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Artificial intelligence: Hold on, troubles are coming

In an industry as profitable as the video game sector, massive layoffs foreshadow greater turbulence

An image from 'Baldur's Gate III,' the top video game of 2023. It’s based on the game 'Dungeons and Dragons.'

Jorge Morla

Jan 02, 2024 - 16:09CET

Baldur’s Gate 3, Zelda: Tears of the Kingdom, Resident Evil 4, Diablo IV, Super Mario Bros. Wonder, Alan Wake 2, Spider-Man 2, Hogwarts Legacy… to say that 2023 has been an extraordinary year for the video game industry is almost a bit repetitive. It has been a year with extraordinary works that will greatly influence the future of the industry and it has been an excellent year in economic terms. However, for all the good that the year has been, the truth is that a deplorable and counterintuitive phenomenon has occurred: the industry has suffered more than 6,000 layoffs in some of the most powerful companies (Rockstar, Bungie, Ubisoft, Take-Two, CD Projekt, Epic, Bethesda, Blizzard…).

It is not the first time that one of these companies has laid off many workers in a prosperous year (one of the most famous cases was that of Activision-Blizzard and its 800 layoffs in the 2018-2019 financial year, when it broke a revenue record). But the figures of the labor debacle of this recently completed 2023 exceed all catastrophic perspectives. Paradoxes are always complicated to resolve, but we can point out three factors that can explain this bad news.

The first has to do with the effects of Covid-19. 2020 was a year in which circumstances pushed half the world to take refuge in digital leisure. This led to private investment in video games during 2020, 2021 and 2022 multiplying due to the safe bet image that emanated from the sector, but in 2023 that investment has lost two-thirds. That, without a doubt, is a loss of financial muscle that is impossible not to notice in the labor ecosystem.

The second reason is the exorbitant increase in the price of the largest projects. Insomniac Games (Spyro the Dragon, Ratchet & Clank) recently suffered a data leak that showed the world simply dizzying figures. Marvel’s Spider-Man 2, the company’s most recent release, had a budget of $315 million (the forecast is that it will leave a profit of $75 million). The future Marvel’s Spider-Man 3, according to the leak, will have a budget of $385 million. And the even more future Marvel’s Wolverine would have a budget of $305 million. That is, figures that are hardly found in Hollywood and that imply the total closure of any project in the event of a disaster.

And lastly, of course, there is AI.

Image of 'Marvel's Spider-Man 2,' which according to leaks has had a budget of $315 million.

The toy company Hasbro has just announced 1,100 layoffs. And, last year, 800 people were fired. While the company lost almost 10% in annual revenue, the video game division’s profits rose by 40%. Still, there are layoffs. Why? Well, within Hasbro, one of the divisions affected is Wizards of the Coast, the parent company of the Magic card game and the Dungeons & Dragons role-playing game (the video game of the year, Baldur’s Gate III, is based on D&D). Coincidentally, Wizards of the Coast has recently been accused of using artificial intelligence to create some of the art for its upcoming Dungeons & Dragons book. The company has defended itself with a less-than-resounding statement: “We require artists, writers, and creatives contributing to the Magic TCG to refrain from using AI generative tools to create final Magic products.”

Perhaps in that innocent word — “final” — lies the key to everything. Everything that’s released will ultimately be supervised by people, obviously. But anyone who’s even a little bit interested in generative applications based on AI know that it’s naive to think that this new technology will not greatly affect illustrators, editors, creators of video games, application designers and almost everyone who works with a computer. It’s not unreasonable to bet that the highly-anticipated technological revolution will begin with a labor revolution. A revolution with many layoffs, apparently.

Video games are the canary in the mine of a world in which the digital precedes the analog. And it’s within the world of video games that many political wars and discussions were born, which would only reach the newspapers years later. If AI influences a technology sector that literally vomits gold, it’s not very gratifying to think about what it will eventually do to digital companies that live in a precarious balance.

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