Game Over? Layoffs, AI, and the Future of Game Development

What can we do as artists?

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Let’s take a quick look at the state of the games industry. 2024 was a tough year, and 2025 is so tumultuous that it's difficult to see what's going on in any industry. Will the trends continue or will things stabilise? What can we expect for the rest of 2025, and how should we, as creators and aspiring game artists, prepare for it?

The Harsh Reality: Big Companies & Profits Over People

First off, let's look at the numbers. We've seen a staggering 13,000 job losses in the games industry in 2024 alone. That's on top of the 10,000 layoffs we saw in 2023. We're talking major players here: Microsoft Gaming, Unity Technologies, Sony, Electronic Arts, Ubisoft, Epic Games, Take-Two Interactive, Riot Games, and Sega. They've all had significant layoffs. These trends have continued into the first part of 2025. Approximately 11% of developers reported being laid off in the past 12 months (leading up to the GDC 2025 report), and a staggering 41% have been impacted by layoffs this year, up from 35% in 2024. This creates significant job insecurity for creative professionals.

Now, what's really interesting is that many of these companies made substantial profits last year. Microsoft Gaming, for instance, laid off nearly 3,000 staff but pulled in a $5 billion profit. Sony Interactive Entertainment saw a $3.5 billion, and Electronic Arts $2 billion. Unity did make a loss, though, but you get the picture, most companies are pulling in a good profit.

Let's dig a bit deeper into what these numbers mean. The average annual salary for a game artist in the United States is roughly $123,000. So, if Microsoft Gaming laid off 3,000 staff, that's nearly $370 million in salaries. As a percentage of their $5 billion profit, that's about 7.4%. Even if you factor in other costs like pensions, let's bump it up to 10% of their profits that could have gone into keeping these talented people. But it didn't.

This isn't unique to games, sadly. It's a trend we see across many industries. Companies aren't just expected to be profitable; they're expected to show growth in profits year after year. If those numbers aren't going up, shareholders get nervous and might pull their money. And to ensure profits keep climbing, they cut wherever they can. Unfortunately, this usually means cutting staff. It feels counterintuitive, doesn't it? You'd think a company that sells games would want to hold onto the people who actually make those games. But then, I'm not a wise CEO.

Beyond the layoffs, we've heard consistent reports about the difficult working conditions, especially for artists: immense pressure, long hours. So, not only are people losing their jobs, but the jobs themselves weren't particularly great to begin with.

The Elephant in the Room: AI

So, why is this happening? It's the classic progression of putting profits before people – a natural outcome for big corporations. They bring in decision-makers focused solely on maximising profit, often at the expense of their workforce. With this in mind, the recent development in AI has the potential to automate a lot of tasks and, consequently, eliminate many jobs in the industry. And let's be honest, CEOs are desperate to get AI working in place of staff. Why? Because AI works 24 hours a day and doesn't complain about tough conditions or high pressure.

Now, in my opinion, AI isn't quite there yet for many complex tasks. It still needs a fair bit of human intervention. But it's already having an impact. I've heard from many freelance concept artists seeing less work, and the work that is available often involves "cleaning up" AI-generated art, which, frankly, isn't always the best job.

Legal Battles and Historical Precedent

You might be thinking, "What about the court cases?" OpenAI, for example, is being sued for copyright infringement, having scraped artists' work without permission. Surely, these big companies won't be able to just take people's art anymore, and artists will get paid fairly, right?

I'm afraid to say, I don't think that's how it's going to play out. If we take a brief look at history, consider the banking industry in 2008. They caused a global financial catastrophe, affecting millions, if not billions, of people. Many lost their homes and savings due to dubious loans and lax regulation. The result? One person went to jail – a scapegoat, really. And then governments bailed out the banks with taxpayer money. They introduced regulation, sure, but that regulation is slowly being watered down by successive governments.

We see this pattern repeat over and over: Big Pharma, tobacco companies, and chemical industries polluting communities. These are huge companies, and unfortunately, they often get away with it, or receive a minor slap on the wrist, a fine that barely impacts their massive profits. It's rare that these corporations, or the individuals involved, are truly held accountable.

This isn't meant to be overly negative, but history teaches us that big money and big business wield immense power in our societies. They heavily influence politics and, by extension, our laws.

So, back to the artists whose work has been scraped and who are losing their jobs to the very machines that did it. These companies that arguably broke copyright law are enormous. Their power dwarfs that of a relatively small community of artists. Even if these court cases are successful, will AI stop taking jobs? I don't think so. The industry will likely find a way to circumvent copyright or incorporate it into their terms. We've already seen companies like Adobe stating they own the rights to use your work created in their programs for AI training, and while you can opt out for now, for how long? We need these platforms, right? I need YouTube to show you this video, and YouTube, to a degree, dictates the terms.

