PARIS - On December 12, the video game industry's elite will converge in Los Angeles for the annual Game Awards, often dubbed the Oscars of gaming.

However, this glamorous celebration masks a troubling reality: 2024 has been a catastrophic year for the industry marked by significant layoffs and studio closures.

Mr. Mike Bithell, head of a small British game development studio, recently expressed his dismay on the Bluesky social network, stating, “The game industry continues to be just incredibly bleak behind the scenes. The ecosystem is in free fall, and I doubt there’ll be an easy solution or a quick one. This darkest hour has dragged out to a darkest couple of years.” His sentiments reflect a broader concern as reports indicate that nearly 14,500 industry professionals lost their jobs globally in 2024, a sharp rise from the 10,500 layoffs in 2023, according to data from the Game Industry Layoffs website.

The trend of studio closures has also been alarming. Notable companies like Ubisoft have announced the closure of their branches in San Francisco and Osaka. Sony’s studio Firewalk, which produced the unsuccessful title *Concord*, also shuttered its doors last October.

Despite these challenges, the overall gaming market continues to grow, generating an impressive $188 billion (S$253 billion) in revenue this year, according to Newzoo analysts. The root of issues appears to lie within funding; studios and publishers are struggling to secure investment as venture capital shifts focus towards industries like artificial intelligence, leaving gaming in a precarious position.

In an effort to adapt, many leading companies are diversifying their revenue streams. Nintendo, for instance, had monumental success with *Super Mario Bros the Movie*, which became the second-biggest film of 2023. Other companies are branching into television, with series adaptations like *Fallout* and *Secret Level* aiming to capture new audiences and expand their franchise universes.

While established franchises like *Call of Duty* continue to thrive—claimed by publisher Activision Blizzard to be the best installment yet—new game releases face stiff resistance in an already saturated market. Analysts point out that iconic titles such as *Fortnite*, *Minecraft*, and *Grand Theft Auto* remain popular, but newcomers frequently struggle to gain traction.

Despite high anticipation, major sequels like *Final Fantasy VII Remake Part 2* and *Star Wars Outlaws* have underperformed in sales this year. On a brighter note, indie games like *Palworld*, creatively described as "Pokemon with guns," have made significant strides, and *Helldivers 2*—an homage to *Starship Troopers*—has also garnered attention.

A noteworthy breakout success this year comes from China with *Black Myth: Wukong*, which has sold around 25 million copies globally, despite 70% of its sales coming from the Chinese market. This game, based on the classic 16th-century novel *Journey to the West*, is set to become the highest-selling game of 2024, marking a pivotal achievement for China's gaming industry.

Analysts are optimistic, recognizing that China’s gaming landscape benefits from lower development costs and boasts over 700 million players—almost a quarter of the global gaming audience. With many Chinese gamers favoring mobile and free-to-play models, expectations are high for the future. “We’re still in the very early stages of this big push from Chinese game companies to release AAA games,” notes Daniel Ahmad from Niko Partners, anticipating a wave of blockbuster releases in the near future.

Looking ahead, there is hopeful speculation for a sector recovery in 2025. Midcap Partners analyst Charles-Louis Planade foresees “the end of the hemorrhage” of studios and suggests that those who endure these challenging times will thrive in a more favorable competitive landscape. Exciting new launches, such as the successor to Nintendo’s wildly popular Switch console and the highly awaited *Grand Theft Auto VI*—which will mark a decade-long wait—are expected to reignite enthusiasm and propel the gaming industry forward.

In conclusion, as industry giants gather to celebrate their achievements at the Game Awards, they must also grapple with a turbulent year beset with challenges. Only time will tell if the anticipated innovations and restructuring will lead the gaming world back to a path of prosperity.