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5 events that rocked the game industry in 2018

5 events that rocked the game industry in 2018

December 18, 2018 | By Alex Wawro




Gamasutra editor Alex Wawro continues our annual series of year-end roundups by looking back at some of the big events that shook up the game industry in 2018.

A lot of long-simmering game industry issues boiled over in 2018.

As we noted yesterday while looking back at the trends that defined the games business this year, many longtime studios executed big layoffs or shut down entirely.

Unionization in the game industry is a hot topic again, and in 2018& Game Workers Unite coalesced and seemed to focus years of chatter into meaningful statements and action.

After years of giving chase, French media giant Vivendi finally gave up on trying to acquire Ubisoft and sold off its entire stake in the company to (among others) Ubisoft, Tencent, and the Ontario Teachers' Pension Plan.

Iconoclasts finally came out!

2018 was a long one. Before we put it behind us, let's think about which bits we'll still be talking about in the year ahead.

The closure of Telltale Games (and Capcom Vancouver and Carbine and Bandai Namco Vancouver and Wargaming Seattle and…)

Telltale Games wasn’t the only studio to fall this year, but it was among the biggest and the most beloved. 

Despite clear signs of trouble (including reports of a toxic work environment, a big round of layoffs last year and a legal fight with ousted CEO Kevin Bruner) it was still a shock when Telltale initiated its “majority studio closure” in September, effectively laying off over 200 people with no warning and no severance.

They weren't alone, either; Telltale's sudden shuttering happened within days of Capcom Vancouver closing and Big Fish laying off over a hundred people, meaning the game industry lost two big studios and over 500 jobs in the course of a week. In retrospect, this seems a particularly bad year for mass layoffs in the game industry: 

While Skybound Entertainment works to finish up Telltale's final Walking Dead game with at least some of the original developers, the once-beloved studio's abrupt shutdown and failure to pay workers what they're owed (inspiring at least one class action lawsuit) drove many to ask: will Telltale's failure be a catalyst for industry reform

Valve implements rev-share tiers that favor the biggest earners (as indies flounder)

This year Steam's polite dominance of the PC games industry appears shakier than ever, seen perhaps most clearly the week Valve announced it was formally creating new rev-share tiers that give big sellers a break.

By cutting its take on big earners (the standard 30 percent take drops to 25 percent on all post-September earnings over $10 million, and 20 percent over $50 million), Valve seems to be making a serious play to keep top game makers from taking their work elsewhere in the years ahead.

This has never been more viable, now that multiple publishers (including Bethesda, Ubisoft and Electronic Arts), and it comes right as Epic and Discord are opening up their own online game marketplaces with much better rev-share rates.

Most importantly, Valve is making this concession to big game makers even as smaller devs continue to struggle with discoverability problems in a market overflowing with remarkable games. Low-profile or niche games can easily get lost in the mix, especially when Valve is tweaking Steam's recommendation algorithms in ways that drastically affect some devs' earnings.

Once upon a time, just getting your game on Steam meant nearly guaranteed sales success; now, most devs could be forgiven for seeking greener pastures in which to launch their next game.

FTC agrees to investigate loot boxes in games (closing out a year of loot box backlash)

"Loot box" reward systems have been a thing in games for years, but after the Battlefront II imbroglio of 2017 they caught the attention of media outlets outside of games. Fast-forward to the end of 2018 and they're now firmly in the sights of gambling regulators around the world, with countries like Belgium and The Netherlands branding them a potentially illegal form of gambling.

This has already caused devs like Valve, Square Enix, and ArenaNet to modify or stop selling games in those regions, and it's likely that more devs will be impacted in the new year as the U.S. Federal Trade Commission commits to investigating loot box monetization schemes and their influence on young players. 

British game devs get their first-ever union (amid rising tides of unionization talk)

Talk of unionization in the game industry is nothing new, but action remains a rarity. Not so this year, when the United Kingdom chapter of pro-union activist group Game Workers Unite signed on to become an official branch of the Independent Workers Union of Great Britain, effectively creating the U.K.'s first game dev union

It's a notable step forward for game industry labor activists, and it should give devs a fresh opportunity to observe what (if any) effect organizing can have on your local game industry. This is important because practical examples of organized labor in this business are still rare (though some do exist), and it caps off a year of reinvigorated conversations about unionization in the game industry. 

(Photo courtesy of @GWU_UK)

Game Workers Unite has been a driving voice in those discussions all year (or at least, since the IGDA unionization roundtable at GDC), but the focus has been on how to curb the game industry's predilection for precarious, high-pressure jobs that burn people out and push them into other fields at a steady clip.

After a year filled with big layoffs and high-profile stories of toxic, mismanaged, or just plain poor work environments at various game companies ( Riot, ArenaNet, Rockstar et al), those discussions are sure to continue -- and the U.K.'s first game industry union is likely to play a key role.

The Epic Games Store launches (bringing the Store Wars to a head)

The continuing success of Fortnite Battle Royale has pushed developer Epic Games in some surprising new directions, most notably towards backing the strongest Steam competitor to date. In launching its Epic Games Store with an 88/12 revenue-share split across the board, the company made a specific pitch to devs: we can take care of you better than Steam can.

While some devs don't buy it, the evidence is compelling: Fortnite claims over 200 million registered players across all platforms, and while the Epic Games Store reaches only the PC portion of that audience, the company aims to build out a cross-platform market. There's a (comparatively) small number of games competing for attention on the Epic store, and no paid ads to clutter up search results. 

Perhaps most importantly, Epic's 12 percent take is among the lowest in the business (narrowly beaten by Discord's 90/10 rev-share split), and the company waives its royalties on Epic Games Store sales of Unreal Engine games. At the end of a year in which Steam faced fresh competition from Discord (which also boasts over 200 million users) and other would-be game merchants, Epic's decision to throw its Fortnite-fed weight around in Valve's territory may create a fresh wave of opportunities for game devs in the year ahead. 

Want to read more about the best of 2018? Don't miss our look at the 5 trends that defined the game industry this year, and keep your eyes peeled for more end-of-year reflections and lists from the Gamasutra team!



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