If one word could sum up the video game industry in 2025, it would be ‘turbulent’. While incredible games continued to be made, it was often in spite of, not because of, the industry's own machinations. The year was marked by more layoffs, major acquisitions, and a growing sense of cynicism, even as executives proclaimed a bright future.
This was the backdrop for the 11 most significant stories that shaped the gaming landscape, setting the stage for what promises to be a challenging 2026.
Hardware Wars: New Consoles & Market Shifts
The most anticipated hardware launch of the year was undoubtedly the Nintendo Switch 2. After a year of accurate leaks, the reveal was surprisingly contentious, criticised for being a simple power upgrade and for first-party game prices soaring above £75. Yet, commercial success was undeniable. The console became the fastest-selling video game console of all time, shifting 10.36 million units worldwide and on track to hit Nintendo's 15 million target by March 2026.
However, its software lineup has been peculiar. While Mario Kart World and Donkey Kong Bananza succeeded, the system has leaned heavily on upgraded ports and niche titles like Hyrule Warriors: Age Of Imprisonment. The lack of a major new 3D Mario game for the franchise's 40th anniversary and an unclear 2026 release schedule leaves its future uncertain.
Meanwhile, the traditional console war shifted dramatically. Sony had a surprisingly strong year financially, despite a bare release slate—only Ghost Of Yōtei and the externally developed Death Stranding 2 as major exclusives. Its live-service ambitions floundered further, with FairGame$ missing and muted excitement for Bungie's Marathon. Conversely, Xbox’s brand power eroded severely. The appearance of Halo on PlayStation, a lack of Black Friday discounts, and devastating July layoffs—including the cancellation of the Perfect Dark reboot and the closure of The Initiative—signalled a profound crisis for Microsoft's gaming division.
Industry Trends: AI, Costs & Consolidation
Generative AI became more prevalent in game development, though no more popular with players. Microsoft championed its Muse AI tech, and Sony experimented with an AI-powered Aloy prototype. The driving force is cost-saving, exemplified by Candy Crush Saga developers being replaced by the tools they helped train. Backlash remains fierce, with some developers marketing their games as AI-free. The controversy was highlighted when Clair Obscur: Expedition 33 had awards stripped for undisclosed AI use, despite its critical and commercial success.
Everything in gaming got more expensive. Console prices rose, Xbox Game Pass subscriptions increased by 50%, and Nintendo set a new premium standard with £75 games. Factors include inflation, US tariffs on Chinese manufacturing, and the AI boom causing RAM shortages. This economic pressure fuels industry consolidation.
The buyout of EA by a consortium including Saudi Arabia's PIF for $55 billion and Tencent's bailout of Ubisoft point to a risk-averse future focused on milking established IP. Warner Bros. Interactive's sale to Netflix (or Paramount) after studio closures further suggests a Western industry being stripped for parts.
Game Delays, Surprises & The Future
The year's biggest software story was the double delay of Grand Theft Auto 6. Initially slated for Autumn 2025, it was pushed to May 2026, and then again to November 19, 2026. The delays have caused ripple effects across the industry's scheduling. Rockstar also faces a UK government investigation over union-busting allegations following the firing of over 30 staff.
In a stunning indie triumph, Clair Obscur: Expedition 33 from Sandfall Interactive became a phenomenon, sweeping The Game Awards 2025 and proving the viability of mid-tier, double-A development. It stood in stark contrast to the faltering of a giant: Call Of Duty: Black Ops 7 was a critical and commercial disappointment, outperformed by rivals like Arc Raiders and EA's Battlefield 6, forcing Activision to reconsider its annual release strategy.
Looking ahead, rumours of the PlayStation 6 and next-gen Xbox point to a 2027 release, with AI integration a key selling point. Valve's rumoured Steam Machine revival, potentially bundled with the mythical Half-Life 3, could further disrupt the market. However, with rising component costs and the shadow of GTA 6's launch, the path forward for the entire industry is anything but smooth.
