Video game industry sidetracked by excessive investor hopes?
In the ever-evolving world of video games, a recent survey by The Game Developer Collective and Omdia has shed light on the industry's struggles since 2022. The survey, which polled numerous developers, revealed that unreasonable investor expectations and mismanagement are the main causes of the downturn, with 64% and 60% of respondents citing these factors respectively.
The survey's findings, however, have sparked a lively debate among industry players. Some investors and studio founders argue that the sentiment against investor expectations is unfair. Jake Solomon, founder and CEO of Midsummer, for instance, believes that the venture capital model is inherently built on expecting significant returns, which is not unreasonable in itself.
On the other hand, Devin Reimer, founder and CEO of AstroBeam and former CEO of Owlchemy Labs, blames increased competition, rising development costs, lack of long-term studio funding, and overestimates of game growth during Covid for the industry's downturn. He suggests that investing in at least the first two games from a studio could increase the odds of a hit and show growth potential.
Jason Della Rocca of Griffin Gaming Partners, too, disagrees with the survey's findings, stating that market conditions are driving investor expectations. He refers to a trend toward "evidence-based investing," with investors responding well to developers who can prove "audience validation" early in the process.
The high development costs of modern video games have also been identified as a significant factor, with 43% of respondents noting this as a contributing factor. This, according to Devin Reimer, makes a large investment out of the gate more difficult, even though it is necessary to see growth potential and increase the odds of a hit.
Despite the disagreements, the survey's findings seem to resonate with many developers. The number of developers who reported no change in the difficulty of finding funding increased from 7% to 27%. Fewer developers reported that it was "easier" to find funding in 2025, dropping from 9% to 6%.
In 2025, fewer developers also reported that it was "harder" to get funding compared to the year before, with 50% of respondents stating it was more difficult, a 23% decrease from 2024. This suggests that while the industry is facing challenges, there might be a glimmer of hope on the horizon.
Meanwhile, the game industry may need a way out of its current difficulties that isn't just cashing in on trends and buzzwords. As the debate continues, it is clear that finding a solution will require a collaborative effort from all stakeholders in the industry.
Elsewhere in the industry, Sega, Netflix, and others have announced plans to allow Roblox creators to monetize their major franchises, offering a potential new avenue for creators to find success. As the industry evolves, it will be interesting to see how these developments shape the future of video game development.
In a separate development, Informa, the parent company of our website and Omdia, announced that Santa Ragione's game Wheels of Aurelia is being delisted by Apple without justification. This unexpected move has left many in the industry questioning Apple's decision and its impact on the indie game development community.
[1] https://www.gamasutra.com/view/news/376345/The_Game_Developer_Collective_and_Omdia_release_annual_developer_survey_results_2022?page=1
- The ventures in the video game industry may have a better chance of success if investors understand the importance of long-term funding for studios, as suggested by Devin Reimer.
- As the interactive nature of video games merges with the advancements in technology, the potential for new monetization opportunities, such as partnering with companies like Sega and Netflix, could revolutionize the industry, as seen in the recent announcements.
