Video game market could collapse according to this article.

[BricatSegaFan]

It makes a lot of valid points

http://www.cracked.com/article_20727_5-reasons-video-game-industry-about-to-crash.html

[Rickstilwell1]

Yeah definitely. There's a few third party companies I'd like to see lose their limelight so some of the once popular, now niche ones can regain their lost thrones. And also make way for new ones.

If EA hadn't bought out so many studios we'd still have more companies and creativity.

[Collector_Gaming]

Yeah definitely. There's a few third party companies I'd like to see lose their limelight so some of the once popular, now niche ones can regain their lost thrones. And also make way for new ones.

If EA hadn't bought out so many studios we'd still have more companies and creativity.

See thats the problem. EA is what i think we can say a "video game sweat shop" they just want the money. So thier theory is to eliminate all competition by buying them out and letting them collapse on themselves so they get all the profit. Wouldn't surprise me if EA has tried to buy out other mega hit companies like valve and such

[Neb6]

Good article.

Mentions a lot of important issues:

- project budgets spiraling out of control, coupled with the pressure to sell tons of product in order to recover costs.
- the wrong people making the creative decisions/too many cooks in the kitchen.
- falling back on 'what sold last time' comfort zone advice from investors (this is what's plaguing the film industry right now).
- biased reviews (not all that different from the payola system that influences what music gets played on commercial radio).

I think scaling projects down to smaller budgets with smaller teams could help. Of course then there'd be the argument of. "Can we still sell it at the price of a bigger/badder game?" Question is, do they HAVE to sell it at the $60.00 introductory price to make a profit if the budget was lower and the game was good enough? I suppose it then enters the realm of marketing budgets. Distribution is a pain too. Ugh. It seems they've worked themselves into a corner.

For me though, there are a lot of things that cost money that I don't need in my games. So if they need so save money, they can:
- model less cars for racing games (I only need a maximum of ten vehicles to choose from).
- skip the elaborate intros and cut scenes for racing and flight games (I don't need these either).

The shotgun approach to game development might be a smart approach for some studios. Same idea as Sundance Studios for motion pictures. Fund four smaller projects with what you'd normally fund one and if two out of four do well, then you're okay. If one does amazingly well, then you're still okay. That would also give the designers more flexibility and take some of the pressure off of them.

[Bojay1997]

Good article.

Mentions a lot of important issues:

- project budgets spiraling out of control, coupled with the pressure to sell tons of product in order to recover costs.
- the wrong people making the creative decisions/too many cooks in the kitchen.
- falling back on 'what sold last time' comfort zone advice from investors (this is what's plaguing the film industry right now).
- biased reviews (not all that different from the payola system that influences what music gets played on commercial radio).

I think scaling projects down to smaller budgets with smaller teams could help. Of course then there'd be the argument of. "Can we still sell it at the price of a bigger/badder game?" Question is, do they HAVE to sell it at the $60.00 introductory price to make a profit if the budget was lower and the game was good enough? I suppose it then enters the realm of marketing budgets. Distribution is a pain too. Ugh. It seems they've worked themselves into a corner.

For me though, there are a lot of things that cost money that I don't need in my games. So if they need so save money, they can:
- model less cars for racing games (I only need a maximum of ten vehicles to choose from).
- skip the elaborate intros and cut scenes for racing and flight games (I don't need these either).

The shotgun approach to game development might be a smart approach for some studios. Same idea as Sundance Studios for motion pictures. Fund four smaller projects with what you'd normally fund one and if two out of four do well, then you're okay. If one does amazingly well, then you're still okay. That would also give the designers more flexibility and take some of the pressure off of them.

While I think the article raises some interesting points, it's the same basic points that gamers and industry analysts have been debating for well over a decade now. Frankly, people were claiming the same things about budgets, the same movies or sequels year after year, biased critics and non-creative decision makers in the movie industry in the 1970s and 80s and yet the movie industry continues to make increasing profits year after year by raising ticket prices and pushing premium experiences like 3D and IMAX. The same thing will happen in games.

Sure, there may be some massive failures and some publishers that go under in the coming years, but in an industry where games with hundreds of millions of dollars in development and marketing costs (i.e. COD, GTA, etc...) recoup that within a day or two of launch, the financial incentives are far too great for these large developer/publishers to change what they are doing. I think if anything you will continue to see more and more smaller and mid-size developers either fold completely or be absorbed into these larger companies and in a few years there will only be massive developer/publishers like Activision, Ubisoft and EA and tiny publishers doing mobile and download games on a true shoestring. The sad thing is that unlike digital low budget film-making, there is a certain level of technical expertise needed to make games, so it's not exactly as open as other forms of creative expression.

[Greg2600]

Given the sheer numbers of PS4/One consoles sold this month, I kind of doubt any crash is coming.

[camarotuner]

Given the sheer numbers of PS4/One consoles sold this month, I kind of doubt any crash is coming.

The original collapse of the gaming industry in 83/84 wasn't caused by lack of sales it was caused by too much crap on the market and the backlash of customers refusing to continue to purchase it. If you want to read something interesting Spielburg (spelling?) has been warning of a major "restructuring" of Hollywood due to a lot of similar concerns being raised in the gaming industry.

[TonyTheTiger]

While I think the article raises some interesting points, it's the same basic points that gamers and industry analysts have been debating for well over a decade now. Frankly, people were claiming the same things about budgets, the same movies or sequels year after year, biased critics and non-creative decision makers in the movie industry in the 1970s and 80s and yet the movie industry continues to make increasing profits year after year by raising ticket prices and pushing premium experiences like 3D and IMAX. The same thing will happen in games.

The difference is that when a movie is completed it can keep making money for years and even decades. Back to the Future is still a viable moneymaker for Universal. Even films that flop at the box office can earn money through various means. When movies age they don't lose their relevance. People will watch A Christmas Story on TBS or buy a Blu-ray of Terminator 2. Video games, though, age like computer software. After a few months they've essentially exhausted their entire revenue stream. And they generally can't be resold or repackaged as-is unless it's bona fide classic like Super Mario Bros. 3, and even then it won't sell for more than $5 or so. Budgets need to reflect this reality.

