In 1983, the video game industry suffered a historic collapse as the console market was flooded with cheap imitations, which led to lower sales due to higher prices, offsetting worse games that cost more. Companies have either exited or withdrawn from the market entirely, and home video game revenues in the United States have fallen 97%, from $3 billion to $100 million in just three years. As interest in consoles waned, players migrated to PCs, allowing innovators like Nintendo to come out the other end as pioneers by building a reputation for unique, high-quality games.
We're seeing a very similar situation unfold today, as the digital marketplace is filled with AI slop, outright scams, and cheap rip-offs. There were 2,469 games released on Steam in March alone, compared to just 343 games released in the same period 10 years ago. With the continued price increases of the PS5 and Xbox Series
The problem is compounded by overstretched budgets and live service failures that have shaken entire studios, and widespread layoffs that have continued in the wake of the coronavirus boom. Not to mention the 'RAMpocalypse', where AI data centers will cause a global memory shortage, leading to further price increases for key components, next-gen console delays, and technology stagnation. It's no surprise that Doom co-creator John Romero warned that things are “definitely messier” than they were in the '80s, but Fallout creator Tim Cain disagrees.
“We lost an entire generation of game developers”
“that bad. Quote me: It's bad,” Tim Cain said (via PC Gamer), but he assured that “it's nothing like the crash of 1983.”
“For me, the crash of 1983 is still the biggest industrial collapse I have ever seen, experienced, or ever had,” he continued. “I don’t think there’s ever been a worse time for the gaming industry, especially in the U.S. The gaming industry has been very concentrated in the U.S.”
Cain claimed that “we lost a whole generation of game developers” as the entire American market collapsed upon itself in the 1983 crash. It took a decade to recover, and in the '90s, many developers who lost their jobs left the industry for good. “There were no jobs for console developers of any kind,” he said. “It just disappeared.”
Great games are still being released, and we're seeing markets like Korea and China thriving. But bloated budgets running into hundreds of millions of dollars are holding developers back, and historic layoffs continue to hit the industry, further shrinking it. As John Romero said, “Too few people are unaffected, or whose partners are affected.” Even successful studios can't escape unscathed, as Battlefield 6 developers were rewarded for beating Call of Duty with widespread layoffs.
It's unclear what impact the past few years will have on the gaming industry as a whole or how it will be resolved, but it's no surprise that it's being compared to one of the worst times in the medium's history, whether or not the situation has yet reached its 1983 lows.
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