The video game industry runs by making a profit but their philosophy to run their company is so pathetic, they can earn more but they don't have a decent understanding to comprehend why they cannot make more profit because they lack common sense. They are educated by professors and experienced people in their respective fields, however all their knowledge makes them misunderstand and become too idealistic. As a result they say "you will enjoy our game because it will take you 200 hours to unlock each skin" and "you will buy GTA 6 no matter how expensive it is because it's a GTA game" lolol. They all believe in whatever justification they believe in. And then Hideo Kojima says "Death Stranding didn't sell as much as I expected because people want mindless action games", he has no idea why Death Stranding wasn't liked by lots of people and it was not because it lacks action or it wasn't similar to Metal Gear. Then why did people love Life is Strange that much? It wasn't because it's a walking simulator puzzle game with too much dialogues and girls stuff. It fundamentally touched the human soul on deeper levels so no wonder.
So they are so ignorant all they do are contradicting ironies:
Top 11 video game industry fails lol:
1) Selling video games that would only interest little kids at expensive prices that a parent would rather buy a banana instead of that game for their kids. Parents hardly think it would be worth buying a video game console for kids who are younger than 12. They think "if he/she won't like it it would go to waste". Another aspect is how destructive kids can be so imagine you buy PlayStation 5 for $700 and next day the kid breaks it because he/she couldn't pass the game lolol. This is what you think as an adult so you use video games and video game consoles as part of the rewarding system for older kids who are like 12 and above. You can hardly explain to kids how important their education is because they cannot believe just because you have a diploma won't make people hire you. So you gotta give them rewards but then these are so expensive they require a top-tier level of goals to be unlocked by the kid lol.
2) They have no idea how the world in general has usual social problems in its own dynamics. Video game companies and whoever work in them generally come from rich families who never had to even think about "how to pay water bill this month" therefore they cannot comprehend how poor people are in most parts of the world. But then they wonder why video game customers won't increase relatively despite how much the population has increased. They have no idea how they lose customers as much as they gain customers in a rather subtle balance lol. In that context they don't get how ignorable video games can be and how their potentials are tanked to the lowest levels just because they sell video games at higher prices way more than people think it deserve. So it's not impossible that one wrong move from many AAA video game companies in the same year can collectively crash the whole video game industry in a way it can negatively affect the future of the whole industry forever. Netflix may steal their customers instead lol. Never underestimate how people can just sacrifice entertainment just to focus on survival especially when a hobby is too expensive for them. When you are an adult paying bills, rents, whatever necessities and saving money because you know you'll be fired so you'll need money until you find your next job if you can ever is the actual concern they have, not when GTA 6 will release. If they think it won't even be worth $20 they will ignore it and keep playing GTA San Andreas and it's no rocket science.
3) Developing free to play games that targets kids. You expect to make money by selling stuff but not many kids has the means to give you their money even if they're dying for it. They cannot convince their parents or something. As a result free to play industry makes money thanks to rich parents of kids who care to have the kid buy digital stuff and adults who make money.
4) Video game companies are too shy. When their game doesn't sell well because of bad execution despite it being really a good idea they don't wanna risk developing a video game like that again. It causes tons of copy-and-paste generic video games.
5) Ignorance of video gamer profile. Japanese developers misunderstand Americans and vice versa. It causes nonsense cut contents and censors. They also believe everyone loves what Americans loves. This causes what I'll explain later.
6) Because they believe everyone loves what Americans or Japanese loves, video game companies study statistical data on in which countries their video game sold or sold less. When they think X countries don't buy many of their games and it really sell too less it causes them to misunderstand the situation in most unfair way possible: "Sales in X country are so low we believe there is no video game culture there that can help us profit." In reality the whole X country loves to play retro video games instead of various reasons I explain later. It also causes another misunderstanding.
Sometimes why video game culture seem to don't exist is just because people don't care about English and they don't care to translate video games to their native language. Cannot expect people to wanna play games in English despite they know English. Some countries prefer materials in their own language. For example you can't simply make French people enjoy anything in a non-French language. Of course there are individual exceptions that exist but this is the culture they have.
However in such countries video game culture is common and popular despite it works via piracy and fan translations. As a result who makes money from it is pirates and translators perhaps way more than how much video game made profit by "legal sales" lololol.
7) "X country loves to pirate games."
Some countries have so much unfair taxes and bank transaction fees and how much money can be spent in your bank account in every month, when Steam sell you the game for $100, they have to pay a money to get the game in a way converting the money they lose to dollars it can be high as $500. This is why game prices should befit to regional pricing.
Then the arguments Americans give me is: "Dude if they are so poor then they should find better job." But they don't get these people are not poor in their own countries. They live their normal life without much problem as much as you American. It's just to buy your product people have to sell kidneys to befit your currency just so you can buy eggs lololol. Currency is not a fair value conversion between currencies from different countries, it's a trade marked that has subjective sense of worth based on objective reasoning. If no one has any reason to buy your money for international uses, which they don't have to because it's normal, then it's not the local economy's problem when they can afford their own products and services but not international products and services that don't care about regional pricing.
Naturally people in these countries either pirate games or they keep playing same legit video games they bought 20 years ago. Piracy is not a preference but a forced reality for gamers in certain countries because they don't have much choice to play games.
As a result video game industry suffers from customer time dilation because of economy in certain countries that, for example, when Americans were bored of PlayStation 2, SEGA Genesis video games around piracy market was so cheap, people started to buy SEGA Genesis and enjoy it because they couldn't even afford PlayStation 1 yet when Americans were so excited about PlayStation 3 lol.
When video game companies learns about this they think these people are retro fanbois or intentionally having crazy nostalgia so "they can't move on" to enjoy new video games. This is a nonsense take.
8) Despite the current most popular video game profile is people aged 30 - 50 video games still being produced for 6 years old kids. Tons of forced tutorials, too shallow story, characters and situations, and the worse: Video games that use obvious elements from many fictions people saw already over and over again and they got bored like 10 years ago.
9) Remakes are believed to guarantee sales. People often buys them just because of their love for the original, thus they can attract new gamers so which makes a profit indeed but it's either hit and miss. However video game companies leans too much on remakes so it's dangerous. Sometimes they remake games that obviolusly wouldn't sell. Instead it would be better for them to turn their old standalone video games into a series because they have too much potential to be a series but they are forgotten after they just released 1 game about it and that's it. (Still to this day I wait for Racing Lagoon 2 and I refuse to die until then lololol.)
10) Companies are too scared by trends. They think when Zelda games popular they should release "Zelda killer" games. As a result these games are strongly rejected.
11) Video games ignore new factors and patterns affecting the future, they are still too tied to what happened before so much they keep expecting the same customer behaviour will always continue because they mistakenly believe they figured out how the world works. How the world works is constantly changing fast right now more than ever so you constantly learn and understand how world works over and over again.
Perhaps there is more to say but these are my personal take to make sense why the video game industry couldn't realize its full potential yet. They seem to care too much about remakes and Netflix-like games by ignoring in this world not only Americans, Japanese and Chinese are interested in games lol.