The Death of Passion: How ‘Excel-Driven’ Consolidation and the Pandemic Bubble Restructured the Video Game Industry

The video game industry is undergoing a profound structural crisis. Behind the glossy marketing campaigns of high-budget releases lies a landscape defined by mass layoffs, sudden studio closures, and a pervasive sense of creative exhaustion. To industry veterans, this instability is not a random market fluctuation, but the predictable consequence of a fundamental shift in who holds the purse strings—and what they prioritize.

Stephane D’Astous, the founder and former general manager of Eidos Montreal—the studio responsible for acclaimed titles such as Deus Ex: Human Revolution and the Thief reboot—recently shared a candid assessment of this transformation. Speaking with esports betting platform Thunderpick, D’Astous lamented the decline of creative risk-taking, pointing to a stark transition from "passion-driven" leadership to a highly financialized, "Excel-driven" corporate culture.

According to D’Astous, the entry of massive global conglomerates, sovereign wealth funds, and short-sighted investment strategies during the COVID-19 pandemic has fundamentally broken the traditional pipeline of game development. The result is an industry dominated by astronomical budgets, unrealistic executive expectations, and a workforce bearing the brunt of corporate mismanagement.

1. Main Facts: The Transition from Passion to Spreadsheets

At the heart of D’Astous’s critique is the changing profile of the industry’s decision-makers. Fifteen years ago, major publishers were primarily run by executives who, while profit-oriented, still possessed a deep familiarity with the creative and technical realities of game development. Today, power has consolidated into the hands of a few ultra-wealthy entities with little connection to the medium’s creative roots.

Traditional Game Development (circa 2010)
   [Mid-Sized Publishers] ➔ [Creative Directors] ➔ [Mid-Budget Narrative Games (AA/AAA)]
                                                        │
                                             (Driven by Studio Passion)

Modern Game Development (circa 2026)
   [Sovereign Wealth / Megacorps] ➔ [Financial Analysts (Excel)] ➔ [Unrealistic Templates ("Witcher 3 clones")]
                                                        │
                                             (Driven by Debt & Restructuring)

"The people with the money and the decision power are much fewer, and their pockets are much deeper," D’Astous observed. "They don’t have the same DNA of the decision maker 15 years ago; it’s much more Excel than passion-driven."

This financialization has led to several critical distortions in how games are greenlit, funded, and managed:

• The Loss of Middle-Tier "AA" Development: The industry has increasingly polarized into a binary landscape: hyper-budget AAA blockbusters or small-scale indie titles. The highly creative, moderately budgeted middle-tier games—where Eidos Montreal once thrived—have been systematically squeezed out.
• The Sovereign Wealth Shift: Traditional Western publishers are no longer the apex predators of the market. Instead, sovereign wealth funds, most notably Saudi Arabia’s Public Investment Fund (PIF), and Chinese tech giant Tencent have acquired massive, controlling stakes across the global gaming ecosystem.
• The "Witcher 3" Paradox: Executives frequently demand massive, open-world masterpieces without providing the necessary resources, time, or stable teams. D’Astous revealed he has repeatedly been asked to produce a "Witcher 3-like game with a limited budget in less than four years with a new team"—an operational impossibility that showcases the disconnect between corporate boardrooms and development floors.

2. Chronology: The Road to the Modern Crisis (2007–2026)

The current state of the industry did not emerge overnight. It is the result of a nearly two-decade transition from localized, publisher-led ecosystems to global corporate consolidation, supercharged by a pandemic-era financial bubble.

2007–2013: The Eidos Montreal Era and Mid-Budget AAA

In 2007, Stephane D’Astous founded Eidos Montreal under the umbrella of Eidos Interactive. During this period, publishers still took calculated risks on atmospheric, narrative-driven single-player games. The studio successfully revived the dormant Deus Ex franchise with 2011’s Deus Ex: Human Revolution, proving that sophisticated, choice-driven immersive sims could achieve commercial and critical success. However, even then, cracks were appearing; after Square Enix acquired Eidos in 2009, the Japanese publisher began imposing increasingly high, often unrealistic sales targets on its Western studios.

2014–2019: Silent Consolidation and the Rise of Mega-Conglomerates

As development costs began to balloon, the industry witnessed the quiet rise of massive corporate buyers. Tencent expanded its global footprint, acquiring full ownership of Riot Games and purchasing significant stakes in Epic Games, Ubisoft, and Activision Blizzard. Simultaneously, Sweden’s Embracer Group began an aggressive, debt-fueled acquisition campaign, buying up dozens of independent studios and intellectual properties under the radar.

2020–2021: The COVID-19 Pandemic and the Investment Bubble

The onset of the COVID-19 pandemic brought unprecedented engagement to video games as billions of people locked down globally. Revenues spiked, and financial institutions viewed gaming as a recession-proof, high-growth sector. Capital flooded the market.

"Thousands of projects were given money during COVID," D’Astous explained. "When I saw some of those… I said, ‘That idea was funded? Oh my god, this is bad news.’ We’ll see the end results of that bad decision of this investment [a few years from now]."

2022–2023: The Bubble Bursts and the Embracer Collapse

As lockdowns ended and inflation rose, consumer spending normalized, leaving publishers with bloated headcounts and expensive projects greenlit during the pandemic peak. The crisis escalated dramatically in mid-2023 when Embracer Group’s planned $2 billion partnership—widely reported to be with the Saudi-backed Savvy Games Group—collapsed at the last minute. This forced Embracer into a brutal restructuring program, resulting in the cancellation of dozens of games, the closure of historic studios like Volition (Saints Row), and massive layoffs.

