Episode 202: The Last Gasp of a Brutal Year (Season Finale)

2025 has continued the trend of layoffs, consolidation, and privatization. The gulf between AAA and everyone else is widening, as the AI bubble strains before an inevitable burst. With November's Circana report coming in bleak after months of stronger performance, 2026 will continue to challenge us all. BUT... there is reason to hope. Unions are growing in number and reach and studios doomed by AAA mega-corps are finding a way to survive. We need to stick together to not only survive, but thrive. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:07:28] - Circana Report on U.S. Video Game Spending for November 2025 [00:27:31] - Sony and Tencent Settle Light of Moritram Lawsuit [00:28:43] - Investment Interlude [00:37:27] - Quick Hits [00:43:53] - Labor Report  SOURCES Sony and Tencent settle lawsuit over "slavish clone" of Horizon: Zero Dawn | GamesIndustry INVESTMENT INTERLUDE Tencent makes minority investment in France's Drama Studios | GamesIndustry Disney to Invest $1 Billion in OpenAI in Major Deal That Boosts Sora in Hollywood | The Hollywood Reporter Bandai Namco sells Limbic Entertainment to "private investor" | GamesIndustry LABOR REPORT Naughty Dog Studio Orders Employee Overtime for 'Intergalactic' | Bloomberg (Paywall) Days after launching their first indie game, everyone responsible for publishing it was laid off: 'We had a Slack channel with everyone in it, and then you see them leaving one by one' | PC Gamer We are crowd funding Wreckreation | Three Fields Funcom may have closed down Metal: Hellsinger studio The Outsiders, but its co-founder and Battlefield vet David Goldfarb says it's not over yet | PC Gamer The Studio Behind Doom Just Unionized | Kotaku

Warner Bros. is selling itself like a $1.50 hot dog at Costco, and everyone wants a bite. Before the weekend, Netflix looked like it had a clear path to regulatory review. But now, New Paramount is taking a swing with a hostile takeover. Things are about to get ugly. Regardless of who wins, though, we lose. Consolidation continues and consumers pay the price. Also: Nintendo, Square Enix, Take-Two, Embracer Group, and Sony earnings; Circana's report on U.S. video game spending for October 2025; and another grim labor report. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:06:02] - PAX Unplugged Roundup [00:23:44] - Circana Report on U.S Video Game Spending for October 2025 [00:31:49] - Sony Earnings for Q2 FY26 [00:36:49] - Nintendo Earnings for H1 FY26 [00:48:15] - Square Enix Earnings for H1 FY26 [00:54:31] - Take-Two Earnings for Q2 FY26 [00:55:39] - Embracer Group Earnings for Q2 FY26 [00:59:48] - iam8bit is Suing Skybound [01:02:40] - Tencent Pauses Light of Moritram Promotion During Sony Lawsuit [01:03:35] - Krafton CEO Accused of Using ChatGPT to Get Out of Unknown Worlds Earnout [01:06:43] - Investment Interlude [01:24:37] - Quick Hits [01:29:47] - Labor Report [01:38:13] - FAFO SOURCES Q2 FY2025 Consolidated Financial Results | Sony Nintendo Earnings for H1 FY2026 | Nintendo HUGE blow to Nintendo: head of U.S. patent office takes RARE step to order reexamination of "summon subcharacter and let it fight in 1 of 2 modes" patent | Games Fray Financial Results Briefing Session Six-Month Period Ended September 30, 2025 | Square Enix Take-Two Interactive Software, Inc. Reports Results for Fiscal Second Quarter 2026 | Take-Two Grand Theft Auto VI is Now Set to Launch November 19, 2026 | Rockstar Embracer Group publishes Interim Report Q2, July–September 2025 | Embracer Group Embracer Group divests Arc Games and Cryptic Studios | Embracer Group Arc Games Is Now an Independent Publisher | Arc Games iam8bit is suing Skybound Game Studios alleging fraud and theft of designs | Engadget Tencent agrees to stop promoting its Horizon ripoff during Sony lawsuit | Engadget Krafton CEO accused of forming secret task force 'Project X' to seize control of Unknown Worlds | Game Developer Remember Postal? | PC Gamer INVESTMENT INTERLUDE Digiphile - About Us | Digiphile Saudi Fund to Own Almost All of Electronic Arts After Buyout | WSJ via MSN Netflix to Acquire Warner Bros. Following the Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72.0 Billion) | Netflix Netflix Sells Spry Fox Back to Founders | GameFile ‍Paramount launches all-cash tender offer to acquire Warner Bros. Discovery | Paramount LABOR REPORT The Rockstar Workers Fired Before They Could Finish GTA 6 | People Make Games The Messages Rockstar Saw Before Firing 34 Union Members | People Make Games NetEase racks up its third studio casualty in one week, kneecapping dev working on a Warhammer MMO | PC Gamer Splash Damage places entire studio into consultation ahead of redundancies | GamesIndustry Three Fields Entertainment puts entire studio in consultation | Fiona Sperry on LinkedIn Coatsink to lay off half its staff due to "challenging co-development market" | GamesIndustry UK publisher Outright Games confirms layoffs | Game Developer Atomhawk is Closing its Canadian Studio | Atomhawk on LinkedIn Layoffs at Gorilla Tag dev Another Axiom | Jonathan Dearborn on LinkedIn

