The video game industry at a crossroads

Summary

Consider This: The Video Game Industry at a Crossroads

Release Date: April 5, 2025
Host: NPR's Asma Khalid
Reporter: Vincent Akovino

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Introduction

In the April 5, 2025 episode of NPR's Consider This, host Asma Khalid and reporter Vincent Akovino delve into the current state of the video game industry, highlighting its immense growth, internal challenges, and the pivotal role of independent developers amidst a landscape dominated by colossal studios.

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The Expanding Video Game Market

Asma Khalid sets the stage by underscoring the staggering revenue of the video game industry, which amassed approximately $187 billion last year—surpassing the combined earnings of the film and music industries. This financial boom has traditionally been fueled by major developers producing blockbuster titles.

"The video game industry is massive, probably way bigger than most people think."
— Asma Khalid [00:37]

However, the tide is shifting as smaller independent studios begin to disrupt the market. Vincent Akovino cites New Challenger and their upcoming release, Beatdown City Survivors, as prime examples of indie success.

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Big Developers vs. Independent Studios

The conversation pivots to the contrasting dynamics between large-scale developers and indie studios. Akovino points out that some of the industry's biggest hits originate from teams as small as a single individual, illustrating a significant shift in power dynamics.

"Some of the biggest hits in the industry are coming from developers that are, you know, a team of one person."
— Vincent Akovino [01:09]

Sean Allen Alexander, creator of Beatdown City Survivors and former Rockstar Games employee, embodies this transition. He critiques the industry's volatility, attributing delays in big-budget game releases to ballooning costs and poor management.

"Why not make 10 games in the span... why don't you make 10 games and make different games?"
— Sean Allen Alexander [05:13]

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Financial Pressures and Project Sustainability

A significant concern highlighted is the astronomical budgets of major games. Taking The Last of Us Part II as an example, which reportedly had a $200 million development cost, Akovino discusses the precarious balance between investment and profit.

"If your game makes $500 million in return, but it doesn't always do that. And that's where the problems start."
— Vincent Akovino [05:57]

The risks are evident when large projects fail to meet expectations, leading to abrupt shutdowns and massive layoffs, as seen with the collapse of the high-budget game Concord.

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AI Integration: A Double-Edged Sword

A central theme of the episode is the role of Artificial Intelligence (AI) in game development. At the Game Developers Conference, Akovino observed divergent views on AI's impact.

Positive Perspective:
Elvis Lu from Tencent showcased a demo where AI enhances gameplay through sophisticated voice commands, allowing players to interact seamlessly with in-game elements.

"Voice control or voice command becomes the only efficient way to communicate with an AI."
— Elvis Lu [07:45]

Skeptical Perspective:
Conversely, independent developers express apprehension about AI potentially undermining creativity and job roles. Keita Takahashi, renowned for Katamari Damacy, voiced strong reservations about generative AI's influence on artistic aspects of game design.

"AI is just the business stuff because they just want to make more money."
— Keita Takahashi [09:14]

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Future Outlook and Industry Enthusiasm

Vincent Akovino reflects on the industry's future, emphasizing the need for widespread enthusiasm to navigate the evolving technological landscape. While major tech firms advocate for AI-driven advancements, the broader gaming community remains cautious.

"The most interesting question facing the video game industry right now, to me, it is the AI question."
— Vincent Akovino [10:20]

He draws parallels to past technological shifts, such as the rise and fall of VR's popularity, suggesting that only with collective support can significant innovations take root.

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Conclusion

The episode concludes by reaffirming the video game industry's pivotal moment, balancing immense financial success with internal challenges and transformative technological advancements. As the sector stands at this crossroads, the interplay between big developers and indie studios, coupled with the integration of AI, will shape its trajectory in the years to come.

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Produced by: Noah Caldwell
Edited by: Adam Raney and Courtney Dorning
Executive Producer: Sami Yenikin

Transcript

[Asma Khalid]

You're walking down a city street. You turn a corner and you're swarmed by zombies. You fight them off with a folding chair. Explosions rattle the street around you.

[Vincent Akovino]

You're basically beating up enemies in a dystopian version of New York City. And there's all this kind of like ooze spilling out of this onto the street.

