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The video game industry faced another challenging year in 2024, with developers navigating widespread layoffs, studio closures, and dwindling investments post-pandemic. But amid these challenges, artificial intelligence (AI) is emerging as both a disruptor and a potential tool, complicating the landscape further.
Indie developer Adam Riches describes the current state of the industry as chaotic: “Everything is on fire at the moment.” Despite more games being released than ever before, over 14,000 on Steam alone, according to SteamDB, the battle for player attention has intensified.
Discoverability remains a significant hurdle, with developers competing against both indie peers and blockbuster titles. Adam, whose game Loco Motive launched this year, jokes the best time for such releases was a decade ago when competition was lighter.
AI is increasingly playing a dual role in these struggles. On one hand, tools like procedural generation and AI-assisted development offer opportunities to innovate and reduce costs, particularly for smaller teams.
On the other hand, players’ time is dominated by established franchises like Call of Duty and Fortnite, leaving only 8% of gaming hours for new titles, according to Newzoo. AI-driven algorithms further prioritize these dominant titles, making it harder for smaller games to gain visibility.
Funding is another pressing issue. Investment in new projects has slowed, prompting studios like Innersloth to launch funding programs to support indies. But even with backing, developers must navigate rapid technological shifts, as highlighted by Husban Siddiqui, whose game Rogue Eclipse benefited from such a fund. “The speed of change is unforgiving,” he says, emphasizing the need to adapt quickly.
Some successes offer hope. Manor Lords, a Medieval strategy game, sold 4.5 million copies thanks to innovative gameplay that allowed players to walk through their settlements. Its publisher, Hooded Horse, credits sustainability and realistic expectations for its success. But co-founder Snow Rui warns against overconfidence: “You cannot count on breakout hits repeating year after year.”
As AI continues to influence the industry—reshaping workflows, enhancing gaming experiences, and dictating visibility—developers face an increasingly complex environment. While innovation and strong gameplay remain vital, luck and timing are equally crucial in standing out. For many, the challenge lies in balancing new opportunities with the unpredictability of a rapidly evolving industry.
