The London Developer Conference - just one of the events that's part of the London Games Festival 2024 - is in full swing at Savoy Place in London today, and Chris Dring, head of GamesIndustry.biz kicked off the day with a neat snapshot of what’s happened in the past few years, what’s happening right now and what could happen next.

His talks were a complex litany of bravery and misadventure, good fortune and disaster, but Dring’s take captured the tortuous story perfectly, and paved the way for optimism in the future.

Back to the good old days…

“Back in 2019, the games industry was growing steadily. Mobile was growing rapidly and the Industry was going nice and steady,” remembers Dring. “But then the pandemic hit, and everything changed. PC and game sales leapt 50%. Mobile games were up 25%. We were making lots of money - and we spent it…”

While the growth kickstarted by the pandemic resulted in record breaking sales, it can similarly be directly connected to the collapsing share prices and multiple studio closures that followed and Dring had an interesting potted insight on how the pandemic boom has led to the relentless layoffs that have blighted 2023 and - so far - made the early days of 2024 pretty miserable.

“The boom triggered new investment in new studios. Chances are, if you were working for a big company and wanted to start your own studio, you could get investment. And all of these new companies were competing for staff… And spending big… But that was OK because of all the money we were making,” explained Dring.

“Sales started to fall in 2022 - even mobile. They fell for the first time on mobile. There were PS5 stock shortages… There was war in Ukraine and we didn’t expect the cost of living and its effects on rent and travel. Making a game got very, VERY expensive. 2023 has seen some big new games – Hogwarts Legacy, Spiderman 2 and so on - the message was that the games industry was still very strong - but despite the hits, games cost have spiraled and investors have dried up.”

We’ve seen:

• A post pandemic drop in engagement figures across the board.
• Inflation putting pressure on wages and costs (insurance, travel, accountancy, rent) and impacting profitability as game prices haven’t risen to compensate.
• Investors and publishing are pausing or cutting back their investments. They’re playing it safe.
• Challenges in the ad market including in-game advertising due to improved privacy measures.
• Production challenges and delays due to the switch to remote and hybrid working.
• More games released than ever and big games are lasting longer, which means the competition for time has increased.

“Although we’ve had a good start to 2024, that’s unlikely to continue - comparisons to 2023 won’t look good. Hopefully, by now, we’re through the bulk of the bigger layoffs, but we’re heading for a further 12 months of unsettled times - but it won’t be all doom and gloom,” Dring explained.

The turnaround starts here

And those reasons to be cheerful for 2024?… Dring's take broke down the good news into a few simple highlights to come:

• There’s a full Call of Duty release set for Christmas 2024
• Potential new hardware from Xbox and PlayStation - there’s a PS5 Pro on the way
• Possible major releases from EA and Ubisoft this year in Q4
• But little is expected from Nintendo or Sony

And what are the trends that will help us recover?…

• AI - It’s all about making games faster.
• Games companies continue to investigate AI to offset rising HR and development costs.
• Workers unrest and user acceptance will be a focus of conversation.
• Other challenges surround speeding up development will cause some companies to scale back remote and hybrid working.
• There’ll be a focus on making games ‘faster, cheaper and better’.

And into 2025 and beyond? Dring gave his take on the road ahead.

“It’s funny, but with games like GTA6 coming next year, we actually know more about 2025 than we do about 2024… In the drive to make games faster and cheaper we should expect more remasters. And never underestimate the opportunities afforded by platforms like Fortnite. Fortnite has 100 million players - that’s more than PS5,” observed Dring. “And on mobile Microsoft and Epic will lead the new app stores on Apple and Android/Google. This movement begins this year.”