For an industry trying to make sense of a number of conflicting signals, GDC 2024 served as a temperature check. Taking place from March 17-21 in San Francisco, this year’s conference welcomed nearly 30,000 attendees from across the globe — up around seven percent from 2023. These numbers alone are a reason for optimism. As Derek Reese, CEO and Founder of Chronicler Software, put it, “GDC is the place to be if you want to have your finger on the pulse of the industry.”
To fully comprehend the event and its implications for the future, we interviewed four CEOs, founders, and leaders at various points in their gaming industry journey: Melissa Phillips, Director of the Games Leadership Network and former Head of Studio at Silver Rain Games; Marnix Licht, Co-Founder of Enchanted Works; Emily Yim, CEO and Co-Founder of Superbloom, and Derek Reese.
Their insights revealed several common themes, including the growing impact of AI on game development, challenges and opportunities for indie developers, shifts in business models and funding, the future of gaming and the role of emerging technologies, and the importance of industry events like GDC.
AI Takes Center Stage in Game Development
One of the most prominent topics at GDC 2024 was the impact of AI on game development. There were countless demos of new solutions and talks on the subject. But how useful will these advancements prove to be? Derek Reese emphasized the potential of machine learning and AI to streamline development processes and enhance gameplay, stating, “Machine-learning and computer vision automation for tedious parts of game development is now being offered by new startups like Agentic across the board, which will greatly decrease issues in studios that make them part of their development process on day one. Many other studios, like Chronicler, are bringing these technologies into new areas such as storytelling and iterative design.”
Emily Yim observed the widespread adoption of AI in game development, stating, “I could see that a lot of people have adopted AI in their development processes.” She also mentioned the potential for AI to accelerate game development, particularly in 3D art, saying, “AI is adding lots of value from an art pipeline and cost perspective. I could see this accelerating when 3D art AI gets improved, hopefully towards the end of 2024, if not 2025. I am seeing more AI solutions happening in the games marketing side, too, not just development.”
Melissa Phillips built on these observations, stating, “As an operations director I have created my first ethical AI policy in the last year. I think we will see continued debate around its use — particularly in regards to art, but we are seeing some studios embrace more basic use of AI focused on helping support roles. I think we have to proceed with caution — this isn’t a quick fix but we could find ways for it to be an enhancement.”
Challenges and Opportunities For Indie Developers
Indie developers face unique challenges in an increasingly competitive landscape, but also have opportunities to innovate and stand out with creative ideas. Melissa Phillips shared her insights on the indie scene, stating, “Competition is intense and many are looking at alternative funding, smaller teams, and focusing on creating investment opportunities right now. There are fears that the competition will result in a lack of imaginative games, but I’ve also seen devs keen to bring out new concepts and really push previously unseen ideas in this space as a way of standing out.” The success of indie titles was celebrated at GDC 2024, with Melissa noting, “There was a real love for indie teams at GDC this year. Venba was received spectacularly well.”
Marnix Licht discussed the ability of small studios to take risks and innovate, stating, “If there is one benefit of having a small studio then it’s being able to take tremendous risks and be innovative. That is at least how we intend to compete with the big behemoths out there. Not to say AAA never innovates because they certainly do, but their risk margins tend to be a lot smaller.”
Derek Reese emphasized the importance of diverse expertise for indie studios, saying, “I feel that smaller studios are learning that you can’t solely be a game artist or engineer, but that you need expertise in-house or from partners and mentors in business development, experience design, UX, and more. Thankfully, help in this amazing industry is often a message away, and rarely elsewhere will you find the kind of generosity and kindness you see every day in the indie space.”
Emily Yim highlighted the hustle and experimentation required for indie studios to navigate the competitive landscape, stating, “Founders doing the weirdest little tasks, they might feature themselves on marketing videos — like myself — source community players by going on Reddit and approaching people one by one, be cost conscious and explore every avenue to become profitable whether it’s a publisher deal, or experimenting with all kinds of growth hacks.”
