[kkukshtel]

The economics of traditional AAA game development just don't make sense, and the market conditions right now are just acting as a forcing function to expedite their (current) collapse. You have insanely high development costs (50-100m on the low end to 200m+ on the high end) where the _only_ opportunity for return is to release a hit or polish the game to a hit (read, more $$$), but even being able to predict what will or won't be a hit is near impossible. So you have high burn on teams for long dev cycles (2-3 years+) that can't even really time the market because of their slow releases, with audience expectations for what a title means also insanely high, and also that their are both very good free options like Fortnite and large discounted backlogs of "really good games" that you're also fighting against. You also have weird calculus now where you're fighting against your own bets on live service games — spending 100m on expanding GTAV some more is likely a better return than working on GTA6. In the email announcing this from Microsoft's own words, you can see this:

"In 2024 alone we have Starfield Shattered Space, Fallout 76 Skyline Valley, Indiana Jones and The Great Circle, and The Elder Scrolls Online’s Golden Road. "

3/4 of those titles are old games that are live services, where it's a better investment and dev cost to pump engaged players than build new audiences. It's VERY hard to beat a 5% (even more for an MS-sized deposit) return on a savings account, so closing studios that made Good Games isn't about the games at all, it's just looking at the balance sheet. Everyone always knew they were creating on borrowed time, and now that time is unfortunately up.

The solution of this is to not let private companies dictate cultural production for a nation, but the US is piss poor at arts funding and all our billionaires want to squirrel away wealth overseas rather than building libraries, museums, or cultural production funds.