Welcome back to our weekly gaming news roundup. As the year comes to a close, we look back on 12 months of massive change for the video game industry, driven by acquisitions, layoffs, and unionization. You can read my story on consolidation to learn more about gaming's difficult year.
This week's stories
There is no game pass for Baldur's Gate 3
Baldur's Gate 3 is officially the Game of the Year and after months as an exclusive to the PlayStation console, it is finally available on Xbox. However, if you're waiting for it to be available on Game Pass, stop. Baldur's Gate 3 will never come to Xbox or PC Game Pass, according to Larian Studios founder Swen Vincke. It's a fantastic, big, long game that sells for a standard price of $70 – take it or leave it.
The Last of Us Online is dead
Naughty Dog has canceled The last of us online, its multiplayer spin-off that has been in development for years. This isn't too surprising, considering the lack of updates on the game, but it's now official. Naughty Dog said it didn't have the resources to support a live service game and also create new single-player narrative experiences, which are historically its thing. The studio has more than one of these games in development right now.
2023 was a pivotal year in gaming
2023 was a year of turbulence in video games. There were three main factors that shaped the industry: consolidation, layoffs, and unionization.
In terms of consolidation, the biggest news of the year was the approval of Microsoft's purchase of Activision Blizzard King for $69 billion. Microsoft is now the world's third-largest video game company by revenue, just behind Sony and Tencent. Today, the Xbox umbrella covers nearly 40 studios, including Arkane, Bethesda, id Software, Infinity Ward, Mojang, Ninja Theory, Playground Games, 343 Industries, and Turn 10.
Sony is more subtle than Microsoft in its attempts at total domination, but it owns 21 development teams, including Bungie, Guerrilla Games, Haven Studios, Insomniac, Naughty Dog, and Sucker Punch Productions. He has made a lot of purchases in the last three years and has invested heavily in studios like Epic Games and FromSoftware.
And then there is Tencent, which has thousands of tentacles spread throughout the industry. Tencent owns a portion of Bloober Team, Paradox Interactive, PlatinumGames, Remedy, Roblox and Ubisoft, among others. It has a majority stake in Supercell, Tequila Works, Techland and others. He fully owns Riot Games, Funcom, and of course others. He also manages several internal development companies and publishing labels.
Tencent also owns a 40 percent stake in Epic Games. This alone means that every time you buy a game built on Unreal Engine, Tencent gets a cut. If you played anything this year, Tencent was probably involved.
There are clear short-term benefits to being bought out by a larger company, but giving up independence has downsides. Acquired studios are held accountable by people outside of the actual development of a game, and the larger the company, the further their bosses are from the creative process.
The most extreme negative outcomes for an acquired independent studio are, of course, layoffs and closures. We saw a lot of these in 2023.
An estimated 9,000 people lost their jobs in the video game industry this year, up from about 1,000 in 2022. This is a crisis level of loss, and was driven by overeager acquisitions by the companies at the top. Embracer Group, which owns more than 100 video game studios, laid off more than 900 people and completely closed several studios.
Unity laid off about 900 people this year. In November, the company reported a 69 percent year-over-year revenue increase, and executives told investors, “We continue to manage costs well.”
Epic Games laid off about 830 people in 2023, including some of the team at Fall Guys studio Mediatonic, which it bought in 2021. EA laid off more than 1,000 employees this year, including significant cuts at Codemasters, a studio it bought in 2021. Projekt RED, Sega, Ubisoft and Microsoft's 343 Industries also laid off at least 100 people each.
Looking back on this year's carnage, it sounds like a warning: As consolidation efforts ramp up, more studios will be controlled by just a handful of companies and vulnerable to measures like mass layoffs and closures. We're laying the groundwork for the future of video games right now, and consolidation only makes the industry smaller and more generic. What will rampant consolidation mean for all these acquired studios five years from now? What will it mean when these teams are no longer brilliant, there is no new investment and the people at the top are ready to lose weight again?
Unionization is an approach that can help protect the livelihoods of people in the video game industry, and there was progress on this front in 2023. Developers at multiple studios now have the support of unions, from small businesses independent up to AAA powers. Microsoft is currently home to the largest union in the industry, with representation of more than 300 QA workers at ZeniMax Media.
Other companies with unions established in the last two years include Avalanche Studios, Anemone Hug, CD Projekt RED, Experis Game Solutions, Keywords Studios, Sega of America, Tender Claws and Workinman Interactive. We love seeing it, and for the industry to remain stable, we need to see it more.
playing now
I have not been able to get The Talos II Principle It's been out of my head since I previewed it and interviewed the developers a few months ago, and I'm finally happily playing the game in its entirety. I'm playing on a Steam Deck OLED and having a blast solving laser puzzles and talking about the meaning of life with a group of robots. I recommend you try the same.
This article originally appeared on Engadget at https://www.engadget.com/2023-was-a-year-of-layoffs-and-acquisitions-this-weeks-gaming-news-163028348.html?src=rss
