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WHY YOU SHOULDN’T ABANDON YOUR CREATIVE AMBITIONS IN SEARCH OF GROWTH
By Rachel Rakowski, global head of gaming at We Are Social
WHILE GAME DEVELOPMENT and advertising may seem like very different industries, they’ve had a lot in common over the past 12 months – from mass layoffs and shrinking budgets, to cancelled projects and shifting marketing spend. Both industries are ‘checking’ at the proverbial poker table and reigning in some of their riskier bets amid economic uncertainty. As a result, it’s leading to a shift away from ambitious creative projects, instead seeing investment into safe bets that may ensure growth amid the impending storm. The problem is that, in doing so, this will stifle the innovative work that made both sectors – and especially gaming – great.
HOW WE GOT HERE
During the pandemic, industries such as gaming thrived as more people turned to online worlds than ever before to stay connected. However, reduced marketing budgets due to the pandemic’s uncertainty made 2020 a very difficult year for advertising agencies. In 2021-22, this began to change; as doors reopened around the world, marketing spend with agencies started to come back in full force and both game developers and agencies grew exponentially. Nevertheless, what many businesses failed to
recognize was that this level of growth was both unpredictable and unsustainable. Rather than forecast back down to pre- pandemic levels and come back to reality, they
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instead chose the path of Icarus: making far too many risky bets on bold new projects and new hires in hopes that they could continue to carry us toward the promised land of endless growth, without thinking of the timelines these investments entail. As a result, the overly ambitious flew a bit too close to the sun, and are now slowly descending upon the Icarian Sea.
WHERE WE ARE NOW To combat this, game developers (like some of the key players in advertising) have taken an overly pragmatic approach. This has included restructuring and cutting the workforce, cancelling projects, cutting marketing budgets, and shifting away from the seemingly boundless creative campaigns and ideas that made their companies great. Take-Two Interactive/2K called a halt to
Marvel’s Midnight Suns, Creative Assembly stopped developing HYENAS, and Embracer Group has reportedly cancelled over 29 games since 2023.
It often takes several years to create or see
a return on a AAA game title. But amid economic uncertainty, shareholders want short- term profits instead of taking on any risk which could lead to big wins further down the line. So, we see fewer radical new ideas and more sequels, expansions and seasonal live service offerings.
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