Industry Veteran Warns: AAA Game Development Model Reaching Breaking Point, Calls for Return to “Fun-First” Philosophy

The Unsustainable Economics of Blockbuster Gaming

Former God of War executive Meghan Morgan Juinio has issued a stark warning about the current state of AAA game development, stating that the blockbuster model with massive budgets and emphasis on spectacle is “not really sustainable.” Having recently departed her role as director of product development at Sony’s Santa Monica Studios, Juinio brings insider perspective to what many industry observers have suspected for years.

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“I think it’s already not really sustainable in terms of the cost of development,” Juinio told PC Gamer during Gamescom Asia. “There’s been a ton of layoffs, and a lot of that is focused on the West Coast of the US, and it’s clearly because the minimum costs are so high.”

The Human Cost of Development Inflation

The gaming industry has witnessed significant turbulence throughout 2024, with widespread layoffs affecting thousands of developers despite record-breaking revenues for major publishers. Juinio directly connects these workforce reductions to the escalating costs of producing AAA titles, where development budgets regularly exceed $100-200 million, with additional hundreds of millions allocated for marketing., as our earlier report

“Development costs will necessitate that the big publishers create [new] pathways,” Juinio emphasized, suggesting that the industry’s current trajectory requires fundamental restructuring.

Rediscovering Gaming’s Core Principle: Fun

Beyond the economic concerns, Juinio advocates for a philosophical return to gaming’s fundamental purpose: entertainment. Her message cuts through industry conversations about graphical fidelity, open-world scale, and technical achievement to refocus on what truly matters to players.

“My opinion is that it has to be fun first,” she stated. “It can look the most beautiful, the best soundtrack in the world, it can be winning all the BAFTAs for audio and all this, but if it’s not fun it’s not worth the investment, whether that’s $2m or $500m.”

The Rise of AA and the “Small Game” Advantage

Juinio believes larger publishers will increasingly look to AA or single A games for inspiration, citing recent successes like Clair Obscur: Expedition 33 and Peak as evidence that smaller teams with constrained budgets can create impactful experiences. This sentiment echoes broader industry movements toward more sustainable development scales.

Sony’s Astro Bot serves as a prime example of how AA-sized ambitions can achieve both critical and commercial success. The game’s director, Nicolas Doucet, reinforced this approach during a talk at this year’s Game Developers Conference, stating: “It’s OK to make a small game… A lot of choices we made with Astro Bot could be labelled as AA… but that doesn’t really matter. We could still make something that gets people really happy.”

Practical Pathways Forward

Juinio’s commentary suggests several potential directions for the industry’s evolution:

• Scope Realignment: Games don’t need to be 40+ hour epics to provide value
• Resource Reallocation: Redirecting budget from graphical arms races toward gameplay innovation
• Diverse Portfolio Strategy: Balancing AAA tentpoles with smaller, creatively ambitious projects
• Discovery Solutions: Addressing the challenge of visibility for smaller titles in an overcrowded market

The industry veteran’s perspective arrives at a critical juncture, as developers and publishers alike grapple with development realities that increasingly strain both creative ambitions and financial practicality. Her call to “just make something fun” may sound simplistic, but it represents a necessary correction for an industry that has prioritized scale over substance for too long.

As Juinio concluded: “I think that’s where the biggest publishers can return: how do we go back to building solid games that are really fun to play. Maybe they aren’t 40 hours long, and maybe they aren’t the most cutting edge – but that doesn’t matter if the core experience is really fun.”

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