Can the massive hype around ‘GTA 6’ help a struggling games industry?

Varying sums of grandeur are being reported around “Grand Theft Auto VI”. Production of the video game, which comes out on November 19 after a 13-year wait, is said to cost somewhere between $1 billion and $2 billion.

The analytics platform Sensor Tower estimates that the game had already sold more than 10 million copies by November 11 and had brought in $1 billion. Other analysts say it could sell 40 million copies in its first four months, bringing in $3 billion to $5 billion.

What is clear is that GTA VI is the most eagerly awaited video game in recent years and is often described in superlatives.

Hardware increasingly expensive for gamers

The game is arriving at an ambivalent time for the games industry. “It’s a great time to be a gamer,” games investor Joost van Dreunen told dpa. He sees the market as a buyer’s market: gamers have a great many options when choosing a game.

This goes for both large, elaborate games such as GTA VI, known as AAA titles, and small titles from indie studios, of which there are ever more.

But “even though there’s a wide variety of games, hardware is becoming prohibitively expensive,” van Dreunen said. Gaming PCs and consoles need chips, which have recently become ever more expensive, including graphics cards and memory.

Consoles like the Xbox Series X/S and PlayStation 5 have recently increased in price, instead of becoming cheaper over the years as was usual with previous generations.

More powerful versions of the PS5 are in some cases no longer available in stores at all. Prices for the games themselves are also rising in the AAA segment: “GTA VI” pushed the ceiling for blockbuster games even higher to €80 or $80 – and that’s only for the cheapest version.

‘GTA VI’ launch during ‘shake-out’ in games industry

Felix Falk, managing director of the German industry association Game, describes the industry as “dynamic” – and says it always has been. “Because we not only see many great games coming onto the market, but at the same time have always seen many changes, like the strong consolidation right now, which has meant studio closures and layoffs worldwide. The global industry is currently going through a certain shake-out.”

Tens of thousands of people have lost their jobs since 2022, development of promising games has been halted and studios have closed. Falk said this is also partly linked to the effects of the coronavirus pandemic. As many people had to stay at home, a lot was played – sales and investment rose, and more people were hired. Growth has now consolidated at a high level, Falk said.

Games compete with Netflix

This also shows who games compete with: not only with each other, but also with other ways of spending time. “It will be interesting to see how usage times for Netflix, Amazon Prime and the like develop on November 19,” one industry expert said. Gaming competes with video streaming and social media for users’ attention and screen time.

“GTA VI” is now on the doorstep, and not only developer Rockstar Games and publisher Take-Two Interactive expect great success from it. “GTA is one of those brands that have the potential to bring everyone along,” van Dreunen said. A major success could also revive investment, not only at publisher Take-Two but across the industry in general.

At the same time, there is hope for the “system seller” principle: that many people now buy a new console for GTA VI and then want to play something else once they have finished the game. PlayStation maker Sony Interactive Entertainment updated its PlayStation 5 sales figures shortly before GTA VI’s release to more than 100 million units, although annual sales have recently declined. Data for the current quarter is not yet available.

Then there is the cultural moment GTA VI brings. “A launch like this makes once again clear what scale and potential there is in games,” Falk said. “This is a moment that even those who otherwise have nothing to do with games cannot avoid.”

GTA influences pop culture

This is also because GTA as a brand has a very strong influence on pop culture. Music plays a huge role in the game, for example. The radio stations heard in it are carefully curated and hosted by stars like Bad Bunny and Lana Del Rey.

In a marketing campaign, the US city of Miami is being transformed into Vice City, the city from the game, which in turn is modelled on Miami, including the renaming of a basketball team and alterations to nightclubs.

With such a huge machine and the size of the brand, “GTA VI” can really only become a success. “In the end, those with the strongest financial power, brand and marketing survive,” said an industry expert.

Otherwise, game development remains a financial risk. “This is a completely irrational business,” van Dreunen said. “From an economic point of view, you should absolutely not develop games.”

Whether the most elaborate video game of all time will reduce this risk for the entire industry will probably only become clear after release.