Out of the loop

10780 readers

1 users here now

A community that helps people stay up to date with things going on.

founded 1 year ago

MODERATORS

zachimusprime44@lemmy.world

Why is the video game industry in crisis? (sh.itjust.works)

submitted 4 months ago by Zeppo@sh.itjust.works to c/outoftheloop@lemmy.world

32 comments fedilink hide all child comments

I keep hearing about layoffs, studios being closed and how the industry is troubled. Are companies losing money and sales are poor, or is it the same as Google and other companies laying off people just to pump their stock price and make money despite profitability?

you are viewing a single comment's thread
view the rest of the comments

[–] MamboGator@lemmy.world 16 points 4 months ago

It's less about profit and more about sustained growth. During the COVID lockdowns publishers saw a big bump in cash flow due to increased sales and subsidies. That caused them to hire new employees en masse among other investments because in the corporate world there is no such thing as leaving money unspent. Money needs to earn more money because capitalism and shareholders.

After the lockdowns, that extra cash flow receded quickly. The response from publishers to keep their growth rate from also falling is to lay off employees and reduce risks.