In a gloomy forecast for the game industry, industry experts are predicting a wave of closures that will permeate throughout 2024 and potentially extend into the following year. Last year alone, an estimated 10,500 game industry employees were subjected to job cuts. As 2024 kicks off, approximately 3,000 planned job cuts have already been confirmed, leaving little hope for a swift recovery.

Citing an overabundance of new releases, cautious investors, and continued high interest rates, senior industry figures, speaking anonymously to GamesIndustry.biz, expressed concern over the market's trajectory. Not only do developers face the risk of closures, but publishers, media companies, and service providers are also expected to feel the impact.

According to one CEO of a public company, 2024 is poised to be the year of closures, as the industry grapples with an alarming number of unprofitable businesses. "We're looking at up to two years of pain," warned the CEO, emphasizing the need to navigate through a difficult period ahead.

A publisher boss echoed these sentiments, highlighting the excessive number of games greenlit in 2020 and 2021. The industry now faces the task of returning to pre-pandemic release schedules, a process that may take a couple of years. The repercussions of the saturation in the market are evident with publishers increasingly signing fewer games. It appears that games are failing to live up to the expected levels of success, affecting sales across various platforms.

The GDC State of the Game Industry survey found that layoffs had impacted around a third of developers over the 12 months leading to October 2023. When asked about their concerns regarding potential layoffs until October 2024, 14% of respondents expressed great concern, 16% were somewhat concerned, and 26% had mild concerns.

On the subject of layoffs, industry professionals voiced their thoughts anonymously. One respondent emphasized the rapid growth of studios during the pandemic, coupled with decreased consumer spending on games as a result of the cost of living crisis. The respondent expressed hope that this period of turbulence would pave the way for innovative start-ups and inspire larger studios to adopt new practices.

Another concerned voice remarked on the unpredictable nature of layoffs, indicating that they no longer align with the conventional cycle of workforce reduction following project completion. The uncertainty surrounding the timing and location of these layoffs adds to the growing unease among industry professionals.

As the game industry braces itself for turbulent times, industry players and stakeholders must find ways to navigate the impending wave of closures and job cuts. It remains to be seen how the industry will adapt and respond to the challenges ahead, with hopes resting on the emergence of innovative approaches and the resilience of those within the sector.