🚨📢 BREAKING NEWS: Record Revenue, Record Layoffs, Why Only 2 Genres Are Actually Winning in 2026
two & a half gamers · 2026-05-02
💡 Quick Take
1. A massive new supernatural urban open-world RPG called "Never Tosses" has launched globally across multiple platforms.
2. The IronSource ad network has officially ceased operations following its controversial acquisition by Unity.
3. The global video game industry hit record revenue in 2025, but simultaneously saw massive layoffs, with over 44,000 development jobs cut since 2022.
4. Strategy games, particularly "Last War Survival" and "White Out Survival," are the only genre experiencing consistent growth in revenue, downloads, and time spent.
5. Live service giants like Roblox are dominating market growth, with Roblox alone accounting for 67% of net market growth last year.
6. Winning studios are mobile-native, lean, data-driven, and AI-first in user acquisition (UA) and creative development.
7. The aggressive creative testing and sophisticated, sometimes misleading, ad strategies in the strategy genre are key to their success.
8. AppLovin CEO Adam Forgione made noteworthy comments on the 20 VC podcast regarding company performance, AI, and layoffs.
9. A crucial Google antitrust case regarding its ad tech monopoly is ongoing, with potential for significant structural changes to the ad market.
10. The outcome of the Google ad tech case could destabilize Google's ad dominance and shift ad budgets, potentially impacting mobile advertising significantly.
📊 Detailed Explanation
1. A massive new supernatural urban open-world RPG called "Never Tosses" has launched globally across multiple platforms. This game, developed by Hot Studio (the creators of Taboo Fantasy), is described as "GTA meets anime" and features a paranormal investigation theme. It's available on PC, Android, iOS, PlayStation 5, and Mac with cross-platform play. The game boasts ambitious features like driving Porsches, a Persona 5 music collaboration, cooperative heist modes, and asymmetric horror co-op. From a user acquisition (UA) perspective, its strong IP, high production values, cross-platform nature, and gacha mechanics position it for a significant paid acquisition push. The benchmark for its success is "Genshin Impact," and early buzz is positive, though past disappointments with Chinese open-world gachas warrant caution.
2. The IronSource ad network has officially ceased operations following its controversial acquisition by Unity. This marks the end of an era for the mobile ad network. The $4.4 billion acquisition in 2022 was met with shareholder disapproval, and the integration proved messy and poorly timed. The promised dominance of the combined Unity and IronSource ad network never materialized, and now the ad network itself is gone. The publishing arm, Supersonic, is also being sold off. While IronSource is effectively gone from Unity, the company's AI-powered ad platform, Unity Vector, saw a healthy 48% year-over-year growth, showing a silver lining.
3. The global video game industry hit record revenue in 2025, but simultaneously saw massive layoffs, with over 44,000 development jobs cut since 2022. This stark contrast highlights a significant structural issue in the industry. The global video game industry generated a record $195.6 billion in revenue in 2025, yet over 44,000 development jobs have been cut since 2022, with an additional 2,000-3,000 in 2026. A staggering one in three US developers have been laid off in the past two years, and 48% of them are still seeking employment. This phenomenon is attributed to revenue concentration, where a small number of companies are capturing the vast majority of market growth.
4. Strategy games, particularly "Last War Survival" and "White Out Survival," are the only genre experiencing consistent growth in revenue, downloads, and time spent. According to the Sens "State of Gaming 2026" report, this genre stands out as the sole area of consistent positive growth across all key metrics. This success is driven by what are described as "winning operations," characterized by sophisticated onboardings and aggressive creative testing, including ads that are sometimes misleading or fake. The underlying machine powering these games is incredibly effective.
5. Live service giants like Roblox are dominating market growth, with Roblox alone accounting for 67% of net market growth last year. This reinforces the idea of revenue concentration. A small number of massive live service games are essentially absorbing all the market expansion, leaving smaller players to fight for the remaining share. This trend indicates a significant shift in how the industry's growth is distributed.
6. Winning studios are mobile-native, lean, data-driven, and AI-first in user acquisition (UA) and creative development. The companies that are thriving in the current market are those that have adapted to its demands. They are built for the mobile ecosystem, operate efficiently, rely heavily on data analysis, and leverage AI for their UA and creative strategies. This is in contrast to studios that may have been built for a previous market paradigm.
