Month: July 2026

This post was originally written in Italian by Paolo Gambardella. It has been translated by an AI agent and may contain inaccuracies.

There’s a belief, among the finance people who now call the shots in my beloved industry, that because we’re in a large, mature sector, the only sensible move is to invest in things that are bigger, shinier, better.

But getting to bigger and better generally means going through smaller first. Anyone who’s studied the history of video games can see that easily enough.

There’s a video I watched yesterday on YouTube where Ross, a data scientist at Game Oracle, does exactly that: he analysed sales data from over 62,000 developers on Steam. The figure that struck me most is that only one in five developers publishes a second game. Those who stay in the game through to their fourth or fifth title see their chances of a significant hit climb from one in ten to something close to a coin flip. That’s compounding advantage — reusable code, a community built over time, a genuine understanding of what actually works.

Statistically, the Call of Dutys of tomorrow will come from something that would make a major VC smile politely and move on today. It’s worth looking at how the giants we have now actually got started.

Minecraft: one man, very little money, and a lot of drive

Markus “Notch” Persson wrote the first version of Minecraft alone, at home, drawing inspiration from Infiniminer and Dwarf Fortress. On 17 May 2009 he uploaded an alpha to the indie forum TIGSource and sold it for $10, with no marketing plan whatsoever. There was a rough prototype and a community that started sending back feedback, ideas, mods. That loop between a lone developer and his community became, over the years, the best-selling game in history.

Fortnite: a game that was struggling

Before Battle Royale, Fortnite was “Save the World” — a PvE building-and-survival mode that Epic Games had spent years developing, released in 2017 to a fairly muted reception. When PUBG blew the battle royale genre wide open, a small internal team (the same one working on Unreal Tournament) repurposed the existing engine and assets to build the new mode in roughly two months. It was supposed to stay in the background, locked behind a purchase of Save the World.

It only became standalone and free-to-play in the final rush before launch — more out of necessity than vision.

If they’d been shut down straight away? Well, it would have been lost.

Call of Duty: a brand-new studio, 22 people, $1.5 million

Infinity Ward was founded in 2002 by Vince Zampella, Grant Collier, and Jason West, veterans of Medal of Honor: Allied Assault. The entire founding team — 22 people — came from that same previous project. Activision invested $1.5 million for a 30% stake in the studio, a modest sum even by the PC standards of the time. The first Call of Duty, released in 2003, was a solid game but nothing like the phenomenon we know today. It took another three entries before Modern Warfare, in 2007, turned the series into the hundreds-of-millions-of-dollars franchise it is now.

The real investment is staying in the game

None of these three giants was born as a “big, ambitious, best-in-class” bet. They started small — often inside projects that were struggling or studios that had barely formed — and only became enormous after multiple iterations, second attempts, and communities nurtured over time.

If you’re an investor, the right question is how long you can afford to let a team stay in the game long enough to land on the right project. If you’re a developer, the job is to finish the game in front of you, ship it, and use it as the foundation for the next one.

Creativity needs direction and constraints, but it can’t survive this new start-up mindset of wanting everything at once and right now. That’s not how you build the industry of the future — investment needs vision too.

This post was originally written in Italian by Paolo Gambardella. It has been translated by an AI agent and may contain inaccuracies.

Today’s post starts from this piece of news: Sony is ending physical disc production for new PlayStation games from January 2028.

For me, when you’re doing marketing there are always three relationships to keep an eye on: the one with your customers (obvious), the one with your partners, and the one with your peers. On all three counts, this move looks poorly handled.

With players

Sony has chosen to alienate a significant chunk of its own users. There’s a bit of confusion around that “20%” figure floating about — it’s not entirely clear what it actually represents. Sony reports roughly 80% digital sales versus 20% physical in the last fiscal year: that figure describes sales, not people. A handful of collectors who buy almost exclusively on disc is enough to generate that 20% of sales, without representing a fifth of the fanbase. That said, the underlying point still stands: there’s a real audience, far from negligible, for whom this news means their collection stops here.

