The gaming industry has looked unstable for years, but investor materials reviewed by Gothic Therapy point to 2026 as the real fracture point. A private session involving major gaming-sector investors—people who collectively manage billions in gaming capital—outlined a blunt expectation: the current AAA model may not survive the next two years.
The information discussed in the investor meeting wasn’t under NDA and was all publicly available, if difficult to find. And it explains why publishers have spent the past year cutting projects, laying off staff, and restructuring ahead of schedule.
Everything converges in 2026.
COPPA’s 2026 Expansion Hits AAA Where It Hurts
The expanded rules for the Children’s Online Privacy Protection Act (or COPPA for short) arriving in April 2026 are the first major shock to gaming investors.
According to Gothic Therapy, the law’s new scope covers biometric data—including facial scans, eye tracking and voice analysis—behavioral data, movement and interaction data during gameplay.
Studios will be unable to collect this from minors without verified parental consent. Not a checkbox, but legal proof. And regulators are already applying similar standards to teens in some monetization cases. Because teens drive most multiplayer and live-service engagement, the revenue model many AAA publishers rely on becomes a compliance liability.
Studios built around behavioral tracking and targeted monetization may need to rebuild core systems entirely.
Biometric Data Is Becoming a Financial Hazard
Several states now regulate biometric data, and in some jurisdictions, each scan counts as a separate violation. Additionally, each violation can result in $1,000 to $5,000 in fines.
Gothic Therapy points to VR as an example. The average VR system conducts 60 scans per second, which leads to 216,000 scans per hour. At the aforementioned statutory rates, theoretical exposure can exceed $1.08 billion in legal fines—per user, per hour.
Illinois recently capped these penalties, which investors likely see as proof of how extreme the risk was. But other states haven’t followed yet.
If older penalty models expand before caps do, investors believe VR becomes financially nonviable overnight.
Investors are also preparing for the results of more than a hundred active legal cases focused on addictive design, behavioral manipulation and monetization loops. Most of these cases haven’t yet hit mainstream reporting, but the first trials and settlements land in 2026. Those outcomes are likely to set the first major legal standards for “harmful design” in gaming.
If even one case establishes precedent, insurers may raise premiums or drop studios relying on those systems, forcing mid-development redesigns that AAA teams can’t realistically absorb.
Why AAA Studios Can’t Adjust in Time
AAA development cycles take five to seven years. Games launching in 2026 and after were greenlit under assumptions that no longer hold under the new rules and laws. These systems can’t be overhauled mid-development, and will likely be forced to delay or even cancel projects entirely.
As Gothic Therapy explained, AAA built its empire on exploitative design, ignored warnings, and now has no room left to maneuver. They abandoned their core financial source—the players—and have lost whatever goodwill remained.
Gaming Will Be Fine, AAA Might Not
This isn’t the death of gaming, per se. It’s the collapse of a specific era defined by bloated budgets, analytics-first design, manipulative engagement systems, and defensive PR. Indie game studios, which don’t rely on AAA practices, will emerge mostly unscathed.
If the investors’ forecasts hold, 2026 will force a correction the industry avoided for over a decade. Government pressure carries long-term risks, but for now, it aligns with consumer interests.
In short, the gamers have been vindicated by the studios’ investors, and the studios are not ready for the fall of the AAA gaming empire.
