234. The Future of Online Games

Online games used to be so engaging that men forgot about their women and women forgot about their children. Now we can't give them away. What can we do to turn this around?

My gaming journalism career lasted from 2001 to 2005. I was one of the top read independent writers in the USA during this period. While reviewing MMOs world-wide I also volunteered to repair or optimize the economies of most of the MMOs launched across Earth during this period. In 2005 a woman wrote to me, in tears, because her young husband was ignoring her, preferring to play World of Warcraft.

I told her I understood, and admitted that I had often ignored my very beautiful partner because of my engagement with WoW. I said “I will let you burn my dev-signed WoW box, if you let me film it.” She calmed down and ultimately decided not to do it. She was significantly above average in appearance, but she couldn’t compete with WoW. Looking back from 2026, we find that love seems near-impossible to find (replaced by a Gender War). MMOs that cost hundreds of millions of dollars to create are being offered for free to gamers and they still won’t install them.

What Derailed Online Gaming?

Where did the gaming industry lose its way, how did consumers and regulators react, and is it possible to change course even if leadership is willing to take responsibility and change course? It seems clear to all that the cataclysmic industry collapse that I very publicly predicted in 2017 has happened.

The five main vectors for the collapse were as follows:

1. “Gold Farmers”, as I predicted in my first Los Angeles Times article in April of 2000, ended up extracting billions of dollars from open economy MMOs from 2001 to 2010. Brock Pierce, who no doubt read my article as he lived in Los Angeles, decided he wanted to be the one to do what I predicted there. He created the top gold farmer company, IGE. I would challenge him in person at a Q&A in Santa Monica in July of 2000, saying that he was harming gamers. Weeks later he would flee to Spain to avoid sex crime charges in the USA. He would return to the USA in 2003 and plead guilty to minor charges. But he was forced by investors (primarily Goldman Sachs) to ultimately hand the company over to his close friend Steve Bannon. As IGE killed the games it lived upon, it self-destructed as those economies got shut down.

2. In 2009 at UC Berkeley Mark Pincus (Founder of Zynga) admitted that he “Did every horrible thing in the book [to make Zynga successful]”. I talk a bit about some of those things in my 2011 Zynga Analysis, where I predicted the Zynga IPO “Pump” prior to the historic “Dump”. As I was the only person to call that correctly, I got a lot of attention after that. But the thing that Pincus and his lead designer Roger Dickey did that had the most harmful effect on the gaming industry was the promotion and normalization of frustrating consumers to get them to spend. They called this “Fun Pain”.

3. Bobby Kotick, head of Activision/Blizzard, acted and consulted on the movie Moneyball in 2011. He intensely promoted the substitution of creative content with Data Driven Design (DataDD), which I wrote about recently. I would go on to write several papers about Moneyball, and in 2017 I predicted that misuse of DataDD would cause an industry-wide collapse, which is still ongoing. Gamasutra, where I was a senior writer, would censor all my content after that paper. Pincus was also very pro-DataDD.

4. In 2011 Brock Pierce and Jeffrey Epstein would begin orbiting each other. Both had become convicted sex criminals years prior. Presumably Steve Bannon would have also been involved at this early stage but there is no public record of when their relationship started. Jeffrey began hanging out at Bobby Kotick’s house in 2012, and by 2013 the two were brainstorming selling “Microtransactions” to children. These were never popular with consumers, but ended up replacing the open economies of the earlier MMO era as a way to “upsell” visitors to these virtual worlds. This was essentially a virtual adaptation of the Disney amusement park business model.

5. In 2012 I wrote Game Dosing, and introduced the concept of Dopamine Driven Design (DopaDD). I warned that it could be harmful if done by unqualified people. When I testified before the ICPEN in 2013 I told them this was already being deployed across games and social media. In 2018 I wrote The Physiology of Gaming, and explained how species-wide harm was already showing up in data. I proposed a healthier way of doing things in the next paper: How to Make Healthy Games. I proposed that we could generate oxytocin with games, which could counter some of the harm of DopaDD. The exact mechanism of the harm was revealed by research in 2024 with the discovery of the D2-Oxy Heterocomplex. I explained what this was, the implications, and how to use this knowledge in 2025. Now Meta, Google, and Valve have been sued for knowingly using DopaDD. Meta and Google already lost their cases, and Valve is acting like they know they will lose too. Valve is being sued for $6 Billion USD, and that’s just from New York. The legal liability applies to any company making online games that didn’t follow my guidelines. Which is almost all of them.

