Owen Mahoney, the former Nexon CEO who took a risk saying ‘yes’ to the company’s acquisition of Arc Raiders studio Embark, has extremely dire words for the future of AAA game development.
Mahoney recently sat down with The Game Business and reflected on risk in the industry and how the perception of risk could be contributing to the potential demise of AAA development and publishing as we know it. As CEO and president of Nexon from 2014 to 2024, Mahoney was the one who decided to invest and ultimately fully acquire Embark in 2021, even as he faced “a lot of pushback” from the company’s investors and Board members.
It’s tricky sympathizing with CEOs of $23 billion companies, but from the outside looking in, that does sound like a tremendous amount of pressure, and it seems natural to lean back on ideas and formulas that have proven to be reliable, but according to Mahoney, that’s precisely the issue.
“I think that the AAA industry is structurally at its end,” Mohoney added. “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.”
For his part, Mahoney said he was willing to take a risk on Embark and Arc Raiders because he could tell the former Battlefield developers had “something to prove.” Still, he admitted it wasn’t guaranteed to be a hit until around launch.
“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?” Mahoney said. “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.”
Of course, knowing in advance what particular bolt of lightning will be bottled is impossible, as has always been the case, and that leaves individual game developers with a difficult decision: stay in the indie space and deal with all of the funding issues that poses, or take the chance with AAA. In either case, Mahoney doesn’t sound hopeful.
“They can either build something as an indie without much experience, or go work in a factory, which is essentially what working for those big AAA developers looks like,” he said. “It’s a terrible choice. And then you go work in a factory and work on one tiny piece of a game, and it’s not fun. Structurally the industry is in really bad shape. We’re sort of at the end-of-days.”
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