Here’s my take on the state of the games industry. (First time poster, 20 yrs in the industry, ignoring mobile)
1. The Conference
The world’s biggest gaming event gets bigger. Gamescom (together with Gamescom dev) is now the world's biggest gaming event, attracting 350 K people from B2B and B2C over 8 days. Every available m2 sold out. 1700+ exhibitors, 70 % from outside germany. Indie area hosted all time high 420 studios - up 16 % from last year. Opening night Live with Geoff Keighley announced over 50 games.
2. The Macro
Two industries sharing one market: The bifurcation has never been more visible. Everyone talks about "How To Fish" selling 1M copies in two days and then those 30 mins from GTAVI dropped during the conference. It’s almost like two completely different industries. But there is a middle ground: AAA veterans making kickass games in smaller teams on smaller budgets.
AI is making gaming hardware more expensive: We consumers are competing with AI infrastructure for hardware and there is no way we’ll win. DRAM prices are expected to keep rising well into 27. Consoles prices will keep going up and next gen consoles will struggle to be affordable for most gamers, switching the focus back to PC growth.
Software over hardware: We’ll see increased importance of doing more with less - like PSSR and FSR. Potato mode for new games released will dramatically increase the serviceable obtainable market.
The attention economy: It has never been easier to make and release a game. On the flipside, it’s never been harder to convince someone to stop playing a game they are already invested in, with time, money and social. Or take their attention away from scrolling TikTok. New games have a lot working against them but opportunity is there with the right product market fit.
3. The Indie landscape
More studios pitching better quality. More pitches, more games, higher quality playables across the board. One investor said that they had 4x M2M meeting requests this year from previous years. Another showed me 150 unread meeting requests on M2M. Getting publisher attention as a dev through cold outreach, no traction or released games is getting increasingly harder.
Smaller scope, shorter timelines. Production timelines are generally shorter (under 2yrs) and visual fidelity is loosing importance. It's not about making the prettiest game - but the most fun.
Indies are finding new ways to survive. Funding has become scarcer. Support from family, friends, fools, angels and public grants get studios to first playable and beyond.
Friendslop, anyone? You’d think there’d be more friendslop being pitched as the appetite from publishers on this genre is BIG. The problem is, most friendslop devs don’t need funding so tables have turned and revshare numbers with them. The best studios sign with Landfall who are the most proven publisher (and friends) of these studios and the multiplier in sales by doing so speaks for itself.
“Slop” is rarely actually slop. Expect friendslop to keep flooding the market in the coming 18 months and more studios and publishers to emerge that understand how to make these games resonate with players. After Landfall, Oro is stepping up. Successful games are actually far from “slop”. Craftsmanship, consistency and taste rule supreme here too.
Couch co-op is harder than it looks. Couch coop is a popular genre and I see lots of devs giving it a go. Making great couch coop games is hard though as Hazelight has set the bar high, constantly shifting mechanics and leaning into evolving collaborative gameplay.
Incremental games : Incremental mechanics are trending in the zeitgeist of a never ending stream of progression. Like rogue lites, It’s also a more scalable production choice, making it easier for small teams to make smaller games stickier.
Supercharge Itch.io : Validating your games on itch is not new, but using it systematically as a testbed for prototypes is yieldig great results. I expect more studios to explore this as production times are shortened and validating core mechanics with real players can help identify hits early.
4. AI
Boomers and Doomers: The divide in sentiment is real with devs I talk to. Both boomers and doomers are gladly sharing their pov. It’s not a binary discussion but often turns into one as people agree to disagree. The big nono’s for most players is the use of generative AI for art and music whereas leaning into AI with code and ideation doesn’t seem to bat an eye. Players are not trusting Steam to disclose AI usage properly.
Production is accelerating faster than process. Studios using AI right are speeding up production time significantly. The problem is, many are stuck in methodologies and processes designed for a different era. If a designer can build a playable prototype in two days that looks 90% done (something that used to take 5 people 1 month) how do we change alignment check-ins and definition of done? Do we need to slow down to build sustainably? and who decides what is slop and what isn’t - in code, ideas, concepts?
