It was a huge year for video games, with smash hits like The Legend of Zelda: Tears of the Kingdom and Baldur’s Gate 3 enthralling gamers. But 2023 also brought an array of seismic shifts to the industry itself, shaking up the gaming world in potentially good and bad ways.
From mass layoffs to Microsoft swallowing Activision Blizzard whole and the encroaching reality of generative AI tools, 2023 left an impact that will be felt in the space for years to come. Here are some of the biggest gaming stories from this year.
Microsoft adds Activision
The Xbox giant’s year-and-a-half effort to acquire Call of Duty publisher Activision Blizzard finally pushed through regulatory hurdles and was completed this fall, giving Microsoft yet another massive set of studios and gaming IP to add to its roster.
Through the $68.7 billion deal, Microsoft now owns Activision itself, Blizzard Entertainment, mobile studio King, and all of their various teams. Along with Call of Duty, Xbox now controls enormous franchises like Diablo, Candy Crush, Warcraft, and Overwatch. That’s on top of IP that Microsoft acquired recently, including Minecraft and the Elder Scrolls.
Microsoft has agreed to keep Call of Duty on competing consoles for the next 10 years, but the fate of other franchises remains to be seen. Xbox users should benefit as various Activision Blizzard games should hit Xbox Game Pass before long, but other console owners could see diminishing releases in the coming years as Microsoft’s consolidation continues.
Xbox roadmap leaks
That’s the good news for Microsoft. The bad news is that confidential documents uploaded as part of the SEC’s failed attempt to stop the Activision deal were accidentally made available to the public, spoiling Microsoft’s big Xbox plans for the next several years.
It’s no surprise that Microsoft is thinking ahead to its next Xbox console, but now we have some details about how the tech giant thinks about the hardware. The next-gen Xbox is expected to release in 2028 and feature a hybrid cloud model, using local hardware prowess and cloud computing to produce more powerful experiences. And one slide in the leaked deck pointed to a potential crypto wallet for Xbox, so that’s an intriguing twist.
The slides suggest that refreshed current-gen Xbox hardware will roll out in 2024, including a disc-less Series X model and a more efficient Series S revision. Both will have more storage onboard than the current models, enhanced controllers, and faster Wi-Fi capabilities.
Layoffs devastate industry
Gaming isn’t fading as a phenomenon. Even so, 2023 proved to be a rough year for many of the people who make games, with an estimated 9,000+ developers laid off from studios large and small this year. Nearly every major publisher and studio was hit with layoffs this year, from Epic Games and Riot Games to Electronic Arts, Ubisoft, and Activision Blizzard.
Some of it appeared to be the result of ever-changing trends in the industry, while some have been attributed to “right-sizing” teams after over-hiring following the pandemic lockdown surge in gaming demand. Broader economic headwinds likely also played a role, and almost no tech sector was safe from such shifts—but an industry built around fun and entertainment proved to be sadly miserable for many creators in 2023.
AI is coming—and gamers hate it
Another factor leading to downsizing in 2023 may have been the rise in generative AI tools, although it’s unclear how many jobs are being impacted by such developments at this point. In one particular example, studio Mindark announced layoffs while saying it would embrace AI tools to cut costs, but there haven’t been a lot of really obvious swaps like that just yet.
Still, there’s a growing fear in the industry that AI tools will make some current gaming jobs unnecessary and cut trained professionals out in favor of cheap generative programs. Major publishers like Ubisoft, Microsoft, and Blizzard are adopting AI tools with the notion that they will help humans make better games more efficiently, but cost-cutting concerns persist.
Many gamers have loudly complained about games built using AI tools, and pushed back against companies (like Microsoft) that have announced such plans. What’s not clear is how much of this defensive posture is because of the potential impact on jobs and creators and how much is an aversion to tech shifts, as also seen with NFTs and crypto tokens. But it’s the prevailing vibe around AI in gaming right now.
GTA 6 is finally official
Grand Theft Auto 5 launched a full decade ago and has gone on to be one of the best-selling games of all time across three separate console generations. Of course there was going to be another game in the open-world series, but Rockstar Games hadn’t announced it yet. However, some major leaks in 2022 already revealed a lot of what to expect.
Earlier this month, Rockstar finally unveiled the first official Grand Theft Auto 6 trailer, showcasing another lavish open-world crime game that takes cues from TikTok and streaming culture while apparently amping up the immersion (and chaos). And yet again, Rockstar was preempted by a leaker, who shared the trailer a day early with “Buy BTC” stamped on top of it.
We’ll see whether Rockstar can keep the game under wraps before its 2025 release on PlayStation 5 and Xbox Series X/S.
Apple Vision Pro revealed
Following years of speculation and leaks, Apple finally made it official: The tech giant is indeed making a mixed-reality headset. The Apple Vision Pro is set to debut in early 2024, merging virtual reality and augmented reality into one super-premium headset… at an ambitious asking price of $3,499.
Undoubtedly, Apple is targeting early adopters with this one before presumably offering a cheaper, more streamlined successor aimed at a broader audience. Interestingly, Apple hasn’t shown its hand yet regarding gaming on the Vision Pro, but gaming has rarely been one of Apple’s chief focuses. Still, we anticipate that developers will be eager to embrace this higher-end headset to create new immersive experiences.
Immutable and Polygon team up
In a move that could help streamline Web3 gaming in the years ahead, crypto gaming startup Immutable announced an alliance with Ethereum scaling network creator Polygon to power a new Ethereum gaming network called Immutable zkEVM.
Rather than battle it out for game developers and users, the two prominent crypto startups are teaming up on the Polygon zkEM-powered gaming network, and we’ve seen a growing list of game creators commit to building on the network. Immutable is rapidly becoming one of the most prominent names in blockchain gaming, plus its new Passport wallet is designed to simplify onboarding and identity sharing across games. We’ll get a stronger sense in 2024 of how important this move may ultimately be for crypto and NFT games.
Esports woes only grow
Much like the broader gaming industry, the esports space is going through its own reckoning of late. The industry saw a spike in interest and viewership early in the pandemic when live sports events were axed, but the buzz eventually quieted. On top of that, much of the crypto sponsorship money that poured into the industry went away after FTX’s collapse in 2022. Now, companies are reckoning with industry shifts and finding ways to cut costs and stay afloat.
“Everyone in esports is in a war right now,” team M80 co-founder and CEO Marco Mereau told Decrypt’s GG this fall. “And that war is survival.”
Activision Blizzard’s Overwatch League, originally one of the most hyped esports launches and one that pulled in hundreds of millions of dollars worth of team franchise fees, is effectively dead as the publisher shifts its strategy for next year. Meanwhile, the prominent gaming org FaZe Clan went from a $725 million SPAC deal in 2022 to being sold off for just $17 million this fall, after performing terribly as a publicly traded company.
Can esports bounce back in 2024 after some of its highest-profile teams and leagues took hard hits this year? There’s a passionate fan base and top-tier pro players, but even after all these years, the space is figuring out how to make money—and become sustainable.
Edited by Ryan Ozawa.