I submitted a lengthy solution paper to the “Gold Farmer” problem to senior USC professors in 2009, and they authenticated it. At the time I was unaware that Goldman Sachs had taken over IGE. As GS has a very cozy relationship with USC, had I known I would have been more cautious. My solution paper could have cost them billions of dollars in revenue from IGE. Both USC and Activision/Blizzard ignored my breakthrough and my academic career essentially ended.

In 2013 the International Consumer Protection and Enforcement Network (ICPEN), the world regulatory body, asked me to testify against the industry regarding harmful behavior towards children from game developers. My testimony, and the source papers I wrote on this topic, would become foundational to the later creation of the EU’s Digital Fairness Act. The DFA would seek to solve/eliminate problems 2, 3, and 4 above.

The gaming industry lobby reacts very aggressively to any attempts to protect consumers. As the spokesperson for the Stop Killing Games consumer rights organisation recently pointed out, for every meeting that SKG got with EU regulators, the industry would get 100+ meetings. These intense and well funded efforts to control foreign governments are the primary reason why the DFA has taken 13 years to deploy.

The Core Problem Ruining AAA (and Social Media)

While “indie” developers have had little organised consumer or regulator push back, consumers and regulators are getting very organised against major game developers (the ones that hire lobbyists). I predicted this in 2017. There I explained that the unifying problem with AAA was their ideological commitment to consumer antagonistic policies. Very few industries can maintain such intensely negative relationships with their consumers unless they can maintain a monopoly and eliminate choice.

We did see AAA organise into what I would describe as an Oligarchy, which acts as a monopoly if everyone “plays ball”. Which they did. This works until it doesn’t. If your oligarchy becomes a big enough threat to consumers, both consumers and regulators are ultimately forced to push back hard with near Draconian methods. Ilkka Paananen (CEO of Supercell) complained in an open letter that they would not be able to continue to operate under the new rules. As I explained back in 2017, that’s the whole point of these rules. I responded quickly to his letter with some good advice.

It makes no sense to use lobbyists to suppress regulators so that you can continue to be a “bad actor”, and then complain that eventually that stops working. That 2017 paper described these consumer antagonistic methods as “Darksided Tech”. The EU changed the name slightly to “Dark Patterns” to remove the Star Wars themed association. Hence, going forward, all these consumer antagonistic behaviors are now called Dark Patterns.

If we look back to the period when gamers were most excited about games, that was that Golden Age period from 2000 to 2005. You paid your money and you got to play, without the threat of “Fun Pain”, Dark Patterns, and developers trying to harm/manipulate you. The Gold Farmers were a huge problem, which is why I developed the counter tech to passively protect game economies. But some of the most powerful people in the world were getting rich off of Gold Farming, so that tech was doomed.

Big Gaming knows they face an existential crisis with organised consumers and regulators. In their alternate reality bubble, they think they are so loved by gamers that they can turn gamers against the regulators. I think they were surprised when their pleas for relief just made gamers more angry.

As regular employees of AAA companies jump ship and start to join independent projects, the Indie scene is really improving in quality. Ultimately the next great studios will rise from the ashes of the failed AAA studios, formed around the best Indie teams.

What’s Next? Is There a Road to Redemption?

The clock has pretty much run out on an attempt for AAA to course correct. I gave them 9 years of detailed warning, that’s a pretty luxurious clock. Games as a Service has the potential to generate outrageous revenues. My own GaaS designs (World of Tanks Blitz and World of Warships) have generated billions of dollars of revenue from relatively inexperienced (but extremely skillful) teams in Eastern Europe working for a fraction of what Western teams charge.

The problem with GaaS is that these are extremely complex services that involve a lot of technical and scientific expertise to build reliably. Current attempts tend to cost $100 million USD or more to create, and that’s just too much money to build unreliably. To make matters worse, the abuse of the D2-Oxy Heterocomplex by gaming and social media companies means that a product that might have been successful ten years ago using DopaDD will absolutely be dead on arrival in 2026. Not because the industry has changed, but because consumers have changed on a biological level.