The Shifting Landscape of Business Models and Funding
Video game funding was down in 2023, and there is some optimism that funding is picking up in 2024. Emily Yim is skeptical. She observed, “Funding for mid and growth stage companies is still difficult. It didn’t get better than six months ago. However, there has been more action on early stage companies.” She also noted a trend towards new, innovative business approaches, stating, “I’m continuing to see shifts to platforms, tools, and services, and a tendency to stay away from content.”
Derek Reese echoed this sentiment, saying, “Funding is starting to open up and founders are starting to come around on novel and interesting business models. Our 30%+ industry margin won’t last forever, and now’s the time to find ways to better connect with customers, whether it be gamers or advertisers.”
Emerging Technologies Shaping the Future of Gaming
The potential impact of emerging technologies like VR and AR on the gaming industry was a hot topic at GDC 2024. VR from big players like Meta was prominently displayed. Marnix Licht shared his perspective, stating, “Apple recently released its Vision Pro. I don’t think that has been the big change some people expected it to be. VR and AR can be fun but are still very much a gimmick.”
Derek Reese discussed the potential for co-op games and new genres, saying, “I think we’ll see an absolute explosion of co-op games in the next few years, culminating in new genres that are unlocked by groundbreaking technologies like our atomic storytelling or Hathora‘s horizontally-scaling server technology.”
He also noted advancements in visual technologies and their influence on game art, stating, “We’re also seeing the maturation of several visual technologies that means the focus on visual language and art direction will only deepen, resulting in stronger, more visually-excellent titles. The tech I used in animated films over a decade ago is now the real-time workflow for today’s games!”
Melissa Phillips was impressed by one area in particular, stating, “The GDC expo was very much about motion capture technologies and making these accessible to a wider range of developers. It felt like mo-cap has become incredibly accessible for indie developers in more recent months.”
Predictions and Possibilities for 2024 and Beyond
As the gaming industry regroups after layoffs, studio closures, flat growth, and disruptive new tech, GDC 2024 offered a glimpse into the future. Emily Yim discussed the potential for consolidation among mid-sized studios, stating, “More consolidation and scarcity of middle range independent studios is possible. Without any distribution diversity and innovation, I think we’ll see a lot of small studios disappearing. Indie devs, on the other hand, have more chance of a breakout, because they are not afraid of doing wild and risky experiments.”
Melissa Phillips predicted the rise of indie teams and partnerships with other media, saying, “I think we’re going to see a rise in the disparity between super small indie teams and giant AAA over the next 5-10 years. I think we will also see an increase in investment from outside of the games industry with studios looking to partner with other forms of media and IP.”
Marnix Licht expressed his hope for a renaissance of smaller teams doing more unique and innovative games, stating: “Yes, you can spend 100 million on making another live service game that might be a massive hit or flop completely. Or you can invest between 250k-2m in a whole bunch of smaller teams that are currently doing amazing things. I strongly believe your odds of getting a good ROI are a lot better with the right vetting of smaller projects.”
Derek Reese addressed the potential short-term content drought due to studio closures, noting, “We’ll likely see a small content drought in 2024 and 2025 due to studio closures from industry over-correction last year and this year, with things opening back up again in 2026 around exciting new genres and gameplay innovation.” He also discussed the emergence of new business models and platforms, stating, “Ten years out, I think we’ll see completely new business models and platforms dominate, such as advertising-driven or IP ecosystem-driven models similar to those we see outside of video games.”
As we continue to monitor the pulse of the gaming industry, one thing remains certain: new technologies and advancements are only significant if they positively affect the player experience. Developers and studios must understand the needs, preferences, and motivations of the global gaming audience to create engaging, inclusive, and innovative experiences. This understanding enables them to resonate with players deeply. By staying focused on the player experience, the industry can continue to push boundaries and deliver unforgettable gaming experiences that turn players into fans.