Episode Transcript
[00:00:00] The state of game localization in 2026amidst the turmoil how are localization professionals faring? By Cameron Rasmussen it's been a brutal four years for the video game business.
[00:00:13] Between 2022 and 2026, the largest entertainment industry in the world shed 45,000 jobs, peaking in 2024. The layoffs snuffed out a full third of industry positions in just two years, according to Variety.
[00:00:28] Consequently, companies canceled game projects, powerful industry players announced abrupt strategic pivots, and professionals of all stripes, many of whom turned their love for the medium into a career, found themselves wondering if they'd ever work in the field again. As the games industry continues to grasp for stability, localization specialists find themselves adjusting with the market dynamics.
[00:00:52] With title releases shifting or even outright canceled, how does that affect localization studios? How can they maintain stable revenue when their patron industry is itself unstable?
[00:01:03] And what are the causes of this chaos in the first place? The landscape is evolving fast, said Belen Agulo Garcia, executive consultant of innovation at game localization studio Terra. Therefore, we need to move quickly, anticipate and identify emerging needs with the aim of creating new solutions to meet them. This is what we're doing at Terra arrested development it's April 2020 and the COVID 19 outbreak is officially a global pandemic. An estimated 3.9 billion people worldwide are under stay at home orders of varying severity, and with outings to the bar or the theater out of the question, people are starved for entertainment choices. Video games are an unexpected, stress relieving savior. With a smartphone, console or computer connected to the Internet, consumers have thousands of titles at their fingertips, all without leaving home. Under those circumstances, it's no surprise that the video game industry experienced a surge in demand.
[00:02:05] According to the World Economic Forum, the market exploded by 26% between 2019 and 2021.
[00:02:13] Mobile gaming was particularly fertile ground, growing at 1.7 times faster than the broader market. Buoyed by roaring profits and optimistic economic forecasts, gaming giants launched a season of high profile mergers and acquisitions, including Microsoft's record setting purchase of Activision Blizzard for $69 billion. But the flush times didn't last. As COVID 19 restrictions were lifted, the industry experienced a post pandemic slowdown, and while revenues eventually steadied, they were a far cry from the glittering projections of 2020-2021. That, plus high profile game failures, studio closures, enormous AA game budgets, AI driven market squeezes on essential hardware components like RAM, and myriad additional factors contributed to the professional bloodbath still afflicting the industry cutting costs, managing risk and meeting demands.
[00:03:11] Given the scale of industrial cost cutting, it's no surprise that localization partners are seeing changes to demand and work expectations.
[00:03:20] Those changes, however, sometimes bring in more work for external partners, not less. What we see in practice is that work isn't disappearing, it's shifting, said Lionbridge Games managing director Tugdual Delisle.
[00:03:34] As internal teams fluctuate, studios rely more on external partners for flexible capacity and specialized expertise.
[00:03:42] Instead of large, permanent in house teams, they want partners who can scale up and down without losing quality, continuity or institutional knowledge. Despite that shift, Delisle said that customers buying behavior has tightened and cost speed and return on investment ROI are increasingly scrutinized. It's also impacted how publishers and studios prioritize releases.
[00:04:08] Studios may pause a new IP and double down on a live service title that is performing well, Delisle said. In those cases, the work will shift rather than disappear. Lionbridge Games has responded to the volatility with its own business discipline.
[00:04:23] A broader portfolio, for example, means less reliance on the fortunes of individual titles, and the studio has focused on improving its own technology for faster, more consistent results, using investments more as resiliency tools than cost cutting mechanisms. Garcia, too, has seen a shift in service demands at Terra, and in turn she and her colleagues are finding new ways to add value.
[00:04:49] Clients are feeling the cost pressures and they're looking to save money however they can, including through artificial intelligence integration into localization workflows. Terra staff have also seen less emphasis on transactional localization services and more demand for localization, quality assurance, automation workflows, local marketing and culturalization services, and AI readiness and workflow optimization consultancy. Believe it or not, the gaming industry hasn't been the fastest in adopting AI, Garcia said. Given the trend toward aggressive cost cutting, one might assume the industry's business class would be bullish on AI. Video games, more than any other expressive medium, stand at the intersection of technology and art, and that unique dynamic can create tension both internally and with fans. Gaming companies deeply care about their users, and they are very cautious when changing workflows that might have a negative impact on the player experiences or brand reputation across the globe, said Garcia. That caution is understandable.
[00:05:56] For one thing, opinions on AI are split within the industry.
[00:06:00] According to the 2026 State of the Game Industry Report, 52% of developers believe AI has a net negative effect, and generative AI in particular can spark public relations firestorms.
[00:06:13] For instance, Larian Studios, the beloved developer behind the critical and commercial smash success Baldur's Gate 3 faced unexpected and unusual fan backlash this past December and January over AI generated concept art and placeholder text for its upcoming role playing game Divinity. Studio size and ownership influence AI approaches too. Thanks to relatively open platforms like Steam, Steam and itch IO, small independent studios and even individual developers are thriving, covering niche genres and occasionally producing breakout hits like Slay the Spire or Hollow Knight, according to Garcia. These studios tend to place a more pronounced emphasis on artistic integrity and want human processes centered. They want all parts of the process to be equally treated, including localization, dubbing and and lqa, she said. Indie developers also have more freedom to make decisions regarding how they spend their budget. While major studios have more restrictions, another important factor is volume. Indie games usually are not so big, so the localization cost is typically more contained, serving studios of all shapes and sizes.
