AI is considered a potential future growth engine, as it cuts costs in art production, where the bulk of game production costs lie. Game executives are latching onto it hard because it's arguably one of the few straightforward ways to keep growing their publicly-traded companies and their own stock earnings. But technologists already know how this will end.
Other games industry leaders are betting on collapse and renewal to simpler business models, like self-funded value-first games. Also, many bet on less cashflow-intensive game production, including lower salaries (there is much to be said about that).
Looking at industry reports and business circle murmurs, this is the current state of gaming. Some consider it optimistic, and others (especially the business types without much creative talent) - dire. But it does seem to be the objective situation.
[0] VC investment has been down by more than 10x over the last two years, and many big Western game companies have lost investors' money in the previous five years. See Matthew Ball's report, which I linked in my parent comment, for more info.
[1] The games industry has seen more than 10% sustained attrition over the last 5 years, and about 50% of employees hope to leave their employer within a year: https://www.skillsearch.com/news/item/games---interactive-sa...
I just don't think that's true in a world where Marvel Rivals was the biggest launch of 2024. Live service games like Path of Exile, Counter-Strike, Genshin Impact, etc. make boatloads of money and have ever rising player counts.
The problem is that it's a very sink-or-swim market - if you manage to survive 2-3 years you will probably make it, but otherwise you are a very expensive flop. Not unlike VC-funded startups - just because some big names failed doesn't make investing into a unicorn any less attractive.
Outside of live service everyone is also looking for that new growth driver. In my opinion the chances are though we're in for a longish period of stagnation. I don't even share the OPs rosey outlook towards more "grassroots" developers. Firstly because they're still businesses even with a big name attached. Secondly because there is going to be a bloodbath due to the large number of developers pivoting in that direction. It'll end up like the indie market where there are so many entrants success is extremely challenging to find.
Another similar exception to the industry rules is the top 20-30 franchises, like NBA2K, GTA, FIFA, Far Cry, Call of Duty, The Sims, Assassin’s Creed, etc. Together, they account for about half the new game and DLC sales. Black hole games take another ~30%, and the remaining 19,000 annually released games share the remaining 20%, with the top 50 games making up 19/20ths of it.
What matters for 95%+ of game developers is performing well in that 20%. And they sell close to 0 lootboxes, for example.