in February, Compulsion Games’ South of Midnight in April, and id Software’s Doom in May. Nvidia is launching its Nvidia GeForce RTX 50 Series graphics cards, driving a cycle for a PC gaming refresh.

The Switch 2 is coming from Nintendo this year, but some gamers fear that it doesn’t offer much beyond a bigger screen and better graphics. And Grand Theft Auto VI is coming sometime this year, and it could come out at $100 or so, boosting the price of games so they might catch up with inflation. If this price rubs off on other titles, that would be great for the industry.

On the technology industry front, we’ve seen tech stocks get rocked by the announcement from Chinese AI startup DeepSeek, which reportedly was able to create a competitive AI model to compete with Open AI’s ChatGPT for just $6 million (this narrative is being challenged) — while others are spending billions on Nvidia’s GPUs to create their models.

The announcement tanked Nvidia’s stock by 15%, taking few hundred billion dollars off its valuation in the stock market. It’s not good if the result is going to be that investors turn bearish on the whole technology sector. In gaming, developers are fearful that AI will take their jobs.

And Donald Trump announced that he plans to place tariffs on semiconductors coming in not only from China, but from our ally Taiwan as well. Just 10 days into the new administration, I fear the Trump wrecking ball will hit the economy and the game industry. The Consumer Technology Association fears that a tariff trade war could raise game console prices by 40%, laptop prices by 46% and smartphone prices by 26%.

I do not count myself among the pessimists, but I am being a realist. Still, I hold out hope that we’re in for some outstanding games this year, starting with Civilization VII coming for the PC from Take-Two Interactive’s Firaxis Games on February 11. And fun games is the best way to combat a tough game economy. We know gaming will always have winners and losers. Let’s just hope that the good news starts outweighing the bad.