Matthew BallCEO of Epyllion and author of The Metaverse book, dropped 220 slides in an early access deck this week that explains what happened in the rise and fall of the modern games industry.

The slides are easy to read and I encourage everyone to look at them, because it takes less time to go through them and understand them than if he dropped a big essay on the subject. Ball created a preview his views on ours GamesBeat Insider Series: Hollywood and Games event on December 12 in Los Angeles. I am excited to discuss this new slide deck and the issues it raises at our upcoming event GamesBeat Summit 2025 on May 19-20 in Los Angeles.

Just a few years ago, the game hit its peak in 2021 because the pandemic forced everyone inside and players found solace in the online game. Drivers include the growth of mobile, live services, free-to-play, cross-platform, battle royale and battle pass, user-generated content, social play and social game services and the COVID-19 pandemic itself.

Matthew Ball captures this confluence of events that make the game play faster than other markets. But it has stalled for the past 2.5 years, resulting in an unprecedented 34,000 layoffs and a lack of investment capital to fill the then-starting wave of game studios.

In one sentence, Ball summed up what happened. He writes, “The exhaustion of decades of additional growth drivers that have increased players, playing time, and spending … has coincided with evolving users, behaviors, changing models of monetize, and increasing “lock-in” effects … … as growth concentrated in foreign markets shifted to domestic products (and then branched out abroad) … … exacerbated by microeconomic platform policy shifts … as well as the emergence of new and hyper-viral substitutes …

The promised drivers of cloud gaming, betting, subscriptions, esports, XR, Web3, metaverse and app store regulation all failed to deliver the much-needed growth, resulting in winter. Players are focusing on the old existing live games on the service, stalling the growth of new titles.

Apple’s shift to focus on user privacy over targeted ads has crippled the growth of mobile gaming, which has fueled a decade of growth in the game.

The base installed on the console does not grow. Foreign development took off. Social video like TikTok is becoming more prominent and interesting among young people. Players get lost in black hole games. Game sampling has become a habit of the past. Production timelines grew as did development costs. App Stores have strict, closed policies. The price increases were rejected by the players. Fear of failure leads to more conservative bets. The cost of user acquisition has increased. The discovery of the game has increased.

Without new growth engines, games are stuck in a vicious cycle. Incomes have stagnated. Revenue fell, with several major failures such as Concord and Suicide Squad: Kill the Justice League. Large companies took less risk and held back on investment. That leads to fewer big games and big studios, fewer new hits and innovations, and no player growth or playtime improvement. That wheel keeps turning.

But we are not without hope, said Ball. The Switch 2 offers some opportunity for change. It has competition from other new handhelds and devices from the likes of Valve, Sony and Microsoft. Double-A and triple-A games have succeeded on mobile in the form of Genshin Impact. Non-core markets are growing like the Middle East. User-generated content platforms and tools have emerged in Roblox, Minecraft, Fortnite and Overwolf. Social gaming services are on the rise. App store regulation is starting to happen that it is possible to get 30% compensation. New game genres are emerging, with titles like Helldivers 2 and Palworld on the rise. AI has the potential to improve game development, cut costs and find new types of games. Advertising is growing, and Grand Theft Auto VI is coming this year, possibly with a higher price.

The result, as always, is winners and losers.

In the meantime, I want to express my shock and horror at the number of fires in Los Angeles. Please consider it resources here and donations to some of these organizations: 211 LA, California Community Foundation Fund, Direct Relief, Greater Los Angeles Education Foundation, Habitat For Humanity of Greater Los Angeles, Los Angeles Fire Department Foundation, Los Angeles Regional Food Bank, Los Angeles Unified School District Education Foundation Emergency Relief Fund, MusiCares and Pasadena Educational Foundation Eaton Fire Response Fund.

As a side, It is interesting to hear the optimism from crypto people because a new Trump administration will take power on Monday, apparently with a high level of crypto advisors. I’m afraid that such a profit for Web3 will come at many other higher costs, such as tariffs on game engines.

I wish you all well, and only William Butler Yeats can think of.

“And what a wild beast, his hour has come at last,
Bowed down to Bethlehem to be born?”