Game dev in 2025: At revolution's doorstep… or not?
Unlike the previous year, 2024 has been a fairly slow one in terms of game releases as a result of the fallout of layoffs that affected many studios and developers during these past 2 years.
However, new developments are bringing a new wave of change that’s bringing new players in the market, but also hanging its future in the balance.
The Asian imposition
We’ve already seen a preview of what’s to come in the past edition of the Game Awards: Nearly all of the nominees for the Game of the Year award were mostly developed by studios in Eastern Asia, with Balatro being the sole exception, and that wasn’t even developed by someone in the United States.
By the way, I have to admit, this last edition of the show has been a bit nicer to game developers compared to the previous ones. But honestly, I think that they did a very half-assed job at addressing the controversies.
Particularly the “please wrap it up” one. That was brought up very quickly at the start of the show and was never mentioned again.
Something like this is a testament to just how awful it has been for Western developers. Balatro was for the most part there because there had to be at least an indie game in the mix.
China in particular has been sticking their panda paws on the market, and hard. It’s only a matter of time before they start to dominate it. Unlike the United States and Canada, East Asian economies function differently, so they haven’t really been subject to layoffs. In fact, Tencent has begun to purchase controlling shares of Western studios that had gone public like Riot Games, and recently they have been keen to buying Ubisoft, which could be a turning point for European AAA studios in the long run.
Game developers from China have also been doing remarkably well lately. MiHoYo has been featured in the Game Awards for the past 4 years with games such as Genshin Impact, Honkai Star Rail, and most recently, Zenless Zone Zero. Also, Black Myth: Wukong has been a huge commercial success for China’s first dive into the AAA market.
While I wouldn’t say that China is going hard on the AAA market for now, we’re definitely going to see more games of such scale. China is going to be more ambitious and its current trend of transitioning to the console market will speed up this year.
Is this a good thing or not? It depends on how you see Chinese competition.
Another important factor is the upcoming release of the so-called Nintendo Switch 2, which I predicted would come not before this summer. From the current officially disclosed data we know, it’s going to be backwards compatible with the original Switch and will use the same Nintendo Switch Online service, although it’s not clear if it will have cross-play with the original console.
Combined with the fact that the Japanese economy has been steadily improving, this is a good moment for Nintendo to strike big, bringing back a lot of interest into the Japanese videogame industry, since there’s a strong correlation between the success of a console and local game development studios’ reach.
Considering the huge fiasco of the PS5 and Xbox Series X, it’s all in the Big N’s hands to maintain the future of the console market for the next generation. The other big player here is —shocking but unsurprisingly— Valve with the Steam Deck, which is currently competing with its clones and the Nintendo Switch. And those aren’t technically consoles, but glorified PCs!
The stagnation of generative AI (yes, that’s a thing)
You may have heard that gen-AI technology was going to revolutionize society as a whole for the past 4 years. But just as any new craze, it eventually has started to slow down in adoption despite its recent advancements.
Many people, myself included, are reading the tea leaves and are starting to believe that the AI bubble burst is imminent. So you’re probably gonna expect something very similar to what happened with the games industry in the last two years, but on a much larger scale. Potentially as devastating as the dot-com bust.
This could bring some opportunity in Europe. Videogame studios have been pretty affected by investors flocking off to AI companies, and videogames could pose as a good alternative for them to invest in again.
I can’t help but think that investors trust videogames only whenever there is a crisis looming or ongoing, as if the videogame industry was some sort of a safety net for them.
Then again, high risk for a slow ROI? I don’t blame them.
This, however, could also be a double-edged sword, particularly outside Europe. After many consecutive failures (don’t forget crypto and Web 3.0), investor sentiment could turn very sour, and may not be willing to drop a dime on anything tech-related for a while.
Worst of all? The videogame industry is somewhat linked to all this.
The GPU market is in danger
Spurred by both the crypto and the generative AI booms, Nvidia has reached outlandish share prices. Its market cap as of January 2025 is 3.7 trillion USD (a billion for those who use the long scale). That’s more than 10% of the GDP of the United States, and it’s getting extremely close to the levels reached by Lehman Brothers before the 2008 financial crisis. Suffice it to say, this is extremely overpriced.
Economists are still debating whether this is a bust or the start of Nvidia consolidating itself as a tech giant, but I see this as something inevitable, as Large Language Models and other AI technologies depend heavily on GPUs for matrix multiplication and parallel processing for machine learning, so much so that Nvidia has began to create products specifically for these use cases. Like with all very risky investments, it’s all speculative.
Why I bet $250,000 that Nvidia will crash (15:14)
The economic situation of Nvidia described here has gotten a bit better since this video, though.
If Nvidia crashes, not only the game industry will take a hit, but the tech industry as a whole. This could be troublesome for Nintendo, as they rely on Nvidia for the Switch’s GPU, and it seems like it could be the same for its successor. It may not matter much if units are already in production, however.
Honestly I’m a bit torn about Nvidia crashing. Their GeForce cards are generally not well regarded within the Linux community and their overuse has been a major source of controversy by environmentalists because of their power consumption.
But I don’t want the games industry to be going down hard like this, either. We’re already having bad times with consoles, and I wouldn’t like at all the PC market following suit.
The takeaway of this year
If 2024 was the year we screamed with the layoff nightmare, 2025 is probably going to be the year we hold our breaths. There is a lot of uncertainty in the air, particularly in the gaming hardware market, but there is still the hope of the Asian industry in the realm of software, particularly in the mobile and console market.
If you are a gamer, you may want to consider switching to PC or either Valve’s Steam Deck or Nintendo’s Switch 2, and be more patient to Western developers as they struggle in these hard times. You’re going to expect new big names in your games store, particularly Chinese ones. And probably get an Radeon GPU if you are concerned about Nvidia’s future —although I’d bet that AMD would also be in big trouble if the green team goes down.
If you are a game developer, though… I would consider looking for other opportunities outside of tech, just in case the tech bubble bursts. Even in Europe, it’s going to get icky. But if you are still insistent on working on games, you might want to start learning Mandarin.
