Unemployment Rising in the Game Industry

Before we all proclaim how recession-proof the game industry is, I think that we should keep in mind what's been going on in the publishing and development community. Publishers and developers have been laying off staff left and right, and a number of studios have just closed their doors entirely. Factor 5, Aspyr, Free Radical, and Turbine have all cut staff in one form or another. Midway's Austin studio has been closed and EA will have 1,000 jobs gone by April 2009. As a rough estimate, there are 2,000 more unemployed game industry folks now. As of 2007, there were almost 50,000 game developers in North America, so that's a 4% increase in unemployment! All of a sudden, the game industry isn't looking so recession-proof.

What does this mean? Risky or new franchises won't get funding. Publishers are bracing for a rough 2009 and will fund the titles with the highest priority, i.e., the titles with the highest rate of financial return. Guitar Hero, Madden, and Call of Duty will all move right along, but those "riskier" projects will get shelved. The portfolios will be lean and only the guaranteed hits are safe. Best of luck trying to get funding from a publisher right now - I imagine it to be nigh impossible right now unless you have a super-experienced team and rights to a well-known franchise. My 2 cents? Go grab a team and make iPhone games....

I almost feel bad for EA though (trust me, I'm no fanboy). They finally give new IP a chance with games like Dead Space and Mirror's Edge, and then the economy goes to tatters right when they launch. I applaud them for finally diversifying their portfolio, but unfortunately, their timing was just terrible. I wonder how much the development teams working on the sequels will get affected. Dead Space is working within a proven genre (comment dit-on Resident Evil?) so they probably won't get hit too hard. But who knows with Mirror's Edge and Dante's Inferno.

Overall though, since most consumers like the big titles anyway, the portfolio slimming won't hurt the industry in 2009 too much. It's just those people who are looking for something fresh and new in gaming that will get squeezed out. But really, that's been happening for a long time already..........

One hope is that there are just too many Wiis out there for publishers to ignore and they'll be forced to think of something appealing AND innovative to keep their shareholders happy.