Gaming’s Billion-Dollar September: Steam Hits £11bn, Capcom Dominates, and the Industry Splits in Two

September 29, 2026 — by Vito Ruocco

If you think 2026 has been a quiet year for video games, you haven’t been paying attention. This September alone has delivered a dizzying array of headlines: Valve quietly crossed an eye-watering £11 billion in Steam revenue for the year, Capcom is enjoying what might be its most successful calendar year ever, Sony sent shockwaves through the industry by announcing the end of physical PlayStation discs, Rockstar cracked down hard on the modding community weeks before GTA 6 arrives, and a damning investigation into Amazon’s disastrous AI-driven game development revealed a team that built something genuinely creative — and got laid off anyway.

Welcome to gaming in late 2026. It’s a tale of two industries. On one side, Japanese studios are thriving with lean teams, reasonable executive salaries, and hit after hit. On the other, Western triple-A development is bleeding jobs, chasing trends, and wrestling with existential questions about physical media, AI, and sustainability. Let’s break down the biggest stories shaking the industry today.

1. Steam’s £11bn Year: The Numbers Are Staggering

Let’s start with the headline that puts everything else in perspective. According to new data from Alinea Analytics, Valve has generated an estimated $15 billion (£11.1 billion) in Steam revenue already in 2026. That’s Valve’s cut — the 30% commission on every game, DLC, and piece of software sold on the platform. To put it bluntly: Steam is printing money.

The biggest revenue-generating new release on Steam this year? Forza Horizon 6, the open-world racing juggernaut from Playground Games and Xbox Game Studios. According to Alinea’s analysis, Horizon 6 has generated an estimated $210.5 million (£155.7 million) in revenue for Valve alone. That’s followed closely by Crimson Desert at $203.3 million (£150.4 million) and Resident Evil Requiem at $200.9 million (£148.6 million).

Here’s where it gets interesting, though. Alinea analyst Rhys Elliott noted that the top six highest-grossing new releases on Steam accounted for just $1 billion of that $15 billion — or a mere 6.6 percent. The rest? That’s the long tail: thousands of smaller games, catalog sales, DLC, microtransactions, and the massive revenue from perennial hits like Counter-Strike 2, Dota 2, and PUBG.

Two of the top six — Crimson Desert and Meccha Chameleon — are entirely new intellectual properties. Crimson Desert alone accounts for 18 percent of all new IP revenue on Steam this year ($203 million). Remove it from the equation, and the ‘new IP’ share drops from 63 percent to just 39 percent. That’s a sobering reminder of how hard it is to launch a successful new franchise without a pre-existing fanbase.

And there’s more coming. Onimusha: Way of the Sword (which just crossed 1 million copies sold on day one), The Blood of Dawnwalker, Gears of War: E-Day (releasing October 1), Call of Duty: Modern Warfare 4, and Phantom Blade Zero are all still to come this year. The $15 billion figure will only climb higher.

2. Capcom’s Unstoppable 2026: Onimusha, Resident Evil, and Beyond

If one company encapsulates the health of Japanese game development right now, it’s Capcom. This year has been nothing short of spectacular for the Osaka-based publisher.

Resident Evil Requiem, the ninth mainline entry in the survival horror series, has now crossed $500 million (£377 million) in estimated revenue, according to Alinea Analytics. That makes it the fastest-grossing Resident Evil game in history, outpacing every previous entry and closing in on the Resident Evil 4 Remake’s $600 million haul (which took three years to achieve).

The data reveals that PS5 is Requiem’s most popular platform with 4 million copies sold, 30 percent of which are still physical. That’s notable given Sony’s recent announcement that it will stop large-scale production of physical discs in January 2028. Even more fascinating: the new Zach Cregger-directed Resident Evil film — which had a record-breaking $108 million opening weekend — didn’t actually boost game sales as much as Capcom’s routine price discounts.

Meanwhile, Onimusha: Way of the Sword — the first new Onimusha game in over 20 years — sold over 1 million copies on its first day after launching on September 4 across PC, PS5, Xbox Series X/S, and Switch 2. The Steam version peaked at 85,081 concurrent players. The Onimusha series as a whole has now surpassed 10 million lifetime sales. It’s a stunning revival for a franchise many had written off as dead.

Capcom also saw Pragmata, its ambitious new IP, sell 1 million copies in its first two days. The company’s strategy — modernizing classic franchises while betting on new IPs — is paying off handsomely. Capcom is proving that you don’t need 500-person teams and $30 million executive bonuses to deliver hits.

3. Sony’s Disc-Less Future: A Hammer Blow for Retail

Perhaps the most consequential industry news this month is Sony’s announcement that large-scale production of physical PlayStation discs will cease in January 2028. The move sent tremors through an already fragile retail ecosystem.

