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Why is the video game industry in crisis? (self.outoftheloop)

submitted 7 months ago by Zeppo to c/[email protected]

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I keep hearing about layoffs, studios being closed and how the industry is troubled. Are companies losing money and sales are poor, or is it the same as Google and other companies laying off people just to pump their stock price and make money despite profitability?

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[–] [email protected] 2 points 7 months ago

I think it is also related to the economy as a whole. While the pandemic was dragging on and on, inflation got much higher and central banks responded by increasing the interest rates. As a result, investors no longer had access to infinite free money.

Turns out, there are lots of companies that relied on constant funding instead of actual revenue. Those companies are undergoing some major changes at the moment.