I understand the move makes sense if you want to control the entire supply chain and improve margins, but I don’t understand the coldness of the execution. They could have offered an alternative plan rather than simply closing the book. The model of a physical object as a permanent access key already exists and is well proven: Nintendo’s amiibo unlock content through a toy that remains yours and resaleable, Limited Run Games has built an entire business selling physical editions with a code for games that would otherwise be digital-only — and people snap them up — collector’s editions with steelbooks and a code are now a standard that publishers use to monetise attachment to the physical object.

Sony could do the same thing at scale — with a figurine, a book, a collectible artefact that guarantees lifetime access to the game: a reason to keep buying physical even in a digital-first world.

With commercial partners

Sony has also managed to antagonise its main distribution channels. The response from Meridiem was blunt and direct: some things aren’t downloaded, they’re felt, with a promise to resist. And they’re not alone: GAME responded with “it’s time to defend what matters to us”, Tesura Games openly called for the decision to be reversed.

I don’t know who makes these calls at Sony, but with partners you act before you publish a blog post, not after. Now Sony will have to find the carrot to offer after already swinging the stick.

With competitors

The major publishers, Nintendo aside, seem to be almost competing to see who can upset their audience the most. I don’t always buy physical — I buy a lot digitally — but knowing that I could no longer choose even if I wanted to stings a bit, and maybe makes me feel a little more distant from this industry I claim to love.

This post was originally written in Italian by Paolo Gambardella. It has been translated by an AI agent and may contain inaccuracies.

The games industry has been in crisis for a few years now, like the rest of the world. Mass layoffs, studios closing, investment drying up.

The crisis isn’t a surprise. Things don’t grow forever — that’s a natural law. And yet people coming out of MBA programmes and finance courses seem to forget this basic fact, or perhaps they’re trained to ignore it. The result is that unrealistic expectations of continuous growth are created for investors, expectations the industry simply can’t sustain for long. Add the global geopolitical situation to that, and you’ve got a recipe for disaster.

What struck me most, though, was the behaviour of developers themselves.

This year in Madeira an interesting workshop took place. Participants were first asked to pitch an original game, then to build a hypothetical investment fund with a million dollars. The result: most of the money ended up going to tools, tech infrastructure, and ecosystems like Roblox. The very same developers who had just passionately pitched an original project wouldn’t have funded it themselves.

As one participant put it: “I literally built an investment firm that wouldn’t have funded my own pitch.”

It’s a system that rewards short-term returns and penalises long-term vision. When money becomes the goal rather than the means, everyone falls into line.

This isn’t a game for people without a safety net

I should be honest about where I stand in all of this. I’m an independent consultant, and one of the reasons I chose that path is precisely that I understand this mechanism and I’d rather not be dependent on it. But there’s another reason too: my parents are well-off. I’ve had a safety net that allowed me to stay in this industry through the rough patches. Not everyone has that.

The games industry today is increasingly an industry for people who can afford to wait. For people who already have family money behind them, who don’t need this month’s salary to cover the rent. This is a problem not just of fairness, but of quality. You’re shutting out talent that simply can’t afford the structural risks of such an unstable industry.

So what do you do?

I look to Hollywood with genuine interest, because it’s found some practical answers to similar problems.

1. The slate model: spread risk across multiple projects instead of betting everything on a single blockbuster. It means accepting that some will fail, but that the overall portfolio holds up.
2. Structural protections for creatives: Hollywood’s unions exist because without them the balance of power between capital and talent is too heavily skewed. The games industry needs similar structures.
3. The A24 model: small, curatorial, with a clear editorial identity. It picks the projects it believes in, makes them with care, and generates sustainable profits. Modest scale and a sharp vision can coexist with financial health.

A solvable problem

What’s needed are financial structures built around the actual timelines of game development, not venture capital cycles. More forums where developers can practise thinking like investors before they’re ever in a real boardroom. Models that give a studio enough runway to build something that lasts.

This is the moment when the people with decision-making power — investors, publishers, leads — can choose to build something more solid than what came before.