AAA Game Industry is Dying, Ex-Nexon CEO Believes
Owen Mahoney warns the industry will collapse unless it gets "a serious rewrite."
Where AAA once stood for quality and signified a game being great by default, the sheer number of underwhelming AAA releases in 2024 and 2025 – ranging from simply disappointing, to downright awful, to Concord – and the concurrent rise of indie and AA gaming have turned those letters that once carried weight into little more than an indicator of a title's production budget.
Sharing this opinion is Owen Mahoney, Nexon's former CEO responsible for acquiring ARC Raiders' dev Embark Studio in 2021, who recently said he believes the AAA video game industry is in dire straits these days, comparing the current situation to an "end-of-days" scenario.
Being a corporate himself – i.e., knowing better than anyone else how CEOs, CFOs, and other C-level executives think and what drives them – Mahoney stated in an interview with The Game Business that he sees the reluctance and fear of taking risks shown by gaming giants as the main reason the AAA industry is now knocking on heaven's door.
"Let's play game company tycoon," he explains. "You're sitting in the CEO seat. You're running a $23 billion company. And you have to make a decision, in a very short period of time, to greenlight a project. And you know, if that new project doesn't do well, you're going to be explaining to your Board why you burnt $300 million in company cash.
You get one of those mistakes with a Board of a company that size. If you do it again, they're going to be calling openly for your head, and by the third time, you'll have an activist investor. Every CEO who runs a public game company is in that exact situation."
The former director added that unless big studios rethink their entire approach to game development and start setting trends instead of simply following them, the AAA industry could end up even worse than it is now, potentially collapsing altogether.
"I think that the AAA industry is structurally at its end. And without a serious rewrite of the ways we go about making games, it's going to end in more disaster than it has already," Mahoney says. "How come it was so unobvious that Embark was a great deal for Nexon until about three weeks ago? What does it say about the industry?
It reminds me of when Minecraft came out of nowhere and every single belief, bromide, and cliche that we had about high-fidelity graphics was blown out of the water once again. Clash Royale came out, and suddenly everybody realized that you could have synchronous online PVP play, whereas the day before people said, 'Nobody wants that on mobile.'
These are the things that the industry grapples with. They believe one thing until someone shows them different. That is an indication of where the industry's head is at right now. Everybody's so busy trying to execute on today's business, they're having a real hard time thinking about tomorrow's business."
So, do you agree with Mahoney's outlook? Is risk-aversion truly the biggest issue in AAA gaming today? How would you fix the industry? Share your thoughts in the comments!
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