Players should brace themselves for the reality that publishers and corporations may persist in laying off skilled developers and disbanding entire studios as they seek new avenues for business expansion and financial growth, particularly in light of diminishing revenues. This viewpoint was expressed following the announcement of Tango Gameworks and Arkane Austin’s shutdown by Sony Santa Monica’s Alanah Pearce, who also addressed several prevalent myths in the process.
Many players think that if a studio puts in significant effort and creates excellent content, it will be secure. However, Pearce disagrees. A recent case in point is Tango Gameworks, with Hi-Fi RUSH becoming Microsoft’s most acclaimed game in years. Similarly, Warner Bros.’ Hogwarts Legacy has been a market sensation, selling over 20 million copies in its debut year, yet the firm’s leadership still deems the conventional game release model “risky,” opting instead to fully embrace service games.
Pearce’s interactions with the industry lead her to conclude that major publishers have a fixation on service games. Despite frequent failures, the balance between production costs and potential profits makes services highly appealing to them. Thus, companies persist in their quest for a formula that ensures stable, long-term revenue. Should this pursuit necessitate the closure of one or two studios, the expenses are simply written off, and the search for success resumes in other studios.
Pearce has observed a trend where manufacturers are not just competing for quick profits from players, but rather for their most valuable asset — time. Nowadays, people are immersed in social networks, online cinemas, platforms like TikTok, and instant messaging services, investing not only their attention but also their money. Large publishers aim to engage users for longer periods on their games or virtual platforms, encouraging them to spend their money there instead of elsewhere. This is why many publishers are moving away from single-player games; they view the one-time purchase model of a complete game as inadequate and obsolete. While such games will continue to be released occasionally, Warner Bros.’ experience with Hogwarts Legacy demonstrates that even successful titles haven’t persuaded the publisher to increase their production.
“The more time you spend on a virtual platform, the more likely you are to leave your money there or watch ads, and the publisher will receive information about your preferences along the way, which can also be resold. The traditional model of game distribution fundamentally does not meet this goal,” Pearce explained.
The role of game publisher managers is to generate revenue and satisfy investors. They are not malevolent figures who shut down studios and dismiss developers to upset gamers; rather, their duty is to trim the unnecessary, streamline operations, and oversee financial inflows. It’s strictly business, nothing personal. While Peirce might wish for corporations to exhibit more humanity, they are fundamentally driven by data, not sentiments.
In the realm of independent developers, or ‘indie’, the situation today is even more disheartening than in the higher tiers. Small studios struggle to secure publisher support and are shutting down in succession—many unnoticed. While there are instances of success and even miracles, they are rare compared to the overall scenario. Moreover, where a large studio may recover from a major setback with layoffs, a small studio is likely to face total dissolution.
Fortunately, not all large and medium-sized companies in the industry today are solely profit-driven sharks. For instance, if you appreciate FromSoftware games, you can rest assured that Hidetaka Miyazaki’s team will continue to create such games in the future. This is also true for the developers of Baldur’s Gate 3 and The Legend of Zelda | Tears of the Kingdom, as their work is not swayed by the widespread frenzy over Fortnite and mobile gaming. However, these studios and companies are exceptions and remain a minority. They follow their unique path, boast experienced staff, have a substantial fanbase likely to support them, and often possess esteemed franchises they can count on.
In conclusion, Pearce appealed to players to back their favored developers through game purchases. Regrettably, the prevailing industry trends and the widespread post-COVID market downturn are unalterable. However, the Sony Santa Monica staffer remains hopeful that major corporations will learn to avoid drastic measures—insisting that a change is necessary.