We're joined by two special guests on this milestone episode. Please welcome Andy Pan (the only person who has previously co-hosted a show with us) and Greg Alderton, Virtual Economy's lead moderator! With 14,000 people laid off, studios shuttered, and projects abandoned, Amazon seems ready to give up on most or all of its gaming dreams. Also: EA earnings ride off into the sunset, Capcom posts a strong quarter, Remedy's in trouble, and Microsoft is inscrutable. Also: Sony responds to Tencent's request to dismiss the Light of Moritram lawsuit, Circana report on U.S. video game spending for September 2025, and Microsoft is a little too cozy with the U.S. government.  You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:01:12] - Investment Interlude/Divestment Dinterlude [00:11:01] - Quick Hits [00:24:08] - Labor Report [01:06:11] - FAFO Award SOURCES INVESTMENT INTERLUDE NetEase divests Fantastic Pixel Castle as studio hunts for new publisher to avoid closure | GamesIndustry Neon Doctrine is Closing, Folding into Raw Fury | Iain Garner on LinkedIn Neon Doctrine is Closing, Folding into Raw Fury | Vlad Tsypljak on LinkedIn Warner Bros. Discovery Initiates Review of Potential Alternatives to Maximize Shareholder Value | Warner Bros. Discovery LABOR REPORT Amazon Makes 'Significant' Cuts In Video-Game Division | Bloomberg (Paywall) Ubisoft RedLynx Proposes Strategic Refocus on Small Screens | Redlynx Ubisoft Massive is Restructuring | Massive Open Letter to the Executive Leadership at Build A Rocket Boy | IWDB GameWorkers Grand Theft Auto made him a legend. His latest game was a disaster | BBC Netflix reportedly shutters studio behind Squid Game mobile spinoff | Engadget Rovio is laying off 36 staff, says Angry Birds Dream Blast has 'not been performing as expected' | VGC Testronic shuts down another studio, this time in Bucharest | Game Developer Report: Metroid Dread developer MercurySteamworks accused of retaliation and forced crunch | Game Developer "Si algo hace bien MercurySteam es jugar con el miedo porque no hay otro lugar donde ir": Así se ha degradado el ambiente laboral en uno de los estudios de videojuegos más grandes de España | 3DJuegos Krafton declares transformation into an "AI-first" company, investing over KRW 100 billion. | Kraton Heart Machine making layoffs and ending development on Hyper Light Breaker | Game Developer Outerloop Layoffs | Chandana Ekanayake on Bluesky 'Grand Theft Auto' Studio Accused of Union Busting After Firings | Bloomberg (Paywall) Battle.net Workers Unionize As Microsoft Neutrality Agreement Expires | Aftermath

We're joined by two special guests on this milestone episode. Please welcome Andy Pan (the only person who has previously co-hosted a show with us) and Greg Alderton, Virtual Economy's lead moderator! With 14,000 people laid off, studios shuttered, and projects abandoned, Amazon seems ready to give up on most or all of its gaming dreams. Also: EA earnings ride off into the sunset, Capcom posts a strong quarter, Remedy's in trouble, and Microsoft is inscrutable. Also: Sony responds to Tencent's request to dismiss the Light of Moritram lawsuit, Circana report on U.S. video game spending for September 2025, and Microsoft is a little too cozy with the U.S. government.  You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:05:44] - Remembering Tomonobu Itagaki [00:10:32] - Episode 200 Celebration [00:34:14] - Circana Report on U.S. Video Game Spending for September 2025 [00:56:18] - Sony Responds to Tencent's Request to Dismiss Light of Moritram Lawsuit [01:06:57] - EA Earnings [01:17:51] - Capcom Earnings [01:27:49] - Remedy Earnings [01:43:45] - Microsoft Earnings [02:16:00] - Why Is Microsoft Allowing the U.S. Government to Use the Halo IP? SOURCES "I Told Him I Loved Him, Because I Do" - A Tribute To The Late Dead Or Alive Creator Tomonobu Itagaki | Time Extension SIE Opposition to Motion to Dismiss 4142-0511-3185 v.2 | United States District Court - Northern District of California Electronic Arts Reports Q2 FY2026 | EA EA and Stability AI partner to empower artists, designers, and developers | EA United Videogame Workers-CWA Statement on Proposed Electronic Arts Buyout | UVW-CWA Consolidated Results for the Six Months Ended June 30, 2025 | Capcom Inside information, profit warning: Remedy Entertainment Plc lowers operating profit (EBIT) outlook for 2025 and publishes preliminary Q3 key financial figures | Remedy Change of CEO in Remedy Entertainment Plc | Remedy Business Review - January - September 2025 | Remedy Earnings Release FY26 Q1 | Microsoft

