Part 3 – “The Great Gaming Singularity”
A series on why are the layoffs happening in the industry.
Very thankful for all the ideas coming in, thanks to Ivan Lugovoy,
Sasu Louke and some others I’ve had chats about this with.
Speaking of – shoutout to Game Makers of Finland.
Unions are critical in moments like this.
So, let’s dissect a trend that’s reshaping our companies:
Strategic investors taking over the M&A landscape in the past years and how that’s leading to the topics I covered before: Lack of R&D and innovation.
Welcome to the era of the Great Gaming Singularity!
Talking from an European industry worker’s perspective here, so correct me if I’m wrong but – Small companies feel like plankton being scooped up by the larger whales of the industry.
What’s the incentive to these bigger companies? Well, powerful data moats.
The more users collected within these walled gardens, the more data is safe from privacy policies disrupting it, but there’s a catch…
As power consolidates, the diversity of voices and ideas diminishes, leading to a stagnation in true innovation. Why would you need to innovate when you can buy out any studio who does so?
And, with coffers swollen from strategic maneuvers, these warchests are put to it’s secondary use: Pricing out the ones who can’t be bought yet.
The result? Higher CPIs, higher barrier of entry to the market and, at best, a hope to be published or bought out.
How does this tie back to layoffs?
Well, with less ROI available for smaller companies, there is less incentive to start them. Not even mentioning the harder it’s become to get funding.
(Next post is about that.)
Therefore, less jobs coming from less companies.
But are the bigger companies safe? No.
Once M&As conclude and once KPIs are achieved, what’s left to optimize? Employee compensation and quantity.
Once an M&A happens, in some cases (I actually know more cases of good guys here rather than bad actors), it triggers a timer to the inevitable layoffs down the road.
In a nutshell, it’s almost as if the new privacy policies have pushed larger companies to focus on M&A and that has had ripple effects that lead to layoffs.
But, what do you think? Am I off?