Even if the developers have failed to learn the associated biology, the lawyers suing them were not this lazy. They are making eye popping amounts of money suing these companies based on the biological and psychological harm caused by these products.

I don’t see the Oligarchy splitting, so I expect essentially 100% of AAA to crash and burn. That won’t remove the value of making a good GaaS, since one good Service can support 1000+ employees for 10+ years. Every gaming company wants that.

The current environment is essentially AAA and “Indie”. Indie is a pretty wide range, all the way from single person developers (Belatro, Stardew Valley, Rimworld) to “big indies” like Larian Studios (Baldur’s Gate 3). AAA is attempting to sell themselves to investors with incomplete knowledge of what they are buying. Those new owners could fix the things I mention in this article, but I have no evidence that this will happen. All indications are that this intellectual genetic line will go extinct.

I anticipate that “Indie” will initially become a pyramid with the best led teams (like Larian) moving up the pyramid to the top. Those teams should strive to then make the jump to GaaS. Larian is already showing how to do this. They cut ties with Hasbro, which has a lot of ethical debt from their gambling games. BG3 was a fantastic product, but suffered from a retail business model. They only made a fraction of what they could have generated under GaaS. Even with revenue of over $1 billion USD, that’s far less than World of Warships generated, and BG3 took six times as long to develop on a much larger budget. Wargaming’s Lesta Studio employed 200 people. BG3 had almost 3000 people working on it.

There are already way more great games out there than anyone can play. Most gamers only buy one game a year. With almost 4 billion gamers on Earth, total game sales are around 200 billion USD yearly. That’s $50 per gamer per year. Earth has ~8 billion people who spend nearly 10 trillion dollars a year on food. That’s about $1200 a year, 24 times what they spend on games. Humans spend more than 1.3 trillion dollars a year on nicotine, cocaine, and vaping (in total) a year. These products target the same dopamine receptors as modern GaaS and mobile games do. Entertainment is not a luxury, it’s a biological necessity. If we make better games, we can claw budgets from those other D2 receptor products, or even from food budgets. But all those other products, including food, have a lot of science involved in their production. Game developers are lagging behind and that’s why their revenues are so weak and almost half of the game dev labor pool is unemployed.

Making effective GaaS doesn’t have to be expensive, if you have the tech and science you need. WoWs was a very inexpensive product, certainly well under $10M. Still, we can go even cheaper. Look at all those games out there that people still play over and over again, years after purchase. Consider these current monthly averages for Civilization played on Steam:

• Civilization V (2010 release): ~13,000 average (Peak: ~21,000)

• Civilization VI (2016 release): ~30,000 average (Peak: ~52,000)

• Civilization VII (2025 release): ~8,000 average (Peak: ~20,000)

I use this example because this is my favorite franchise, what ultimately got me into game economics, and I worked on both of the attempts to turn Civ into a GaaS (CivWorld and Civilization Online). I recommended both be killed, not because they were bad ideas (Civ is perfect for migration to GaaS) but because the implementation was overly flawed and I was brought in too late to correct things. If I was still being paid by Take 2, I would have killed Civilization VII also, saving them almost $100M.

The easiest way to make the jump from “indie” to GaaS is to find beloved offline games like Civ V or Civ VI and convert them to GaaS. Of course you should plan the product carefully with the proper expertise before going into production and marketing. This was done with Diablo 2 when it was converted to Diablo 3 and 4, and similar games like Path of Exile (1 and 2). I predicted the failure of Diablo 3 (in 2011) before it was even finished, and that prediction paper was spot on. The information there is still useful today.

I go into more detail in my three part series on “Forever Games” (Part 1, Part 2, Part 3). The key take aways here are that the game dev landscape and even gamers themselves have completely changed over the last couple decades. We failed to adapt because we put ideology ahead of science. Going forward we need to make smarter and leaner projects that are well defined and designed before going to production. When everyone knows what they are building from Day 1, morale is very high.

Ethical and healthy design is going to matter going forward, because the prevalence of bad actors has activated regulatory actions that will be copied world-wide and hungrily enforced by independent litigants. Ethical and healthy designs out perform consumer antagonistic designs, and aren’t any more expensive to make. It was only ideology that took us down an alternate path.