It's specifically because games are competing with Hollywood that this mess started. Back in the mid-90s a budget could only be so big, regardless of what a game's vision was. A flop could only do so much damage under these circumstances. But the shackles came off and the beast ran loose. With those technical limitations no longer an issue and 15 years worth of unchecked growth, here we are in a state of unstable equilibrium in which the majority of publishers are operating under the constant threat of total collapse. It's unsustainable.

[WCP]

Given the sheer numbers of PS4/One consoles sold this month, I kind of doubt any crash is coming.


Yeah, I mean 2 million for each of them, is pretty impressive indeed, and there are still a lot of days till Xmas. Could they both sell 3 million worldwide by New Years day ?

[Zthun]

The original collapse of the gaming industry in 83/84 wasn't caused by lack of sales it was caused by too much crap on the market and the backlash of customers refusing to continue to purchase it. If you want to read something interesting Spielburg (spelling?) has been warning of a major "restructuring" of Hollywood due to a lot of similar concerns being raised in the gaming industry.

Um....isn't that the definition of lack of sales?

Honestly, the majority of the arguments in that article are not going to be the reason the market collapses. The only one with merit is the out of control budgets. Once the cost to make games exceeds the profits made from them, then it's an unsustainable business model and everything will come crashing down. The price of games will rise, nobody will be able to afford them, and people will stop buying them. It's no different than any other market.

[Bojay1997]

The difference is that when a movie is completed it can keep making money for years and even decades. Back to the Future is still a viable moneymaker for Universal. Even films that flop at the box office can earn money through various means. When movies age they don't lose their relevance. People will watch A Christmas Story on TBS or buy a Blu-ray of Terminator 2. Video games, though, age like computer software. After a few months they've essentially exhausted their entire revenue stream. And they generally can't be resold or repackaged as-is unless it's bona fide classic like Super Mario Bros. 3, and even then it won't sell for more than $5 or so. Budgets need to reflect this reality.

It's specifically because games are competing with Hollywood that this mess started. Back in the mid-90s a budget could only be so big, regardless of what a game's vision was. A flop could only do so much damage under these circumstances. But the shackles came off and the beast ran loose. With those technical limitations no longer an issue and 15 years worth of unchecked growth, here we are in a state of unstable equilibrium in which the majority of publishers are operating under the constant threat of total collapse. It's unsustainable.

It really depends on the movie. Universal has a back catalog of thousands of films that generate no net home video revenues and no net licensing revenues even when you account for the typical accounting tricks. For every Back to the Future there are nine other films that never recoup their initial investment even decades later. Movies absolutely do lose relevance and resale value. I actually do a lot of television and film licensing and you would be shocked at how little of the catalog of major studios actually generates any revenue at all in any given year.

While I agree that the future revenue prospects of many games is weaker than films (although with various services like GOG, Steam and various budget publishers re-releasing games in bundles and slimline packaging and in enhanced editions, there certainly is some revenue to be had), the cost of entry for purchasing a game is anywhere from $60+ at release to usually no lower than $20 in the bargain bin (admittedly, there are some games that eventually go lower). That's a much healthier chunk of revenue than the half of an $8-$15 for a movie ticket a studio gets or some percentage of $10-$20 for a DVD or Blu-Ray which most consumers won't even buy anymore or even the lucrative packaging deals studios get by bundling hits and selling them to cable, broadcast or streaming services.

People have been making these same predictions of doom and gloom for years. With Sony and Microsoft both selling record numbers of their new consoles, the console and video game business looks healthier than ever. While things can always change down the road, until some amazing new form of interactive entertainment comes along that makes video gaming obsolete, I just don't see the video game market collapsing.

[camarotuner]

Um....isn't that the definition of lack of sales?


Not exactly, it was the backlash from the mountain of sales of crap. THEN a complete lack of sales. But if they hadn't flooded the market with regurgitated garbage and killed consumer interest the market wouldn't have crashed. Basically they shot themselves in the foot. If the industry continues to crank out sequel after sequel on an annual basis and not take risks they run the risk of the same thing happening. But honestly right now people seem perfectly happy to buy the same game annually and they'll just keep making them. It's if suddenly people DO get tired of call of duty part 20, assassins creed 10, and halo 12 that they'll have a massive problem on their hand as they count on those revenue generating series to fund everything else.

[TonyTheTiger]

It really depends on the movie. Universal has a back catalog of thousands of films that generate no net home video revenues and no net licensing revenues even when you account for the typical accounting tricks.

But video games don't even have a "depends on the game" caveat. They pretty much universally can't generate any meaningful revenue past their brief window of relevance unless it's an MMO but those are expensive to maintain. That's why we're in the double digits of many long running franchises. Because even a smash success like Final Fantasy VII isn't worth much anymore. The value is almost exclusively in the IP rather than the product. Plus, people don't expect movies to be updated. But games, even the most beloved ones, just get old and people hold that against them. People expect remakes and sequels. They won't pay more than a pittance for a PS1 game on the PS4. Games are just too tied up with technological advancement. They suffer from obsolescence a lot more than any other entertainment medium. Especially since, unlike film, hardware needs to actually support the software or the software has to be modified to work with otherwise incompatible hardware. Movies are open to any delivery method. Cable, Netflix, every home format, etc. Games don't have that luxury. Things have gotten better in that regard but it's still not exactly comparable.

I don't see a crash coming but if things don't improve I do see a lot more Kingdoms of Almur situations in which publishers wind up going out of business despite moving millions of units of otherwise perfectly good games that will never get the chance to thrive because of the surrounding insanity. Wasn't Square Enix bitching that Tomb Raider failed to meet its 10 million units sales goal? There's no rationality anymore. These publishers are living in the land of fairies and unicorns.

[Bojay1997]

But video games don't even have a "depends on the game" caveat. They pretty much universally can't generate any meaningful revenue past their brief window of relevance unless it's an MMO but those are expensive to maintain. That's why we're in the double digits of many long running franchises. Because even a smash success like Final Fantasy VII isn't worth much anymore. The value is almost exclusively in the IP rather than the product. Plus, people don't expect movies to be updated. But games, even the most beloved ones, just get old and people hold that against them. People expect remakes and sequels. They won't pay more than a pittance for a PS1 game on the PS4. Games are just too tied up with technological advancement. They suffer from obsolescence a lot more than any other entertainment medium. Especially since, unlike film, hardware needs to actually support the software or the software has to be modified to work with otherwise incompatible hardware. Movies are open to any delivery method. Cable, Netflix, every home format, etc. Games don't have that luxury. Things have gotten better in that regard but it's still not exactly comparable.