2024–2026: The Era of the "Great Cleansing"

The industry entered a prolonged period of severe downsizing. Despite record corporate revenues in some sectors, tens of thousands of developers lost their jobs globally. In early 2024, Embracer Group cancelled a highly anticipated, unannounced Deus Ex game that had been in pre-production at Eidos Montreal for two years, laying off a significant portion of the studio’s staff.

3. Supporting Data: The Financialization of Play

The structural shifts described by D’Astous are reflected in the financial data and market trends of the last few years.

The Scale of Sovereign Wealth and Megacorp Investment

The financial resources of the industry’s new power players dwarf those of traditional publishers from fifteen years ago:

Fifteen years ago, Electronic Arts (EA) was considered an untouchable, independent industry giant. Today, with sovereign wealth funds holding massive stakes in the company, D’Astous notes that "EA [has been] on the chopping block to be bought," illustrating how vulnerable even the largest traditional publishers have become to hostile takeovers or total buyouts.

The Human Cost: Industry-Wide Layoffs

The consequences of the post-pandemic correction have fallen squarely on developers.

Estimated Video Game Industry Layoffs by Year:

2022: █ 8,500
2023: ██████████████ 10,500
2024: █████████████████████████ 11,500+ (as of late 2024)

These layoffs occurred alongside the closure of highly respected, award-winning studios, such as Arkane Austin (Prey), Tango Gameworks (Hi-Fi Rush), and London Studio, proving that critical acclaim no longer offers protection against corporate restructuring.

The Ballooning Costs of AAA Production

D’Astous’s frustration with executives demanding "Witcher 3-like games" on limited budgets is grounded in stark financial realities. The cost of producing a competitive AAA game has risen exponentially:

• The Witcher 3: Wild Hunt (2015): Produced for approximately $81 million (including marketing) over three and a half years.
• Modern AAA Titles (2020–2026): Budgets routinely exceed $200 million to $300 million for development alone, excluding marketing. Insomniac Games’ Spider-Man 2 reportedly cost over $315 million to produce, requiring several million units sold just to break even.

4. Corporate Strategy and Executive Justifications

When confronted with criticisms of mass layoffs and studio closures, corporate executives have consistently pointed to market efficiency, debt reduction, and long-term sustainability.

Following the collapse of the $2 billion Saudi deal, Embracer Group CEO Lars Wingefors defended the company’s aggressive restructuring as a painful but necessary step to save the company from bankruptcy. "We need to be a highly efficient, cash-generating business," Wingefors stated in investor calls, emphasizing capital allocation over creative continuity.

Similarly, Sony Interactive Entertainment executives justified their 2024 layoffs and the closure of London Studio as a necessary "re-evaluation" of their live-service strategy. Sony’s disastrous push to launch a dozen live-service games simultaneously led to massive development write-offs, including the high-profile cancellation of Naughty Dog’s The Last of Us Online.

From the perspective of institutional investors, these restructurings are viewed positively. Stock prices for companies like Embracer and EA often stabilize or rise following announcement of layoffs, as Wall Street rewards companies that prioritize short-term margin preservation over long-term creative health. This dynamic directly validates D’Astous’s assertion that modern game development is governed by "Excel rather than passion."

5. Implications: The Creative Horizon and the Death of the AA Studio

The structural transformation of the games industry carries profound implications for the future of the medium.

       CONSOLIDATION & BUDGET INFLATION
                       │
         ┌─────────────┴─────────────┐
         ▼                           ▼
   SOCIOPOLITICAL              CREATIVE RISK
     CONSEQUENCES                AVERSION
         │                           │
  • Career Instability        • Safe, Iterative Sequels
  • Loss of Senior Talent     • "Live-Service" Churn
  • Regional Subsidies        • Homogenized Design

The Homogenization of Game Design

When publishers commit hundreds of millions of dollars to a single project, they become highly risk-averse. This creative caution manifests in:

• The Sequel Trap: A reliance on established, aging intellectual properties rather than new, unproven concepts.
• Design-by-Template: The forced integration of trending monetization mechanics—such as battle passes, live-service roadmaps, and microtransactions—into single-player games where they do not belong.
• The Loss of Genre Diversity: Atmospheric, experimental narrative games like Deus Ex are abandoned in favor of broad, homogenized open-world RPGs designed to appeal to every demographic simultaneously.

The Talent Drain and the Rise of "Boutique" Indies

As corporate studios lay off thousands of experienced developers, a massive talent drain is occurring. Many senior developers are leaving the AAA space entirely, exhausted by systemic instability and constant restructuring.

This migration has fueled a rise in independent, developer-owned boutique studios. Freed from the constraints of short-sighted corporate boards, these studios are attempting to reclaim the mid-budget "AA" space. However, these startups face an uphill battle in a crowded digital marketplace dominated by massive marketing budgets.

A Grim Outlook for Beloved Franchises

For fans of celebrated narrative franchises like Deus Ex, the outlook is bleak. Under the current financial paradigm, a high-quality immersive sim—which is historically expensive to make and appeals to a dedicated, but relatively niche audience—cannot generate the massive, recurring returns demanded by sovereign wealth funds and global conglomerates.

As Stephane D’Astous warns, as long as decisions are dictated by spreadsheets rather than creative vision, the industry will continue to struggle with a cyclical pattern of over-investment, market corrections, and creative stagnation. The era of the passion-driven AAA studio may not be entirely over, but it is rapidly being eclipsed by a landscape where art is secondary to capital allocation.