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

submitted 6 months ago by Zeppo@sh.itjust.works to c/outoftheloop@lemmy.world

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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?

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[–] kbin_space_program@kbin.run 3 points 6 months ago* (last edited 6 months ago) (1 children)

Interest rates are not high.

They are still edit slightly below average compared to what they were pre 2008.

https://www150.statcan.gc.ca/n1/pub/11-210-x/2010000/t098-eng.htm

[–] Habahnow@sh.itjust.works 3 points 6 months ago (1 children)

You're right they're not high historically speaking, but they high compared to the last almost 15ish years. And this is after coming out of a time of low interest rates, and increased demand from Covid. The shock from covid wore off, and now the shock from increased interest rates is hitting hard as well.

[–] kbin_space_program@kbin.run 1 points 6 months ago (1 children)

Its only an issue if companies / people have been greedily and immorally doing fractional reserve lending /borrowing.

[–] Habahnow@sh.itjust.works 1 points 6 months ago

It would also be an issue if they assumed that with their current staff, they could burrow money cheaply in the hopes that it will pay off in the future.

Now that that isn't an option, cut down staff. Which or course sucks.