Lately, many industry experts have been suggesting that the era of big-budget “AAA” games might be coming to an end. Shawn Layden believes we’ll soon see more mid-range “AA” games, a view shared by the publisher of Space Marine 2. The creator of the Diablo series also points out the significant risks involved in making expensive games today. Now, a former CEO of Nexon is adding their voice to this conversation.
“AAA industry is structurally at its end”
Owen Mahoney led Nexon as CEO from 2014 to 2024, and a key decision during his tenure was the 2019 acquisition of Embark Studios. Despite pushback from investors and the board, he chose to invest in the recently founded studio.
He attended the launch of their first game, The Finals, but wasn’t able to celebrate the success of ARC Raiders this year. Still, buying a studio that hadn’t released any games yet was definitely a gamble.
According to Mahoney, a key issue in the game industry is that many CEOs are too hesitant to take chances. They tend to approve projects that feel predictable and secure, but often find that players are actually looking for innovative and original experiences.
Mahoney explained that CEOs of major companies face intense pressure. A failed project requires explanation, and a second failure could cost them their job. However, Mahoney believes that sticking only to ideas that have already been proven is a significant problem.
The big-budget game industry is facing a major crisis. Unless we fundamentally change how games are made, things are likely to get much worse.
Mahoney felt comfortable taking a chance with Embark Studios because the team included veterans from the Battlefield franchise. Still, he acknowledged that the game’s success wasn’t guaranteed beyond its initial launch.
It’s surprising it took so long – around three weeks – for people to recognize how valuable the Embark acquisition was for Nexon. This situation highlights a larger trend in the gaming industry. We’ve seen this before – games like Minecraft completely changed expectations around graphics, and Clash Royale proved that real-time online PvP could be successful on mobile, despite previous assumptions. The industry often clings to established ideas until something new demonstrates a different path. Right now, everyone is so focused on current projects that it’s difficult to think strategically about the future.
Predicting which games will succeed is incredibly difficult. This leaves developers facing a tough choice: continue creating independent games, or take a chance and try to break into the large-budget AAA market. Sadly, Mahoney doesn’t offer much guidance on how to decide.
New game developers face a difficult situation. They can try creating a game on their own with limited experience, or they can join a large, established studio. But working at these big companies often feels like assembly-line work – focusing on just one small part of the game and lacking creative fulfillment. The industry’s structure is fundamentally flawed, and things are reaching a critical point.
Mahoney’s statements aren’t particularly hopeful, but it’s clear that independent and smaller-budget games are gaining a lot of popularity with players. Games like this year’s Clair Obscur: Expedition 33, Hollow Knight: Silksong, Hades 2, and Megabonk are great examples. Whether this trend will last remains to be seen.
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2025-12-04 18:07