The Big Picture: What you need to know about the ongoing games industry reset

The games industry is undergoing a reset. That was the message of Gamescom Dev’s opening keynote, delivered by Amir Satvat, who until a few days ago was business development manager at Tencent, but is now general partner at 1Up Ventures.

Satvat is best-known for founding the ASGC, which provides help and advice for job seekers, and in a wide-ranging speech, he dove into the data behind the huge numbers of games industry layoffs, the shift of jobs to different regions, the concentration of revenue among just a few key companies, the changing nature of employment and games, and how the industry needs to adapt to face the current crisis.

He started with the bad news. Back in December, Satvat told GamesIndustry.biz that he expected around 7,500 redundancies across the industry in 2026, down from the roughly 9,200 in 2025. Following the huge waves of redundancies this year, Satvat has now revised that prediction to 14,666, not far off from the 2024 peak of 15,631. As of August 11, there have already been around 10,140 announced layoffs this year – more than for the whole of 2025.

Despite this, the total number of people employed in the games industry has barely changed over the past few years.

Satvat cited “very convincing” research from the Game Industry Coffee Chat (GICC) group indicating that roughly 750,000 people are employed directly or indirectly in the games industry, much higher than typically reported figures. “The reason this often gets very undercounted in my opinion is people don’t understand the extent of employment in China,” explained Satvat.

The upshot is that “even with all these cuts that have been going on,” said Satvat, “the industry is actually net positive in terms of employees from 2022 until now.” It’s only a small growth of less than 1%, but it is growth nonetheless. (Pre-2022, however, the industry saw explosive growth, adding around 150,000 net jobs over the five years from 2017.)

What’s happened over the past five years is a geographic transition. “Head count moving from basically North America to basically anywhere else,” Satvat said, with the move motivated not just by labour costs but also things like “government incentives and talent availability.”

Satvat said that over two-thirds of the layoffs he has been tracking have occurred in North America, pegging the total losses at 25,000 roles amounting to 15% of the workforce. California was hit hardest; in one period of 12-18 months, over 50% of overall layoffs were in that state.

Other regions, meanwhile, have seen a net gain of jobs. Asia Pacific (APAC) saw the number of available jobs increase by 10%, driven by 12% growth within China. The number of roles in Europe, meanwhile, has “basically stayed flat,” Satvat said.

Uneven revenue spread

One thing that’s confusing is why so many layoffs are happening at a time when the games industry is experiencing continued growth. The reason, says Satvat, is that growth is confined to a decreasing number of titles. “You have 50, 60% of the revenue being distributed to just the top 20 games.”

On mobile it’s increasingly difficult to acquire users, meaning the sector is now focused on monetization of existing players – while on PC, only 79 titles account for 80% of play time. “So the top line numbers look good, but … the numbers are much tougher when you go beneath the surface.”

Satvat listed 21 pressures the games industry is facing, including post-pandemic overhiring, changing player habits, longer development cycles, and rising production costs. But the two he worries about the most are discoverability pressure and AI uncertainty, because “to the best of my knowledge, no person has some master plan of how to have a solution to either of those two things, and not solving those two things could be a sinker that invalidates everything else I’m about to talk about.”

However, he said that above everything else, the geographic transition we’re experiencing is “the biggest driver of change in the industry.”

Decline in entry-level jobs

Satvat also pointed to a huge increase in the number of game-related programs at US colleges and graduates from these courses, at the same time as the number of entry-level jobs is declining. “Just in the US for example, there’s 400 colleges and universities that now offer credentials.

Looking at the growth in games and interactive media design completions over 14 years, it has increased fourfold. As more and more people in China pursue higher education, we can expect over 10 million individuals each year to own computers. This growth in education will lead to a significant increase in computer ownership in the country.

The Chinese gaming market presents opportunities for developers both within and outside of China. While the taste for games in China is similar to that in other regions, the increasing number of Chinese developers will bring about global competition that may have been underestimated by many.

In terms of growth opportunities, large user-generated content platforms like Roblox and UEFN show promise, but there is a concentration of revenue in the hands of a few individuals. The competition in the gaming industry is intensifying, with a significant number of new Steam releases each year, although the real level of competition may be lower than perceived at first glance.

The funding landscape for the gaming industry appears grim, with a decline in start-up funding and private equity and venture capital funding. Additionally, there has been a noticeable decrease in permanent AAA job roles, with more emphasis on external development and contracting.

Amir Satvat emphasizes the shift in the gaming industry towards a new normal, rather than a return to the old ways. He believes that engaging players early in the development process, offering flexible pricing, and improving job conditions are essential for the industry to evolve positively. Satvat also stresses the importance of treating game workers better to retain talent in the industry.

Recommendation number one to address the bleeding out is to stop it entirely,” emphasized the speaker.

Additionally, he advocates for significant changes in video game education programs. Candidates should be informed upfront about the slim chances of securing a job in the industry and should receive training that extends beyond just the games sector. Remarkably, over 60% of individuals assisted by ASGC this year found employment outside of the gaming realm.

Satvat believes that transitioning to smaller teams with limited budgets is a crucial part of solving the current crisis. He suggests that games should target specific niches rather than solely focusing on the most popular genres. This approach involves small teams thoroughly understanding their customers and becoming more adept at external development and contracting.

Regarding the next steps to take, Satvat’s suggestions include:

• Cultivating large, engaging ecosystems that foster lasting player connections through creation, participation, and social interaction
• Developing shorter, focused AA and indie games for players with limited time and disposable income
• Recognizing APAC, Eastern Europe, and Latin America as competitive regions where talent, cost, and growth are merging
• Providing tools and services for smaller teams to create competitive games
• Emphasizing community building through platforms like Discord, streams, and group chats, even for single-player games

“The direction of the industry’s evolution is not predetermined,” Satvat concluded. “This critical moment demands that the choices we make will shape our future.”

He presented two unfavorable scenarios. The first involves extraction, where mature market assets and intellectual property are acquired by financial entities for extractive revenue, leading to increased ownership concentration. The second scenario, dubbed ‘small ball’, envisions a proliferation of user-generated content driven by AI, resulting in numerous small entities with little concentration. Both scenarios pose challenges for individuals seeking team-building opportunities and sustainability.

Satvat envisions an industry comprised of disciplined, smaller firms capable of addressing the issues discussed in his presentation. As these firms grow, driven by continued consumer interest in gaming, the market will rebound.

This vision entails redefining success to prioritize profitability at lower sales figures by tightly managing development costs. By fostering a disciplined, smaller, and more stable ecosystem, the industry can pave the way for a brighter future.

Could you please rewrite the following sentence?