Economic instability and persistent layoffs have left a mark on the videogame industry, with experienced voices now raising substantial concerns about its current direction. Mark Darrah, formerly of BioWare and a key figure behind iconic titles such as Baldur’s Gate, Dragon Age, and Anthem, has described 2025 as an even more uncertain year than its predecessors. Many developers, workers, and investors are questioning whether the growing focus on live service models provides a sustainable future or simply deepens ongoing volatility. The widespread closure of studios and recurring large-scale layoffs have left many industry workers apprehensive about what comes next. In particular, the anticipation surrounding Grand Theft Auto 6 stands as a bellwether moment for the entire industry.
Similar reports throughout 2023 and 2024 highlighted an already turbulent period, with numerous layoffs and repeated studio closures cited as warning signs. Ongoing reliance on high-budget live service launches failed to deliver consistent success, resulting in significant financial losses for several publishers. Despite earlier hopes of stabilization, new accounts maintain that the situation has recently worsened, with increased caution among investors and growing skepticism among industry followers over the efficacy of the prevailing business models. Repeated setbacks with titles like Anthem and continued shut-downs are consistent with Darrah’s recent assessment that industry woes have deepened rather than abated.
Why Does Darrah See 2025 as Worse Than 2024?
Mark Darrah suggests that expectations of a turnaround have proven misguided, stating that, although insiders saw early signs of renewed confidence among investors by late 2024, conditions have deteriorated. He indicates that speculative investment in new projects has declined rather than increased, with risk aversion becoming more pronounced among those financing early-stage development.
“Last year, it was survive til ’25,” Darrah commented. “This year has definitely put the lie to that, because it’s more brutal than last year from everything I can see.”
How Do Live Service Games Affect Industry Stability?
Live service titles reportedly drive much of the current instability. Darrah notes that publishers are encouraged by the potentially lucrative rewards of a small number of successful live service games, preferring a model in which fewer but more lucrative products dominate the market. However, he points out this approach has proven to be unpredictable and high-risk, citing failed launches and ongoing losses associated with expensive projects.
“I don’t think anyone who plays games really wants the industry to look like that,” Darrah said. “But from a business perspective, that’d be awesome.”
Could Recent Game Successes Prompt Industry Shifts?
The performance of Clair Obscur: Expedition 33, developed on a comparatively lower budget, is identified as a potentially meaningful development, suggesting that there is room for successful alternatives to the live service mega-projects. Nevertheless, industry observers regard the impending release of Grand Theft Auto 6 as a crucial juncture. The scale of its commercial performance is expected to heavily influence publishers’ strategies—whether they continue to prioritize large-scale live service investments or reassess their approach in favor of varied, possibly less risky projects.
The discussion around industry strategy remains fraught with uncertainty, as publishers grapple with the high risk-reward profile of live service game investments. Failures of major efforts such as Anthem and Concord have not deterred further ventures of similar scope, even when faced with significant financial setbacks. Upcoming major releases may provide the industry with needed clarity about the future direction of development and investment priorities.
With ongoing labor challenges and persistent skepticism toward the financial viability of consistently large live service productions, stakeholders may benefit from broadening their criteria for assessing new projects. Monitoring surprises like the positive reception to medium-budget titles, and closely analyzing audience preferences when large-scale games are launched, may help publishers and investors make more durable decisions. For those considering entering the industry or developing new titles, diversifying game genres and business models instead of relying predominantly on live service strategies can mitigate potential losses. As demonstrated by recent years, a balanced approach involving both established franchises and innovative, smaller-scale projects may provide a safer footing during times of fluctuating market stability.
