Gamescom’s clues about a game industry recovery | The DeanBeat

Gamescom's clues about a game industry recovery | The DeanBeat


With more than 30,000 layoffs in the past 2.5 years, the game industry’s resilience and adaptability has been pushed the breaking point.

But at Gamescom 2024, the big expo for video games in Cologne, Germany, I saw signs of life and recovery. I walked 73,363 steps, or 31.7 miles, in the last seven days at Gamescom, Devcom and IEM Cologne. I ran 33 stories during the week. My sleep numbers were not so impressive. And I barely scratched the surface of the 230,000 square meters of space that was available to see across all of Gamescom.

In a number of meetings, game CEOs have told me it’s hard to raise money now. During the intro to Opening Night Live, celebrity showman Geoff Keighley acknowledged it has been a difficult year for game makers. But his show in front of 5,000 live audience members was inspiring as it highlighted so many good games to come.

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Geoff Keighley at Opening Night Live.

I don’t want to overstate the state of a recovery before it’s real because we have all been thrown for a loop so many times. And yet, Gamescom typically gets more than 300,000 attendees. This year, when I saw a wall of people advancing toward me and the huge crowds, I figured, “I think we’re going to be OK.” These people were all at the event out of a love for gaming.

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I felt like I saw the first bits of good news before the show. Amir Satvat, creator of the Game Jobs Workbook, calculated that September is the month where we should see more hiring than firing in games for the first time in a long while. Satvat has helped more than 2,400 people get jobs in gaming during the past year or so. Based on his data, he expects there will be a slowdown in layoffs, with second half layoffs hitting 2,000 or 3,000, compared to more than 11,000 in the first half.

Stephan Reichert, head of Devcom.
Stephan Reichart, head of Devcom.

And at Gamescom itself, we could see that the good games were there, as were the crowds of fans and cosplayers. After acquiring Activision Blizzard for $68.7 billion in 2023, Microsoft showed up with more than 50 games on display in the cavernous Hall 7 at Gamescom where thousands of fans waited to see ambitious titles like Indiana Jones and the Great Circle, a game that is squarely targeted at mainstream core players. And Call of Duty: Black Ops 6 looks pretty solid in its previews.

Martin Sibille, Tencent’s head of central publishing for the Level Infinite label, said in an interview that while the past year was pretty rough, he also is hopeful about signs of a revival in the game industry. Level Infinite showed up with 20 games at the Gamescom event, which itself had more than 1,400 exhibitors in Cologne, Germany, a figure that was up 15% from a year ago.

Just ahead of Gamescom, the Devcom game developer event drew more than 5,000 people (up 45%) to a business-focused game developer event. And, before that, the Intel Extreme Masters esports event drew 39,000 people to the tournament known as The Cathedral of Counter-Strike at LANXESS Arena. And even with a war raging in its country, Ukraine’s game developers showed up at Gamescom. The Saudi Arabian esports event, the Esports World Cup, also drew large numbers of fans.

Elena Lebova of GDEV at the Ukraine booth at Devcom.
Elena Lebova of GDEV at the Ukraine booth at Devcom.

This is the first signal that some kind of recovery is underway in gaming: people are showing up. Gamers are coming to the events, as are game developers, and players are playing titles like Black Myth Wukong, the hit PC and console game from China that exploded this week on platforms like Steam.

At the show, there were plenty of games to see like Funcom’s Dune Awakening and Pearl Abyss’ Crimson Desert. These titles are being readied for launch and they mean that we’ll likely see fresh titles coming in the next year after years of reloading.

Christina Seelye, CEO of Maximum Entertainment, said in an interview with me that she also sees signs of recovery, though she is also cautious about drawing too many conclusions now. Rather than invest in just a few big titles, Seelye’s focus is on indie game devs and having a healthy variety across a portfolio of games.

Christina Seelye is CEO of Maximum Entertainment.
Christina Seelye is CEO of both Zordix Game Group and Maximum Games.

“I think by the end of the year, we are at the end of the significant reductions,” said Seelye. “I think it’s mostly going to be a stabilization, and we won’t really see new hiring until we see the capital markets ease up a little or interest rate changes. If you start seeing that more money is flowing into the system, you can think of it as rising again.”

Seelye said investor conversations have changed. Earlier, they asked if the company was focused on capital expenditures and controlling budgets. Now it’s more like how much of your cash is available. We have to all live within cash constraints in the industry, Seelye said.

Seelye actually believes all the cutbacks in gaming means that we’ll see a drop in the number of games finally, for the first time in a long while, where the numbers show that money isn’t free anymore. The decline in games shipped may show up in 2025 or 2026, she said.

Maximum Entertainment will come out with fewer games, but Seelye thinks it is wrong — at least for her company — to come out with games with much bigger budgets. Rather, she thinks that finding a market fit on games that have realistic budgets and realistic audience expectations is a must.

Ievgen Grygorovych (right) and Maria Grygorovych lead the Stalker 2 team at GSC Gameworld.

For the definition of resilience, just look at Ukraine’s game companies like GSC Gameworld, which has been working on this version of Stalker 2 for the past six years.

“We’re an independent developer,” said Ievgen Grygorovych, game director on Stalker 2 at GSC Gameworld. “We have a lot of limitations that other developers might not have. We have all the situations connected to the war with Russia. With all these difficulties, we’ve still come to this point where we’re near the release. It’s been a long journey.”

GSC Gameworld stayed on its path and didn’t cut corners on Stalker 2. For instance, the team didn’t proceed with the game until the writers for the narrative felt like they got it right. It took six different scripts to before they proceeded, despite pressures to move faster.

