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Gaming Industry Veterans Discuss Crisis: 'We Might Have to Fix Reality'

Jane McGonigalJane McGonigalSep 18, 2026

A recent discussion among prominent figures in the gaming world has brought to light concerns regarding the present state of the video game industry. While there are varying perspectives on the severity of the situation, with some comparing it to the infamous market collapse of the 1980s and others deeming it even more critical, there's a collective understanding that the industry faces significant challenges.

During a session documented in a 'Knowledge newsletter' by Edge magazine, industry veterans expressed their views on the roots of these problems and potential solutions. Many argued that the difficulties within the gaming sector are not isolated but rather symptoms of larger, more complex societal and economic systems. Harvey Smith, former creative director at Arkane Studios, articulated this by stating that the issue transcends merely the game industry, linking it to broader 'greedy, rapacious forces'. He suggested that the closure of studios and the cancellation of projects like Redfall, which led to the shutdown of Arkane Austin, are consequences of prioritizing short-term financial gains, such as investments in AI to inflate share prices, over long-term creative development.

Echoing these sentiments, Tanya X. Short, co-founder of Kitfox Games, questioned the compatibility of current financial models with artistic and entertainment pursuits, emphasizing that capitalism may not inherently foster creativity. Raph Koster, a veteran behind titles like Ultima Online and Star Wars: Galaxies, further elaborated on the systemic nature of the problem, pointing out that unchecked market dynamics often lead to concentration, cartels, and ultimately monopolies, unless regulated. Sam Barlow, known for games such as Her Story, offered a stark conclusion: to truly mend the broken aspects of the video game industry, it might require a fundamental societal re-evaluation—'fixing reality' itself. This perspective underscores a grim outlook, especially when observing the trend of massive mergers and acquisitions that frequently result in widespread layoffs and constrained creative choices, even for once-independent entities like Devolver Digital, which now seeks to delist from the stock market due to the incompatibility of artistic endeavors with market expectations for 'predictable, sequential growth'.

Despite the prevailing somber mood, there remains a spark of optimism. Smith, identifying himself as an optimist, believes in the enduring human capacity for creativity and collaboration. He envisions that even if the industry's structure undergoes significant transformations, there will always be a demand for innovative and well-crafted experiences, as long as talented individuals continue to pursue their passions. This hopeful outlook suggests that, while the path ahead may be arduous and necessitate challenging established norms, the inherent drive to create will ultimately lead to a more positive future for the gaming world.

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