Former Nexon CEO Warns AAA Industry Is “Structurally At Its End” Without Major Rewrite

Owen Mahoney, former CEO of Nexon and the executive who greenlit the acquisition of Arc Raiders studio Embark, has issued dire warnings about the future of AAA game development. Speaking with The Game Business, Mahoney reflected on the role of risk in the industry and how overly cautious leadership could threaten the future of big-budget game development.

Mahoney, who led Nexon from 2014 to 2024, took a significant risk by acquiring Embark in 2021, despite pushback from investors and the Board. At the time, Embark was developing The Finals, a moderately successful free-to-play shooter. Although Mahoney left Nexon before the release of Arc Raiders, the studio’s later success validated his gamble. Still, buying a veteran-led studio focused on a live-service shooter was risky, particularly in an industry where such projects frequently fail.

According to Mahoney, the core problem lies in the risk-averse nature of many AAA CEOs. “CEOs often only greenlight projects that feel safe or familiar,” he explained, “but players actually want something fresh and new.” He described the pressures faced by leaders of major public companies:

“You’re running a $23 billion company. You have to greenlight a project quickly. If it fails, you explain to the Board why $300 million was spent. Make a second mistake, and they’re calling for your head. By the third, you have an activist investor. Every CEO in a public game company faces this exact situation.”

Mahoney argues that this environment discourages innovation, leaving companies reliant on proven formulas rather than exploring new ideas.

“I think that the AAA industry is structurally at its end,” he said. “Without a serious rewrite of how we make games, it’s going to end in more disaster than it has already.”

He credits his willingness to take a chance on Embark and Arc Raiders to the team’s Battlefield veteran developers, who had ‘something to prove.’ Yet, even Mahoney admits that the project’s success wasn’t clear until just before launch.

“How come it was so unobvious that Embark was a great deal for Nexon until about three weeks ago? What does it say about the industry?” he asked.
“It reminds me of Minecraft, which came out of nowhere and shattered all beliefs about high-fidelity graphics. Or Clash Royale, which showed synchronous online PvP could work on mobile when nobody thought it could.”

Mahoney notes that the industry often clings to old assumptions until someone proves them wrong, making it difficult for companies to plan for the future. Developers face a tough choice: remain in the indie space with limited resources or join AAA studios and work on highly compartmentalized projects that can feel like a “factory job.”