this post was submitted on 16 Mar 2024
93 points (97.9% liked)
Games
16751 readers
567 users here now
Video game news oriented community. No NanoUFO is not a bot :)
Posts.
- News oriented content (general reviews, previews or retrospectives allowed).
- Broad discussion posts (preferably not only about a specific game).
- No humor/memes etc..
- No affiliate links
- No advertising.
- No clickbait, editorialized, sensational titles. State the game in question in the title. No all caps.
- No self promotion.
- No duplicate posts, newer post will be deleted unless there is more discussion in one of the posts.
- No politics.
Comments.
- No personal attacks.
- Obey instance rules.
- No low effort comments(one or two words, emoji etc..)
- Please use spoiler tags for spoilers.
My goal is just to have a community where people can go and see what new game news is out for the day and comment on it.
Other communities:
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Can anyone break down this trend of layoffs and why it's happening? Does it have to do with AI content generation?
Higher interest rates means investors are being more conservative with investments, so companies that relied on external money injections are in a world of pain. The same applies to subsidiaries of larger companies.
Gaming companies are particularly vulnerable to this since games have much bigger lead times and usually have much bigger teams than most other software.
NuScale had a nuclear power plant project in the US that got clobbered too, when interest rates shot up. Nuclear power plants require capital up front and pay out over a very long term period of time, so interest rates play a big role in what their return is.
I suspect that you could look at any field that requires a lot of up-front capital and a return that only shows up years later and be seeing stuff like this. Game development is just something that this community happens to (unsurprisingly) pay attention to.
Also, I don't know how much of a factor this is, but for games, I've seen consumer spending listed as being a factor. During COVID-19 lockdowns, a lot of people stayed inside and alone. Gaming spending went way up. That ended, spending dropped.
I've also seen inflation listed; inflation has put pressure on consumer spending and games are an easy luxury to reduce spending on.
It's not inflation - it's price gouging by corporations. Wages aren't going up nearly as quickly as corporate profits.
It's definitely inflation. Normally, we see around 2% annual inflation.
Here's what it's done recently in the US:
https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
It's not as bad as it was in 2022 and early 2023, but it's still high relative to the norm.
That's not necessarily bad; it was in significant part driven by the Federal Reserve holding rates down during COVID-19. If that hadn't happened, there might have been a recession, lot of people losing jobs back then.
And then 5 trillion more were dumped in by congress. Half during the Trump admin and almost that much under Biden's