Hasbro Cannot Capture Lightning In A Bottle Twice Like It Did With Baldur’s Gate 3

When you think about the history of the video game industry, you’ll find it littered with tales of brutal crunch, failed projects that have threatened to sink studios, and companies that could not sustain themselves in the hyper-competitive market. And the end result is almost always hundreds, if not thousands, of talented developers losing their jobs because the ones who always pay the cost of such failures are always the workers.

And when it was recently brought to light that Hasbro had around 40 different video game projects in the works across multiple different internal studios and through partnerships, alarm bells started ringing in my head. Why? Because it sounds like a classic case of someone biting off more than they can chew, and the results of that are never pretty.

NEW – Hasbro/Wizards of the Coast have about 40 video game projects in the works as it doubles down on games

My chat with their execs covered a lot:
– Transformers games (new and old)
– Larian
– Project cancellations
– AI
– Layoffs (or lack thereof)
– And more! pic.twitter.com/8DyffufUeT

— Stephen Totilo (@stephentotilo) March 6, 2024

Just The Cost of Doing Business

As it stands now, the video game industry is rapidly bleeding talent because the modern gaming landscape is so incredibly averse to creativity and innovation. And, due to the sky-high cost of development, fewer and fewer companies are willing to take risks on new and creative ideas, and most are simply satisfied with regurgitating existing concepts, that is when they aren’t too busy abusing their employees.

And in that dark and depressing environment, Baldur’s Gate 3 stands out like a shining light in the darkness. Nothing Larian has done here is particularly innovative for them, but everything they have done is so exceptionally well executed that it has set a new standard for not only how to design a game but also how to go about running a studio and producing consistent hits.

Because make no mistake, Hasbro, which owns the Dungeons & Dragons IP, had no hand in the incredible success of this game. They only granted Larian the license to the Baldur’s Gate name, and the rest was only possible through the sheet talents of one of this industry’s greatest and most respected studios. For them, the launch of BG3 was probably like catching lightning in a bottle, but we all expected nothing less from Larian.

Spread Way Too Thin

So when I hear that Hasbro has 40 other video game projects in development, I begin to think that the suits in charge are getting a bit too overconfident. We’ve all seen corporate greed in action, and the executives probably think that Baldur’s Gate 3 was successful because of its star power alone, and not that it was a remarkable game because it was made by a remarkable studio.

And when you hold something akin to such a belief, it only makes sense to look at all of your other IPs and go: “Why can’t we make a My Little Pony RPG that sells millions?” or “Why can’t Peppa Pig be the new Tomb Raider?”. I’m obviously exaggerating a bit for comedic effect, but anyone who’s worked a corporate job at any point in their life can attest to how ridiculous executives can sound when more money is on the table.

They could go for quality over quantity and invest in a few high-quality games instead of 40 different ones, but logic does not play a part in making these decisions; greed does. So while I’m fairly excited that a deal for Baldur’s Gate 4 could also be part of the package, the vast majority of these projects will either never see the light of day, flop, or simply be so mediocre that will put more studios and more workers at risk.

Unsustainable Growth

Do you know what happens when a studio signs a deal to develop a game for a corporation like Hasbro, especially one that may be large in scope and require more manpower than they currently have? Well, they hire more and more people with all the new funding they get, sometimes hundreds of them. And do you know what happens if these projects don’t pan out or sell enough copies? Yes, once again the answer is more layoffs.

Because in these scenarios, which are more common than you think, the studios that hire all these new developers suddenly find themselves without a steady revenue source and many many additional mouths to feed. And when faced with having to close down shop in a few months or lay off a significant chunk of their workforce to save money, you know what choice most companies are going to make.

It's a sad day with 1900 people being laid off at Microsoft's gaming division today.

Ybarra out at Blizzard. And Blizzard's survival game is canceled.

I'm left with many feelings.

On the one hand, in a vacuum, it seems ridiculous that a 3 TRILLION DOLLAR market-cap company…

— Ryan McCaffrey (@DMC_Ryan) January 25, 2024

It’s a cruel and vicious cycle that cares little for the very people who make the games we all love, and yet it’s the industry standard nowadays. Even big companies like Ubisoft and Bungie that do maintain significant sources of revenue still lay off swathes of developers after each major project in order to reduce operating costs, and Hasbro is potentially going to subject dozens of studios to that fate.

Video Game Sales Have Been Going Down

Let’s not pretend otherwise, video games are a multi-billion dollar industry that dwarfs even the film industry in terms of how much money it generates. And, while this will not change any time soon, there is a bit more to the story these days, namely that revenues have been declining since the pandemic, as seen in the graphic below by analyst Matthew Ball.

In his article on the subject, he goes into great detail as to why he thinks this is happening. But long story short, development costs are up, customer spending is down, and profits have been decreasing overall. And, while the difference on paper is only a few percentages, this represents billions of dollars in value, and when a company sees this, their most common instinct is to reduce more costs, aka, fire their developers.

And that is exactly what’s been happening so far. The year has barely just begun, and a record 8,100+ layoffs have been announced so far, with many more expected to follow in the coming months. It’s a harrowing time to be a member of this industry, and I’m not sure how long things can go on like this before everything starts to implode.

So now we once again come back to my original point. When I hear that Hasbro is working on 40 new projects, I don’t think of all the cool new games that may one day exist. All I can think about are the careers that will be affected, and all the livelihoods that will be lost. I hope I’m wrong, and that this is all the worrying of a pessimistic video games enthusiast, but I really doubt it.