To be fair to all these studios AAA development does take considerably longer in Current Year, but the fact remains the majority output of these studios were titles that either failed outright or were so niche they never had a chance of being profitable enough to justify their continued existence.
It was a loss-leader type strategy, the general gist was that it didn't matter whether these studios made money in any individual event, they'd eventually get a hit like Hi-Fi Rush, and in the interim CoD and Halo would keep the lights on for everyone. Then Halo ate Infinity shit, and CoD lost hundreds of millions of dollars of potential revenue via gamepass. Suddenly, there wasn't money to fill the gaps the same way anymore. The strategy only works when you have enough serious players constantly bringing home the big bucks.
Honestly, they'd have faired better if they'd taken a page from the books of older hollywood models. To take a page from Shamus Young, if I was crowned the King of Gaming tomorrow and given free reign to restructure things, I'd restack the various studios to be genre focused - Arkane would be the Immersive Sim guys, and that studio makes immersive sims. If a dev doesn't want to make an immersive sim, go work somewhere else. This is a proven model when given time to simmer out, look at Laurian as the choice-RPG kings right now. Apply the same model all around, with some requisite rescaling for market niches, and likely a lot of closures as it turns out most of these studios don't have a functional specialization, or are excessively competing with themselves. We've known for a long time from Hollywood that creating specialized producers that focus on something tends to accumulate talent and institutional knowledge that just improves it over time. Blumhouse has budget horror in the bag, Michael Bays production company is a strong force in dumb action blockbuster, and knows how to do it well. Rather than constantly gutting your studios existing institutional knowledge to chase a new trend forcibly, stand up new studios and allow interested talented to migrate naturally. You don't want to take your RPG systems strongman and force him to make a live service, you want to take the junior who doesn't really mesh working with RPG systems under him and give him an escape path for something he's more passionate about.
Immediately following off that, address concerns from the creative side of the industry about opportunity for creativitiy with another page lifted from old Hollywood. When you've got this senior creative talent that want to do something you don't have a vertical to adequately describe, or don't see much sense in, but they're adamant about it, lay out a simple agreement for a passion project. If they have/do steer a couple projects to success, let them have a small team, budget, and a project to do something weird and new to see if its a success, or just get that creative itch out. If they fail, its not a big loss and you bring them back onto making what they were commercially good at, and if its a success, you can consider expanding that place, or taking it as a one-off win. There's no shame in a studio/team being dismantled after a freak success that won't be repeated. The industry isn't completely Alien to this line of thinking, its more or less how Obsidian made Pentiment, I'd just formalize it a bit more.
There may be some room to better decouple IP from individual studios, but I think its a mixed bag - Halo and Gears both have interesting strategy adaptions, and lots of games have worlds that are ripe for expansion. Perhaps a sort of mainline/sideline content approach, keep the core identity of a franchise with its genre and originators, but allow side-exploration by other studios as one-off niche titles.
Right now the industry is suffering in a lotta different ways from having tried to force-pivot everyone to a specific genre and type of game. We're seeing creative collapse as a lot of the artists and thinkers involved just don't fucking care about the space they're being forced into and have no passion for it, and are just doing their best to copy what they've seen work without understanding why, just look at every hero shooter like Concord. We're seeing design space collapse as people who don't know why the gameplay loop is enjoyed try and shallowly copy it because they have no other options, and you get awkward things like Marathon where you've got a nice PvE combat loop saddled with awkward PvP and an increasingly irrelevant extraction loop as they ratchet up the free gear kits to try and retain players. And we're now seeing the biggest chunk of suffering from it come around as they've all gone and massively oversaturated the live service market, to the point that they've actively demolished it by burning so many players out, while starving them of the rest of the genre space across the board. Capcoms been getting a lotta praise and attention over the last year for doing financially better than they've done in years, their games are generally huge sellers and success stories despite their issues, and literally all they've done is just release normal singleplayer games, normal multiplayer franchise sequels, and generally just not given up their proven money makers to chase a fractionally likely bigger one.
Even with the crown to do all this though, the mass layoffs in the industry wouldn't change. Human wants are unlimited, but human time is not, and money most certainly is not. A smaller team can get by on a much smaller audience with a niche product that can be priced higher due to niche appeal, but there's a limit to the price hike, and only so many games that can be played at once. Even with flawless talent distribution, we're massively oversaturated on people, and that's before accounting for the fact that most of this talent isn't genre-specialized or passionate in a way that'd actually make anything good.
If I spend a fuck ton of money buying a company, and do an audit to see what everyone is doing and how things are going, and I find an entire department sitting on their asses jerking off, that department no longer exists. I do not care if they have families, I do not care how badly they needed the job, fuck em.
Everyone is entitled to be allowed to sell their labor. Nobody is obligated to buy it. Someone has to find a way to turn the labor you provide into a product to be sold to get the money to pay you for it. If you don't want to be beholden to that process, you are already allowed to skip all that and just sell the product of your labor directly. But there usually isn't a market for prepackaged Scrum meetings or whatever the fuck middle manglements flooded a lotta these studios. If someone is passionate about making games, the tools exist to let them do so for free. If all you're actually passionate about is 3d modelling, or programming, and not games specifically, get a non-games job if games ain't working out. If you're a capable person, you're set.
You'd think a youtube creator like Jim would know better than most that effort != value, considering how highly uncorrelated time spent on anything posted online is to the response it'll get. 15 minute shitposts go viral, talented or insightful media gets 25 views. All that matters is what the audience wants, not how hard you did it.
