The global games industry converges at the Gamescom trade fair in Cologne this week, with high hopes that upcoming blockbusters like “GTA VI” can rejuvenate the sector. The event, which kicks off on Tuesday, will showcase major releases slated for the coming months, headlined by “Black Ops 7”, the latest entry in the expansive “Call of Duty” series.
Trade visitors will have exclusive access on Wednesday to explore the exhibits and forge connections, before the event opens its doors to tens of thousands of eager gamers from Thursday to Sunday. Last year’s Gamescom attracted nearly 335,000 attendees to the Cologne exhibition center, where studios offered hands-on experiences with the latest games through extensive setups featuring consoles and PCs.
Nintendo’s Return and Sony’s Absence
In a notable return, Nintendo is back in 2025, buoyed by record sales of its Switch 2 console. Meanwhile, Microsoft’s Xbox division plans to unveil new portable hardware expected to launch later this year. However, Sony, the powerhouse behind the PlayStation, has opted out of this year’s event.
The mood among the approximately 1,500 exhibitors is mixed. While major publishers have recently returned to profitability, the industry continues to grapple with job cuts seen over the past two years. In early July, Microsoft announced plans to lay off around 9,000 employees, impacting game studios such as “Candy Crush” developer King and leading to the cancellation of several games, including “Perfect Dark” and “Everwild”.
Industry Consolidation and Competitive Landscape
The announcement comes as the industry undergoes significant consolidation following the surge in demand during COVID-19 lockdowns. According to Rhys Elliott of Alinea Analytics, around 30,000 workers have lost their jobs since early 2023, with over 4,000 layoffs occurring this year alone.
Revenue in the global games market is projected to remain steady at just under $190 billion this year, according to data firm Newzoo.
While the number of players and hours spent gaming remain stable, an ever-growing array of titles competes for attention. With giants like “Roblox” and “Fortnite” capturing the interest of hundreds of millions of monthly users, “everyone’s fighting for a smaller share of that pie,” noted Mat Piscatella, an expert at Circana.
Strategic Shifts and Cross-Platform Success
The need to reach new audiences has prompted Microsoft’s Xbox, the world’s largest games publisher, to shift strategy by offering its titles on competing consoles. This approach has seen success, with PlayStation benefiting financially from Xbox’s presence on its platform.
“They’ve had really great success on the PlayStation platform. Sony is making a bunch of money on that too,” Piscatella said. “It’s a little bit of a win-win all the way around.”
Conversely, some PlayStation games are crossing over to Xbox, with “Helldivers 2” being the first to be available on both Xbox and PC.
Balancing Budgets and Blockbusters
Meanwhile, the rising costs of developing high-spec “AAA” games, which can reach hundreds of millions of dollars, expose studios to significant risks if their games underperform. However, recent successes of lower-budget games, such as the four-million-selling French turn-based battler “Clair Obscur: Expedition 33”, demonstrate that quality gameplay, story, and art style can still captivate audiences.
“There’s a realization you don’t need to spend masses of money to deliver a high-quality game that can appeal broadly and so everyone is rushing towards that model,” said Christopher Dring, founder of industry website The Game Business.
Nevertheless, for every success story like “Clair Obscur”, there are numerous games that struggle to find an audience. Piscatella emphasized the hyper-competitive nature of the market for smaller developers seeking funding to bring their games to market.
Despite the growing trend of cult hits, analysts predict that mega-budget titles will continue to dominate. Rockstar Games’ upcoming “Grand Theft Auto VI” is anticipated to achieve the largest launch for any entertainment product in history, potentially providing the boost the industry needs to regain its momentum.
As Gamescom 2025 unfolds, the industry watches closely, seeking the next winning combination to propel it forward in an ever-evolving landscape.
