Necrosoft Games was running out of money. At the rate things were going, the video game studio’s director, Brandon Sheffield, surmised that the company would be broke before its current project, a Persona-like RPG called Demonschool, shipped in September.
This was in March, and prospects were looking glum. The funding climate for video games was dangerously bad, especially for small projects, and layoffs seemed to happen at studios across the industry almost weekly. Then, a Hail Mary: Sheffield, an industry veteran with over a decade of experience, was able to secure a contract for Necrosoft to do some work on another game. It wasn’t an ideal situation—the studio would have to do the work while also finishing Demonschool—but a necessary one. “It was the only way to survive, because nobody was funding anything,” he says. “It’s also better than what’s happening to a lot of people, where they just have to fold.”
The studio’s troubles are hardly unique. After a harsh year of layoffs in 2023, GamesIndustry.biz reported in January that company heads were already eyeing 2024 as “the year of closures.” After a boom in hiring during the Covid-19 pandemic, things cooled off, and now many game developers say mismanagement is making things worse. Avenues smaller developers could once rely on for cash, like offering their games as exclusives on the Epic Games Store or Microsoft Game Pass, are no longer open. In March, Chris Bourassa, creative director of Darkest Dungeon developer Red Hook Studios, put it bluntly in an interview with PC Gamer: “The gold rush is over.”
Necrosoft bought itself time to get its game across the finish line, but now—like so many other small developers—it remains in a precarious position. “All of our hopes depend on this game being a success,” Sheffield says. “That’s obviously a bad situation.”
As the industry shrinks, independent developers are vanishing left and right. While some are holding on to the hopeful refrain “survive till ’25”—making it through this brutal year in hopes prospects improve in the next—others are less optimistic.
“‘Survive till ’25’ assumes that we are encountering a long winter rather than having burned our own crops for three years previous,” says Xalavier Nelson, studio head of El Paso, Elsewhere developer Strange Scaffold. “Unless we start planting differently, unless we start changing the way we work and think about making games, then we’re going to continue to see the highest highs and the lowest lows that games has ever seen. And it might, in fact, just get worse.”
The video games industry seems to be in free fall. How any particular company lands, though, depends on their size. When large companies like Microsoft, Unity, Electronic Arts, or Ubisoft want to tighten their belts, they do layoffs, but the company itself still exists. For independent gamemakers, the fallout is more existential. Since they’re often run by small teams of fewer than a couple dozen people, belt-tightening can often mean simply shutting down.