“In game development you really need to love the process,” said Maria Grygorovych, creative director on Stalker 2 at GSC Gameworld. Real satisfaction will come after those six years. You need to love the process that leads up to that. You could have a couple of children in that much time. If you really need to have that satisfaction right away, you might not want to go into game development. You need to be a patient person.

Asked about the impact of the war on the team and the game, they got emotional.

TIevgen Grygorovych id, “The short answer is that everything changed. But it’s different when you look at the team’s personal lives, our personal lives, how we live, our goals, our interests. For the development, it was a very hard moment. But we were prepared. We had prepared everything so as to not let this affect, as much as possible, our team’s lives, their families’ lives. We were ready for evacuation before the war started, and we did it.”

Maria Grygorovych added, “Still, it’s a totally different life from the day before the war started. Emotionally, for everyone – everyone in Ukraine, everyone on our team – it’s a point where you understand will never be the same again. At some points it’s hard to work, emotionally. You see tragedy happening every day, every couple of days. It’s a usual thing for missiles to hit Kiev near our office. It was really scary in the beginning, and it’s still really scary now. You can’t adapt for moments like that.”

I tried to get some advice from Tim Willits, chief creative director at Saber, about how game companies and game startups should operate in this environment.

Tim Willits, chief creative officer at Saber, at Gamescom.
Tim Willits, chief creative officer at Saber, at Gamescom.

“We’ve focused on affordable territories in the world. Let me tell you, you can work with a team in any part of the world, and they’re going to do just as great as a team in California,” Willits said. “That’s an example. You focus on the strengths of the team. On some of our projects, they don’t need to sell 4 million copies to be profitable. They just need to do well. We’re very clear in our projections. We’re very clear on what we’re burning every month. We’re very clear on our checkpoints. We manage and run a tight ship.”

Willits added, “Look at the projects we’re making. It’s ridiculous. They’re all kicking ass. You make smart decisions with teams that are the right size and have the right talent.”

Ian Proulx is CEO of 1047 Games, maker of Splitgate 2.

I also interviewed Ian Proulx, CEO and creative director of 1047 games.

“I’m actually very optimistic about the market, for my own company,” said Proulx, whose company just announced its Splitgate 2 game.

The company had a brilliant idea to bring portals (inspired by Valve’s Portal) to multiplayer games and it raised $100 million at a $1.5 billion valuation in 2021. That turned out to be more than enough money to get Splitgate 2 to its beta, which was recently unveiled.

Cosplay at Gamescom 2024.
Cosplay at Gamescom 2024.

1047 Games hired more than 175 people to bring its original intellectual property to a more ambitious state with the sequel. The staff is spread out across locations like the Bay Area, Seattle, Los Angeles, Montreal and Germany. With remote work, it’s possible to have a lot of locations.

“Finally, we’re in really good shape, which has been great for hiring. It also means there has been less competition coming out,” Proulx said. “A lot of people look at the FPS market and say it looks so crowded, so competitive. But we’re playing the same games we played two or three or four years ago. From what I’ve seen of the recent games that have come out, gamers are desperate for something new.”

Most of the games coming aren’t prepared for the big task of doing live ops, he said. Lives ops is the reason Proulx hired so many people.

Nate Mitchell is CEO of Mountaintop.
Nate Mitchell is CEO of Mountaintop.

“We have a content plan, a live ops plan,” he said. “I want to make sure we deliver the best multiplayer experience ever.”

Few other venture-funded game startups have been able to amass so much money as 1047 Games. Rather, many raised small rounds that got them off the grounds on the assumption that they could raise more rounds later if they hit milestones. But as the market slowed down and layoffs accumulated, the venture funds pulle back and many companies found they could not raise a second or third round.

Meanwhile, earlier this month, Mountaintop showed off its brand new shooter game, Spectre Divide, after raising $30 million in funding a while ago. Nate Mitchell, ex-Oculus cofounder and CEO of Mountaintop, said in an interview that venture capital funding for new games has been a good thing to the industry as it can foster creativity and bring new ideas and games to market. In an effort to turn Spectre Divide into a “ten-year game,” he said the company is investing heavily in live ops as well.

Mitchell said startups should be “focusing on a genre you know and love and care about is step one. Stick to the core, or maybe 80%. Something like we did with [an innovative shooter game].”

He added, “Then put your effort into that 20% unique evolution. When you can get that right, it’ll feel more like 80%. But the mindset–focus on a few major needle-movers that really change the game versus trying to make every aspect of the game completely unique. That’s a massive undertaking that requires a massive team. It’s not even what players necessarily want. It’s not necessarily the best game. Stay focused on what matters, put effort into that, and then thread it through the game.”

Mitchell said that he is glad that his company could be considered among those that have proven that the game venture capital model works, where game VC money enables a company to come up with original intellectual properties because the triple-A game studios are too cautious to do it.

I asked him if he was worried about having too much competition.

Mitchell said, “Not at all, really. That might sound crazy. But the products I’ve worked on before faced a similar question, and it’s never come to fruition. When I was working on Valorant, Counter-Strike was the dominant tac shooter. Valorant came out and grew the market. CS hit new peaks. When I was on Apex, PUBG seemed to have it, and then Fortnite came out of nowhere. With those two in control of the market, was there really room for another one? And then Apex and Warzone both came out. There was room for two more. The key, if you look back at those, is they’re all solving a different need. That’s why we’re excited about 3v3, duality, and ADS gunplay.”

Stephan Reichart, head of Devcom, was also encouraged by the large crowds that came to the brand new Confex venue within the Gamescom complex.

In sum, I don’t want to get too optimistic yet. But it was good to see happier people at this year’s Gamescom and Devcom events.



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