Rich Vogel may not have a huge profile with MMO players, but he probably should: He’s been involved with the business end of MMORPGs since the days of Ultima Online, all the way though Star Wars Galaxies and SWTOR. Even now, he’s head of T-Minus Zero Entertainment, a NetEase-backed studio working on a “third-person online multiplayer action game set in a sci-fi universe” in a new IP.
So keep that business approach in mind when we note that Vogel has released a blog post prognosticating on the future of the gaming industry. Like a lot of other people at the end of the year, he has to admit that he was wrong about 2024. He thought the industry would begin recovery this past fall, but now he says that was “optimistic.” Instead, he argues that the industry will continue playing host to game and studio closures and their concomitant layoffs as studios that have successfully funded a few rounds of investment money won’t be able to secure more.
“Many studios that got their first few rounds of funding have difficulty finding the funding they need to get their games to market,” he laments. “Publishers are returning to their catalogs, investing in sure bets, and developing very few or no original IPs. Minimal third-party deals are happening.”
However, Vogel points out that consumers haven’t stopped spending, and some games are still booming. The disconnect is fivefold: AAA game dev salaries have skyrocketed, money is no longer pandemic-levels of cheap to borrow, everyone’s afraid of getting in GTA6’s way, several big-name titles have flopped, and publishers suck at marketing. OK, he said it more nicely than that.
The “silver lining” here, as Vogel sees it, is that salaries have flattened and studios are trying to “find ways to produce high-quality experiences with smaller teams” in order to stay sustainable. Yeah, you see where this is going: He’s pitching user-generated content as a useful tool and generative AI as “promising technology” to “help reduce team size, make teams more efficient, and allow them to iterate faster in the future.” But he’s also aware of the significant limitations and drawbacks.
“One promising technology, AI generative tools, should help reduce team size, make teams more efficient, and allow them to iterate faster in the future. However, they are still in their infancy, and it will take a few years before you see any signs of impacting team size and time to market in game development. I don’t see AI generative tools as the silver bullet execs have spoken about on shareholder calls. I see AI tools helping teams become more efficient and helping with mundane tasks like LOD creation, basic code creation for gameplay, quality assurance for maps, and code hygiene. IP issues with these tools still need to be figured out, and until that is sorted, using AI to generate game assets will be a barrier to entry in game development. Also, AI will never replace the creative element that goes into making a great player experience. That craftsmanship still requires the human touch. I do see these tools giving developers the flexibility to iterate on their ideas quickly to find the right path forward in creating a compelling player experience.”
Ultimately, Vogel says the business-to-business side of the industry will improve in 2025 thanks to “solid consumer sector demand for good, quality player experience and the market pressure for publishers to focus on fewer games that fulfill the player’s fantasy rather than just unique gameplay.”
In case you’re wondering at this point what T-Minus Zero is working on (and whether/how it’s applying the tools Vogel is promoting here), well, we still don’t know much more than we said in the intro here, but it doesn’t sound as if NetEase has nuked it yet, which is better than some other NetEase teams are doing. A few weeks back, TMZ game director Mark Tucker penned a detail-free blog of his own discussing the development of the game’s “trailblazing” prototype, but it looks as if we’re years away from whatever it is.