With prices skyrocketing this generation, Microsoft has increased costs on Game Pass' top tier while cutting offerings on others. We discuss the broader implications as price-sensitive players get boxed out. Also: Unity security alert sends devs scrambling, Tencent fires back at Sony's Horizon: Zero Dawn lawsuit, and private equity rears its head once more. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:01:40] - Game Pass Price Hike Hits Hard [00:29:53] - Unity Security Flaw Alert [00:32:53] - Tencent Hits back at Sony's Horizon: Zero Dawn lawsuit [00:50:13] - Investment Interlude [00:57:46] - Quick Hits [01:01:19] - Labor Report SOURCES Updates to Xbox Game Pass: Introducing Essential, Premium, and Ultimate Plans | Xbox Unity Platform Protection: Take Immediate Action to Protect Your Games and Apps | Unity SONY INTERACTIVE ENTERTAINMENT LLC v TENCENT HOLDINGS | United States District Court, Northern District of California INVESTMENT INTERLUDE Ubisoft Launches Brand-New Subsidiary - Vantage Studios | Ubisoft Splash Damage breaks away from Tencent | GamesIndustry Fragbite sells Playdigious to Griffin Gaming Partners for €10.5 million | Game Developer LABOR REPORT Dune: Awakening developer Funcom announces redundancies | GamesIndustry The Outsiders is closing | David Goldfarb on Bluesky Testronic makes 4.8 percent of its total workforce redundant, closes Madrid and Belgrade studios | Game Developer Digital Extremes layoffs | Justin Kranzl on LinkedIn A Studio Update from Avalanche Studios Group | Avalanche

EA is going private in a $55 Billion deal. Saudi Arabia's Public Investment Fund, Jared Kushner's Affinity Partners, and Silver Lake will own the company after the deal closes in Q1 FY27. We discuss what that means, explained how leveraged buyouts work, and share our concerns for the future of EA's workforce and identity. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise!

PAX West 2025 felt like home for the first time since the COVID-19 lockdown ended. We recap our favorite games and tech from the show. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise!

Following the flagging performance of Destiny 2 and Marathon woes, Sony has jettisoned embattled Bungie studio head Pete Parsons. They've also announced significant hikes on PS5 prices. Also: Another Subnautica 2 lawsuit, a BioShock shakeup, and Frost Giant studio head Tim Morten leads with transparency and accountability. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:02:07] - PlayStation 5 Price Increases in the U.S. [00:05:25] - Unknown Worlds v Cleveland, McGuire, and Gill [00:14:33] - Circan Report on U.S. Video Game Spending for July 2025 [00:19:22] - Investment Interlude [00:26:45] - Quick Hits [00:34:09] - Labor Report [00:50:42] - FAFO SOURCES PlayStation 5 price changes in the U.S. | PlayStation Blog Unknown Worlds v Cleveland, McGuire, and Gill | The Court of Chancery of the State of Delaware Guy Who Tried To Fight Nintendo Piracy Lawsuit Without A Lawyer Will Now Pay $2 Million | Kotaku INVESTMENT INTERLUDE Saudi Arabia's Qiddiya Acquires EVO Part-Owner RTS | Muhannad Aldawood on LinkedIn Atari Announces Strategic IP Agreement With Ubisoft To Revive Five Acclaimed Titles | Atari LABOR REPORT Cloud Chamber lays off "unspecified" number of staff as Rod Fergusson is parachuted in to lead troubled BioShock 4 production | GamesIndustry Take-Two Guts 'BioShock' Studio After a Decade of Development | Bloomberg (Paywall) Frost Giant CEO Tim Morten says layoffs are possible after Stormgate underperforms | Game Developer Frost Giant CEO Tim Morten Reflects on Stormgate's Failure | Tim Morten on LinkedIn Dreamhaven is Going through Layoffs | Mike Morhaime on LinkedIn Crystal Dynamics Layoffs | Crystal Dynamics on LinkedIn Ubisoft is cutting jobs within its publishing team | Game Developer NetEase shuts down Rich Vogel-led T-Minus Zero Entertainment | Game Developer Hundreds of Diablo Game Developers Join Communications Workers of America | CWA