Experts across the industry weighed in, and the verdict is grim for physical game stores. Chris Dring of The Game Business called it ‘clearly a blow,’ noting that PlayStation games still sell millions of copies physically worldwide. Rhys Elliott from Alinea Analytics described it as ‘a hammer blow for games retail,’ pointing to the pre-owned market — ‘one of the rusty engines keeping specialist retailers alive’ — as the biggest casualty.

‘The margins on new physical games are so thin for retailers, but used games are where the real money was,’ Elliott told Eurogamer. ‘GAME has already stopped accepting trade-ins, and CEX is basically gone. Why pre-order a physical copy from Amazon or GameStop when what arrives is a slip of cardboard with a download code? A code-in-box has none of the things that made physical worth choosing: no resale value, no lending, less collectability. The physical channel has no reason to exist.’

Piers Harding-Rolls from Ampere Analytics offered a slightly more nuanced view, arguing this could push retailers toward innovation around digital game sales in-store. But the trajectory is clear: physical gaming media, as we’ve known it for four decades, is entering its final chapter. The PlayStation 6 — rumored to arrive in late 2027 or 2028 — may well be Sony’s first disc-free console generation.

4. Rockstar Tightens the Modding Leash Ahead of GTA 6

With GTA 6 potentially just weeks away from its rumored fall 2026 release, Rockstar Games has updated its modding guidelines — and they are significantly more restrictive than the laissez-faire approach that allowed GTA 5’s modding scene to flourish for over a decade.

The new guidelines, posted on Rockstar’s community resources page, begin with a simple directive: ‘Respect our games.’ What follows is a list of prohibitions that effectively kill many of the most popular types of GTA mods:

No expanding or modifying Rockstar’s official storylines, plots, missions, characters, or established continuity
No combining maps, assets, or characters from one Rockstar game with another (sorry, Arthur Morgan in Vice City fans)
No multiplayer modding outside Rockstar’s official Creator Platform
No porting Rockstar games to consoles or hardware where they haven’t been officially released
No third-party IP — so Shrek in GTA 6 is officially dead
No monetization of mods outside the Creator Platform

This is a dramatic shift from Rockstar’s historically permissive stance. GTA 5’s modding scene gave us everything from Iron Man suits to zombie apocalypses to fully custom roleplay servers. Many of those mods — especially the roleplay servers — were eventually targeted by Take-Two’s legal team, but the creative anarchy of single-player mods was largely tolerated.

The timing is notable. Rockstar recently announced its own official GTA Online RP server in closed beta, years after trying to shut down (and then acquiring) the team behind the popular FiveM mod. The new guidelines seem designed to funnel all modding activity through Rockstar-controlled channels. It’s a power play, and it signals that Rockstar — unlike Bethesda or Larian — wants tight control over how its games are modified and experienced.

5. The Great Divergence: Why Japanese Studios Aren’t Laying Off Their Teams

While Western studios hemorrhage jobs, Japanese developers are quietly doing just fine. According to industry analyst Amir Satvat, who has run the ASGC Games Industry Layoffs Tracker since 2022, 57,628 jobs were lost across the global games industry between 2022 and 2026. But here’s the kicker: 96 percent of all jobs lost in 2026 were in North America and Europe.

‘There was a 12-to-18-month period where I estimated that over half of layoffs, globally, were in California,’ Satvat told EDGE magazine. ‘I think this is as bad as the ’83 crash if you’re a game developer based in North America or western Europe.’

So why are Japanese studios different? Satvat identified three key factors:

Smaller, leaner teams — Japanese studios didn’t get swept up in the live-service trend or mega-blockbusters with 500-person teams
Reasonable executive salaries — ‘They still make great money, but it’s two or three million dollars, not 30 million.’ Compare that to EA boss Andrew Wilson’s $38.6 million salary or Take-Two’s Strauss Zelnick, who earned $42.1 million in 2022. Both companies laid off staff this year.
Outsourcing cuts — When Japanese studios need to reduce costs, they typically focus on contractors based outside the country, protecting core local staff

‘Everyone calls out Nintendo, but you can look at Konami or Capcom — these companies all have staff retention of 97 percent plus,’ Satvat said. The results speak for themselves: Capcom is enjoying record-breaking revenue, Nintendo’s Switch 2 and Pokémon Pokopia are selling in the millions, and Koei Tecmo has explicitly stated it believes in smaller titles for continued success.

Epic’s Tim Sweeney called this ‘the worst videogame crash since the 1980s.’ But if you’re working at a Japanese studio, you might not even notice.

