The year 2025 saw significant developments across the games industry, encompassing major acquisition deals, the closure of long-standing studios, notable hardware launches and reveals, and considerable discussions surrounding tariffs.
Sony Adjusts Live Service Strategy (January)
After the poor performance of Concord in 2024, Sony further scaled back its live-service initiatives. This strategy was initially championed by Jim Ryan, who in 2022 stated a goal to release over ten live-service games by March 31, 2026, through collaboration with Bungie and PlayStation Studios.
In January, Sony announced the cancellation of two unrevealed live-service projects from Bend Studio and Bluepoint Games. These and other prominent live-service setbacks prompted industry observers like Rob Fahey to suggest that the sector’s pursuit of live-service success might be concluding.
Xbox Adopts Multiplatform Strategy (January)
In January, Phil Spencer, Microsoft’s CEO of gaming, elaborated on plans to bring Xbox first-party titles to other platforms. Spencer stated there was “no reason” to restrict a game from reaching more players and achieving greater business success.
Following this, Indiana Jones and the Great Circle launched on PS5 in April. By July, reports indicated that six of the top ten best-selling PlayStation games between April 6 and July 5 were published by Microsoft. A significant development occurred in October when Halo: Campaign Evolved was announced for PS5, a move previously considered unlikely.
Monolith Productions Shuts Down (February)
In February, Warner Bros. Games revealed the closure of Warner Bros. Games San Diego, Player First Games (developer of MultiVersus), and Monolith Productions. Monolith, a studio with over 30 years of history, was known for titles like No One Lives Forever, FEAR, and Middle-earth: Shadow of Mordor. Its ongoing Wonder Woman game project was subsequently cancelled.
Despite a slight decrease in overall layoff numbers in 2025, the year still saw several studio closures, including Ubisoft Leamington and various NetEase development teams. Further details on industry layoffs are available in a review of the year’s layoffs.
US Tariffs Impact Gaming Sector (April)
On April 2, coinciding with Nintendo’s Switch 2 Direct presentation, US President Donald Trump announced new tariffs on imports from numerous countries. This immediately led to speculation about the impact on the games industry. Nintendo promptly delayed Switch 2 pre-orders in the US, which eventually began on April 24 with the console’s price unchanged, but accessories seeing price increases due to “changes in market conditions.”
Sony indicated it was considering US manufacturing for PlayStation 5 consoles because of the tariffs, while retro handheld manufacturer Anbernic halted US shipments. Later, Nintendo increased US prices for the original Switch by up to 15%. Similar price hikes were observed for the PS5 and Xbox Series consoles in the US. Rob Fahey suggested these tariffs would likely necessitate a “strategic shift” for the next generation of console hardware.
App Stores Face Increased Openness (May)
May saw a US court implement an injunction preventing Apple from collecting fees on app purchases made outside its App Store. This significant ruling is expected to transform the app ecosystem. In April, the EU had already fined Apple €500 million ($568 million) for hindering third-party payment options on its App Store.
Google also introduced changes in October, permitting US developers to offer alternative payment methods on the Play Store, following a US court decision that restricted Google’s ability to mandate Google Play Billing. Furthermore, in November, Google and Epic Games reached an agreement that could facilitate the global availability of third-party app stores on Android.
Scopely Completes Niantic Acquisition (May)
On May 29, Scopely, a subsidiary of Savvy Games Group, finalized its $3.5 billion acquisition of Niantic’s game division. This transaction encompassed Niantic’s full game development team, popular titles such as Pokémon Go, Pikmin Bloom, and Monster Hunter Now, along with the Campfire and Wayfarer applications.
Scopely itself had been acquired by Savvy Games Group, a Saudi Arabian multinational game investment firm, for $4.9 billion in July 2023.
Nintendo Switch 2 Debuts (June)
Nintendo released the Switch 2 on June 5. The console achieved impressive initial sales, moving over 3.5 million units in its first four days and 10.36 million units within its first four months, effectively doubling the original Switch’s performance over a similar period.
Despite strong launch figures, concerns emerged regarding a perceived scarcity of indie games, the slow distribution of developer kits, and implications for game preservation due to Game-Key Cards. Towards the year’s end, the Switch 2’s sales momentum appeared to slow. Circana reported that combined sales of the Switch and Switch 2 in the US during November were 10% lower than the original Switch’s sales in the corresponding period of the previous year.