[00:07:26] AI policy isn't the only factor that distinguishes studios.
[00:07:31] Indeed, Delisle has noticed more trends based on studio and budget size. While certain pressures like cost, turnaround times and reduced internal localization staffing are consistent, other business demands vary. Indie studios, often looking to expand quickly, have immediate global ambitions but need to grow from fewer launch languages. They also depend more on localization partners experience to shape decisions and strategies, Delisle said. Developers of mobile games, which account for a full 49% of the industry, often focus on continuous development cycles that keep players hooked. Their games require continuous localization work on new updates and content, which prioritizes speed and operational efficiency, according to Delisle. When times are tight, business leaders often choose to prioritize already successful mobile titles and similar live operations. Games testing and QA focus more on cadence regression and live operations instead of milestone based certification, he said.
[00:08:35] Our ability to support games across their full life cycle with teams who already understand the product helps absorb those shifts smoothly. Then there are the major studios, either third party players with massive IPs or first party studios controlled by platform owners like Sony or Microsoft whose demands shift based on project budget size. Mid tier releases often bring phased launches, selective language rollouts, sharper market targeting and flexible development.
[00:09:05] And in the big budget AA space, Delisle finds that teams are consolidating around fewer partners that can handle localization, testing, audio and live operations.
[00:09:17] Large games typically come with multi year roadmaps and as developers fix bugs, tweak game balance, add content and respond to player feedback. Because we work across aaa, mid tier, indie and liveops titles, we see the contrast between segments very clearly, delisle said. A targeted approach to global audiences Game studios and publishers face a delicate balance when developing a global launch strategy. On the one hand, curtailing localization costs too tightly reduces a game's potential reach and revenue. On the other, successful launches in regional markets require a calibrated approach, particularly in lean times.
[00:09:59] That means tough choices. According to Garcia, localization clients might choose to not dub in certain languages or remove dubbing altogether as it is the costliest service. In keeping with its emphasis on innovation, Terra has developed its own business intelligence model to help clients identify the strongest expansion markets. The model leverages data in four game performance and revenue growth, user behavior, monetization strategies and market trend anticipation, revenue, sales per market ratings, user behavior and localization strategy. Data from more than 100,000 games helps identify the strongest localization markets.
[00:10:42] We are seeing how localization teams on the client side want to support the growth function beyond just being reactive and provide localization services, so they are really seeking this type of data to help them make informed business decisions that will potentially impact our oi, garcia said. But while careful strategy is more important than ever, Garcia said the long term trend is toward more languages and bigger launches. We have seen the biggest expansion with Southeast Asian languages such as Thai, Filipino, Vietnamese, Indonesian or Malay, she said. Turkish has also expanded in the last few years and Latin America Latam with Latam, Spanish and Brazilian Portuguese continues to grow strongly across the board, with companies starting to expand their dubbing scope to those languages as well. Arabic is starting to grab the attention of major studios that are willing to invest in the dev aspect of implementing Arabic and as they see a clear growth path in the Middle east and North Africa region, she added. Building resiliency for Terra and Lionbridge games Weathering change is nothing new after all, the video Game industry's 50 year history is largely defined by rapid change. Each generation has introduced exponential technological leaps, expanding the experiences games can capture and the stories they can tell.
[00:12:05] The explosive expansion of earlier decades is naturally giving way to more sustainable growth levels, said delisle. It is not a slowdown, but rather a sign of maturity. The trick then is to anticipate needs and build capabilities accordingly. That need informed the development of lionbridge Games Samurai localization platform in which linguists work in tandem with large language models to localize a game's style and tone on the fly.
[00:12:32] The idea is to lower costs, accelerate timelines and increase language options to broaden the field for all players, especially the smaller studios. We also expect new localization models to emerge closer to the source and in some cases more tightly integrated into content creation and live operations rather than treated as a downstream step. Delisle said. For the love of the game, there are no sure bets in any industry, and no business is immune to downturns. But passion is something of a professional shock absorber, and that's something that both the games industry and game localization service providers have in abundance. We are in this business because we love games. Our work only matters if it resonates with players, delisle said. Keeping human game experts at the core of localization helps ensure the focus stays on authentic player experiences, which is what makes games succeed globally. Regardless of what the future holds for the games industry, localization professionals remain committed to that central mission, ensuring that billions of players worldwide can enjoy their favorite titles in their own languages. We don't have a magic ball, so giving a prediction would be deceiving, garcia said. What we can say is that as long as we find ways of adding value, there is a bright future ahead of us. It might be different, but still promising and satisfying for the talented people in this industry.
[00:13:59] This article was written by Cameron Rasmussen. He is a is senior writer and editor for Multilingual Media.
[00:14:06] Originally published in Multilingual Magazine. Edu2 52 June 2026.
