The gaming industry’s catchcry ‘Survive till 25’ must become ‘Fix for 26'
Ahead of the heady news rush of Summer Game Fest, a more sobering take on the games sector in 2025. The good and the bad.
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This year, unlike many others in gaming, didn't begin with a flashy announcement or a game launch. In a sign of the times, it commenced with a warning in the form of a dense 250-page report.
Six months on, Matthew Ball's State of Gaming report still reverberates and is still argued in corners of the internet to this day. It paints an undeniable picture of a sector that's peaked in terms of growth, and is facing several structural issues. They include, but are not limited to, pricing, decade-old games soaking up the majority of playtime, the wholesale shift away from console gaming, the shifting workforce and mass redundancies becoming the norm. The list goes on.
For pundits in the industry, this wasn't saying anything new. These issues have been known for a while, but are now likely being exacerbated by one of the most challenging financial conditions the sector has possibly seen. Gaming's position as a "recession-proof" industry is being tested by persistent global concerns regarding cost of living. Meanwhile, on the other side of the coin, for new studios or projects, the funding environment for all businesses is seeing turbulence from broader macro uncertainties.
So before we go off and celebrate the latest and greatest games in Summer Game Fest, this week Infinite Lives looks at what progress has been made on addressing these challenges, and runs a similar lens over the Australian gaming industry.
The pricing correction is in full swing
If there's one issue the gaming industry has made headway on, it's pricing. Gaming, as a whole, is a more expensive hobby today than it was at the start of 2025. The industry has ripped off the band-aid, raising prices on almost all new games and devices. As I mentioned earlier this year, this has now become the most direct way to chase ongoing revenue growth, given concerns that the gaming market has peaked.
Perhaps the one area of improvement, though—and this may take more time still—is communicating the need for this to consumers. The current play appears to be to weather the outrage and assess the impact of higher prices on sales at a later date. Though, if the Switch 2 launch is any indication, charging more hasn't deterred its customers. At least not in the short term.
Despite sellouts, consoles are still under siege
Even with the Switch 2 selling out across the US, UK and other major markets (aside from Australia), the console market is still in hot water. By all indications, there's no smoke and no fire. Sony had one of its most successful years to date.
Yet, it's arguable these are all lagging indicators. The delay of Grand Theft Auto 6—the latest in one of the greatest-selling games of all time—will defer the need for many to upgrade their gaming consoles. That will have a flow-on effect. And while the Switch 2 has sold out for now, its real test will be Christmas sales later this year, where two of its core markets, casual gamers and parents, are likely to make their purchase.
Meanwhile, other non-traditional players are entering the sector. Netflix, for instance, has redoubled its efforts in gaming, attempting to offer a console-free experience aimed at casual gamers. And more games are releasing simultaneously on console and PC.
That's also not to mention that consoles are losing their purpose. The whole idea of a set-and-forget device that just plays games is giving way as it attempts to compete with PC gaming. The PlayStation 5 Pro is the latest example, where fiddling with graphics settings for 20 minutes when you get a new game is now the norm.
Redundancies have slowed, for now, but the workforce is changing
There were 14,600 layoffs, as tracked by the Game Industry Layoff Tracker, last year. So far, we're mercifully sitting at 2,200 layoffs for 2025. At a surface level, this is good news. But it also points to something a little more disturbing—the deprofessionalising of the gaming workforce.
Ryan K Rigney had an excellent piece on this earlier this year. Perhaps we're ahead of the curve here in Australia. This checks out with my experience at GCAP Melbourne last year, where most attendees I met in coffee and food queues were in fact freelance developers and artists, looking for their next gig.
Again, most of this is anecdotal, as one other downside of a casual or hobby-led workforce is that it's harder to track, and that makes it harder to report on. That's especially concerning as more gaming companies globally begin to toy with AI agents.
Then, there's also the ongoing consolidation in gaming journalism, which I'm getting a sense isn't actually a broader concern for the gaming sector. The abrupt sale of Polygon— and following redundancies — earlier this year speaks to the challenge this part of the industry is facing as traffic collapses due to changing search algorithms and the rise of AI-powered responses to queries. Your perspective on this generally comes down to your philosophies on media as a whole.
