Fifteen years ago I used to work on the translation of our Annual Reports at Square Enix into English. One area that often required editing was the word "content." It was a commonly used word in all our IR materials. The Japanese write コンテンツ (Kontentsu) which is plural

We used the word “content” a lot because we were in the content business. We made myriad content: games, manga, anime. Starting in 2004 my boss, CEO Yoichi Wada, began writing in his annual letter to shareholders about the “Network” being the future rather than content.

In 2004, the word “content” appeared in the Annual Report 90 times. Over time, this went down. In 2024, the word content appeared in the Annual Report a mere 28 times.

Square Enix has spent two decades slowly moving away from being a content business. Not just Square Enix, but every publisher. Wada-san was right. The future of games was the Network (here is page 2 of his 2004 Annual Report!). But the Network business he imagined isn’t

The game industry is facing a fundamental realignment. This is not a passing storm. It is a change in the forces that stitched the industry together. The industry was once defined by scarcity of content. You would consume a game (finish "Super Mario Bros") and move onto the

This is the reason why release dates for the biggest titles were set in the fall (best time to sell content into Christmas), and why there was a constant hustle for getting a unique date that didn’t have something like a Call of Duty or Assassin’s Creed also launching that week.

To understand why, we have to take a short detour. Concurrent to the growth of this business was another new market that opened an expanded games: it began with the casuals who first picked up a Wii controller, who then moved onto F2P mobile titles. Meanwhile, younger

The younger generation has stayed with platform titles, graduating in some cases from Roblox to Fortnite, but still staying within ecosystems. Meanwhile the casual business that had shifted to mobile started to stick with dominant forever games (Candy Crush, Clash Royale) that

With competition on time looming and the biggest games becoming platforms, we are left with only the traditional packaged business continuing to function as content. But the number of hours in a day has not changed, and the amount of freely available distraction has. Scarcity is

Games had indeed reached their Network era; but there are very few successful new social networks. In the last decade, the only one that has grown to any prominence to rival Facebook’s blue app and Instagram has been TikTok, with Snapchat having remained relatively small. This

You cannot beat the basic economics that their cost of development is covered by much higher demand, enabling them to build more content. This is the transition point: we have moved from a content based business to a social media business based on platforms that can constantly

This does not mean games go away, in the same way that movies or television did not go away with the advent of YouTube. But we are fighting for time; time does not increase. Tiktok increasingly taking up time that once belonged to more casual play. Hardcore players are aging

Prior to 2024, a situation like Concord had never occurred. $400m and eight years of people’s lives gone permanently in two weeks. Zero revenue generated, every sale was refunded. This is astonishing. We’d had Duke Nukem Forever incidents before (and Duke Nukem Forever wasn't

June 2025 was in fact a critical month for the game industry, though few have written about it. Nearly $1bn in game investment went into the following games: $400m for Mindseye, $100m for Splitgate 2, hundreds of millions more for Marathon, and tens of millions more for FBC:

Sidenote: FBC: Firebreak was available for free to Gamepass and PS+ subscribers. Splitgate 2 was also free. Don’t be misled by articles like the one in the image below that the industry's problems can be chalked up to Gamepass, a service with barely any growth the last few years.

Many have argued that this is a cost problem, saying that we can resolve industry problems by fixing the cost base. Fewer assets, smaller worlds, etc.! However, thats for AAA and fixing the cost base does not resolve for lack of players. A shorter FF17 is not going to make more

Again, this is what the audience wants. It’s silly to blame “suits” at publishers when any flaw in a title is magnified by a thousand YouTubers and Gaming websites saying “Look at this snarky reddit post” https://gamingbible.com/news/b... Management cannot infinitely invest, and the

Additionally, if you think that $400m for Battlefield is too high, or $2.5bn for GTA6 is insane, by definition you are saying those people working on it should not have had jobs. We cannot expect that everyone should be employed, games can be developed perfectly, and no flaws

Enter AI. There are many misunderstandings here. But we should not misconstrue the Microsoft layoffs with them replacing studios with AI. What happened with Microsoft was clear: AI is a one-in-a-generation change in the entire digital order. MS must either get on board, or

What choice does Phil Spencer have when Satya’s decided it for him? MS isn’t a games-only company that needs to live or die by Xbox. Meanwhile, Phil is a smart guy- he can see that alternatives like the smartphone or PC market is shut out. Mobile is a UA game- Scopely spends

The ultimate ticking time bomb is Roblox and UEFN as the generations that grow up with it continue to stay. I return to the Grow a Garden growth. This is not coincidence. Gamers who are happy with Roblox and UEFN will stay with it, just as the YouTube generation of kids

This is where AI comes in -> Tiktok is already a game run by an AI. The next step is Roblox-like platforms built with AI prompts where kids just enter the type of entertainment they want. They will be build a Matrix-like world in five to ten years. Epic will as well. These

This is what I think many have failed to grasp. T2, Epic, Roblox’s competition is going to be OpenAI, xAI, etc. The big tech companies are already making interactive world models that will compete with game experiences. This is why Mark Zuckerberg moved his bets away from