I don't see a crash coming but if things don't improve I do see a lot more Kingdoms of Almur situations in which publishers wind up going out of business despite moving millions of units of otherwise perfectly good games that will never get the chance to thrive because of the surrounding insanity. Wasn't Square Enix bitching that Tomb Raider failed to meet its 10 million units sales goal? There's no rationality anymore. These publishers are living in the land of fairies and unicorns.

I won't dispute that the vast majority of hit games don't have the shelf life of a hit movie. Having said that, a hit game has the potential to generate far more revenue in a much smaller period of time than all but the biggest blockbuster hit movies. GTA V did $800 million day of release and over a billion within three days. Even the biggest hit movie of all time hasn't come anywhere close to those numbers in the first week of release. In fact, in the entire history of cinema, only 17 movies have ever exceeded $1 billion worldwide. In comparison, in just the past few years, several games have exceeded $1 billion including GTA IV at about 1.3 billion, Mario Kart for the Wii $1.4 billion, Black Ops at $1.5 billion, etc...

So yes, those are insane numbers, but frankly, the risks being taken by those publishers seem pretty rational in relation to the rewards. Spending $265 million to create GTA V seems like a wise investment on revenue of $1+ billion. To you it might be the land of fairies and unicorns, but to the entertainment studios, it's just another well calculated risk no different than television and film. The reality is that a small start up using taxpayer money had no business trying to launch such an ambitious IP like Amalur. Square may need to look for merger or sale opportunities to have the financial assets needed to compete. Frankly, I don't have sympathy for either company when EA, Ubisoft, Activision and many smaller Japanese publishers and tons of indie publishers are doing just fine either targeting the masses or the niche to maintain profitability.

[Tanooki]

Well given the tendencies of the big shift in how game companies operate since the middle of the 2000s a crash of some sort, or at least a good boot to ass adjustment I think will happen, just not sure when or how severe. You have these very poor but functional business models being used where it's all about putting only the safe bet to physical media and that's few genres and little else far between. Because of this you get a bad case of me-too-itis where people just one up each other but really if you take the rosey glasses off, there's little different to see, yet this same polished turd pops up every year. People will wear out on it over time, and a mini bubble of this could be seen as how far along Rockband/Guitar Hero went and look where they're at now...unsellable shit guitars and parts at goodwills for a buck. If someone wants to take a chance, you're better off going to a handheld, a kickstarter(ugh) project, or doing just a lame digital download because it's a safe bet, cheaper to develop since you can cut a lot of big budget corners, and no packaging/marketing either really is needed. Things are getting stale, but at the same time NOT stale enough is the problem.

As long as you have an endless parade of idiots re-buying the same Call of Duty, Battlefield, Halo, Madden, Tiger Woods, ??? Racing, NBA 20XX, random MMO in the massive droves of millions that do, it won't stop. Until those people realize they're being screwed paying $60/yr for roster updates, same shitty shooter with new stages/graphics, and so on there's no motivation to stop taking advantage of sheep. We can hope eventually people catch on wondering why they can't just get a $20 upgrade to an existing disc or download and things shift back towards more genre diversity, creativity, and chance taking, but well you can hope in one hand and shit in the other and see what fills first.

[WCP]

The industry is too big, and too mainstream to collapse as it did in the early 80's, but I will say that there is an underlying evil that is brewing with this new generation of gaming. Now that I've had my Xbox One for awhile, I've noticed that Microsoft is interested in nickel and diming their customer at every possible juncture. Forza 5, as great a launch title that it might be, has microtransactions littered throughout the game, a full priced game no less.

This is a very disturbing trend. Full priced games, that still try to nickel and dime you at every opportunity. If this continues unabated, and gets even worse, it could actually push me away from modern gaming entirely.

Having said that, I'm an old dog when it comes to this industry. There is plenty of new blood out there that is growing up with F2P and Freemium and all that stuff, and they are more open to it. Personally, I prefer to pay a flat rate for my games, and be done with it. I don't want the constant pestering, and the unnecessary grinds that are added to the experience, to try to get me to pay $ to make them go away.

I thought that if I bought a game for the full $65 (after tax), that maybe I could play the game in peace, but that doesn't seem to be the case. This really is a disturbing trend, and it's much more in-your-face on the Xbox One, but I'm sure Sony will see what MS is doing and they will also try to nickel and dime their way as much as possible.


This crap is the only real threat to gaming imo, but again, like I was saying... I'm an old dog, and these tactics could get other old dogs like me to leave modern gaming with all the microtransactions to the young whipper snappers that have grown up with this model.

[Tanooki]

Therein lies your problem. The industry is too big to fail, but it's also not too big enough to fail as it's existing now. What needs to be done is enough people from the new blood, and much of the older (25+yrs) to just say no. The industry really has no right to be demanding more money off a full price game, but we allow it. If people would fight back to remain profitable they'd have to adopt a whole new design in game development, production, release and solid pricing on a project to sustain and then those lame DLC bits would purely have to be extras or get burned for it.

It's a huge IF, but if it did happen it would fix the problem.

[Rickstilwell1]

Therein lies your problem. The industry is too big to fail, but it's also not too big enough to fail as it's existing now. What needs to be done is enough people from the new blood, and much of the older (25+yrs) to just say no. The industry really has no right to be demanding more money off a full price game, but we allow it. If people would fight back to remain profitable they'd have to adopt a whole new design in game development, production, release and solid pricing on a project to sustain and then those lame DLC bits would purely have to be extras or get burned for it.

It's a huge IF, but if it did happen it would fix the problem.

Well, I'm playing my part. I rarely ever buy any new games and when I do it's usually from Nintendo who aren't really a part of the problem here. Did you hear that even though the new consoles are out the Wii U is still getting more sales than them? It says a lot about who is developing games with a good model for content. DLC on Wii U and 3DS is probably less rampant because they focus more on selling actual complete full titles digitally.

