A Tough Time In Games
Some thoughts on where videogames are right now, plus an ihobo update - and of course, Gamescom!
Dear friends,
We’re getting ready to go to Gamescom again right now, and ever-thankful that the company I founded a quarter century ago is able to resist the slings and arrows of outrageous fortune that have certainly left their mark on videogames in recent months.
As you may be aware, videogames are having a rough patch. It started last year, which was a layoff year, which means a few underperforming companies take the opportunity to fire a proportion of the workforce. This usually allows them to declare higher than usual profits (as they’ve brought down their overheads), which helps them get investment. And when one company decides its a layoff year, lots of other companies decide the weather is good for downsizing, and so they do it too, even if they weren’t underperforming.
Usually, a layoff year is followed by an investment year - the companies get fresh money in on the back of their improved fiscal statements, and use it to start hiring again. However, this hasn’t happened this time.
Now that Meta have tacitly admitted that VR has all but failed (i.e. they have declined to accept any further licensed IP in the VR space), videogames are no longer attracting investment, and that has hurt the industry as a whole. Several groups that bought up developers in the boom have now shut them down - a few such unfortunate companies have their logos featured in the post-apocalyptic montage above. Investment money is largely going into Large Language Model companies right now, most of which are not going to be able to deliver on what they’ve promised investors, but that never quite seems to matter.
Players of videogames - whether gamers or otherwise - probably don’t notice all this, unless they keep their ear to the ground for industry news. After all, there are plenty of games out there, and plenty of companies (Microsoft, Epic) giving games away for free to pull in subscribers. But in the trenches, its a different matter. I haven’t seen the games industry this troubled in all my thirty years in the business.
Having plenty of games to choose from doesn’t mean the games industry is thriving… actually the opposite is often true. A surplus of games can be bad news for developers and publishers, because the markets are over-competed and it becomes even tougher to make ends meet. But then, this is the shape of all media marketplaces: the top few percent of the content makers earn half of all the money in the industry - this is true for film and TV as well as videogames. The difference is, when times are good, there are portfolio businesses like publishers who will go fishing for those top hits, providing funding for a wide range of projects in the process. When times are tough, well, everybody struggles…
Will we get through this rough patch? We will. But to everyone out of work right now, every company struggling to get through the wilderness, my heart goes out to you.
International Hobo Endures
As for us at ihobo, we’re ticking over rather well. I built the company with low overheads from the outset, and consultancy work is always ‘feast or famine’, so we always squirrel away nuts for winter. One of my favourite consultants came back to work with us after getting laid off from a certain large multinational, but she has now gone off to work in another industry. That’s a sign of how tough it is out there right now.
Still, we’re working on more games a year now than ever before at ihobo, and I’m greatly impressed at the standard of games that developers are creating! Many of the fabulous games we’ve worked on in the last two years aren’t out yet, but below are three recently released titles that we contributed towards.
Gamescom 2025
As mentioned, I will be at Gamescom this year! My meeting slots are already full, but if you’re in Cologne and want to meet up do let me know as there are always opportunities in the cracks and corners. Please email me or message me via LinkedIn if you’d like to catch up.
Until next time,
Chris and the ihobo team
Have you been laid off or lost a games company recently? Please let me know about it in the comments.