[Asma Khalid]

That's Vincent Akovino, All Things Considered producer who covers video games for the show. This game is called Beatdown City Survivors and it'll be released later this year.

[Vincent Akovino]

So it's like a really old school looking game. It's all like pixel art that's reminiscent of retro kind of video games and arcade games.

[Asma Khalid]

The game might look retro, but it says a lot about this current moment in video game development. The video game industry is massive, probably way bigger than most people think. It brought in around $187 billion in revenue last year, which is more than the film and music industries combined. Much of that money was made by big developers creating big games. But more and more small independent studios are disrupting the space. Studios like New Challenger, which is making beat down city survivors.

[Vincent Akovino]

Some of the biggest hits in the industry are coming from developers that are, you know, a team of one person. It kind of goes to show the power dynamics right now in the industry where small independent developers do have the power, power and potential to make big video games without the risk that comes with making a giant multimillion dollar project as a big studio.

[Asma Khalid]

Consider this. The video game industry is facing a host of issues. Massive layoffs, the advent of AI games that take years to be released, and that schism between big and small developers. Today for our weekly Reporter's Notebook series, Vincent Akovino takes us inside this evolving world. From NPR, I'm Asma Khalid.

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[Asma Khalid]

Learn more at plus.NPR.org it's consider this from NPR. Every year, tens of thousands of video game insiders gather in San Francisco for the Game Developers Conference. New games are demoed, programmers hold tutorials, awards are given, and the big existential questions about the industry are debated. In other words, paradise for a video game journalist like Vincent Akovino, who recently covered the conference for npr. He sat down with All Things Considered co host Scott Detrow to unpack some of those big existential questions, starting with the tension between the huge game developers and the small independent studios like the one that made Beatdown City Survivors.

[Scott Detrow]

Why is this the game that you flagged that you wanted to start this conversation talking about?

[Vincent Akovino]

So I find the creator of this game and his story, Sean Allen Alexander, absolutely fascinating. Years ago he worked for a major video game company. So he was on the other side of the industry, big budget games. Now he's making his own games. And he sees the industry right now at a crossroads. He looks around and says, why are we seeing so much volatility in this industry? Why are we seeing the mass layoffs that we're seeing right now? It takes an incredibly long time for big budget games to be released, games people are waiting for a long time for. He worked for Rockstar 13 years ago. Rockstar Games is the creator of Grand Theft Auto. It's been that same amount of time since a Grand Theft Auto game came out.

[Scott Detrow]

It's been that long.

[Vincent Akovino]

Yeah.

[Scott Detrow]

So there's been more than a decade of this?

[Vincent Akovino]

More than a decade.

[Scott Detrow]

Is that just because it's so ambitious or because it's ballooned or what's the clear answer?

[Vincent Akovino]

Well, that is kind of the question if you ask someone like him. He says it's a combination of these ballooning budgets and also bad management strategies and everyone just wanting it to be, needing it to be a billion dollar game. He says, why not make 10 games in the span of like, how many, however many years it takes to make one large giant game.

[Sean Allen Alexander]

Like, we're all taught not to put all your eggs in one basket. I don't know. You look at indie games and we're putting out a lot of good stuff. And it's like, you can make 10 games in the span that you make these one game. Why don't you make 10 games and make different games? It's boring.

[Scott Detrow]

So you've got all of these people like that creating these really interesting games. But at the same time you have a handful of massive companies spending what, like hundreds of millions of dollars developing the big ten games.

[Vincent Akovino]

Yeah. So video game budgets are kind of like this closely guarded secret. But we know that for example, the Last Of Us Part 2, Last of Us has been adapted to like an HBO series. So a lot of people are now familiar with that game. The second game in the series cost around $200 million to make. And that's fine.

[Scott Detrow]

Like movie level budgets.

[Vincent Akovino]

Oh, beyond, yeah, beyond. Because the, these people have often literally thousands of people who work on them. That's fine if Your game makes $500 million in return, but it doesn't always do that. And that's where the problems start. Like for example, last year there was a game that came out called Concord. And that game had a big budget, a lot of expectation and it absolutely flopped. And in one month they shut that game down. Multi hundred million dollar project most likely.

