In many respects, it’s a great time to be a gamer. The abundance of choice is like nothing we have ever experienced before in the industry. 2026 is also the year that Grand Theft Auto VI will finally arrive, with preorders now open for what is arguably the most-anticipated game in history. There’s also new hardware, including the Steam Machine and the Nintendo Switch 2.
Yet, many gamers are not talking about those things. The main discussion point of the industry right now is inflation, which seems to have hit gamers more than most industries. The cost of the aforementioned Steam Machine is much more expensive than originally planned, as is the new Switch. They are even raising the prices of older consoles, which is something unprecedented. GTA VI, while ‘only’ costing $10 more than similar AAA games at $79.99, won’t break the bank, but some wonder whether the price point will now become the norm.
Younger gamers are already choosing to switch off
It all adds up to this sense that we are reaching a point of inflection, a point where gamers will start to switch off. There might be an argument that gaming is too big to fail now, but there is always competition for leisure time, ranging from TV streaming to sports to casino gaming, so no arm of the entertainment industry can take its customer base lightly. Indeed, there is evidence that younger gamers are starting to switch off and, crucially, spending less as costs rise.
It isn’t all about pricing, however. There is a lot of discussion of market saturation. Yes, big hitters like GTA are always going to find an audience, but there is a crisis of discoverability for a lot of titles. The industry is top-heavy, so to speak, and it is increasingly difficult to make money at the indie level. The numbers vary, but it is claimed that around 50% of games on Steam fail to generate over $1000. A lot of good games simply remain undiscovered.
AI is both a challenge and an opportunity
While it is a shame to see good games remain undiscovered, some worry that we may also face the opposite problem with AI, as cheaply made, low-quality games could flood the market. We are not quite there yet with gaming “spam,” but the prospect is looming as AI tools become more ubiquitous.
AI is also posing a problem inside the industry. On the one hand, you can argue that the technology will improve the industry, making studios leaner and able to do more with less, but there is also a human cost, with layoffs at different levels of the sector, ranging from designers to developers to voice actors. A backlash to the use of AI in game development is not impossible, as many believe it should have no place in the creative arts.
Getting back to costs, and it’s worth noting that some gaming bosses believe that games are too cheap. The production cost of GTA VI was said to have reached somewhere between one and two billion dollars, so it’s going to take a lot of sales to make that money back. It probably will because it’s such an outlier, but many titles can struggle to recoup the outlay. The answer, according to Capcom’s boss, is to raise prices.
There is, of course, nothing new about inflation – it’s hitting everywhere – but the fact that every aspect of gaming outlays seems to be rising at once is not sitting well with a lot of gamers. Coupled with that, there are the constant delays of game releases. It’s almost expected now that a new AAA game – or console – will be delayed, and that has left many gamers feeling disgruntled with the industry.
It’s going to be interesting to see what happens next. Gaming is at a crossroads of sorts. It is possible that we start to see more winners and losers in the coming years as the dust begins to settle. Some brands, like Xbox, already look distressed, whereas the industry in general is concerned about Gen Z’s spending on games. AI, as we have said, is the elephant in the room. Big changes could be on the way in an industry that already feels too bloated.