As a former business technology journalist now plying my craft here, I'm of the belief that strong media serves as an industry watchdog—sunlight is the best disinfectant, as we often tell ourselves in journalism circles. Yet, unlike a lot of other rounds of reporting, I'm unsure that's universally accepted in gaming media. Perhaps the drive for traffic at all costs—given many are display advertising funded—has eroded this sentiment.
The bright spots
This is all not to say that 2025, so far, hasn't been all bad. The breakout success of smaller titles has punctuated the year. Perhaps the most poignant of these is Clair Obscur: Expedition 33, which is reported to have sold 3.3 million copies in 33 days. (Yeah, the developers were surprised by the coincidence there too).
In gaming terms, this isn't nearly hitting the highs of other AAA games. But Clair Obscur: Expedition 33 was developed by French studio Sandfall Interactive on a lower budget and with a portion of the staff required by major games. It's also a contender for game of the year, and is an excellent title in its own right.
It paves the way for similar games from other countries. Australia, for instance, has the talent for such an endeavour. The funding or appetite for it, however, is another question. Let's just see what happens after Hollow Knight: Silksong's launch. It is coming this year, right?
Speaking of Australia, it also can't be understated how incredible it is for our part of the world to have its own showcase as part of Summer Game Fest. I mentioned this in an earlier column, but of the over 14,000 games released on Steam last year, 100 or so were from Australia. That statistic really grounds the "discoverability" issue many local developers here say is their greatest challenge.
So, what is happening in Australia?
To wrap up this incredibly long column, I polled about half a dozen developers and leaders in the Australian gaming industry about the year so far. Some on the record, others in background, mainly so they could talk candidly.
Generally speaking, times are still tough. As Chad Habel from Bad Plan Studios' creator of End of Ember, puts it: "'Survive till 25' has become 'Survive 25'."
"As a very young micro indie studio, discoverability is an intractable problem, and it is very challenging to even define success, let alone know how to drive towards it.
"Gotta stay positive though: games still rule!" he says.
Martin Stradling, the solo developer running SporkTank, is also feeling the burn. After an initial burst of success last year winning PAX AUS Indie Showcase with his game Rita, he says the grindy realities of the gaming industry are catching up with him.
"I think in the back of my mind—or maybe just assumptions I'd made—I thought it should be this kind of easy ride all the way through," he says.
"But it's actually not. So, yeah, I'm very grateful for what I got last year, but it's difficult."
Andrew Naish, principal developer of Covyne Entertainment, added: "It's tough out there with limited funding and rising costs, but there's also a lot of grit in the community."
"At Covyne Entertainment, we've been surviving by working full-time while building Dolven on the side; it's a balancing act, but it's coming together."
Ron Curry, CEO of the Interactive Games & Entertainment Association (IGEA), also confirmed the challenges faced by the sector, but argued there is some stability here compared to other markets.
"Game developers are innovative problem solvers by nature and, as such, are working through innovative solutions to the current state of the industry, which many are now claiming to be 'the new normal,'" he said.
"Locally, we are witnessing the impact the overall government funding has had on the ecosystem. The generous rebates and direct grant activity are driving technical capability and contributing to overall capacity building in the sector, which should bode well for the future."
It's a positive note to end on in what continues to be a very challenging period for the broader gaming industry. Now, with that out of the way, let's all ignore the holes in the ship for a bit, and all enjoy Summer Game Fest.
There’s a lot to take in. What do you think about 2025 so far and some of the points raised here? Let me know in the comments. And if you’ve made it this far, please consider a paid subscription to help me keep going and expand what I’m doing with Infinite Lives.
It's heartening that the three best reviewed games of the year so far - Clair Obscur, Blue Prince, and Split Fiction - are all new IP from smaller studios that have enjoyed strong sales (although we don't have exact numbers for Blue Prince).
With that said, breaking into this industry as a professional who receives adequate conpensation does feel harder than ever - especially in Australia. I have friends in the indie game development scene who are relying on incredibly difficult-to-obtain grants to fund their projects, and even then they need to maintain other work to supplement their income.
TLDR, some really positive signs from a purely artistic point of view, but the business of gaming is still very much in shambles.