I’d hoped 2025 would be a better year than 2024. And in some personal ways, it was. But it was also yet another year filled with layoffs, AI slop, greedy execs, price increases, and more signs that the entire game industry is collapsing.
So, like we’ve done in years past, Kotaku has rounded up a collection of some of the worst, most disappointing video game news and events from 2025 and catalogued it in a handy dandy list. Take breaks as you scroll through this, and let’s all hope 2026 is better. It can’t be worse, right? Please, tell me it can’t be worse. Please…
So Many Canceled Games
©Xbox / Kotaku
This was the year in which, more than ever before, a lot of big games got canned, or we learned about projects that were binned not long ago.
Perfect Dark, the slick-looking reboot of Rare’s sci-fi shooter series? Canned, and the studio behind it shuttered. A Wonder Woman game from Monolith? Canceled taking the beloved studio behind No One Lives Forever and Shadow of Mordor down with it. An EA-published Black Panther game from some former Monolith devs that would have reportedly featured a version of Mordor’s popular Nemesis System? Dead and the studio behind it closed, too. EA also shelved a Titanfall extraction shooter spin-off; Sony killed a few live-service games, including a God of War multiplayer project; and a cool-looking Transformers game from Splash Damage got the axe this year, leading to, you guessed it, layoffs.
And these are just the ones that we know about. I’d bet a lot more games were canceled in 2025 as publishers continue to focus more and more on fewer franchises that can be reliably counted on to turn a profit. And as noted, many of these cancellations led to layoffs and studios being closed, a problem worth talking about separately, because in 2025, these cuts and closings happened a lot.
More Layoffs And Studio Closings
©Three Fields Entertainment
2025 wasn’t as bad for industry layoffs as 2024, but it was still pretty terrible. Nearly 10,000 developers lost jobs, according to layoff tracker Amir Satvat. That’s down from the over 15,000 pink-slips peak of 2025, but still up from 2022. The big cutbacks were once again at Microsoft, which shaved hundreds of jobs across its gaming division, including at Rare, Zenimax, and King.
But those were hardly the only ones. Notable teams like Cloud Chamber, working on BioShock 4, lost dozens of staff, Amazon Gaming cut over 100 positions, and Square Enix made cuts across its international publishing business. Indies were also still hit hard. Heart Machine had to lay people off and end Hyper Light Breaker Early Access development early, while Wreckreation maker Three Fields Entertainment turned to Patreon as it looks for new funding.
Randomly looking up the developer behind Floppy Knights to see what they were working on next, only to find a shutdown notice on their homepage, pretty much summed up the ongoing industry vibe. – Ethan Gach
Generative AI Slop Spreads Through The Game Industry
©McDonald’s / Kotaku
Generative AI isn’t new tech. It’s been floating around for a few years now. But in 2025, it felt like AI popped up more than ever across different games and studios. Swen Vincke, the head of Baldur’s Gate 3 maker Larian Studios, stepped into it big time in December after he sounded shockingly bullish on AI generation tools. And Vincke wasn’t alone. Plenty of other video game executives and bosses had lots of positive things to say about AI generation tools.
Kingdom Come: Deliverance II director Daniel Vávra is all for AI usage if it lets his studio make games faster. Chris Cocks, the CEO of D&D parent company Hasbro, said AI is “supercharging fandom.” Nexon CEO Junghun Lee, whose company owns the studio behind Arc Raiders, said in an interview that it’s “important to assume that every game company is now using AI,” and that other companies needed to rely on the tech to “increase [their] competitiveness.” Helldivers 2 boss Shams Jorjani thinks people are being too quick to dismiss AI and called Arc Raiders‘ use of the tech interesting, adding that in his view the tech “actually makes gaming better.” Level-5 CEO Akihiro Hino reportedly said that it’s “becoming common sense in the creative world to rely on the power of AI to boost work efficiency.” Level-5 is the studio behind Professor Layton and Ni No Kuni.
The gung-ho attitude so many gaming execs and bosses have toward gen AI tools likely explains how ugly, wonky AI slop keeps ending up in big video games, including Battlefield 6, Call of Duty: Black Ops 7, Anno 117: Pax Romana, and others. And despite players almost universally being against AI art and other slop, this trend isn’t going away in 2026. PUBG publisher Krafton plans to spend nearly $70 million on becoming an “AI-first” company. Ubisoft, meanwhile, is investing a lot into leveraging the controversial tech into its future video games, even showing off an FPS that was built entirely around AI tech.
The shit has even worked its way into stuff like GZDoom and television show recaps. This is our future. It fucking sucks, and until the AI bubble pops, we all will have to put up with more slop in 2026, so greedy execs can make the line go up more by replacing devs and artists with AI chatbots and hoping gamers eventually get over it.
Playing Video Games Is Becoming A Very Expensive Hobby
©Nintendo / Kotaku
It’s never been cheap to play video games. But in 2025, this already expensive hobby became even more pricey. As noted by Stephen Totilo over at Game File, since April, there have been eight price hikes total from Nintendo, Sony, and Microsoft on consoles, accessories, and subscriptions. This is likely one big reason why console sales were in the gutter in November. And even if you tried to buy a used Xbox or PS5 to save money, it would still likely be more expensive than that same console would have cost at launch in 2020.
Meanwhile, Nintendo became the first publisher to break a shocking price barrier when it announced that Switch 2 launch title Mario Kart World would be priced at $80. Later, Xbox announced that The Outer Worlds 2 would also be $80, but the backlash was so strong that it relented and lowered the price to $70. However, Xbox didn’t back down on raising prices on Game Pass and turned the service, once called the best deal in gaming by many, into a more complicated and expensive subscription service. Sony raised prices on PlayStation Plus as well.
