From leadership to layoffs, 26/06/2025
What's going on with games leadership and how can we make it better?
We ask Games Leadership’s Mel Phillips what constitutes success in this industry
UK games business scores £30m from Government in new funding boost
Death Stranding 2: On the Beach makes a splash as the biggest game of the week
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Hello VGIM-lings,
This week is brought to you by George Young or, as my friends like to call me, the other George. I’ll be filling in for your usual George this week and as you can see by my initial greeting, I’m here to completely change things up.
Before I get into the piece, I have a note from the other George for VGIM Insiders. The Debrief will be out on Monday 30th June, rather than Friday 27th June because he has a book deadline to hit. Please hit him the next time you see him.
This week I had the chance to interview the wonderful Mel Phillips. She’s the Founder and Director of Games Leadership, a company designed to support leaders in our often wonderful and equally often frustrating industry. She’s also been on the front line of games leadership at Silver Rain Games and as a Ukie board member.
I was (un)lucky enough to catch up with Mel just as the industry hit another bumpy wave in the turbulent seas it has been sailing through.
A week ago, Embracer Group that 2,000 employees left the business last year following extensive restructuring. Since then, there have been further layoffs at Mindseye developer Build A Rocket Boy, the closure of Northern Ireland’s biggest developer Hypixel Studios and reports that Xbox is set to make cuts too (see the news below).
I’m a positive person and given well… just about everything at the moment, this newsletter should inspire rather than depress you.
So that’s why I caught up with Mel to discuss the challenges the industry is facing, talk about the state of leadership in the games business and provide plenty of tips to help gaming studios big and small through challenging times.
The big read - From leadership to layoffs
Time after time: The games industry has had a wild few years. On one hand we’ve seen some of the best games of all time be released like Baldur’s Gate 3, Balatro, and Blue Prince. But we’ve also experienced tens of thousands of layoffs and studio closures from companies of all sizes, as game sales have struggled to keep up with budgets in a maturing market. Despite plenty of advances, it seems that the business of making hit games is as hard as ever.
Success stranded: “If we had a perfect system of finding success, we would all be doing that and we would all have a successful game. That’s how you know that nobody's found this perfect formula yet,” she tells me. “And I don't think we will anytime soon at least. At the moment, the biggest measure of success for the games industry is money and sales, but there are other ways to define it.”
Data diving: That isn’t to say that money is unimportant to a games business, of course. Instead, Mel believes that companies may have found too much comfort in the idea that there is a provable, researchable format for success - something that may be behind the wave of high-profile live service failures last year. “The millions of dollars in researching what makes something a success isn't working. There isn't a perfect formula, or we haven't found it yet. But I don't know if it's that sort of market.”
Trending downwards: Her fear about companies chasing an elusive ‘sure-thing’ success extends to what is being pitched in the current market. The major trend at the moment seems to be towards smaller or ‘AA’ games made with lean teams propped up by external developers. Clair Obscur: Expedition 33 provided a perfect example of this with its Gallic-tinged JRPG delights. However, while the model has worked for them, Mel cautions against businesses trend chasing - especially if they’re deep in development.
Timing is everything: “Unless you're making a game exactly like that, that's coming out in the next six months after a three, four or maybe five year development cycle, you're already too late. If you start to build that game now in the hope of picking up on that trend, it's already too late,” she said.
Don’t ask how much, but how long
Ten-year itch: So, how can your company or your leadership team break out of the twin perils of short-termist thinking and or full faith in a one-size-fits-all formula for success? According to Mel, one way to do it is to build an industry that sustains good companies beyond their first game - something that is often at the whims of a cruel market.
Avoiding decimation: “We're often just doing one game. The system is flawed and I don't think we can get sustainability until we have regeneration,” she said. “People don't make the game they want until they're three games in. Let's say a studio makes their first game, and they put it out and it's just OK. Then the publisher says, ‘I don't want to do game two’, but game two would have the foundation of game one. We're going to repeat that one-hit-wonder process so that maybe we will capture a wonderful game. The nurture sequence isn't there for the industry.” The result is a lack of breathing room for good developers to make mistakes on their first project and take those lessons with them, killing off growing companies at source.