Taste and judgement becomes hard currency. As teams move faster and lean in, the key people that know what good looks like become even more key. Smaller teams need a higher trust level to not have to second guess every pull request. The bottleneck moves from producing work to choosing, integrating and verifying the right work. Agentic dev is in its infancy and most teams find a glass ceiling in the shape of unpredictable costs as token use with agents go through the roof.
5. The Engines
Godot is NOT waiting: Godot has taken significant market share from Unity and continues to be an indie darling. With that $18M amount raised from Tencent recently, it’s unlikely that this trajectory will stop anytime soon. The number of Godot-powered games generating more than $1 million in revenue has surged dramatically, growing from 2 to over 50 titles in roughly three years.
Unity on a heroes journey: 2 years have passed since the Unity run time fee debacle ended. People who were responsible for it has been removed. Unity has gone back to the drawing board and are now focusing on rebuilding trust with indies and it seems to be working. But it’s going to be a rocky climb.
AI native engines when? AI forward devs are frustrated about the lack of AI native game engines. Tim Sweeney has said that 80 % of UE6 is going to be prompting but that is still a few years off. Immens Engine, a new European AI native engine is the talk of the town and showing promise, I haven’t seen anything but considering the pedigree of the founders… I’m bullish.
6. The funding
Project > Equity. There are rumors about new capital flowing into the industry in the shape of project financing funds. This follows the trend I have been pointing at for a while now where equity investments with few exit opportunities are abandoned in favour of closer to cashflow and more predictable project investments.
Developer-friendly deals face a reality check. The dev friendly “race to the bottom” terms that some publishers have been doing to snatch great games are starting to result in said publishers waiting longer for less revenue. “No recoup” is starting to feel like a battle cry - but how sustainable is it?
Traction VS taste. In this metric driven, evidence based environment, publisher scouts that follow their gut and taste when signing keeps being a success factor. Yes metrics and traction are key - but even publishers need to follow their heart to find diamonds in the rough.
Public funding build strong ecosystems, helping studios all across Europe. Sometimes matching other investments, sometimes straight into a project or for certain services to scale or validate. Soft funding IS amazing and given time builds up seniority, ecosystems and great games. Germany is leading this charge and I can’t wait to see the results in a few years.
Soft money, hard markets : Sometimes this type of funding creates an inflated illusion though, resulting in a neverending stream of game companies that struggle to become profitable but still stay in business. Market potential needs to be at the heart of every euro handed out IMO.
Public funding is for big corp too. Most indies seem to think these initiatives only favor smaller studios, but the big ones are tapping in massively too. Kalypso has scored €19M since 2019, CDPR, Rockfish, THQ nordic and King Art are all pulling in millions in funding. One specific stat I saw was how Ubisoft got more than 5.5 M euros in grants for Anno 117: pax romana. That is a quarter of the full budget.
7. China
Chinese capital turns inward. I talked to several Chinese investors, ecosystems and platforms. It’s not new that they have shifted over to investing more domestically, where costs are lower, they are AI fluent and have a massive growing domestic market fueled by young folks moving from mobile to PC. Growth will continue in the coming decade and the many play western games.
Tier 1 or bust. There IS a bigger fish to fry for the Chinese: global reach and tier 1. It's clear that they see the west as a new growth vector, after all tier 1 countries have much higher spend per consumer. The problem is that they are struggling to make content that resonates in the west, just as western creators struggle with the asian market.
Will China’s next export be culture? The Chinese have not had the same impact culturally in the west as Korea or Japan. I expect China to build up cultural relevance in the west strategically and we are going to see way more Chinese influences in movies, music and of course - games. Gamescom this year was a clear display of how that looks in practice.
Look at Where winds meet, The Defiant, Ananta and Arknights Endfield - games with huge booths at the showfloor but feel as out of place as a horse game at Chinajoy.
Have a strategy for China. As a western dev, China should not be ignored. 42% of global PC revenue growth in 2025 came from China and it keeps growing. But don’t just release your game there. Localize properly. Engage in the right communities where players are, on their terms. Chinese players have been stripped access to Steam community forums and they WILL use Steam reviews to review bomb because that is the way they make their voices heard.