Perhaps you decide to skip consoles entirely, build a PC, and take advantage of all the great deals on stores like Steam and GOG. Well, thanks to a number of factors, including tech companies gobbling up parts for AI usage and President Trump’s idiotic tariffs, RAM and other PC parts are becoming more and more expensive. And this also means that PC handhelds, like the Steam Deck and ROG Ally, will likely cost more when newer versions are announced, and prices on existing models will probably increase. Valve has also announced that it is done making the cheapest version of the Steam Deck, which isn’t good news for folks looking for an affordable and accessible entry into PC gaming. I mean, none of this is good news, and with rumors swirling that next-gen machines will be expensive behemoths, I’d recommend gamers start saving up money as we enter 2026.
Valve And Credit Card Companies Decide What Games Are Allowed To Exist
©EroticGamesClub
It’s been five months since Steam and itch.io began purging certain NSFW games from their storefronts following pressure from payment processors like Mastercard. Despite an immediate backlash and ongoing calls not to let banks censor art, tons of games remain unavailable to purchase on the world’s biggest PC gaming storefronts.
The worst part of all is that it’s still not even clear who the corporate partners are trying to appease with the crackdown. The message to potential censorship advocates is that if you make enough noise, controversy-averse companies will back down. – Ethan Gach
The $55 Billion Saudi / EA Deal
©EA / Kotaku
Electronic Arts is probably not anyone’s favorite publisher, given it’s responsible for turning some beloved IPs into live-service slop and gutting certain teams under its umbrella after undermining them for decades, but nobody wants to see a company bought out by the Saudi government.
Though EA claims it will maintain creative freedom after the $55 billion deal is signed, sealed, and delivered, all it takes is one person from on high to say that BioWare can’t include queer relationships in Mass Effect 5 or that The Sims is now going to focus exclusively on the nuclear family for all of that independence to go away. EA can put on a brave face all it wants, but this is bleak, and a lot of good developers and stories are likely going to suffer for it. – Kenneth Shepard
Mindseye
©Build A Rocket Boy
There was a lot of buzz around Mindseye, the first game from longtime Grand Theft Auto producer Leslie Benzies’ indie video game studio. It was going to be a GTA-like semi-open-world action game that tied into a larger suite of online game creation tools that people could use to build their own experiences, ala Roblox or Fortnite. Instead, what Mindseye ended up being when it launched earlier this year was a complete disaster. It was extremely buggy, ran like crap, was filled with boring missions, and felt sterile and empty. It was easily one of the worst games of the year, and it likely jeopardizes the future of Benzies’ studio and other projects.
President Trump’s Gaming Posts And The Lack Of Any Pushback
©Rockstar Games / Comedy Central / Kotaku
The Trump administration turning fascist propaganda into the stuff of memes isn’t terribly surprising, but it’s disappointing that some of the biggest companies in video games just let him use their IP to do it. Microsoft and The Pokémon Company both saw their creations used in posts from the Trump administration trying to recruit nerds to join ICE, and while The Pokémon Company said it hadn’t given permission for the use of its work, it stopped short of condemning the video post of ICE agents “catching” immigrants set to the iconic anime theme song from the ‘90s. Microsoft, meanwhile, didn’t say a goddamn word.
With the current administration being this brain-rotted and online, I imagine most people want to just keep their heads down and not put the spotlight on themselves for longer than they have to. But if Sabrina Carpenter can tell Trump to eat shit, so can you, Master Chief. – Kenneth Shepard
The Continued Death Of Physical Media
©Nintendo / Kotaku
2024 was a bad year for physical media, and 2025 just brought more bad news on that front. Some physical game releases on the Switch 2, the hottest new console around, make use of Game Key Cards, which are basically little pieces of plastic that don’t contain the game, but instead a digital DRM key that lets you download and play a specific game. They rely on the internet and Nintendo’s servers, and that should make everyone nervous.
Meanwhile, I walked into a Target to do some Christmas shopping and discovered that my local store has just stopped selling Xbox games. The Outer Worlds 2 skipped a physical Xbox release entirely. And PlayStation made only 3 percent of its total profits in 2024 from physical game sales. Yikes. While physical games aren’t going away entirely in 2026, it does seem like the era of stores filled with aisles of games to buy is long gone.
GTA 6 Delayed Twice As Rockstar Faces Accusations Of Union Busting
©Rockstar Games
Grand Theft Auto 6, possibly the most highly anticipated video game release in a decade, suffered two more delays in 2025. Originally, Rockstar’s long-awaited open-world crime sim was supposed to launch this year, with many anticipating a fall arrival. But in the spring, the game was delayed until May 2026. Fans were given a second trailer to make up for the delay and marked the new date on their calendars. And then, about six months later, Rockstar announced another delay, pushing GTA 6 back all the way until November 2026.
Of course, this wasn’t the most disappointing news to come from Rockstar Games in 2025. No, that would be the union-busting accusations leveled against the company after it fired over two dozen employees for allegedly sharing confidential information on Discord. The staff who were fired deny these allegations and, with the support of the Independent Workers’ Union of Great Britain, continued to protest at Rockstar’s offices. This whole situation has blown up so much that the UK’s Prime Minister has openly called out Rockstar Games and demanded further investigation. It’s clear this isn’t going away like Rockstar Games likely hoped, and when (if?) GTA 6 finally launches in 2026, the company’s firing of these employees will likely be a hot topic among the press and fans.
