Former Santa Monica Studio writer Alanah Pearce has shared some insight on the game industry, and it’s not great.
Alanah Pearce, former writer at Santa Monica Studio, recently shared a disappointing yet insightful analysis of the current state of the game industry, based on data she received through her discussions with investors, highlighting systemic issues that are increasingly impossible to ignore. She broke down the complex economic, technological, and demographic forces contributing to widespread layoffs, studio closures, and stagnating growth.
According to Pearce, the game industry has become deeply entangled with stock market expectations of exponential growth, which is no longer realistically achievable. Many of the monetization models that once propelled industry profits, such as free-to-play games, battle passes, and “whale”-targeted microtransactions, have plateaued. She noted that the market has become saturated, and the novelty that once drove investor enthusiasm has worn thin.
Adding to this is a more surprising factor: population trends. Pearce pointed out that global birth rates are no longer rising fast enough to sustain the kind of new consumer influx that tech giants are banking on. “We’ve run out of humans,” she said, suggesting that the industry’s reach into developing countries for smartphone adoption and cloud gaming growth is less about accessibility and more about appeasing investors. Microsoft’s Xbox cloud initiatives are framed as a direct response to this problem. They aren’t meant for “core gamers” but designed to tap new, unexplored markets.
Pearce also warned that “black hole” games like Fortnite, Call of Duty, and Minecraft are monopolizing player attention in ways that are cannibalizing the rest of the industry. These titles, which now compete with social media for engagement hours, are reshaping consumer habits, often leaving smaller games and studios without an audience.
Still, there are glimmers of hope. Pearce pointed towards independent and privately owned studios like Larian Studios’ Baldur’s Gate 3, and Warhorse Studios’ Kingdom Come: Deliverance 2 as examples of games that succeed without the burden of investor expectations. She urged gaming enthusiasts to play and support the kind of games they enjoy and want to see continue, especially single-player titles.
