Games industry growth stalls at $189.3 billion as companies struggle with player retention 

The GameDev industry has stopped growing at a valuation of $189.3 billion in 2025. 

That’s according to a new Duamentes Gaming report, which showed that while mobile, console, and PC games still make big money, studios are struggling with higher production costs, repetitive gameplay, and changing player expectations. 

Based on findings from the report, 92% of players quit playing a game before Day 30 and 70% drop off within the first few sessions. 

Notably, 38% decide whether to continue playing during their first session, driven by emotional connection, social features, and clear gameplay. 

Moreover, 60% of new mobile games in crowded genres struggle to gain traction, and 40% of games entering new regions fail due to cultural mismatches in user experience, tone, or monetisation.

Developer struggles 

In places like the US and Europe, the market has completely stalled, leading to more studio closures and layoffs, marking the end of the pandemic-driven gaming surge.

High-profile failures include Suicide Squad: Kill the Justice League losing over $200 million after poor reviews and player drop-off, Concord being criticised pre-launch for lacking originality, and XDefiant shutting down due to balance issues and low player retention, ultimately leading to the studio’s closure.

The report found that 71% of studios delay user testing until beta, which is often too late to address critical issues. 

Furthermore, nearly half (49%) of developers believe unionisation is necessary to combat burnout and protect working conditions, while 40% report that layoffs have affected their teams. 

Regarding working hours, 46% of developers now work over 50 hours per week, up from 35% last year. 

The report further highlighted that the games industry is increasingly divided between studios that adapt to modern challenges and those that don’t, citing the need to abandon outdated practices. 

Finding a solution 

Duamentes’ report outlines six key principles for building high-performing games such as: 

• Test onboarding and narrative in early prototyping 

• Align UX, monetisation, and player emotion 

• Build modular systems to adapt faster 

• View player feedback as strategic input, not noise 

• Invest in junior talent pipelines, protecting creativity over time 

• Respect player time by replacing grind with clarity and purpose 

“Studios keep building games players don’t want, delay testing, misread player behaviour, and try to fix retention too late,” said Duamentes head of games division Maria Amirkhanyan. “We’re seeing the same mistakes repeated across platforms.” 

“As short-form platforms like TikTok change how users discover games, the bar for first-session clarity has never been higher. Studios now compete not just with other games – but with every other moment of screen time.” 

You can access the full report here.