Accelerating growth: Fortunately, a lot of the industry has recognised this. The plethora of games accelerator programmes that have popped up across the world have encouraged creatives to think more like businesses. Developers have realised that cautious publishers and investors are more likely to be convinced by pitches that show the strength of a business, not just a game idea. Even the Government has taken notice of the need for more ways to support sustainable games businesses, as seen by the bump to grassroots games funding in the UK announced earlier this week (see the news below).
Filling the funding gap: But with less cash on the table from publisher deals and VC money drying up, Mel thinks that a gap remains for funding that supports long-term business sustainability - not just single games. “There have been calls more recently for studios to see investments that will take them to a ten-year-plan, but those investments don't exist at the moment,” she said. This is a challenge for games businesses that will always be tricky to overcome in a market that likes to fund games instead of businesses. But it could be an opportunity for long-sighted investors, who may see the value in funding talented teams instead of one-off projects.
Leadership from the front
Self-reflection time: Cash alone isn’t enough though. There’s also a need for leaders in the games industry to think more about the vision they’re providing for their business and how it fits into a changing market.
Death of the auteur: Part of the problem has been a temptation to idolise solo development or a single dominant voice within games companies. “I've said it for years now, and I think it's starting to come true: the time of the auteur is dead.” Shifting away from believing one person represents the whole fortunes of a games business - whether its the ‘solo’ indie dev who uses contractors to achieve their vision or Hideo Kojima - is handy for helping leaders think about their companies in the context of the industry ecosystem.
Retention problems: Taking this wider view is particularly important because the UK games industry is desperately short of experienced clever-clogs to help it make games. “We have about half the needed senior talent in the industry,” she said “Why are we not able to retain senior talent? There's been a huge loss over the last few years, and watching the layoffs happen you see incredibly spectacular teams being disbanded. That senior talent has to go somewhere, but I know that a lot of them haven't found somewhere, and have left the industry.”
Snowballing out of control: The result of this is that “there's not enough senior talent to complete and keep making the games that the industry wants to make.” And this causes an unwelcome snowball effect for the whole business. For the biggest businesses, a lack of senior talent causes delays at recruitment, slows production and drives up costs. And for small businesses, it usually means that founders have less commercial experience working in, or with, a bigger partner to help them set their business expectations accordingly. “We're investing in people that have no business experience, and then expecting them to suddenly gain business experience overnight and still produce a groundbreaking, spectacular game,” she said.
Reality checked: Both factors can lead to major failures. And when that occurs, people are faced with the kind of tough choices that they really don’t want to make. “There are leaders that find themselves in a situation where they are overwhelmed and there are maybe no other choices left but to have to make layoffs. That's not something that any individual is waking up in the morning eager to do,” she said.
People over power
Flashing lights on the dashboard: So, it’s in everyone’s interests for the sector to find a more sustainable way to make games. For Mel, part of the answer is for the industry to look more closely at early warning signs instead of waiting for the worst to happen. “It shouldn’t be, ‘I'm deciding if I have to lay off half the studio, or if we can make the game that we want to have.’ It should be, ‘Why are people burning out? That's weird. Why are we losing studios? Why are we not able to retain senior talent?” A change in the industry’s wider culture could help insulate more businesses - and therefore more people - from harm.
Toxic captaincy: At the same time, this ‘catch the illness, not the symptoms’ approach also applies to tackling toxicity within the games industry. The sector has seen some of its biggest businesses hit with accusations of executives engaging in activities such as sexual harassment and abuse. Such behaviour is clearly not conducive to long-term sustainable success. But stopping it from popping up is trickier than you might think.
Powerful people: “Toxic leadership exists at any level of any size of a company. It is often about the power dynamics given to somebody and how they wield that power,” Mel says. “Toxic leaders don’t see themselves as the villains. We have to have this understanding about what it is to be human.”
Train to gain: Countering this behaviour requires proper professional development and management training. And while it can be hard for small businesses to do it, bigger companies can more effectively retain staff by preparing them for leadership - building healthier cultures within big business and the small businesses that many senior creatives in games go on to found.