[Bojay1997]

Well, I'm playing my part. I rarely ever buy any new games and when I do it's usually from Nintendo who aren't really a part of the problem here. Did you hear that even though the new consoles are out the Wii U is still getting more sales than them? It says a lot about who is developing games with a good model for content. DLC on Wii U and 3DS is probably less rampant because they focus more on selling actual complete full titles digitally.

I'm sorry, but where are you getting your information? Microsoft and Sony each sold 2 million of their new consoles within a little over two weeks of launch. In that same period, Nintendo only sold 220K WiiUs. Indeed, this past year, Nintendo has sold less than 1 million WiiUs which means they were outsold by both the Xbox One and the PS4 on their respective launch days. Even great games like Super Mario World 3D only did a little over 100K units in the first week. Those are horrible numbers and a reflection of a failing console, not something to be pointing to as an example of success.

http://www.forbes.com/sites/erikkain/2013/12/15/wii-u-sales-surge-340-in-november-still-down-from-launch/

[camarotuner]

No such thing as "too big to fail" guys.

[Rickstilwell1]

I'm sorry, but where are you getting your information? Microsoft and Sony each sold 2 million of their new consoles within a little over two weeks of launch. In that same period, Nintendo only sold 220K WiiUs. Indeed, this past year, Nintendo has sold less than 1 million WiiUs which means they were outsold by both the Xbox One and the PS4 on their respective launch days. Even great games like Super Mario World 3D only did a little over 100K units in the first week. Those are horrible numbers and a reflection of a failing console, not something to be pointing to as an example of success.

http://www.forbes.com/sites/erikkain/2013/12/15/wii-u-sales-surge-340-in-november-still-down-from-launch/

Some website a member on Atariage posted from.

[Greg2600]

Wii U has sold under 4 million consoles worldwide in one year's time, while Sony and Microsoft consoles have reached half that total in less than one month. I compare gaming to movies, neither are going anywhere because the big players are all run down to the penny by lawyers and accountants. They won't get too far out of their element, but that also limits creativity.

[TonyTheTiger]

Thing is, we have to define "collapse." I don't think anyone is arguing that the likely outcome will be as catastrophic as no games ever again! That's not quite what happened during the crash of '83, either. People are just arguing that if things keep going the way they are then at some point it's going to trip over itself enough so that there's going to be a mass cleaning and restructuring that will see more studio closings (seriously, tons have fallen this past generation) and the smart publishers and developers adapting to the changing landscape. This article (http://www.destructoid.com/an-industry-that-needs-xbox-one-drm-is-a-failed-industry-256643.phtml) is about a different but tangentially related issue and makes some great points on the subject.

[Bojay1997]

Thing is, we have to define "collapse." I don't think anyone is arguing that the likely outcome will be as catastrophic as no games ever again! That's not quite what happened during the crash of '83, either. People are just arguing that if things keep going the way they are then at some point it's going to trip over itself enough so that there's going to be a mass cleaning and restructuring that will see more studio closings (seriously, tons have fallen this past generation) and the smart publishers and developers adapting to the changing landscape. This article (http://www.destructoid.com/an-industry-that-needs-xbox-one-drm-is-a-failed-industry-256643.phtml) is about a different but tangentially related issue and makes some great points on the subject.

In theory though, if the big publishers take the advice of many of these articles and focus on more niche and lower budget approaches to game making, it's possible the large numbers of gamers who like the bigger budget games could become bored and simply move on to some other form of entertainment. The big publishers could in fact face financial collapse by doing the very thing you are advocating as the overall video game market could contract as a result of a lack of compelling big budget content.

To your other point, I personally see studio closings as a good thing as it tends to weed out those that release mediocre title after mediocre title and the most talented members of those teams go somewhere else, hopefully to create the great games they are capable of creating. Compelling IP ends up getting resold or licensed to others and again the cream rises.

[TonyTheTiger]

Who says it has to be all or nothing? There's no reason why Grand Theft Auto can't be an enormous undertaking. The point of contention is that not every game can do it. And most have proven that they shouldn't. If you want to put up Grand Theft Auto numbers you have to be Grand Theft Auto. We've seen that even popular IPs like Tomb Raider can't hit those numbers. But they don't seem to care. They keep overbudgeting these projects that have no hope of hitting their targets and then, when the games inevitably fall short, instead of looking at the obvious causes for their financial troubles they blame everything else under the sun like piracy and GameStop and look to squeeze out revenue through all kinds of other (arguably abusive) means. And it's causing more problems than its solving.

Nobody is saying you can't have your GTAs and CoDs. I want them just as much as the next guy. But there has to be some rationality. As much as people say the market is growing, it's not growing enough for games to regularly move 10 million units. Really, the creativity comes in with figuring out how to make a game under a reasonable budget without making it look like it was a reasonable budget. Spend where you need, cut where you can.

[Bojay1997]

Who says it has to be all or nothing? There's no reason why Grand Theft Auto can't be an enormous undertaking. The point of contention is that not every game can do it. And most have proven that they shouldn't. If you want to put up Grand Theft Auto numbers you have to be Grand Theft Auto. We've seen that even popular IPs like Tomb Raider can't hit those numbers. But they don't seem to care. They keep overbudgeting these projects that have no hope of hitting their targets and then, when the games inevitably fall short, instead of looking at the obvious causes for their financial troubles they blame everything else under the sun like piracy and GameStop and look to squeeze out revenue through all kinds of other (arguably abusive) means. And it's causing more problems than its solving.

Nobody is saying you can't have your GTAs and CoDs. I want them just as much as the next guy. But there has to be some rationality. As much as people say the market is growing, it's not growing enough for games to regularly move 10 million units. Really, the creativity comes in with figuring out how to make a game under a reasonable budget without making it look like it was a reasonable budget. Spend where you need, cut where you can.

Well, I'm not sure what specific publisher you are talking about in your theoretical examples, but all of the big ones like Activision, Ubisoft, EA and Take Two already take this approach to budgeting. They don't set unrealistic targets and spend crazy amounts of money because they like the risk, they do so because they have some feeling based on data, marketing research and sometimes gut instinct that a particular IP and game will be a massive success. Sometimes they get it wrong. Most of the time they get it right which is why Activision, Ubisoft, EA and Take Two are massively profitable with the occasional bad quarter or year. What you perceive as "overbudgeting" is pure hindsight analysis and what it means is that next time, there either won't be a new Tomb Raider, or it will be a more modest budgeted game. Show me the publisher that repeatedly "overbudgets" the same IP sequel after sequel and I'll concede the point. Frankly, I don't think such a publisher exists.

