5 predictions for the game industry over the next 5 years -.

While we’re still recovering from the 9,000 layoffs at Microsoft, including cancellations of Xbox projects and studios teetering on the brink of collapse, it doesn’t feel very good looking at the present right now. Just when you think you’ve weathered the storm, you hear again about layoffs, studio closures, the madness going on behind the scenes that is causing some of our favorite franchises to flop with their latest iterations.

Five years ago, in 2020, it seemed like the game industry was in its biggest boom in a long time, and few wanted to believe that in five years we could be somewhere else entirely. So it feels like it’s appropriate to guess what the industry will look like five years from now. What will change? What will continue? Who are the main winners and losers? I don’t really know. I’m not a psychic, but let’s take a guess.

1. AAA will largely disappear from our vernacular

We start bold, we start strong. If 2025 has proven anything so far, it is that gaming can sometimes be a very difficult industry to predict. Games that were destined to sell millions a decade ago now remain quiet, sales figures only revealed in financial reports, while debut studios or “smaller” developers are able to add a classic to an established genre. This feels like a trend that is sure to continue in the near future. Considering how long it takes to make a game these days, especially by the big studios, we will likely see more lesser-known names break out with passionate projects that show that taking a risk can bring abundant rewards.

In this way, I think the line between AAA and AA will begin to blur, to the point where we may not even use these labels very often. Instead, we will judge games by the quality they bring, rather than by the budget and manpower it took to make them. I’m not sure this will help today’s ballooning budgets, as companies will strive to give their game a level of prestige befitting Clair Obscur, Kingdom Come: Deliverance and more, but as traditional AAA publishers and developers struggle to come to terms with the fact that their formulas no longer work, I’m not sure we’ll be referring to things with our old labels. I am absolutely not calling any game AAAA.

2. Live service lives on

With the cancellation of the likes of Concord and Sony reviewing its live-service plans, you might think that the era of battle is over and chasing trends, but unfortunately I can’t shake the feeling that live-service is here to stay. Although the odds are stacked against them, it seems that publishers cannot overcome the dream of creating the next Fortnite. Occasionally, a new player enters the mix. In 2024 alone, Helldivers II and Marvel Rivals attracted millions of players, so the desire from gamers is still clearly there. It’s a gamble to release a live-service game these days, but it’s a risk many companies will still take, when they know the rewards can bring them Fortnite-level megabucks.

It’s unlikely we’ll see so many lame attempts to cash in on the live-service cow, but I do think studios will continue to chase the dragon. Multiplayer games have their space, and perhaps a new fad could replace live service, but nothing has the profit potential like it, which is why I think so many won’t let it go quietly.

3. The last generation of consoles will be launched

At the time of writing, we are almost certainly years away from any kind of new hardware from any of the major players. And yet we know that a PlayStation 6 will come out at some point, in addition to what Xbox is going to call its latest Game Pass cube for goodness sake. Many people point to the PS5/Xbox Series X/S generation as a flop, and while it doesn’t feel like there has been a graphical generational leap for the most part, and the games haven’t flowed like water, I still think this generation has been dealt a bit of an unfair hand by many gamers, who will probably be just as disappointed in the next generation of consoles.

It might be a little dramatic to call it the last generation, but it’s really hard to see where consoles go from here. It feels like we’ve reached a decent graphical peak in terms of what games can and should achieve, and so the clearest thing to do is to add better performance. But once that happens, how do you sell a PS7, a PS8? The Nintendo Switch proved that people are willing to take a performance cut if their console was more convenient, and the fact that the PS4 stuck around for so long makes me wonder how many games will be exclusive to PS6 three or even four years into its cycle. On the other hand… I don’t think we’ll see the demise of hardware anytime soon.

4. Hardware still sells like hot cakes

The Nintendo Switch 2 was released this year, with virtually one game that made people want to buy the console (I mean, of course, the Welcome Tour). And yet it broke records worldwide. Of course, Nintendo is a different beast, one you can’t really study because you’re just scratching your head trying to understand it. Like trying to figure out how a microwave oven heats up food so much faster than an oven, or how magnets really do what they do. But even if not everyone is Nintendo, most gamers will go wild for a new piece of equipment.

As long as new hardware feels fresh and unique and the price doesn’t feel like a kick in the gonads (looking at you, PS5 Pro), I don’t see why people won’t flock to buy it. Gamers are always willing to believe the hype, to pre-order and buy when they think something can really change their experience for the better, and so I don’t see hardware sales slowing down.

5. The gloom continues

Every time we see a new set of layoffs, I wish it would be the last time such news reaches our feed, but unfortunately we’ve gone through years of cuts despite record profits, and I don’t see them slowing down anytime soon. Xbox seems especially suited to Xsplode again, whether through the closure of more studios or significant changes to the current business model. My wise colleague Ben Lyons believes we could see Game Pass depart from its immense consumer focus and instead go back to allow Xbox to adjust its revenue streams.

WB Games also appears to be in dire straits. Over the next few years, we’ll likely see the first games from its new focus on four major franchises, and if those don’t do well, more studios may be up for grabs, or the division and its IPs may simply be sold to the highest bidder. To counter this future, a sense of realism should be adopted within the industry. No more thinking that we are in COVID times, no more thinking that a new game can reach 100 million players without being the biggest franchise in the world. No more huge franchise plans for games that haven’t even been released yet. Unfortunately, the past few years have proven that there are still a good number of important people swallowing crazy pills, driven by the idea that the number has to go up, to a point where we will probably see this industry headed toward disaster one way or another.