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If there’s one sign we can take from the unprecedented number of layoffs across the games industry these past two years, it’s that we’re in the midst of an identity crisis. The industry isn’t in any danger of crashing, but publishers and studios are now being forced to adapt to the new market in ways they may never have had to before. The two major strategies seem to be falling back to the safety of established IP, and rolling the dice in the hopes of launching a successful live-service game. The latter has been attempted by just about every big player in the space, from EA to Xbox, but very few have managed to siphon off a big enough audience from the established titles to last any meaningful length of time.
Recent layoffs at Bungie are just the latest sign of that. The Destiny 2 studio just cut 220 jobs in the wake of its successful and critically acclaimed The Final Shape expansion. Even if you manage to beat the odds and create a popular live-service game, it’s becoming clear that that’s still not a golden ticket that publishers can rely on.
High-risk, low reward
It’s nothing new in the games industry for big publishers to chase the latest trends. Live-service games are just the latest example, albeit a more broad one since it is more a business model than a genre. Instead of trying to recapture an audience with sequels and new titles every few years, these games hold an audience almost indefinitely and earn a consistent drip-feed of income that amounts to more profit in the long run.
On paper, it makes sense for every publisher or platform holder to want a piece of this pie. However, we’re now seeing the harsh reality that even the most successful live-service games are not immune to the same issues plaguing the industry at large. PlayStation believed in this path so strongly that it outright purchased Destiny 2 developer Bungie, as well as Firewalk Studio prior to its debut title Concord being released. While the jury is still out on the latter amid mixed feedback from its beta, Destiny 2 was held as one of the few examples of a live-service game that could go the distance. It wasn’t always a smooth trajectory, but no game reaches 10 years of support without doing something right.
PlayStation no doubt had high expectations for Bungie, Destiny, and the upcoming Marathon when it purchased the studio. Instead of that investment leading to an “easy” stream of income, all signs are pointing to the opposite. Bungie had to lay off hundreds of staff members after launching one of its finest expansions, The Final Shape. The studio was already recovering from a wave of layoffs prior to this one, too.
Just like with traditional games, the development treadmill for new content is only taking more time and money to craft while seeing smaller returns. In fact, the pace at which these games need to feed its audience could very well be even more demanding than the traditional game development cycle. And that’s not even touching on employee morale and crunch.
Even the undisputed king of live service, Fortnite, isn’t immune to the changing market. Last year Epic had to lay off over 800 employees with CEO Tim Sweeney stating: “For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators.” If the game all these publishers are looking to emulate can’t even turn a profit, what hope does a game have that has to compete with it?
It might take a while yet before the industry at large realizes that live-service games — even the ones that beat all the odds and find an audience — are not turn-key operations. The gamble doesn’t end when the game is finished. They are rolling the dice with every update, while also competing with every other game trying to do the same waiting for the other to stumble. Is it really worth it for the hope that one game is successful enough to beat the odds?
In the days when the first live-service games felt like they accidentally fell into that model, there was a lot of excitement and success. It was a novel idea that seemed to benefit the players and developers. However, now that so much competition is flooding that space in a race to offer more for less, we may have reached a breaking point. We are beginning to see that even a live-service game that can stand out and capture a passionate audience isn’t the magic bullet some think it is. In fact, they may be the riskier venture in the current climate. Destiny 2 is a sad example of that reality — and hundreds of workers are paying the price.
