5 Video Game Things I Learned | 2026 August 29 - September 4
An interesting week has come to a close. There were a lot of smaller stories with some interesting threads to them. There’s an interesting thread that happens to connect most of the things I chose to write about this week: the evolution of the video game industry. I start with another headline related to PlayStation’s decision to scrap physical copies of games. Three stories from this past week then lead me to talk about the rough state of the industry and what we can expect going forward. This includes troubling news about the team behind Star Wars Zero Company, claims from video game executives that we are officially in a video game crash akin to that of the 1980s, and the emergence of yet another indie game publishing company. I also spend some paragraphs talking about just an interesting tidbit I learned about the Nintendo 3DS.
PlayStation Customer Service Harassment
We live in an unfortunate world where suits looking to score extra money for themselves and their company at the great expense of the consumer get to pawn any backlash off to their marketing, community management, and customer service workers earning comparative pennies on the dollar. More unfortunately, many consumers don’t seem to have the brains to know that these lower employees have nothing to do with these decisions.
In the case of PlayStation’s announced plan to end physical video game support by 2028, Sony’s customer service representatives have fielded harassing and borderline abusive calls from angry customers who sometimes go as far as to verbally abuse them. We’ve all let our tempers flair up when dealing with customer service before. After all, just like in any job, some customer service representatives just suck. However, anybody calling customer service strictly to complain about a new company policy that’s expected to take effect in about a year and a half must be the most ethically and intellectually bankrupt people in our society. And you may quote me on that. Customer service won’t do anything for you about it. They can’t do anything for you about it. Grow up.
As a result of these degenerates, Sony has had to update its customer service policies to further account for harassment from customers. This includes additional language to address unreasonable requests from customers, such as demands for some sort of compensation or apology. Other items that are shocking to even have to be included in customer service policies are things like sexual conduct or discrimination. Sony has now made it clear that customers behaving in these sorts of ways (and other ways I haven’t listed) can expect to be denied customer service. I think that’s the right thing to do. Sony serves customers. Customers are human beings. So anybody demonstrating that they can’t behave like a human being can expect to not be treated as a valued customer. Which is ironic considering these “people” are upset over consumer rights. Maybe if you can’t act in a dignified way towards customer service representatives you shouldn’t have any consumer rights. Thoughts?
With that said, as I alluded to previously, I believe it’s undeniable that some fraction of the blame rests on the shoulders of video game executives who have no interest in consumer rights. By taking away physical copies of games, PlayStation is taking away the consumer’s leverage. They know that the law hasn’t caught up to the digital age of consumerism, and they know this policy firmly puts them in a position to exercise full power over the consumer (as well as developers) by making it easier than ever to fully eliminate anything from consumers’ libraries that they have legally paid for. Yet PlayStation didn’t anticipate this level of backlash? They didn’t anticipate that their customer service lines would blow up and their social media accounts would be flooded with angry customers asking about their rights?
PlayStation has even doubled down this week, claiming that “In the digital age, it is not plausible to allege that reasonable consumers believed they were obtaining “ownership” of a digital game.” That’s a load of barnacles. The U.S. legal system has already ruled before that a reasonable consumer is not expected to exhaustively read through every licensing agreement or other terms of service. If that’s the case, than a reasonable consumer should not even be expected to know that they’re purchasing a license to begin with. A reasonable consumer has lived with the idea that once you purchase something, it’s yours. When you rent something, it’s not yours. And to differentiate between these two, we have specific language like buy, rent, purchase, lease, etc. However, the software industry (including video games) has gotten away with avoiding using the term “license” on their big, colorful buttons that customers use to give companies money for far too long. This is long overdue.
Film has survived for a long time on the first-sale doctrine and media piracy law. However, with the introduction of digital means to consume media, the first-sale doctrine doesn’t apply, leading to licensing agreements. Over the years, as media has become more and more digital, consumers have had fewer and fewer rights to what they pay for. This needs to change. It’s affecting everybody from customers to customer service.
Star Wars Zero Company Team Furloughs
After last week when I talked about starting Star Wars Zero Company, I’ve been enjoying the game more and more. It’s also come out that it was the 11th most-downloaded game on PS5 in August 2026. Gamalytic estimates the game has sold over 600,000 copies on Steam alone before its first couple of weeks on the market have passed. At $49.99 a pop, that puts Steam gross revenue over $30 million.
However, as we’ve seen with many games in recent years, a successful game does not a healthy studio make, apparently. So much of running a successful game development studio is rooted in proper management of employees and funds. In the case of Bit Reactor, the developers behind Zero Company, the funds management in particular seems to have bit the studio in the butt.
Sources indicated to Game File that around 80% of Bit Reactor’s staff was furloughed ahead of Zero Company’s launch on August 27, 2026. A small skeleton crew was kept on to address post-launch bugs. Otherwise, the Bit Reactor staff is in a horrible limbo where there is technically potential for them to return to Bit Reactor, but while they wait in a holding pattern for that to happen, they’re not getting paid.