Peak Becomes a Summer Sensation (June)
The co-op climbing game Peak, developed by Aggro Crab and Landfall, emerged as a major success on Steam during the summer, achieving 10 million sales by the end of August. This success stemmed from a game that originated from a month-long game jam.
Peak was among several indie co-op games that found significant popularity on Steam in 2025. Other titles like RV There Yet? sold 1.3 million units in a single week, and REPO surpassed 12.3 million sales, according to Video Game Insights. Additional indie hits on Steam included Dispatch, Megabonk, and the drug-dealing simulator Schedule I.
Krafton and Unknown Worlds Developers in Public Dispute (July)
In July, Krafton, the owner and publisher of Subnautica studio Unknown Worlds, removed the studio’s leadership team. This action led to a public disagreement and subsequent legal proceedings, with both Krafton and the former Unknown Worlds employees exchanging various claims. The full details of this ongoing situation are available.
Sony Sues Tencent Over Light of Motiram (July)
July also marked the beginning of another significant legal dispute when Sony filed a lawsuit against Tencent. Sony claimed that Tencent’s game, Light of Motiram, was a “slavish clone” of its prominent Horizon franchise. Tencent responded by accusing Sony of attempting to establish a “monopoly on genre conventions.” The two companies ultimately reached a settlement in December.
Microsoft Implements Significant Layoffs (July)
In July, Microsoft conducted a substantial round of job cuts, impacting approximately 4% of its total workforce and leading to a major restructuring within its gaming division. Affected studios included King, Blizzard, Turn 10, Raven Software, ZeniMax Online Studios, and The Initiative, which was ultimately closed. Projects such as Rare’s Everwild and an unannounced ZeniMax MMO were also cancelled. Lewis Packwood, in an opinion piece, described the cuts as potentially part of a “disordered retreat.”
The broader games industry experienced over 9,000 layoffs throughout 2025.
SAG-AFTRA Strike Ends (July)
In July, members of the US actors’ union SAG-AFTRA voted to conclude their 11-month strike. The resolution included a pay agreement and established “safety guardrails and gains around AI.” The strike, initiated in July 2024, aimed to safeguard voice actors amidst increasing studio interest in generative AI.
Despite the US agreement, a December feature by GamesIndustry.biz highlighted that game actor contracts in the UK continued to present significant challenges.
UK Online Safety Act Implemented (July)
The UK’s Online Safety Act (OSA) became effective in July, mandating that companies implement robust age verification for their games. Some game developers faced difficulties navigating the OSA’s complexities, leading many to reconsider in-game features. Itch, for instance, blocked adult-oriented games on its platform due to an inability to secure a timely and adequate age verification solution. Jeremy Peel’s detailed feature for GamesIndustry.biz explored the experiences of various individuals affected by the OSA.
Adult Games Removed from Steam and Itch (July)
During the summer, a campaign by a pressure group led to a significant crackdown on adult games across Steam and Itch. The catalyst was a sexually explicit visual novel titled No Mercy, which UK technology secretary Peter Kyle criticized in April. Zerat Games subsequently removed the title from sale in the UK.
The Australian organization Collective Shout escalated the campaign by engaging with payment processing companies, which in turn pressured Steam and Itch to delist sex-related games. Jeremy Peel provided a comprehensive account of these events in a feature for GamesIndustry.biz.
Raven Software Secures Union Contract (August)
In August, Activision’s Raven Software studio ratified its initial union contract with Microsoft. This agreement ensures a 10% wage increase over two years, aims to reduce crunch, and mandates seven days’ notice for any compulsory overtime.
Months later, the ZA/UM Workers’ Alliance was established as the first recognized workers’ union within the UK games industry.
Hollow Knight: Silksong Overwhelms Storefronts (September)
Team Cherry announced on August 22 that Hollow Knight: Silksong would launch on September 4. This news led other game companies to quickly adjust their own release schedules.
The game’s immense popularity resulted in its release causing outages across global digital storefronts, including Nintendo, PlayStation, Xbox, and Steam. Within three months, Hollow Knight: Silksong had sold over 7 million copies.
GDC Rebrands to “Festival of Gaming” (September)
The Game Developers Conference announced its rebrand to GDC Festival of Gaming in September, prompting speculation that the event might begin to welcome consumers in addition to industry professionals.
However, organizers clarified in an interview the subsequent month that the “festival” aspect signified an expansion of the conference’s scope and activities, but not an entry into the consumer market. The rebrand received varied reactions.