As for the DLC and other stuff, I'm not sure what that has to do with some impending market collapse. It's just the same as every other entertainment business where the publishers are looking for one more way to charge the consumer more money and unfortunately, people are only too happy to pay. It's why 3D and IMAX continue to play heavily in marketing materials even for movies where it adds little to the experience and why studios love to sell consumers five different versions of the same movie as a bundle (DVD, Blu Ray, Ultraviolet, etc...) when the reality is that many consumers will just play it on a single format. It's also why cable and satellite continue to be sold as bundles when most consumers only watch a small selection of channels. As much as I dislike DLC and other similar revenue streams, I can understand why publishers continue to pursue it as I know many gamers that eagerly buy it without fail for every new game released.

[Rickstilwell1]

In theory though, if the big publishers take the advice of many of these articles and focus on more niche and lower budget approaches to game making, it's possible the large numbers of gamers who like the bigger budget games could become bored and simply move on to some other form of entertainment. The big publishers could in fact face financial collapse by doing the very thing you are advocating as the overall video game market could contract as a result of a lack of compelling big budget content.

To your other point, I personally see studio closings as a good thing as it tends to weed out those that release mediocre title after mediocre title and the most talented members of those teams go somewhere else, hopefully to create the great games they are capable of creating. Compelling IP ends up getting resold or licensed to others and again the cream rises.

Then what they need to do is make some of both so everyone gets what they want. I would buy SNES/PS1 style console RPGs every time one comes out.

[TonyTheTiger]

The point isn't that a publisher repeatedly overbudgets the same IP. It's that the culture is such that a game like Tomb Raider would even be expected to move 10 million units in the first place. That Kingdoms of Almur would require 3 million units. We can sit here and think of how crazy that was and how 38 Studios got what it deserved but clearly this isn't just random lunacy. It's something that was contemplated as a calculated risk because apparently that's what was necessary for the game to find a place in an overcrowded market. And when these games fail to perform, publishers make excuses and look for scapegoats.

What's happening is that the bar keeps going up and there's an increasing lack of a middle ground. Games are produced as either blockbusters or niche because they can't survive otherwise. Well, that's a bad thing. Because that inevitably results in consolidation. Literal consolidation in the form of giant publishers absorbing everything and figurative consolidation in the lack of fresh ideas. New shit is too risky. EA found that out the hard way with Mirror's Edge, which wasn't even a huge game. But it's obvious that developing even an ordinary modern game is too expensive since if an experiment like Mirror's Edge selling a respectable 2.5 million is below expectations then that means what we understand as "normal" is pretty fucked up. It's not really the budgets of GTA and CoD that are the problem. Those are proven blockbusters. It's the inflated cost of ordinary mainstream games that induces the Tomb Raiders and Kingdom of Almurs. The usual shit that isn't breaking any records but at the same time isn't some Nippon Ichi JRPG either. It seems like if we were to envision a "typical" PS3 game, sales need to hover around 3-5 million. And based on what we're seeing, that might simply be too high, where the successful publishers can barely make it work and everyone else has to fail out and/or get absorbed or do iPhone games and hope they hit the next Angry Birds.

Really, what's the value of games failing? It's one thing to say that Square Enix and 38 Studios got what they deserved. Sure, I agree. But are we really better off in the long run? Is it is a good thing that publishing a mainstream game costs enough that studios and IPs are in active danger if they sell "only" 2 million units?

[jefis]

That article IMHO was bullshit. Speculations and thats it

[Bojay1997]

Then what they need to do is make some of both so everyone gets what they want. I would buy SNES/PS1 style console RPGs every time one comes out.

Do you have a PSP or Vita? There are tons of SNES/PS1 style RPGs available on both platforms. In fact, that seems to be one niche that is well filled.

[Bojay1997]

The point isn't that a publisher repeatedly overbudgets the same IP. It's that the culture is such that a game like Tomb Raider would even be expected to move 10 million units in the first place. That Kingdoms of Almur would require 3 million units. We can sit here and think of how crazy that was and how 38 Studios got what it deserved but clearly this isn't just random lunacy. It's something that was contemplated as a calculated risk because apparently that's what was necessary for the game to find a place in an overcrowded market. And when these games fail to perform, publishers make excuses and look for scapegoats.

What's happening is that the bar keeps going up and there's an increasing lack of a middle ground. Games are produced as either blockbusters or niche because they can't survive otherwise. Well, that's a bad thing. Because that inevitably results in consolidation. Literal consolidation in the form of giant publishers absorbing everything and figurative consolidation in the lack of fresh ideas. New shit is too risky. EA found that out the hard way with Mirror's Edge, which wasn't even a huge game. But it's obvious that developing even an ordinary modern game is too expensive since if an experiment like Mirror's Edge selling a respectable 2.5 million is below expectations then that means what we understand as "normal" is pretty fucked up. It's not really the budgets of GTA and CoD that are the problem. Those are proven blockbusters. It's the inflated cost of ordinary mainstream games that induces the Tomb Raiders and Kingdom of Almurs. The usual shit that isn't breaking any records but at the same time isn't some Nippon Ichi JRPG either. It seems like if we were to envision a "typical" PS3 game, sales need to hover around 3-5 million. And based on what we're seeing, that might simply be too high, where the successful publishers can barely make it work and everyone else has to fail out and/or get absorbed or do iPhone games and hope they hit the next Angry Birds.

Really, what's the value of games failing? It's one thing to say that Square Enix and 38 Studios got what they deserved. Sure, I agree. But are we really better off in the long run? Is it is a good thing that publishing a mainstream game costs enough that studios and IPs are in active danger if they sell "only" 2 million units?

Again, you act as though Square Enix sat down and came up with the craziest number of potential buyers and decided that was the target Tomb Raider had to hit. You're forgetting that the Tomb Raider franchise was once one of the biggest sellers in the world and the first game alone sold over 7 million copies in the mid-90s when the video game market was smaller than it is today. Square Enix had no financial or business incentive to set a ridiculous target. In fact, it could have cost them their business if not for the fact that some of their other games sold well. As such, they believed that the sales target was realistic and budgeted the game accordingly. Unfortunately for Square Enix and its investors, they were incorrect on this particular game.