The immediate and understandable reaction would be to blame publisher Electronic Arts for not giving them some extra money to keep the staff on for post-launch patches. After all, EA has a history of this sort of behavior with their internal studios. Namely, the Battlefield development studios saw massive reductions in headcount after Battlefield 6 became the best-selling video game of 2025, a year with no shortage in amazing games.
It seems, though, that this decision was entirely on Bit Reactor. It would indicate that Bit Reactor failed to plan financially for the launch of the game. Or perhaps the game was delayed internally and the studio ran out of runway, indicating project planning/management miscues. So now, once again, we have a tremendously successful game that is likely slated to gross over $100 million by the end of its first year on the market, and the developers who poured their blood sweat and tears into the project are having to look for new jobs while receiving no further compensation.
The 3DS Sucked?
I’m catching up on reading some Game Informer magazine issues that I fell behind on earlier this year, and this week, I finished an article detailing the history of the Nintendo 3DS. In particular, the article focused strongly on how the 3DS, despite its eventual success, struggled to gain a footing at first due to a lackluster launch lineup of games.
I would’ve never guessed. The 3DS launched during a time when I was so young that I enjoyed video games but had no interest in or capacity to understand the industry. In terms of game console sales volume, it performed modestly for its time with just under 76 million units sold. However, considering that this was largely an iteration on the Nintendo DS as opposed to something new and out-there and that the launch was apparently so underwhelming, the 3DS was a definite success in my view. If you were to combine DS and 3DS sales numbers, they collectively would be the best-selling console of all time at north of 225 million units sold.
The article talked more about some of the specific games that I didn’t connect very well with, but the 3DS’s launch was the interesting bit that I would not have suspected without having been there to observe it myself.
Is This Another Crash?
In the early 1980s (primarily being on full display in 1983), the video game industry saw two roughly simultaneous crashes of unfathomable magnitudes affecting the console and arcade markets. From 1982 to 1985, reported estimates indicate that console video game revenue in the United States dropped from a then all-time high of $3.2 billion to about $100 million.
GamesIndustry.biz talked to several experts on what the site dubs “Crash 2.0,” one of whom was Epic Games CEO Tim Sweeney who said, “This is the worst crash we’ve seen since the 1980s.” Many industry experts are focused on how to get out of this “crash” and get back to growing the games industry in a sustainable way.
Unfortunately, I fear that the crash hasn’t actually happened yet.
Time for some history! In the 1980s, there are a lot of misconceptions regarding what caused the crash that led to a 97% reduction in video game revenue. This is likely because there wasn’t one cause. Here are some aspects that contributed to the crash:
Shovelware. The ‘80s were a time when the video game industry was extremely young. It was so young, in fact, that many people around the globe still saw it as a fad that would eventually run its course and fade. Ironically, in a lot of ways, those people were right. Every corporation wanted to jump on the video game bandwagon as they often try to do with any fad to squeeze whatever profit they can out of it.
With everybody wanting in on the video game craze, game developers were getting pushed to make more video games at insane speeds to capitalize on the money flow as quickly as possible, and a lot of these video games were horrible ideas or poorly executed because of the time crunch to develop them. That meant a lot of shovelware was making its way onto store shelves. Frankly, they weren’t good games, and people didn’t want them nearly as much as companies hoped.Excess Stock. In an era dependent on physical copies of games, video game publishers/distributers were sending out millions and millions of copies of games that people didn’t want. This led to storefronts having so much extra inventory that they slowed down their ordering so that they could try to clear the stock.
Everybody always references E.T. the Extra-Terrestrial when talking about the crash, and while it’s far from the sole cause, it does act as a good poster child. The game was shovelware. Was it the worst game ever made? Probably not, but it was the perfect example of what was wrong with the industry at the time. A movie tie-in game that nobody asked for that was made in five weeks by a single developer, Henry Scott Warshaw, and was anticipated to sell a record number of copies. The result was the game selling 2.6 million copies… that’s really amazing! Especially in the ‘80s. However, more than 500,000 copies were reportedly returned, and another 3 million copies were produced yet went unsold.Lack of Proper Console Generations. These days, we’re very used to the console generation cycle: it lasts somewhere around six years, each new batch of consoles comes out around the same time (at least until Nintendo started doing their own thing), and each new console is an advancement in technology allowing for better games, better graphics, etc. In the ‘80s, this wasn’t defined. It wasn’t the expectation. Nobody truly knew where video games could evolve to or what the timeline of that evolution could be.
In the early ‘80s, the dominant console was still the Atari Video Computer System (Atari 2600). The console released in 1977 and was already a huge technological downgrade from arcade games in order to keep the price affordable for people who wanted to play video games at home. By 1983, no fewer than 16 other consoles were released by a vast array of companies, including Atari themselves. None of them were able to touch the Atari 2600’s success with the exception of the Intellivision. Intellivison boasted better technology and better graphics, but it still struggled to take over Atari’s top-dog seat due to a lack of interesting titles that people knew from arcades.
