This revelation insight from former Machine Zone CEO Gabe Leydon spun my head throughout the conference. He’s right: our passion isn’t dead, but it’s undoubtedly been crowded out. Mobile obsesses over acquisition, while HD fixates on fundraising. New platform dreams—web3, AR/VR, HTML5, UGC—have largely fizzled. Yet these platforms persist, surviving but not thriving. Mock AR/VR as the “Dippin’ Dots of Games” if you like, but at least those developers burn with genuine passion.
The rest of the industry must reignite the will to survive—the kind we see from firms like Supercell, Lessmore, and Hypehype.
AI start supply-side; innovation to follow
Michail Katkoff made an excellent observation about the absence of the “world-changing” bravado heard from SF founders intoxicated by Paul Graham essays. Instead, the talks were pragmatic—topics like ” ‘Angry Birds’ and AI in Practice: Finding Our Own Way.” Games’ AI progress has been slower and more modest than I expected, but the supply-side evolution is well underway.
The indie game section demonstrated this shift, overflowing with polished 3D worlds instead of the usual charming 2D sprites.
There’s no shortage of seed AI ventures either, restoring my confidence that we’ll soon master this tool to advance the game-making craft. Realistically, we’re ~2-3 years from seeing a major mainstream AI-driven hit.
Mobile has finally earn industry peer respect
It’s about time. While a decade late, HD developers and indies no longer dismiss “mobile” as trivial. I counted over 30 mobile-focused talks! Seeing companies like Scopely actively participate was an encouraging sign that mobile also wants to be a peer of the game industry, not the tech industry.
GDC is a conference of peers, and it feels like that at each talk. It talks about actual developers sharing lessons and perspectives that advance the craft of game-making. Talks like “Tabletop Summit: Timeless Design Lessons from 25 Years of ‘Duel Masters’ TCG”.
While many opt for the Expo-only pass (myself included in past years), I intend to get the full pass annually. I read a lot of copium from non-attendees, and they’re wrong; if you’re a developer, this is the place to be every year—if you’re serious about advancing the game craft, GDC is essential.
Sweeps, sweeps baby
One of the few EXPLOSIVE growth sections has been in sweeps, or games where players earn virtual currency they can redeem for real-world prizes. While this is a regulatory timebomb, the results so far are breathtaking. I understand the muted enthusiasm from the developers, but the reality is that we need to approach everything with an open mind, including one of the new growth sectors. Like hypercasual, sweeps may look messy now, but their innovation inevitably trickles down.
If you’re European, you need the U.S. economy to grow. If you’re Canadian, you need the U.S. economy to grow. This sobering reality underscores nearly every Western mobile development hub today: for mobile gaming to grow, the U.S. needs to grow. Although optimistic narratives from developing markets like India and Brazil are abundant, their growth rates still pale compared to the U.S.’s real spending power growth. For the foreseeable future, it’s U.S. or bust in mobile gaming, a reality suggesting mobile gaming doesn’t control its destiny.
Tripledot’s nearly $1B acquisition of Applovin’s studio collection appears to be a massive and leveraged gamble but reflects the shrinking pool of the hyper-to-hybrid publisher game of musical chairs. With the stroke of a pen, Tripledot’s revenue portfolio radically shifts from 1% IAP to being a majority. Meanwhile, Voodoo, Homa, and others undergo painful and slow transitions in hybrid-style games, with success stories like All In Hole taking over two years to release after Attack Hole’s 2022 release. Rather than incremental growth, Tripledot bet on transformative integration in one dramatic move. While there’s massive operational risk, if Tripledot can digest Applovin’s studio collection, the product will be larger than the sum of its new parts.
\(\bullet\) \(\text{Revenue}_{i}\) is the revenue for the \(i\)th player.
\(\\\)
\(\\\)
\(\bullet\) \(\text{Attempts}_{i}\) is the number of attempts made by the \(i\)th player.
\(\\\)
\(\bullet\) \(\text{Gold Sink Per Attempt}_{i}\) is the average of gold spent per attempt by the \(i\)th player.
\(\\\)
\(\\\)
Holding \(\text{Gold Sink Per Attempt}\) constant, an increase in \(\text{Attempts}\) leads to higher \(\text{Revenue}\).
Similarly, increasing the \(\text{Gold Sink Per Attempt}\) while holding \(\text{Attempts}\) constant also raises \(\text{Revenue}\).
Many innovations in match economies operate within this framework.
For instance, a “super light ball” mechanic increases \(\text{Attempts}\) but reduces the \(\text{Gold Sink Per Attempt}\).
Events follow the same structure.