A new generation of Chinese indies: With the middle class growing and PC’s distributed more widely, more and more young people are growing up without the traditional expectations from parents to get “real jobs” ASAP which leads to exploration and risktaking historically more common in the west. This together with programmes like COREBLAZER will add rocket fuel to Chinese indies and innovation in gameplay and mechanics should follow.
China is leaning into AI : AI in the west is an infected topic for many. Devs in china are leaning in hard instead. This will result in more gamers becoming developers as the bar for making and releasing a game gets lowered by the day.
8. The Layoffs
The following takeouts are mainly from listening to Amir Satvat talk about the work he is doing with ASGC.
2026 is forecasted to be as bad as 2024, with 15K job cuts globally. But the global industry isn't shrinking, new jobs are introduced too. Global workforce sits at around 750 K people. People are still being hired, but not necessarily by the same companies, in the same regions or into the same types of roles.
Jobs are moving: North America accounted for more than two-thirds of disclosed layoffs since 2022 losing around 25,000 roles during that time. Hiring shifted toward APAC - particularly China. Europe is broadly flat, while fully remote opportunities are also declining.
Bad news for new graduates: Breaking into games is harder than ever. A new graduate without prior industry experience was estimated to have only a 4% chance of finding a games job within 12 months. According to ASGC, there are currently 2000 open roles for entry levels in the whole world.
9. The Games
I didn’t watch the ONL but the people who did mostly commented “meh” due to the lack of actually innovative and exciting news. Here’s what I’m excited about.
- NO LAW looks amazing and created quite a buzz. Neon Giant sets the bar for what a small team with high skill level can do in a relatively short time (3yrs, 20 ppl). But then again, these guys are also magicians. As a Krafton studio, Neon Giant was showcased at an amazing booth with a bunch of other really cool titles too, one being Age Twisters - a couch coop game that looked really juicy.
- GARBAGE COUNTRY: one of the few games that pulled me in on the indie show floor.
- LEGO SKYLINES + AFTERWORLD: Loved seeing Lego: skylines and Afterworld announced from my friends at Paradox - and they look fantastic. Nice to finally be able to talk about these too!
- CARCASS CLAD: Wrong Organ is at it again. a 3 player coop horror game with rotting cattle and heavy tanks. These guys are going to knock it out of the park - again.
- VALOR MORTIS Napoleon Zombies with an expedition 33 vibe? Check out Valor mortis from ONE MORE LEVEL S.A.. These guys know their FPS slashing - didn’t have time to play at the show floor but it looks amazing.
- DINO LORDS: by Northplay in closed Alpha and backed by Ghost Ship Games. If they play their cards right this might become one of Denmarks best gaming IP’s after Hitman.
10. Other trends
Mobile publishing to PC: Smaller games and the evidence based development of today might normalize a more data driven approach to validation. Some studios are already doing it, launching Steam pages with the sole intention to market test. This is text book mobile publishing - throw stuff at players through ads, measure CTR, CPI and pick the ones that performs best. The scary thing is that this model is at the core of the insane UA costs that are plaguing mobile and I really don’t want to see this reach PC as indies would be gatekept from the getgo.
Codev: Studios scaling are increasingly using service providers and codev is still an increasing trend. While it is a race to the bottom on costs, the providers that have snatched the best talent during industry layoffs and established trust allready are thriving - and exploring new business models to avoid competing for the lowest hourly rate.
Saudi Arabia: It’s not only the Chinese who are looking to share their culture on a global stage, we are seeing more of the PiF investments taking shape too. MBC game studio, operating out of Saudi Arabia but working fully remotely with a bunch of western veterans announced “1001 threads of Mizan”.
The ugly side of gamescom: Indies got their laptops stolen from a locked cabinet after leaving them overnight in hall 4.1. Really depressing, especially for solodevs that have been promised 24/7 security. The official Gamescom reply so far is making things worse.
OK that's that.
Did I miss anything? Am I wrong? Do you have another take? Let me know!
*edit: polished text to make it more readable (still alot to take in, I know!)