It seems like every time I turn around, there’s another round of layoffs affecting video game studios.
In July, Xbox announced its biggest downsizing ever, cutting 3,200 jobs throughout 2026 and 2027. At the same time, Xbox made deals with four major studios to go independent or take on new management.
That independence didn’t come without a cost either, as studio Double Fine Productions announced it was laying off 23 employees shortly after going solo.
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It’s all starting to feel like white noise with the same language. Streamlining. Restructuring. Focusing resources. Adapting to changing markets.
After reading an excellent report from Rest of World about the plight of small game developers in Turkey, I realized that the entire video game industry is likely in more trouble than most people realize.
While Microsoft and other big companies at the apex of the industry have been cutting thousands of jobs at the top, there’s something just as disruptive going on at the bottom.
Solo developers are shipping full games with a tiny team, empowered by tools like Claude Code and Cowork, OpenAI Codex, and Copilot. This shift in how games are developed is eating up the entry-level jobs that used to serve as a way to break into the game dev industry. The candle is burning at both ends, as they say.
Turkey’s AI game development example doesn’t bode well
Over the last decade, Turkey has become a mobile gaming hotspot with more than 800 studios at its peak. It served as a pipeline for young developers who finished school, applied, got hired, worked in junior roles, and eventually made their way up the ladder.
This pipeline is no longer functioning as it should, and it’s largely due to AI. One developer interviewed by Rest of World went from a huge studio pumping out a game per week to founding his own studio.
With Claude Code in his back pocket, the developer realized he needed just two employees to achieve similar productivity.
I’m the only developer in my team. When we started, I had to write all the code myself. I also have to manage game design, social media, investment meetings, and the like. With Claude Code, I can do all that easily. It really sped things up and helped me a lot.
Emirhan Gül, speaking to Rest of World
This shift in Turkey’s game development scene is having dire effects. Entry-level jobs are understandably disappearing at smaller studios, and the larger studios are reticent to hire inexperienced developers.
The AI stack designed to make us more productive is killing key jobs
The AI stack negatively affecting one of the largest game development booms in European history is the same AI stack that Microsoft is racing to put in front of every developer, on every platform, including the ones building for Xbox and Windows.
Microsoft has famously spent years telling Windows users that Copilot will make us all more productive. But Turkey’s example is likely a preview of what that means when followed to its logical end.
Not a team of developers shipping games faster (OK, maybe a bit faster). One developer doing the job that used to require a team. Set this dilemma on top of a video game industry that just saw Xbox cut thousands of jobs, and the math really starts to hurt.
It’s worth noting that Microsoft stated that AI is not being used to replace the most recent batch of laid-off employees at Xbox, but the company’s overall massive spending on AI infrastructure and data centers has undoubtedly played a role in cuts to underperforming sectors like Xbox.
With layoffs at the top and an ever-shrinking front door at the bottom, the entire industry is being squeezed for all its juice.
Windows Central’s take
The part that stuck with me the most is the plight of junior developers. A university director in Turkey is warning students not to follow the traditional path of getting hired on in an introductory position and working their way up. Instead, they should be building their own games while in school in order to land a job.
Right now is the worst time to enter the game industry to find a stable job, but it’s the best time to start your own venture, to realize your own idea.
Güven Çatak, Founder and Director of Game Lab, Bahçeşehir University (speaking with Rest of World)
So, yes, AI tools definitely lower the barrier to creating a game. At the same time, however, AI tools do nothing to ensure that a game actually finds an audience.
Key steps in the nurturing and maturing of a video game developer are being skipped, and artists, writers, and programmers aren’t necessarily getting the experience needed to compete at the upper levels of the industry.
Turkey’s degrading video game development scene seems like a preview of what’s to come for the rest of the industry, and I’m not sure I like it.
Are you a developer who uses Copilot, Claude, or any other AI tools in your workflow? Has it made you more ambitious? More productive? Are you more nervous now about who you’re competing with? Let me know in the comments section below!
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