[Scott Detrow]

They just shut it down. You if you can't play it, you can't play it.

[Vincent Akovino]

They refunded.

[Scott Detrow]

It's all interactive online playing mostly now. It's not like you to go back to that 16 bit era. You get the cartridge, you put it in, you've got the game forever.

[Vincent Akovino]

Exactly. And I think also because these games require constant development, if the projects shrink in size or if they're not successful, then they have to let people go.

[Scott Detrow]

I think that all gets to AI in this industry. What's the best way to frame how developers are using AI right now? And I imagine it's two very different answers when you talk about those two sides of the industry.

[Vincent Akovino]

So I talked to a lot of developers at the conference as well who have very different opinions about AI. One demo I saw showed off a Call of Duty kind of game. And this was a demo that was given to me by Elvis Lu at Tencent, which is the biggest video game company in the world. They're a Chinese company. And basically the demo shows you interacting with your squad mates. So you speak to your squad mates and they will listen to you and interact with the environment in very specific ways. So if you say like go behind the red car or the rust colored car, they'll know exactly what you're talking about and they'll do it. This is interesting for the player, but Elvis Lu at Tencent says it's also helpful for the development of these video games.

[Elvis Lu]

In our case, we have more than 17,000 in game objects in just one map and numerous locations. So it would be infeasible to use the traditional methods to issue a command with all these targets. So voice control or voice command becomes the only efficient way to communicate with an AI.

[Vincent Akovino]

So that's one example of a thing that kind of made sense to me. Then you hear from independent developers, and they are largely not excited about this. Many of them are kind of skeptical of what it means for their own creativity in this industry. And so, like, when I speak to, like, people in narrative or art departments, they're like, well, this is a part of the job that I like to do. Like, I don't want to automate the part of my job. They're like, maybe if, like, it sent emails for me, but not, like, if it writes my stories. One person I talked to was Keita Takahashi. He developed a game that people of my age love very much called Katamari Damashi. And it's like this absolutely ridiculous game. It has a great sense of humor. It's basically you're rolling up a bunch of small objects on the world into a giant ball, and then they become planets in the sky.

[Scott Detrow]

That sounds relaxing.

[Vincent Akovino]

Yeah, it's absurd, but on purpose. And it has a great sense of humor. But Takahashi was very blunt about the AI thing. And actually he brought this up unprompted in a different interview I was doing. And here's what he said.

[Elvis Lu]

Who care about the AI? I mean, AI is just the business stuff because they just want to make more money.

[Vincent Akovino]

So that's an example of someone who is just very purely an artist who is completely not interested in generative AI stuff.

[Scott Detrow]

All right, so you're at this massive conference, tens of thousands of people, two different, similar questions.

[Vincent Akovino]

Yeah.

[Scott Detrow]

What are your favorite things about video games right now as somebody who plays them? And what are the most interesting storylines that you're paying attention to as somebody who reports on them?

[Vincent Akovino]

Yeah, I mean, the conference really hit this home for me. The industry right now is just filled with so many video games that are great, especially because we've had this explosion of smaller teams making games. Like, there are just too many video games to play that are great. So that's, like, a great problem to have for the industry and for someone like me who, like, loves playing games. But so I would say just the sheer number of great games is. It's never been better, I think, when it comes to the most interesting question facing the video game industry right now, to me, it is the AI question because it's partially this thing of, like, you know, five to 10 years ago, we saw Meta go all in on VR and everyone was like, oh, maybe this is the next big thing. And it's not. Yeah, it's really not. And I think you need broad enthusiasm from both video game players and the industry to be for something like that to really happen. And that's, I don't know yet what's going to happen because it feels like the, the big tech companies like Nvidia and stuff are pushing it hard and want AI to be the future of games. But I haven't seen the same sort of excitement on the other end.

[Asma Khalid]

That was NPR's Vincent Akovino chatting with All Things Considered co host Scott Detrow. This episode was produced by Noah Caldwell and edited by Adam Raney and Courtney Dorning. Our executive producer is Sami Yenikin. It's Consider this from npr. I'm Asma Khalid.

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