EA Acquired by Private Equity Consortium (September)
Late September brought the announcement that Electronic Arts (EA) would be acquired by an investment group including Saudi Arabia’s Public Investment Fund (PIF), Silver Lake, and Affinity Partners. The total value of the deal is $55 billion, with $20 billion of that amount being financed through borrowing by the consortium.
This acquisition is subject to regulatory approval and is anticipated to finalize in Q1 FY27, if approved. Mat Piscatella of Circana, among other industry analysts, voiced concerns regarding the EA deal, noting that “Leveraged buyouts have a certain history that generally hasn’t been great for the acquired companies.”
AWS Outage Causes Extensive Disruptions (October)
In October, a major disruption to Amazon Web Services (AWS) rendered thousands of web-based businesses – approximately one-third of the internet – offline. The US was particularly affected. Within the games industry, services impacted included Fortnite, Roblox, and PlayStation Network.
Rockstar Dismissals Lead to Union Busting Accusations (October)
The Independent Workers’ Union of Great Britain (IWGB) accused Rockstar Games of union busting in late October, following the studio’s dismissal of 31 employees reportedly involved in unionization efforts. This action prompted protests outside Rockstar’s offices and a letter signed by 220 Rockstar North employees condemning the dismissals.
Rockstar denied the union busting allegations, asserting that the employees were terminated for gross misconduct due to discussing “confidential information in a public forum.” Nevertheless, UK Prime Minister Keir Starmer called the dismissals a “deeply concerning case” and indicated that an investigation would be launched.
GTA 6 Faces Another Delay (November)
In early November, Take-Two Interactive announced a second delay for GTA 6, pushing the highly anticipated title back six months to November 19, 2026.
This delay elicited diverse reactions across the games industry. Damien Sarrazin, CEO and founder of HomeRun PR, commented that for many clients, this delay “opens up a valuable window,” which was previously expected to be entirely overshadowed by Rockstar’s marketing presence.
Valve Unveils Steam Machine (November)
In November, Valve introduced three new hardware devices: the Steam Frame VR headset, an updated Steam controller, and the console-like Steam Machine. The Steam Machine, slated for an early 2026 release with pricing described as “pretty competitive” compared to equivalent PCs, generated the most discussion. Rob Fahey speculated that it could represent an “industry turning point.”
Ubisoft-Tencent Deal Finalized (November)
Ubisoft announced on November 21 the completion of Tencent’s €1.16 billion investment in Vantage Studios, the division overseeing the Assassin’s Creed, Far Cry, and Rainbow Six franchises. Before this announcement, Ubisoft had postponed its H1 2025-26 financial results and suspended share trading, leading to considerable speculation.
Netflix to Acquire Warner Bros. (December)
Early December brought news that Netflix was acquiring the entertainment conglomerate Warner Bros. in a deal estimated at $82.7 billion. Shortly thereafter, Paramount Skydance initiated a competing hostile takeover bid, which Warner’s board recommended shareholders reject.
Netflix stated that it did not “attribute any value” to Warner Bros.’ games division within its proposed acquisition, leading to speculation about the future of Warner Bros. Games.
Call of Duty Franchise Adjusts Release Strategy (December)
Activision announced a shift in its release strategy for the Call of Duty franchise, discontinuing back-to-back releases of Modern Warfare or Black Ops titles. This decision followed the notable underperformance of the latest installment, Call of Duty: Black Ops 7.
The franchise encountered strong competition this year from games such as Battlefield 6 and Arc Raiders. Rhys Elliott of Alinea Analytics observed that while Call of Duty was historically resilient to competition, its player base is now fragmented and dissatisfied, the franchise appears creatively exhausted, and competitors have adopted more deliberate strategies.
Larian CEO’s AI Comments Ignite Controversy (December)
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In December, remarks regarding generative AI made by Larian Studios head Swen Vincke in a Bloomberg interview generated significant discussion on social media. Vincke subsequently issued a rapid clarification, stating that the studio behind Baldur’s Gate 3 was “not replacing concept artists with AI,” and that AI was only utilized in “very early ideation stages” to provide a “rough outline for composition.”
This incident followed several other controversies surrounding AI in 2025, including a dispute over the use of AI-generated speech in Embark Games’ Arc Raiders. This particular debate saw Epic Games’ Tim Sweeney intervene to defend the technology. A comprehensive review of the games industry’s tumultuous year in AI is available.