Prioritising people: For Mel, the lack of support and development for the people and leaders who make games is part of the reason why we find ourselves in the hole. “We've been very focused on making the cool thing, and making the cool thing at whatever cost,” Mel said. “And that cost has always been human.”
Mature industry, mature leaders: But the industry’s painful reset does, at least, provide an opportunity to change things. With investors, publishers and games businesses striving for sustainability in a mature market, there is room for mature leaders who develop their teams to take the lead in both companies and the sector at large. And if they do, we will all be better placed to reap the cost benefits of having happy teams of experienced people making great games in the long term.
Find out more about Mel and Games Leadership here.
News in brief
Governmental gamers: The UK government has whacked £30 million into the UK Games Fund over the next three years as part of a widespread Games Growth package. The funding increase, announced off the back of the Government’s Industrial Strategy, is also being supported by more cash for regional clusters, direct funding for the London Games Festival from the Government and an audit into skills shortages in the games industry. Keep your eyes peeled for something from the Other George about this later today.
Xbox out: Xbox is expected to conduct its fourth major round of layoffs in 18 months, according to Bloomberg. Although the company did not provide comment for the piece, it is reported that around 1,000 members of staff could be let go in the week ahead - once again proving the timeliness of this newsletter.
Switch third: Third-party game sales for the Nintendo Switch 2 were underwhelming at launch, according to Chris Dring of The Game Business. While Cyberpunk 2077 has done gangbusters, most developers posted disappointing sales figures - with one business describing results as “below our lowest estimates.”
Masahiro SakurAI: Masahiro Sakurai, the creator of Super Smash Bros, has weighed in with his thoughts about the sustainability of Triple-A games. As well as suggesting modern game development has become too costly and time-consuming, he also suggested that budget pressures have led to companies dabbling with generative AI in a way that is more likely to prove cheap rather than sustainably useful.
Prize of P: And in uplifting news, Lies of P developer Neowiz reportedly gave the team two weeks of paid vacation, bonuses and Switch 2s following the successful launch of the Overture DLC. This could be a trend in the emerging South Korean industry as the team at Stellar Blade’s Shift Up were reportedly also given similar treats.
Moving on
Phil Rogers will become CEO of Embracer Group replacing Lars Wingefors in August…Caspar Field has rocked up at nDreams as VP of Development…Chantay Louis has taken the position of Marketing Communications EMEA Lead for 2XKO at Riot Games…Aleksha McLoughlin has become Managing Editor of Gaming for ClickOut Media…And Malindy Hatfield is now a Freelance Writer & Editor at Charles Games…
Jobs ahoy
Sledgehammer Games is hiring an Expert Level Designer - Single Player for future Call of Dutys…2K wants someone fluent in foreign languages to become its next International Localisation Producer for Europe…Rockstar Games is looking for a Senior Illustrator to create some more memorable loading screens…PlayStation wants a Principal Gameplay Animator to work at Firesprite Studios…And Sega is looking for a Senior 3D Artist to work at Two Point Studios…
Events and conferences
Develop, Brighton - 7th-9th July
VGIM Business Breakfast sponsored by Games Press, Brighton - 8th July
Taipei Game Developers Forum, Taipei - 9th-10th July
Games of the week
Death Stranding 2: On the Beach - Kojima Productions finds success with the long-awaited sequel to its 2019 postal worker simulator.
RAIDOU Remastered: The Mystery of the Soulless Army - ATLUS continues to bring its library of classic titles back into focus with a remaster of this 2006 PS2 action-RPG.
Mongil: Star Dive - Key art makes it look like a blatant rip off of the HoYoverse games, but its gameplay is a mix of gacha action-RPG and creature collector… wonder where I’ve seen something similar.
Before you go…
Creator of Netflix’s moderately successful Devil May Cry series, Adi Shankar has surprised fans by talking about a future Duke Nukem show.
They weren’t only surprised that Duke Nukem was making a comeback, but also that Shankar tweeted out an attack on “the cry babies at Apache Software (makers of Duke Nukem 3D).”
Considering the studio responsible for the series was actually called Apogee Games, they’re probably not crying too much.
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