„The AAA industry is at its end.” Former CEO of Nexon warns of looming disaster
The former head of Nexon talked about the state of AAA games. He believes that CEOs' unwillingness to take risks and bet only on proven solutions is a huge issue.
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For some time now, we've been hearing many people in the industry predicting the end of AAA games. Shawn Layden thinks we're about to see a comeback of AA titles, and the publisher of Space Marine 2 seems to agree. Meanwhile, the creator of the Diablo series claims that making high-budget games is extremely risky today. Now, a former CEO of Nexon has joined this group.
"AAA industry is structurally at its end"
Owen Mahoney was the CEO of Nexon from 2014 to 2024, and one of his big moves might have been buying Embark Studios in 2019. Although he faced "strong resistance" from investors and board members, he ultimately decided to invest in the then-newly established studio.
While he was present at the launch of their first project, The Finals, he didn't have the opportunity to celebrate the huge success of this year's ARC Raiders. However, it cannot be denied that purchasing a studio without any titles to its name was a risky move.
In an interview with The Game Business, Mahoney stated that the lack of willingness to take risks by many company CEOs is one of the main problems in the industry. They are only willing to green-light projects they think are familiar and safe, only to get a rude awakening when players actually want something new and fresh.
Mahoney stated that this is partly due to the pressure that CEOs of large companies are under. If they approve a project that turns out to be a financial failure, they will have to explain themselves, and if it happens a second time, the board "will openly demand their head." Nevertheless, relying solely on proven ideas is, according to Mahoney, a big issue.
I think that the AAA industry is structurally at its end. And without a serious rewrite of the ways we go about making games, it’s going to end in more disaster than it has already.
In the case of Embark Studios, Mahoney was willing to take a risk because he knew that experienced developers responsible for the Battlefield series were at the helm. However, he admitted that the game's success was only sure at the time of its release.
How come it was so unobvious that Embark was a great deal for Nexon until about three weeks ago? What does it say about the industry? It reminds me of when Minecraft came out of nowhere and every single belief, bromide and cliche that we had about high-fidelity graphics was blown out of the water once again. Clash Royale came out and suddenly everybody realized that you could have synchronous online PVP play, whereas the day before people said: ‘Nobody wants that on mobile.’ These are the things that the industry grapples with. They believe one thing until someone shows them different. That is an indication of where the industry’s head is at right now. Everybody’s so busy trying to execute on today’s business, they’re having a real hard time thinking about tomorrow’s business.
However, it's impossible to predict what will be a success and what will be a failure. This puts developers in a difficult position: to stay in the indie world or take a risk and try their hand at AAA. Unfortunately, Mahoney doesn't have any good advice on this matter.
They can either build something as an indie without much experience, or go work in a factory, which is essentially what working for those big AAA developers looks like. It’s a terrible choice. And then you go work in a factory and work on one tiny piece of a game, and it’s not fun. Structurally the industry is in really bad shape. We’re sort of at the end-of-days.
It must be admitted that Mahoney's words don't sound very optimistic. However, it cannot be denied that indie and AA games are increasingly capturing the most attention from players. Just mention this year's Clair Obscur: Expedition 33, Hollow Knight: Silksong, Hades 2, or Megabonk. Time will tell if this trend will continue.
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Author: Martin Bukowski
Graduate of Electronics and Telecommunications at the Gdańsk University of Technology, who decided to dedicate his life to video games. In his childhood, he would get lost in the Gothic's Valley of Mines and "grind for gold" in League of Legends. Twenty years later, games still entertain him just as much. Today, he considers the Persona series and soulslike titles from From Software as his favorite games. He avoids consoles, and a special place in his heart is reserved for PC. In his spare time, he works as a translator, is creating his first game, or spends time watching movies and series (mainly animated ones).
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