I just think you're failing to give video game publishers credit for understanding the business environment in which they operate. Activision, Ubisoft, EA and even Square-Enix have all been around a long time and frankly have a much better understanding of the video game market than you or I do. I'm just not sure what your issue really is with the modern gaming business. Are you upset that publishers aren't pumping out some specific type of game? Are you just upset that they are trying to squeeze every dollar out of consumers like every healthy business is supposed to do? Are you upset at the millions of people who buy big budget games and pay for PSN and XBL and for DLC? Frankly, the industry has changed and will continue to change, but it's not going to collapse simply because games are becoming more and more expensive to produce.

[TonyTheTiger]

But, see, you're defending their interests, not yours. Something like the massive anti-used games movement is constantly defended at the consumer level as "It's business! Companies want to make money!" Except that's not the consumer's job to defend a company's business practices. Their job is to set standards and have certain demands while the businesses do what they need to do to succeed. Then both sides meet in the middle at some mutually beneficial compromise. It's an adversarial system for a reason. When it stops being adversarial, when one side starts to make excuses for the other, it becomes outright antagonistic.

Let's not pretend that there isn't a connection between production costs and all the things that have been pissing people off lately. We didn't pull this out of our asses here. Everywhere you turn there's someone else in the business bitching about how expensive game production is and holding that over our heads. They constantly bring it up to defend whatever DLC or DRM shenanigans that they're looking to employ. The industry seems to love playing the production cost card to elicit some sympathy from consumers despite also being an industry that is notorious for abusing its workforce. Well, they can't have it both ways. They can't use "we're broke" as an excuse but then be immune to any accusations regarding why they don't have their shit together. If they're making the claim that something is wrong then it's on them to fix it, not us.


http://www.gamepolitics.com/2012/07/19/fez-developer-wont-fix-buggy-update-because-it-costs-too-much#.UrC0nCKA3cs

http://www.polygon.com/2012/10/1/3439738/the-state-of-games-state-of-aaa

http://thegamesofchance.blogspot.com/2013/06/cliff-blezinski-shockingly-defends.html
Not even an explanation. Just a dismissive "how silly." What this basically says is that publishers are in dire straits and all the sacrifice has to be made on the consumer end...because they say so. They're the ones predicting doom, not us. They're the ones who keep saying "Oh no, if consumers don't accept the things we say we need to do (just say, not prove) then we won't be able to bestow these games upon them. There is no alternative and you're silly for suggesting we're responsible for our situation."

http://www.gamesindustry.biz/articles/2012-04-12-the-real-cost-of-used-games
See? More guys on the inside predicting terrible things. "Used games kill the mid-tier publisher." Somehow the lack of a mid-tier (certainly a bad thing) gets spun into our problem by default. We're expected to just accept the current industry standards as an absolute and then make whatever changes on our end are necessary to keep them going as they are instead of anyone asking "Well, why is GameStop automatically the problem? What is the game industry doing wrong that keeps mid-tier publishers from thriving?"

So, yeah. I'm not the one saying games cost too much to make. They are. I'm just responding to their incessant bitching.

[Neb6]

Interesting. This is a very similar argument to the one that the screen writer of TRON used for the argument between Dillinger and Dr. Gibbs. I'm siding with The Tiger on this one as I'm a strong believer that "User requests are what computers are for."

A few observations from the posts on this subject:

First, I don't necessarily think the industry will collapse again. However, I wouldn't be surprised if it did. The thought that it can't collapse because it's too big is nonsense and was proven wrong in 1984. Don't forget how massive Atari was during the crash. If you want an idea of how insanely big they were at the time, read "The ultimate history of video games" by Steven Kent.

Second: Never assume the industry knows more about video games than the players. Perhaps the industry better understands the complexities of marketing and distributing a product (or pleasing their investors), but they don't always know what makes a great game or what it is that consumers actually want or will find entertaining. Furthermore, larger organizations do not generally make better decisions than smaller ones. They just absorb the costs of failure more easily.

Third: The studios that have survived aren't as great as they seem to be. There's almost an undercurrent of 'The big studios won and deserve to have survived because they make such great products and wise decisions.' This can easily be proven wrong by doing historical research into cancelled projects by studios that no longer exist. There are many cancelled games that were looking to be truly great products. So many in fact, that it would make a good thread in and of itself.

The bigger the budgets get, the less risk that a company can take on its product designs. Talk to a famous film director when s/he was starting out and then ask them if they're in a position to take the same level of risk now that they're famous and established.

Games are for the players and the players are currently LOSING OUT. There is less variety of gameplay today than there was in 1982 (or even in 1998) and the concept of DLC is something that needs to be checked before we're reduced to the 'try the first two levels and give us your credit card number if you want more' model of gameplay. Maybe there are some who are fine with this. Personally, I'm not.

I want more gameplay in my games and a wider variety of gameplay types -- all of it in a self-contained and complete package.

As a consumer, I don't think that's too much to ask.

[Bojay1997]

But, see, you're defending their interests, not yours. Something like the massive anti-used games movement is constantly defended at the consumer level as "It's business! Companies want to make money!" Except that's not the consumer's job to defend a company's business practices. Their job is to set standards and have certain demands while the businesses do what they need to do to succeed. Then both sides meet in the middle at some mutually beneficial compromise. It's an adversarial system for a reason. When it stops being adversarial, when one side starts to make excuses for the other, it becomes outright antagonistic.

