Game studios, founders, and investors, here’s how to navigate this market:

1. Stop chasing the current breakout hit genre, unless you have a VERY good reason to believe you can beat all the other trend-chasing studios to market by 6 months.

Your scariest competition isn’t the breakout game itself, it’s all the other studios that are starting their dev cycles right now. By the time you get to market, players might have be vomiting at the sight of “yet another team-shooter”, and your hot trend has just turned into poison.

2. Stop making high risk, high reward bets. Often they’re just high risk, imaginary reward. Buy self-funding lottery tickets instead. Focus on games that will almost surely break even above all, and have something about them that could make them a breakout hit if the stars align.

3. Build a competitive advantage. For some reason game studios and investors just ignore this in ways they don’t in other industries. In this hire-and-fire explosive industry, studios struggle to build the kind of processes and relationships that lead to successful games.

If your investment strategy is about building a game and not about building a long term vision for a studio that is amazing at making games, you are going to fail eventually. It’ll happen. Your early projects should be used to develop tools, infrastructure, processes, that will make your studio more competitive over time – not take on tech debt to chase a big idea.

4. A loyal fanbase is a competitive advantage. Build it over time by focusing on a style of game and IP that appeals to them, and you can get better at making + innovating in over time. It took FromSoftware, Larian Studios, CD PROJECKT RED, and many more cases a whole lot of games to build up their fanbase of evangelists. This is a lot easier than starting from scratch each time.

Stop making big “make it or break it” bets, and founders stop accepting deals structured this way!

Make a business that prints sustainable lottery tickets, ones that will pay for themselves as you build expertise, tech, and loyal players that are excited to check out your next game.

We have no idea what game will catch some streamer group’s attention and become a megahit next, but we can build quality games and quality processes that make every release better than the last until one does.