The Impact of Cutbacks on QA in the Gaming Industry

Each year, Omdia (the Analyst division of Informa Tech, stewards of the Game Developers Conference) puts out a “State of the Game Industry” survey focusing on the latest industry trends and issues. This year, the results showed a staggering 56% of developers are concerned about future layoffs, and some 22% of QA professionals had been impacted by layoffs in the previous year.

In case you’re unfamiliar with the situation, between 2023 and 2024 the video game industry experienced significant layoffs due to various factors, impacting both major publishers and indie developers alike. One of the primary causes of these layoffs was the economic conditions post-pandemic, which led to a slowdown in revenue growth, particularly in mobile gaming, where revenue fell by 15% after initially spiking during the pandemic. This economic shift forced companies to cut costs aggressively (Wikipedia).

Additionally, many companies in the industry had expanded rapidly during the pandemic, leading to over-hiring. Once the surge in demand stabilized, these companies found themselves needing to downsize to match the reduced revenue, as evidenced by layoffs at companies like Microsoft, Riot Games, and Twitch (Fast Company).

Another significant factor was the acquisition dynamics within the industry. Companies like Embracer Group, which acquired multiple studios, faced financial strain and needed to restructure, resulting in the closure of some studios and layoffs across their operations (Engadget). The impacts of these layoffs have been profound:

• Job losses have affected thousands of employees across various roles within the industry.
• There have been closures of newly founded AAA studios, like Ridgeline Games and Deviation Games, which shut down before releasing their games, highlighting the risks involved in the current economic climate (Wikipedia).
• The shift toward mobile and live service games has altered development priorities, affecting how companies allocate their resources and impacting job roles tied to traditional game development (Wikipedia).

Overall, the layoffs reflect broader economic challenges and strategic shifts within the industry as studios adapt to changing market conditions and player preferences. This has been covered numerous times by news outlets such as Wired, with further investigation suggesting that these layoffs would result in more testing moving to outsourced providers, a practice that is common in larger studios. We have also seen a recent increase in unionization in this industry, particularly in QA.

All of this amounts to a great deal of uncertainty in game development, particularly in testing and QA which seems to be the first area to be impacted when a studio is looking to cut costs. But here’s the main issue caused by this trend - the testing still needs to be done.

As we have seen many times throughout the industry when games are released with poor quality - even during “early access” or “open beta” periods, the effect on that game’s financial performance is significant. Reviews drive a lot of that purchasing behavior, and the rate at which negative reviews become widespread can be challenging for developers to overcome.

So what can studios do to control costs while continuing to deliver a high-quality product to their customers?

It starts with testing more efficiently and equipping your limited resources with tools and a process to be able to optimize your efforts and succeed. That means:

• Eliminating wasted, repetitive testing efforts.
• Improving test coverage throughout the project.
• Streamlining test execution across all supported platforms.

Whether your team is launching for the first time, or maintaining a long-lived project through a seasonal content model, it’s never too early or too late to automate the repetitive tasks performed by testers. Even if your team lacks dedicated QA resources, there are likely ways to streamline your validation process.

However, Gartner predicts that:

"Organizations will struggle to manage the gap between reality and perception on cost savings from continued investments in automation. Without true end-to-end process automation, any time savings from automation will be fractional..."

Our Automated Testing Maturity Model outlines the benefits of adopting test automation and helps teams assess the business value at every stage of maturity. If you are unsure where your team fits into this model, or how to advance your testing practice to make the most of your limited resources, then it’s likely you would benefit from meeting with our team.

Book a meeting with us today, or simply visit gamedriver.io to get started on your test automation journey.