Let's not pretend that there isn't a connection between production costs and all the things that have been pissing people off lately. We didn't pull this out of our asses here. Everywhere you turn there's someone else in the business bitching about how expensive game production is and holding that over our heads. They constantly bring it up to defend whatever DLC or DRM shenanigans that they're looking to employ. The industry seems to love playing the production cost card to elicit some sympathy from consumers despite also being an industry that is notorious for abusing its workforce. Well, they can't have it both ways. They can't use "we're broke" as an excuse but then be immune to any accusations regarding why they don't have their shit together. If they're making the claim that something is wrong then it's on them to fix it, not us.


http://www.gamepolitics.com/2012/07/19/fez-developer-wont-fix-buggy-update-because-it-costs-too-much#.UrC0nCKA3cs

http://www.polygon.com/2012/10/1/3439738/the-state-of-games-state-of-aaa

http://thegamesofchance.blogspot.com/2013/06/cliff-blezinski-shockingly-defends.html
Not even an explanation. Just a dismissive "how silly." What this basically says is that publishers are in dire straits and all the sacrifice has to be made on the consumer end...because they say so. They're the ones predicting doom, not us. They're the ones who keep saying "Oh no, if consumers don't accept the things we say we need to do (just say, not prove) then we won't be able to bestow these games upon them. There is no alternative and you're silly for suggesting we're responsible for our situation."

http://www.gamesindustry.biz/articles/2012-04-12-the-real-cost-of-used-games
See? More guys on the inside predicting terrible things. "Used games kill the mid-tier publisher." Somehow the lack of a mid-tier (certainly a bad thing) gets spun into our problem by default. We're expected to just accept the current industry standards as an absolute and then make whatever changes on our end are necessary to keep them going as they are instead of anyone asking "Well, why is GameStop automatically the problem? What is the game industry doing wrong that keeps mid-tier publishers from thriving?"

So, yeah. I'm not the one saying games cost too much to make. They are. I'm just responding to their incessant bitching.

I'm not defending anyone's interests. I'm simply explaining why your theory that games are too expensive to make is ridiculous and why there is no impending collapse as various pundits have speculated about for the past decade or more. A business is solely in existence for the purpose of making money. If a business has no such interest, there are other avenues they can take such as becoming a non-profit or simply providing their product for free. Nobody is being forced to sell games for a living just like nobody is being forced to buy them.

Capitalism is not inherently adversarial, at least not when it comes to the relationship between customers and businesses. Businesses that are responsive to consumer demands typically do better than those that don't, but it's not the obligation of any business to be in either a cooperative or an adversarial relationship with its customers or the marketplace.

I won't dispute that big budget games are becoming more and more expensive to make. I also won't dispute that things like DLC, trying to control used sales, season passes and other means of generating revenue are being used by publishers to offset some of those production costs. That doesn't necessarily mean that games are too expensive to make or that the growth in budgets is a bad thing. It simply means that charging a consumer $60 for a new big budget game may not produce sufficient profit in and of itself to satisfy the investors and shareholders in big publishers. If consumers decide that games are too expensive or that they won't buy DLC, then publishers may be faced with the crisis you seem so concerned about. Until that happens, this is just the same exact speculation that has been happening for the past decade or more.

[Bojay1997]

Games are for the players and the players are currently LOSING OUT. There is less variety of gameplay today than there was in 1982 (or even in 1998) and the concept of DLC is something that needs to be checked before we're reduced to the 'try the first two levels and give us your credit card number if you want more' model of gameplay. Maybe there are some who are fine with this. Personally, I'm not.

I want more gameplay in my games and a wider variety of gameplay types -- all of it in a self-contained and complete package.

As a consumer, I don't think that's too much to ask.

I strongly disagree. In 1982, unless you had access to very expensive development hardware and a means of distribution, the chances of being able to release a commercially viable cartridge or disc based game was very minimal. In just the past five years, the widescale adoption of broadband, mobile devices and digital distribution has allowed thousands of new voices to enter the gaming industry to create niche games that can appeal to very narrowly targeted markets. There is not only a much larger variety of gameplay types available today than at any point in the past, but also a means for the creators of those games to benefit financially without risking much more than their time. As such, I think the video game industry is more healthy and vibrant than at any previous point in time.

[TonyTheTiger]

I'm not defending anyone's interests. I'm simply explaining why your theory that games are too expensive to make is ridiculous and why there is no impending collapse as various pundits have speculated about for the past decade or more. A business is solely in existence for the purpose of making money. If a business has no such interest, there are other avenues they can take such as becoming a non-profit or simply providing their product for free. Nobody is being forced to sell games for a living just like nobody is being forced to buy them.

But it's not my theory. As you can see, people actually making the games are the ones who keep saying it. I'm not going to claim that I understand the game market better than the people in the industry. But when those people keep complaining that they have no money it makes me wonder just how much they really do understand it. For people who supposedly understand the business so well, they sure do complain about money a lot. Why are their financial woes our problem? That's what it boils down to. They're bitching that the realities of the world (used games being just one example) make their current business model unsustainable but instead of adapting like businesses usually do, decide that they should change reality.


Capitalism is not inherently adversarial, at least not when it comes to the relationship between customers and businesses. Businesses that are responsive to consumer demands typically do better than those that don't, but it's not the obligation of any business to be in either a cooperative or an adversarial relationship with its customers or the marketplace.

Sure it is. "Adversarial" doesn't have to mean unfriendly. It just means two parties having independent interests and there's a sweet spot where both parties are happy. But that doesn't mean they aren't adversaries within the context of the transaction.


I won't dispute that big budget games are becoming more and more expensive to make. I also won't dispute that things like DLC, trying to control used sales, season passes and other means of generating revenue are being used by publishers to offset some of those production costs. That doesn't necessarily mean that games are too expensive to make or that the growth in budgets is a bad thing. It simply means that charging a consumer $60 for a new big budget game may not produce sufficient profit in and of itself to satisfy the investors and shareholders in big publishers. If consumers decide that games are too expensive or that they won't buy DLC, then publishers may be faced with the crisis you seem so concerned about. Until that happens, this is just the same exact speculation that has been happening for the past decade or more.

When Cliffy B. goes on Twitter to say that budgets have gone higher than the current state of the market will allow and requires some big change on the consumer end to maintain, that's not me fearing a crisis. That's an industry insider confirming one.

[Bojay1997]

But it's not my theory. As you can see, people actually making the games are the ones who keep saying it. I'm not going to claim that I understand the game market better than the people in the industry. But when those people keep complaining that they have no money it makes me wonder just how much they really do understand it. For people who supposedly understand the business so well, they sure do complain about money a lot. Why are their financial woes our problem? That's what it boils down to. They're bitching that the realities of the world (used games being just one example) make their current business model unsustainable but instead of adapting like businesses usually do, decide that they should change reality.