Krafton's response to the Unknown Worlds lawsuit hinges on one key element: the interpretation of the Equity Purchase Agreement. Also, lots of earnings, Roblox is under fire from the state of Louisiana, an update on the growing censorship of Steam and Itch.io, and more. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:00:48] - Correction: Thunderful Share Price at Time of Atari Purchase [00:02:35] - Sony Q1 FY25 Earnings [00:05:24] - Paradox Q2 FY25 Earnings [00:07:26] - Take-Two Q1 FY26 Earnings [00:08:54] - Remedy Q2 FY25 Earnings [00:11:25] - Square Enix Q1 FY25 Earnings [00:16:06] - Sega Q1 FY26 Earnings [00:20:39] - Embracer Group Q1 FY25 [00:23:39] - Krafton Responds to Subnautica Lawsuit [00:30:06] - Roblox's Content Moderation Failure Leads to Louisiana Lawsuit [00:45:13] - Valve Explains why PayPal is No Longer a Payment Option in Some Territories [00:50:30] - Quick Hits [00:56:25] - Labor Report SOURCES FY2025 Q1 Earnings Announcement | Sony Interim report January – June 2025 | Paradox FIRST QUARTER FISCAL 2026 RESULTS | Take-Two Half-Year Financial Report | Remedy Results Briefing Session for the Three-Month Period Ended June 30, 2025 | Square Enix Q1 for the Fiscal Year Ending March 2026 Results Presentation | Sega Embracer Group publishes Interim Report Q1 | Embracer Group Defendant's Answer to Verified Complaint | Fortis Advisors v Krafton Louisiana Attorney General Liz Murrill files Child Protection lawsuit against popular game Roblox | Louisiana Office of the Attorney General State of Louisiana vs Roblox Corporation | Louisiana Office of the Attorney General Roblox Responds to Louisiana AG Lawsuit | Roblox Valve explain why using PayPal for Steam purchases isn't currently an option in a whole bunch of countries | RockPaperShotgun LABOR REPORT Report: 2XKO and Marvel Snap co-dev Demiurge Studios is laying off staff | Game Developer Bithell Games has Undergone Layoffs | Bithell Games Open letter from the Arkane Studios union section to Microsoft's and its subsidiaries' management | STJV Blizzard's story and franchise development division votes to unionize | GamesIndustry

INT. POSH HOTEL SUITE - DAY TENCENT: Hey, Sony. Can we make a Horizon game? SONY: Nah. We good. TENCENT: Oh okay. Bummer. SONY: WHAT THE F—- So yeah… Sony is suing Tencent for what it calls a "slavish clone" of Horizon: Zero Dawn. Bold move! Also: EA, Microsoft, Capcom earnings, an update on the Mastercard/Visa censorship of legal game content, and more. You can support Virtual Economy's growth via our Ko-Fi and also purchase Virtual Economy merchandise! TIME STAMPS [00:00:30] - Some News From Us! [00:05:21] - An Update on the Conservative Assault on Steam and Itch.io [00:15:34] - EA Q1 FY26 Earnings [00:20:25] - Microsoft Q4 FY25 Earnings [00:30:00] - Capcom Q1 FY26 Earnings [00:35:48] - Sony Sues Tencent Over Horizon: Zero Dawn Clone [00:41:59] - Investment Interlude [00:50:23] - Quick Hits [00:50:44] - Labor Report SOURCES Mastercard Denies Pressuring Steam To Censor 'NSFW' Games [Update: Valve Responds] | Kotaku Vile is Banned | DreadXP Freedom to Buy Games | GOG Electronic Arts Reports Q1 FY26 Results | EA Earnings Release FY25 Q4 | Microsoft Consolidated financial results for the 1st Quarter of FY2025 | Capcom Sony's PlayStation Sues Tencent Over Its 'Slavish Clone' of 'Horizon' Video Game Franchise | Variety Complaint for Copyright and Trademark Infringement | United States District Court, Northern District of California INVESTMENT INTERLUDE Atari enters into an agreement to invest in Thunderful Group AB | Atari Puzzle & Dragons studio considers shareholder group request for a vote to dismiss its president | VGC Lyrical Media Launches Indie Video Game Publisher Led by UTA, Take Two Vet Blake Rochkind; Three Titles in Development | Variety LABOR REPORT Supermassive Layoffs | Supermassive on LinkedIn Indie Publisher Firestoke Games is Shutting Down | Paul Farley on LinkedIn The studio behind Teenage Mutant Ninja Turtles: Mutants Unleashed brings in union after facing closure | GamesIndustry Raven Software Workers Secure First Contract at Microsoft | CODE-CWA