Former PlayStation boss Shuhei Yoshida, who spent over three decades at the company before departing earlier this year, feels “stupid money” is responsible for the wave of studio closures and layoffs that have dominated the video game industry following the COVID-19 pandemic.
During a wide-ranging chat at Gamescom LATAM, Yoshida said it remains “totally possible” for the industry to become truly sustainable, but claimed that would require the biggest players and investors to stop treating the market like a fabled golden goose.
“What we’ve been seeing for the last two years is just the adjustment to the misjudged [spending] by so many companies during the COVID days,” he explained, pointing to the ill-fated M&A spree undertaken by Embracer Group as an example of a growth tactic that seemed incredibly short-sighted.
“Many companies and even the analysts believed the crazy growth [during the pandemic] would continue. So they over-invested and over-hired and they started too many projects, but after COVID there were a lot more ways for people to entertain themselves so the growth slowed down.”
Yoshida described the situation that has left thousands of developers out of work (including many at his former employer Sony) as “very sad,” but claimed the “stupid money” that helped spark that age of over-investment has departed the video game industry in search of the next big thing.
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Yoshida feels diverse portfolios and smaller projects can deliver stability
Does that mean there’s cause for quiet optimism? Yoshida believes so, but feels the largest companies need to begin (sensibly) investing in portfolios rather than pinning all of their financial hopes on a handful of gargantuan projects with no margin for error.
“Each product is different, right? Some live service games are successful—like Helldivers 2. So you cannot just take one product [or model] and say they’re all wrong. Especially with entertainment products, nobody can predict sales, especially when new IPs are tried,” he continued.
“I’ve worked with marketers in the past and they always miss the numbers. So, what big companies should do is invest in a portfolio of titles—because if they just invest in a small number of titles it’s a huge risk. Even when you invest in existing successful franchises, because people’s tastes will change.”
It’s also important, says Yoshida, to moderate the amount invested across that portfolio.
He explains that because big companies have to compete with rivals of similar size and stature, budgets can quickly balloon as competitors attempt to outdo each other. The antidote to that budgetary arms race, he suggests, is to realize that “sometimes limitation is really helpful” for studios and developers looking to push themselves creatively.
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It’s a sentiment that chimes with the advice handed out by Astro Bot director Nicolas Doucet at GDC 2025, where he reminded attendees that “it’s okay to make a small game.”
“A lot of the choices we made with Astro Bot could be labelled double-A or maybe lacking in ambition—like the size of the team, the size of the game, the fact there’s no text, no voice, and its not an open world,” added Doucet. “But that doesn’t really matter. We still made a game that made people really happy, and in fact it was probably the simplicity that a lot of players made time for.”