With all the terrible news of layoffs and that the games industry is in a dire state, some people online have said a crash is the only way to fix things. It won’t.
To understand what’s actually happening here, I would recommend you read some of my previous articles about the layoffs and how that is tied to budgetary overspending, and where that investment comes from.
The important thing to understand here is that games are not really funded by the money they directly generate from gamers, and instead, that investment comes from a “money layer” comprised of private equity and high-value investors.
This means that the leverage that gamers think they have over the industry, as they are the ones buying games, is not the case. As the money from gamers is just the return on an investment, with the actual investors having the real control.
Huge Development Budgets Opened The Door To People Who Don’t Care About Games
The first big issue is that the money layer doesn’t care about gaming. The money layer only cares about making money from games.
This is why the alignment between gamers and the game industry is so at odds, as the industry is not being run for gamers anymore.
The lack of understanding about games and how they’re made is also why we’ve had so many layoffs globally, and yes, Japan has been impacted by layoffs too, although the mechanism for that is a little different from that in the US and Europe.
All of this amounts to a situation where people who have control over the games industry don’t understand or really care about it.
A Crash Will Only Create A Massive Asset Buy Up By The Money Layer
The reason why a crash won’t ‘reset’ the game industry is that now that the money layer is involved in the games industry, a crash would just result in an asset buy-up on a massive scale.
If anything, the money layer is hoping for a crash, because that will hugely devalue gaming intellectual property and allow the industry’s assets to be bought up extremely cheaply.
In short, if a crash happens, the money layer will have even more control over gaming and will actually make the situation much worse for gamers.
What’s The Solution Then?
Firstly, trying to increase the chances of a games industry crash should be avoided.
Secondly, a long-term solution is the creation of new game publishers staffed by people who actually play and know a great deal about games.
Sadly, the current publishing framework cannot be changed from within, as the demand for games is so high, and that affords a great deal of leverage to executives at publishers. The result is that they become complacent and territorial over their domain of influence.
The only way to change this is to have new game publishers that are staffed by new, capable people, forcing the current slate of game publishers to step up to the competition.
The only issue here is that the investment for these new publishers also needs to come from outside the current pool of private equity and other high-value investors. Ideally, the investors need to care about gaming and play them too.
Either way, a crash will not fix any of the issues that the game industry now faces and will just make everything much worse for gamers.
Follow me on X, Facebook , and YouTube. I also manage Mecha Damashii and am currently writing a regular column in Japanese about mecha games for Game*Spark.