6. Amazon’s AI Game Gamble: The Tragedy of Project Trident

A joint investigation by Eurogamer has revealed the inside story of Project Trident, an Amazon Game Studios project that was pressured into integrating generative AI — and still got cancelled, with its team laid off anyway.

Project Trident began life as a cooperative four-player action game in a comedic Nordic setting, where players fought giant monsters Shadow of the Colossus-style. Early builds were received positively internally. ‘We were playing outside of the play tests because it was really fun,’ one source told Eurogamer. ‘We knew it was special.’

But around mid-2024, an ‘AI mandate’ was introduced at Amazon Game Studios. The company, like many tech giants, was pushing to include generative AI across all divisions. The Project Trident team was told to pivot — either incorporate AI, or ‘more than likely shut down.’

The team scrambled. They shifted to a Helldivers-style game where players could command NPCs using voice or text, powered by a large language model. When that 18-month development timeline proved impossible, they shifted again to a single-player linear story. The LLM-powered NPC interaction was genuinely innovative: you could convince enemies to join your faction through custom dialogue, and environmental puzzles required commanding an AI-powered Thor to clear your path.

None of it mattered. In October 2025, as part of Amazon-wide layoffs that cut 14,000 employees, the Project Trident team was let go. The Lord of the Rings MMO Amazon was working on was also cancelled. The San Diego studio, which had tried to do exactly what leadership asked, was shuttered.

The story is a cautionary tale for the entire industry. When executives mandate AI integration without understanding game development — and then lay off the teams that comply — it reveals a fundamental disconnect between corporate strategy and creative execution. Project Trident’s developers weren’t replaced by AI. They were just replaced by nothing.

7. What’s Coming Next: The Fall 2026 Release Tsunami

Despite the layoffs and the uncertainty, the games keep coming. Here’s what’s on the horizon for the rest of 2026:

Gears of War: E-Day (October 1) — The prequel to the Gears trilogy, returning to the series’ horror-tinged roots. Reviews are already strong.
Call of Duty: Modern Warfare 4 (Fall 2026) — The annual COD juggernaut, reportedly featuring a campaign that bridges the original Modern Warfare trilogy with the reboot timeline.
Phantom Blade Zero (Late 2026) — The stylish Chinese action game that wowed audiences at every game show this year.
Crimson Desert: Charting the Unknown DLC (October 2026) — The first expansion for Pearl Abyss breakout hit.
Grand Theft Auto VI (Rumored Fall 2026) — Still the elephant in every room. If Rockstar hits its window, this will single-handedly reshape the gaming landscape for the next decade.

The Blood of Dawnwalker — from the studio behind The Witcher 3 Blood and Wine DLC — also just crossed 1 million sales, proving there’s still appetite for dark fantasy RPGs. And Forza Horizon 6 continues to dominate the racing genre with no serious competitor in sight.

The Big Picture: Two Industries, One Planet

If there’s a single thread connecting all of these stories, it’s this: the video game industry is splitting in two.

On one side, you have the Japanese model: lean teams, fair executive pay, focus on craft over trends, high retention, consistent quality, and sustainable growth. Capcom, Nintendo, Koei Tecmo, and Konami are proving that this approach works. Onimusha: Way of the Sword didn’t need a battle pass or a 500-person team to sell a million copies in a day. Resident Evil Requiem didn’t need to be a live-service game to cross $500 million.

On the other side, you have the Western triple-A model: bloated teams, massive executive compensation, chasing every trend (live services, AI mandates, mega-budgets), and punishing layoff cycles. Amazon’s Project Trident is the perfect parable: a team told to build with AI, laid off anyway. Microsoft’s Xbox division — under new CEO Asha Sharma — just laid off 3,200 people. EA, Take-Two, Bungie, Warner Bros, Epic: all cutting staff.

Steam’s £11 billion year proves the market is healthy. But the money is increasingly concentrated at the platform level and among a handful of mega-hits. For the thousands of developers laid off in 2026, the industry’s financial success means little when you’re locked out of your company email account.

The lesson from Japan is clear: smaller is sustainable. The lesson from Amazon is equally clear: AI won’t save you. And the lesson from Sony is perhaps the most final of all: physical games are ending, and the industry needs to figure out what comes next — for preservation, for ownership, for the independent stores that still survive.

2026 has been a year of contradictions. More money than ever. More layoffs than ever. More games than you could ever play. And an industry that can’t quite decide what it wants to be when it grows up.

One thing is certain: the next twelve months will define the next twelve years. GTA 6 is coming. The disc is dying. The Japanese are thriving. And somewhere — in a smaller studio, with a smaller team, and a reasonable budget — someone is probably making the best game of 2027.

— Vito Ruocco, September 29, 2026