One area where you might think the AI's indiscriminate use of artists' material might finally have met its match is when Disney recently filed a lawsuit against Midjourney. So will this put a stop to AI? No is the short answer. It will put a stop to AI reproducing Disney's protected work, but not anyone else's.

So, I'm fairly confident these companies will continue as they are, and AI will continue to improve. It's not quite ready for the most complex tasks, and it still needs a lot of human input. But it will steadily take more and more jobs. Yes, some new jobs will be created, but likely not as many as are lost.

Adapting to Change: Your Path Forward

This all sounds a bit "doom and gloom," I know. But I'm trying to be pragmatic and realistic. Are there any positives? And more importantly, what can we do about it?

There are, however, some positives. The start of 2025 has seen Continued Growth in Indie and Mid-Tier. While AAA studios are still dominant, there's a growing sentiment that mid-tier and indie studios will continue to thrive. Smaller teams are seen as having more flexibility and a greater capacity for risk-taking and innovation, which provides more diverse opportunities for artists and developers seeking creative freedom.

So What Can We Learn From This & How Can We Respond?

I believe it's not a case of fighting back necessarily, but more about adapting to these changes. Don't get me wrong, fighting back, unionising, and collective action are important. But we also need to be aware and ready for the inevitable changes. These tumultuous shifts will continue into 2025.

Here's my advice for beginners, or anyone looking to start a career in this industry:

1. Don't give up on your dream. If you're passionate about becoming a game artist, pursue it.

2. Master the Fundamentals. AI hasn't solved everything. Retopology, for example, is still crucial in 3D modelling. Even if AI eventually figures it out, you'll still need a strong understanding of retopology to check its work and guide it. The more you know, the better you'll be able to assess and direct AI systems if you end up working with them. Practice your drawing, 3D modelling, and hard surface modelling, and learn as many skills as you can to understand the different parts of the industry. This adaptability will be key.

3. Rethink Traditional Education (Potentially). This might be a topic for another video, but personally, I wouldn't necessarily suggest going straight to a traditional college or university, especially if it's going to cost you a fortune. Instead, consider investing in shorter, more focused online courses and quality equipment. You might even be able to pick up some freelance jobs while you're learning.

4. Look to Smaller Studios & Indie Development. Instead of fixating on landing a dream job at a giant like Disney or Pixar, look at smaller, indie studios. Even better, consider starting your own indie games with a team. Make connections, collaborate with other artists and developers. It's not easy, many people doing this have side jobs, but you'll learn an immense amount by working in a team, collaborating, and yes, failing a lot. But this gives you the best chance to get into the industry on your own terms.

5. Invest in Yourself with Online Courses. I know it sounds like I'd say this because I make them, but I truly believe in online courses. A short, focused program online can offer more "bang for your buck" than a lengthy university degree. Plus, they're often more up-to-date, allowing you to adapt quickly to industry changes.

6. Understand AI (Even if You Don't Use It). You might face some criticism from the artist community for using AI, but it's likely to be part of your journey. It's an inevitable force. You'll probably find it's not perfect and still requires your understanding of the basics to use it effectively. You might choose not to use AI in your personal work, and that's commendable, but a general understanding of its capabilities will be important.

Ultimately, what I'm encouraging is for you to take control of your situation. If you're aiming for a massive company with thousands of applicants and only a couple of positions (which might eventually become one), you're not really in control. If you create your own indie studio, you are. If you join a group of like-minded people, you're building something together. There are success stories out there, games like Manor Lords, Palworld, & Wukong. And while thousands are unsuccessful, if you stick with it, are passionate, and understand the difficulties, you will eventually find your place in the industry.

It won't be easy, but it never has been. The industry has always demanded hard work. Times are certainly changing, but they always are. The main thing is to be adaptable. As Bruce Lee famously said, "Be like water. Water can fit into any container. If you're like water, you can adapt and flow with the punches.” (paraphrasing a lot there, I think)

I honestly believe there will be plenty of opportunities. New tech could help people realise their ideas more easily, and I'm genuinely hoping we'll see more innovative and exciting games in the future because of it.

So, what do you think about what's been happening? What are your plans for 2025 and beyond? Let me know by commenting on this article. I read all the comments, and I really enjoy hearing what you're all thinking about the current situation.