7. The aggressive creative testing and sophisticated, sometimes misleading, ad strategies in the strategy genre are key to their success. The transcript specifically calls out the "sophisticated onboardings, misleading ads, fake ads" as part of the winning formula for strategy games like "Last War Survival." This highlights the effectiveness of these tactics in attracting and retaining players, even if they push ethical boundaries. The "machine" behind these games is optimized for performance, and these creative approaches are a significant part of that optimization.
8. AppLovin CEO Adam Forgione made noteworthy comments on the 20 VC podcast regarding company performance, AI, and layoffs. The podcast episode featuring Adam Forgione is highly recommended for anyone interested in the industry. It delves into topics like his substantial CEO payday amidst stock drops, and discussions around AI and layoffs. AppLovin is highlighted as one of the best-performing businesses in tech, making Forgione's insights particularly valuable.
9. A crucial Google antitrust case regarding its ad tech monopoly is ongoing, with potential for significant structural changes to the ad market. A judge ruled in April 2025 that Google illegally monopolized the publisher ad server and ad exchange markets (DoubleClick for Publishers and AdX). While a deadline for a ruling has passed, the case is a "live grenade" for Google. Legal analysts suggest that a likely outcome involves "hard contract remedies," and any forced breakup could be the largest since AT&T in 1984. This case is critical for anyone involved in programmatic advertising.
10. The outcome of the Google ad tech case could destabilize Google's ad dominance and shift ad budgets, potentially impacting mobile advertising significantly. If Google's ad monopoly is disrupted, it could lead to a major shift in where advertising budgets are allocated. This would be particularly impactful for mobile, where Google's ad services are deeply integrated. Any destabilization of Google's dominance could create new opportunities and challenges for players dependent on ad revenue.
🎯 Expert Opinion
Wow, what a week for industry news! It's fascinating to see these seemingly contradictory trends – record revenue alongside massive layoffs. From an expert standpoint, this isn't surprising, but it is a clear indicator of a market undergoing significant consolidation and a brutal Darwinian struggle for dominance. The fact that strategy games like "Last War Survival" are the *only* genre growing across the board is a huge signal. It tells us that the core mechanics and monetization strategies that work in this space are incredibly potent, and frankly, the aggressive UA and creative strategies, even the ethically questionable ones, are proving to be incredibly effective. This isn't just about good game design anymore; it's about mastering the art of performance marketing at an extreme level.
The demise of IronSource is also a major event. Unity's acquisition was ambitious, but clearly, the integration and the market realities didn't align with their vision. This opens up space for other ad tech players and highlights the difficulty of consolidating such a complex ecosystem. It's a stark reminder that even with billions in investment, execution and market fit are paramount. The continued growth of Unity's own AI-powered ad platform, Unity Vector, is a positive sign for them, suggesting they can still innovate and compete in core areas.
The concentration of market growth in the hands of giants like Roblox is a trend we've been observing for years, but these numbers really hammer it home. It's becoming increasingly difficult for mid-sized or indie studios to break through unless they hit a viral niche or are acquired. The future of gaming, especially mobile, is increasingly about these massive, interconnected live service platforms that can leverage network effects and player data to an unparalleled degree. This also means the studios that are winning are the ones that are incredibly agile, data-obsessed, and willing to embrace AI not just for marketing but potentially for game development itself. The "lean, data-driven, AI-first" mantra is no longer a buzzword; it's a survival imperative.
Finally, the Google antitrust case is the wild card that could shake up the entire digital advertising landscape. If Google is forced to divest parts of its ad tech business, it would be monumental. This could lead to a more fragmented and potentially more competitive ad market, which might benefit publishers and developers who have felt squeezed by Google's dominance. The implications for mobile advertising, which is heavily reliant on programmatic, are enormous. We could see shifts in ad spend, new platforms emerging, and a fundamental re-evaluation of how advertising is bought and sold online. This is a story to watch very, very closely, as it has the potential to redefine the economics of digital media for years to come.
Kanal: two & a half gamers