Basic Match Model
At the aggregate level, revenue across all players is:
$$
\text{Revenue} = \sum_{i}\bigl(\text{Attempts}_{i} \cdot \text{Gold Sink Per Attempt}_{i}\bigr)
$$
Game economy designers have inadvertently revived the economic traditions of famed economist Irving Fisher. In Fisher’s world, the economy is a hydraulic machine, with refinement or “productive process” occurring as resources flow. The impact of major institutions takes on a literal effect, where a tariff might slow the flow of liquid or capital from one chamber or country to another. It’s a surreal approach and the early attempt at modeling game economies.
Irving Fisher studied monetary theory and price levels at Yale, where his obsession with equilibrium led to an extraordinary invention. In 1891, he unveiled his hydraulic-mechanical computer—a contraption of water, pulleys, and floats that physically demonstrated how prices find their level. The machine, described in his paper “Mathematical Investigations in the Theory of Value and Prices,” became the first working economic model, translating abstract theory into observable mechanics. It was part of a broader effort to formalize economic theory—something game economy design desperately needs.
Tools like Machination and Excel carry Fisher’s torch, albeit in digital form. Machination’s node-based diagrams mirror Fisher’s hydraulic logic: resources pool, flow, and transform through gates and converters. The Excel models do the same, but the piping and transformation process is more opaque (another reason it fails as a tool).
The economy designer is a new role that’s emerged only in the wake of live services played over the course of years. Live services, or long-time horizons, make virtual currency viable for lowering transaction costs (hundreds of IAP transactions mean credit card fees and awkward UX) and crafting complex time/money supply chains. This highlights currencies’ key roles as stores of value and units of accounting.
The economic model becomes necessary to understand these time and money supply chains, much as Fisher’s hydraulic computer was necessary to understand price equilibrium. If the only way to understand a supply chain is to solve something down it, then the economy model’s goal is to do just that. The result is an ability to understand unintended consequences between overlapping progression institutions and design the shape of key game KPIs.
The irony of modern game economies lies in their reliance on century-old methodologies. While Fisher’s hydraulic principles find new relevance in persistent digital economies, our tools remain trapped in the past. The field desperately needs reproducible, accessible modeling systems that simplify—rather than replicate—the complexity of modern virtual economies. Reproducibility and accessibility remain elusive, continuing to be the Achilles’ heel of game economy design.
Humanity may be on a colossal technology frontier, but gaming is being dragged along with AI. Instead of surfing atop the wave, it’s retreated to the wake. Gaming has historically been the first-best use case for new technology, so where did it all go so wrong?
In the 26 months since ChatGPT launched, Web3 has made more tangible progress than AI gaming applications. Any technology outpaced by Web3’s progress is in danger of irrelevance. And it’s for good reason: so far, AI’s visible footprint in games has been limited to a series of Cosmic Lounge press releases (I want my match-3 levels!) and a sixth finger in Call of Duty key art. Everything else appears to be cheap VC slideware or corporate investor day fantasies.
It’s true that gaming effectively subsidized the AI revolution by bankrolling Nvidia’s GPU development, ultimately creating a problem set whose solution unlocked accelerated AI growth. However, it’s failed to capture the subsequent gains, as code development is on a tear; real-time voice translations are consumer-grade, and medical diagnosing is advancing. Gaming has pioneered advancements in real-time 3D graphics, physics simulation, haptic feedback, and internet infrastructure expansion via demand acceleration and has taken wrong turns, too. Cloud gaming, motion controls, plastic guitars, and subscriptions don’t look like they work. Web3 looks like it will register as our next wrong turn, not because it’ll die, but because it’ll fail to grow.
When Do You Write Off the Forte Money?
On the demand side, most game applications are demos, while conversing with NPCs—the most rudimentary possible use case—is lauded as a compelling feature. For an industry that prides itself on the fusion of art and science, we must reclaim our heritage of pushing technological boundaries rather than simply implementing API wrappers.
On the supply side, the pursuit of optimized match-3 gameplay illustrates our current limitations. While we understand that level design significantly impacts retention, determining optimal sequencing amid countless variables remains a formidable challenge. AI promises to accelerate the supply chain, but the bottleneck has shifted downstream to fundamental design questions.
Web3 represents a fascinating detour that consumed substantial venture capital, yielding little except the employment of millions of Southeast Asian players who beat local wages through trading virtual value (true!). Whether the answer lies in Roblox text prompts or voice-command FPS demos remains unclear, but there is still room for a team to experiment. Gaming needs to return to Hoffman’s philosophy: “If you’re not embarrassed by your first release, you shipped too late,” and try getting embarrassed ASAP.
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