So six years after its launch, the Atari 2600, a console that was arguably outdated when it released, was still the dominant home gaming console.
What did all of this mean? It meant that players didn’t have to buy the latest shovelware games. They could still buy older, better games at lower prices that looked just as good on their Atari 2600. There was no incentive to spend the high dollar amounts on games that just stunk. So while people kept buying plenty of video games, revenues plummeted as brand-new games that stores had way too much stock of were being thrown into bargain bins for extremely low prices. Profits were hit even harder because retailers paid to produce these games and their copies with the expectation that they would sell at MSRP for multiple dozens of dollars per unit, not $5 or $10. Retailers bought fewer games, so publishers were making much less money.
So how does this relate to where we are today? Well, the retail problem is much less of a problem these days with the industry being almost entirely digital. However, we’re still seeing a lot of the same problems. This time, the problems have some slight differences:
High Development Costs. It costs a lot of money to make a video game. Even a remote team with very little overhead that makes a game over the span of two years with a relatively small team of 10 people making an average of $70,000 (low for compared to the actual average salary of game developers) is looking at $1.4 million in labor costs. Then you add on game engine fees, expenditures for third-party assets, costs of potential third-party development help for testing, paying for voice actors, and, of course, paying for marketing. Suddenly, you have a small game that costs millions of dollars to make. In the ‘90s, this would be the expected budget for a high-end, AAA title by a huge company. Then you look at AAA games that take between three and five years (sometimes more) to make with budgets of hundreds of millions of dollars, and you can see how much development costs have ballooned.
“Shovelware”. Shovelware from big-name companies is still a huge problem. While we typically don’t call it shovelware anymore, it’s very reminiscent of the same problems we saw in the ealry ‘80s. Today’s shovelware that is going for high prices are the mediocre, yearly releases for sports franchises, Call of Duty, Assassin’s Creed, etc. They’re also the AAA titles that cost hundreds of millions of dollars to produce but are uninspired and lifeless; we’re talking about games like Concord, The Lord of the Rings: Gollum, and MindsEye. These types of “shovelware” are being sold at $60, $70, and now $80 price points.
High Hardware Costs. This is being felt pretty hard. Prices for consoles that are six years old are rising due to computer component shortages. Video game companies can’t compete with the slew of billion-dollar companies and individuals opening up data centers to try to capitalize on generative AI. Now, console prices are rising 40%, 50%, 60%, 70%.
This is simultaneously a difference and similarity between today and the early 1980s. While back then console generations weren’t necessarily a proper thing, we’re in a time when the proper console generation could be disrupted heavily by these rising costs. What is a console generation if customers can’t afford to get the latest console?Back Catalogue Purchases Are Increasing. We already have data showing that gamers are dipping into companies’ back catalogues a lot more lately. They are buying the latest games less and less. Instead, they opt to buy the cheaper games from the past. Why? Because there are way more cheap games from the past that are excellent but gamers never got a chance to play than there are excellent new games that are worth the high price tags. Is this sounding familiar?
Times are different, but we have a lot of the same ingredients that could indicate the true crash is imminent. This is why so many executives, developers, analysts, and members of the media are talking about shifting game development models to focus on smaller games with tight, well-done gameplay loops that are cheaper to produce. If we want to stop video game revenue from dipping heavily like it did in the ‘80s, gamers need to get high quality games at cheap prices. The only way to do that is to make games with smaller scopes and budgets.
More Small Game Investors
Many have said that we’re seeing a renaissance of indie games, especially after 2025 when we saw the success of games like Clair Obscur: Expedition 33 (although whether or not this is what we would consider today to be “indie” is debatable), Hollow Knight: Silksong, Blue Prince, Hades II, despelote, and many more. I think this is heavily reflected by the past year or two of opportunities that have emerged for small studios to get their games funded.
Outerslot is one of the pioneers in the game fund space. Outersloth serves as the game fund label slapped onto Innersloth, the developer/publisher behind Among Us. With all of their newfound wealth, they sought to create a fund that could fund small projects with budgets up to $2 million. Since their announcement, we’ve seen plenty of other game funds or small games publishers emerge.
The latest is Aggro Crab’s new publishing arm. Aggro Crab has generated millions upon millions of dollars from their latest game Peak that has sold over 10 million copies since its release in June of 2025. The team is looking to provide publishing support to small game projects with budgets up to $500,000 and up to two-year development cycles.
Aggro Crab is “interested in growing our catalogue,” without growing the size of their team, according to Corey Warning, the Head of Publishing at Aggro Crab. They also point out that they have a lot of experience in publishing games over the years, having worked with a myriad of external publishers while also self-publishing some of their games. They “want to be an example of how good publishing can actually work.”