The AA and indie games industries have come a long way over the last decade. Today, many consider these games the pioneers of creativity and a remedy to the formulaic ways of AAA releases.
However, recent developments in the AA industry have been cause for concern. Particularly, Nacon, a publisher owning nearly a dozen smaller game developers, has recently filed for insolvency, raising alarms for those closely associated with AA game development.
In fact, this situation has even led to those belonging to AAA studios joining the conversation. According to Larian Studios’ publishing director, the AA market is not looking so great.
According to Michael Douse of Larian Studios on Twitter, the reason AA games are currently struggling is that they went all in on subscriptions.
For context, indie and AA studios saw services like Game Pass as very lucrative in recent years due to the initial funds coming in from these deals. Michael Douse believes that smaller-scale studios did not have much of a backup plan and are now struggling, potentially due to the stagnation of subscriptions.
“AA market is in dire trouble. It took huge bets on subscriptions with little fallback.” -Michael Douse
In the past, the Citizen Sleeper game designer also noted that services like Game Pass have kept many smaller studios going. However, as Michael Douse highlights, this can become a problem when subscriptions no longer feel the need to push indie titles as heavily due to dwindling player counts and interest.
Similar concerns have been raised by developers like Raccoon Logic Studios. In a past interview, creative director Alex Hutchinson noted that subscription companies aren’t as generous with their payouts for smaller teams as they once were.
This can become a huge hindrance when games underperform on services, just as Raccoon Logic Studios’ Revenge of the Savage Planets did last year, especially since these subscriptions have been blamed for hurting game sales.
As for Nacon, the publisher has had plenty of AA success stories in recent years, including the likes of RoboCop: Rogue City. Games published by Nacon, such as Greedfall 2 and a new WRC title, also remain on track to launch as announced previously, despite the concerning announcement. For now, Nacon is effectively looking for a way to cover its debt to continue operating in the games industry.
Ultimately, however, the Larian Studios publishing director’s statement highlights growing concerns within the AA games industry. As the challenges of game development become more prominent and studios continue to struggle, it remains to be seen what the future holds for up-and-coming teams looking to make their dream projects.
