Industry Struggles Highlight Gaming Disappointments Of 2025

Kotaku documented the most significant setbacks in the video game industry this year, including canceled projects, widespread layoffs, the proliferation of generative AI, rising costs, and corporate influence over creative content.

Thanks to Kotaku, it is clear how many major titles failed to reach completion. Rare’s Perfect Dark reboot was canceled and the studio closed. Monolith’s Wonder Woman project was scrapped, resulting in layoffs at the studio. EA halted a Black Panther game from former Monolith developers and closed the studio behind it. Titanfall spin-offs and a God of War multiplayer project were shelved, and Splash Damage’s Transformers game was abandoned. Numerous cancellations occurred quietly, suggesting a growing focus on fewer established franchises capable of generating profit.

Layoffs remained widespread. Industry tracker Amir Satvat recorded nearly 10,000 developers losing jobs in 2025. Microsoft cut hundreds of positions across Rare, Zenimax, and King. Cloud Chamber shed staff from BioShock 4, Amazon Gaming reduced over 100 roles, and Square Enix made cuts internationally. Independent studios continued to face instability. Heart Machine ended Hyper Light Breaker early access and laid off staff. Three Fields Entertainment turned to Patreon for funding. Floppy Knights’ developer closed without warning. Ethan Gach described the situation as representative of the ongoing industry atmosphere.

Generative AI became more prominent in game development. Executives publicly embraced AI tools to speed production and enhance competitiveness. Swen Vincke of Larian Studios endorsed AI usage. Hasbro CEO Chris Cocks referred to AI as “supercharging fandom.” Nexon’s Junghun Lee called adoption necessary for competitiveness. Helldivers 2 director Shams Jorjani defended AI’s potential, and Level-5 CEO Akihiro Hino said it had become “common sense” to use AI for efficiency. Despite pushback from players, AI-generated content appeared in Battlefield 6, Call of Duty: Black Ops 7, and Anno 117: Pax Romana. Krafton announced a $70 million investment in becoming an “AI-first” company, and Ubisoft demonstrated AI-built projects.

The financial burden of gaming increased sharply. Console prices rose across Nintendo, Sony, and Microsoft. Nintendo’s Switch 2 launch title Mario Kart World debuted at $80. Xbox initially priced The Outer Worlds 2 at $80 before lowering it to $70. Subscription services, including Game Pass and PlayStation Plus, also became more expensive. PC components saw price inflation due to AI-related demand and tariffs. Handhelds like the Steam Deck and ROG Ally faced rising costs, and Valve discontinued the cheapest Steam Deck model.

Corporate and financial influence affected game availability. Steam and itch.io removed certain NSFW titles following pressure from Mastercard and other processors. Developers criticized the practice as censorship by financial intermediaries. Ethan Gach noted the lack of clarity regarding which external pressures motivated these decisions.

EA agreed to a $55 billion purchase by the Saudi government. Kenneth Shepard noted that creative independence could be compromised, potentially affecting franchises such as Mass Effect and The Sims. Leslie Benzies’ Mindseye launched with significant technical and design issues, undermining the studio’s credibility.

Political interference extended into game use. Microsoft and The Pokémon Company IP appeared in posts from the Trump administration without corporate objection. Shepard highlighted that companies largely refrained from criticizing the appropriation.

Physical media continued to decline. Switch 2 releases relied on Game Key Cards, requiring internet access to play purchased titles. Target stores stopped carrying physical Xbox releases, and PlayStation’s physical sales accounted for only three percent of revenue in 2024.

Grand Theft Auto 6 faced repeated delays, moving from a planned 2025 release to May 2026, and later to November 2026. Rockstar encountered union-busting accusations after firing employees who allegedly shared confidential information. UK authorities and labor organizations criticized the company, and disputes remain unresolved.

The industry’s trajectory in 2025 showed consolidated franchise focus, automation replacing human labor, higher costs, and intensified corporate control over creative content. Developers, players, and publishers faced intersecting pressures that reshaped production, distribution, and engagement.