Source: Aftermath
Major publishers and investors have drastically cut spending on new game development, reversing decades of bloated AAA budgets and speculative funding that treated billion-dollar losses as acceptable. The shift is structural, not cyclical: the hit-driven model that funded lavish single-player campaigns and experimental IP has collided with player preference for live-service games and free-to-play models, leaving mid-budget studios and non-franchise projects starved for capital. The economic model that once funded innovation has broken. The industry now faces a choice between consolidation around proven franchises or a rethinking of how games get made.