Key Summary

Legendary husband and wife developers in the gaming industry, John and Brenda Romero, diagnosed that the gaming industry is currently in a crisis more serious than the 1983 American video game collapse. Romero Games, which they run, suffered a sharp reduction from 110 employees to 9 due to a sudden withdrawal of funding last year.

Why is this statement important?

John Romero is a person who pioneered the first-person shooter (FPS) genre by developing Doom in the 1990s, and Brenda Romero is a veteran developer who has participated in numerous masterpieces such as Jagged Alliance 2 and Wizardry 8. The crisis diagnosis of those who have been in the industry for more than 40 years is not simply a personal reflection, but reflects the structural problems of the industry as a whole.

“The industry is in a really dire situation,” Brenda Romero said in an interview with the media. “We were there during the great crash of the 1980s, but it’s definitely worse now.” “It’s hard to find someone who hasn’t been affected, whose spouse hasn’t been affected, who isn’t worried about being affected,” he added.

Incomprehensible actions by large publishers

John Romero recently pointed out the contradictory situation in the industry. "I don't understand what's going on," he said, referring to EA's layoffs at the studio even though Battlefield 6 was "doing really well."

Romero Games is also a direct victim of this confusion. Last summer, funding for an unreleased shooter game in development with a major publisher was suddenly withdrawn. This coincided with Microsoft's large-scale restructuring of Xbox.

“We were developing a game with a large publisher, but we lost funding along with several other studios and internal projects,” explains Brenda Romero. At the time, Irish media reported the closure of Romero Games, but this was a misreport, and the media later apologized.

Comparison with the Great Crash of 1983

The 1983 American video game collapse was an incident in which the home game console market, led by Atari, collapsed due to saturation and a flood of low-quality games. At that time, the size of the North American game market plummeted from $3.2 billion to $100 million in one year. This crisis continued until 1985 when Nintendo rebuilt the market with the release of the NES.

The current crisis is different from then. After 2022, a combination of interest rate hikes, investment contraction, COVID-19 special termination, and restructuring after large mergers and acquisitions are taking place. According to related industry reports, more than 15,000 people were laid off in the global gaming industry in 2024 alone.

Conflict surrounding generative AI

Brenda Romero said that there is conflict within the industry surrounding the introduction of generative AI. “There is tremendous pressure from management to use generative AI, and there is tremendous pushback from development teams and gamers to use generative AI,” he explained.

He then clarified, “Before you ask, we don’t use generative AI.”

Still, the game continues

Despite the extreme difficulties, the couple has no intention of giving up on game development. “There are so many cool things to make,” said John Romero. “I will never stop making games.”

Brenda Romero laughed and joked, “For him, winning means being found dead in his chair while coding.” However, he emphasized that the fundamental demand in the market remains healthy, saying, “People will continue to play games.”

Future outlook [AI analysis]

The Romero couple's diagnosis suggests that the gaming industry is in a period of structural transition rather than a simple economic downturn. The phenomenon of large publishers laying off even studios that have produced successful games raises questions about the sustainability of the traditional AAA development model.

In the short term, it is highly likely that small and medium-sized studios will continue to close and their workforce will be drained. However, just as Nintendo reorganized the market after the 1983 crash, this crisis can also be resolved with the emergence of a new business model or platform.

Conflicts surrounding the introduction of generative AI are expected to become more acute in the future. The balance the industry finds between pressure to cut costs and backlash from creators is expected to be an important variable in determining the future direction of the gaming industry.