Sure it is. "Adversarial" doesn't have to mean unfriendly. It just means two parties having independent interests and there's a sweet spot where both parties are happy. But that doesn't mean they aren't adversaries within the context of the transaction.



When Cliffy B. goes on Twitter to say that budgets have gone higher than the current state of the market will allow and requires some big change on the consumer end to maintain, that's not me fearing a crisis. That's an industry insider confirming one.

Just because a handful of people keep saying something doesn't make it a fact, regardless of who they are or where they work. There's also a difference between "complaining that they have no money" and seeking alternate revenue streams so that a business model that is very profitable can continue to be so. The market has already spoken and while some consumers complain about DLC and other alternate revenue streams, there is a significant percentage of the gaming population that happily embraces the new pricing models.

I'm not sure what dictionary you are using, but every definition I can find for an adversary is someone who is an enemy or opponent. Having different interests than someone or something else doesn't make you an adversary, it just means that if both sets of needs and desires can't be met, someone may have to compromise. A "sweet spot" may be a nice image, but it's not how the market works in the real world and certainly not in the video game industry.

I recall all the same predictions about games becoming too expensive to develop back in the roaring 90s on the PC side of things. All I'm saying is that these same dire predictions are made all the time by people who lament that the classic era is gone forever and rather than simply accept that those days will never return, they take some odd pleasure in spreading rumors and speculation about some vague future collapse.

[TonyTheTiger]

"Adversary" is commonly used to mean "opponent" without any kind of negative connotation. It often comes up among lawyers who, outside of being on opposite sides of a case, may have absolutely no bad blood between them. Same with athletes. When the Giants and Broncos play each other, the Manning brothers are adversaries as far as that football game goes. And of course a "sweet spot" is possible. It happens all the time. I'm sure a supermarket would love to be able to charge $100 for a loaf of bread and a buyer would love to get it for free. They find a sweet spot where the store makes a nice profit and the buyer gets it for a fair price. This is the foundation of pretty much every transaction ever.

And the reason I pointed to all those insiders is twofold. First, to establish that the argument over the industry's health started on their end. They're the ones who complained about money or lack thereof. They started it. So it's not like I just woke up one day and independently decided games cost too much to make. The idea that such is the case was deliberately put in my head by the people on the inside who keep bitching about the struggles they face staying afloat in today's market. Well, if they keep complaining about their difficulties doing business then they should expect people to question if there's something they're doing wrong that's making it so hard for them to do business. I don't recall that ever happening before this past generation where so many people in the industry would air so many grievances regarding the cost factor on their end. It's clearly coming from somewhere. Something is causing them to bring it up so often. If everything really is peachy why are the insiders complaining as much as they are? And if there is something wrong, why are they exempt from being held responsible for their own problems? Why is it on everyone else to change so they can stay afloat? Again, this isn't me pulling anything out of my ass. I'm just responding to what the industry has been telling me.

And second, to demonstrate that even if you assert that the industry is perfectly fine, it's not a slam dunk. The quotes I linked to may not be 100% dispositive but I think it's good evidence that it's at least controversial. Certainly not something that was made up whole cloth by disgruntled consumers and forum posters. You said it yourself. The business knows what it's doing better than us. Well, if that's the case then the only thing people like us really have to go on are statements from the business or representatives of it. So if Cliffy B. comes out and says that games cost too much to make there are only three options. Either he's correct, he's mistaken, or he's lying. So which is it?

[Bojay1997]

"Adversary" is commonly used to mean "opponent." It often comes up among lawyers who, outside of being on opposite sides of a case, may have absolutely no bad blood between them. Same with athletes. When the Giants and Broncos play each other, the Manning brothers are adversaries as far as that football game goes. And of course a "sweet spot" is possible. It happens all the time. I'm sure a supermarket would love to be able to charge $100 for a loaf of bread and a buyer would love to get it for free. They find a sweet spot where the store makes a nice profit and the buyer gets it for a fair price. This is the foundation of pretty much every transaction ever.

And the reason I pointed to all those insiders is twofold. First, to establish that the argument over the industry's health started on their end. They're the ones who complained about money or lack thereof. They started it. So it's not like I just woke up one day and independently decided games cost too much to make. The idea that such is the case was deliberately put in my head by the people on the inside who keep bitching about the struggles they face staying afloat in today's market. Well, if they keep complaining about their difficulties doing business then they should expect people to question if there's something their doing wrong that's making it so hard for them to do business. I don't recall that ever happening before this past generation where so many people in the industry would air so many grievances regarding the cost factor on their end. It's clearly coming from somewhere. Something is causing them to bring it up so often. If everything really is peachy why are the insiders complaining as much as they are? And if there is something wrong, why are they exempt from being held responsible for their own problems? Why is it on everyone else to change so they can stay afloat? Again, this isn't me pulling anything out of my ass. I'm just responding to what the industry has been telling me.

And second, to demonstrate that even if you assert that the industry is perfectly fine, it's not a slam dunk. The quotes I linked to may not be 100% dispositive but I think it's good evidence that it's at least controversial. Certainly not something that was made up whole cloth by disgruntled consumers and forum posters. You said it yourself. The business knows what it's doing better than us. Well, if that's the case then the only thing people like us really have to go on are statements from the business or representatives of it. So if Cliffy B. comes out and says that games cost too much to make there are only three options. Either he's correct, he's mistaken, or he's lying. So which is it?

As a lawyer myself, I have never called or thought about someone as an adversary in a case unless there was some kind of negative feeling attached to it. I think when lawyers represent different sides in a dispute and don't have any kind of bitter feelings, they simply call it the "other side" or the plaintiff or defendant rather than an opponent or adversary. As for the sports analogy, it's not a friendly rivalry at all when two teams get together, regardless of the blood relations between the two quarterbacks. I certainly don't think of most businesses as my adversary as a consumer and I don't think that our interests are inherently in conflict. Indeed, just like most video game publishers want to keep making games, I want to keep buying and playing them.

As for the sweet spot, I believe what you are referring to is really supply and demand and market pricing. It's never a perfect compromise. I often pay more than I think I should for certain goods and I'm certain retailers sell them to me for far less than they think they should be able to. It's not a sweet spot so much as an acceptance on both sides that you can't get everything you want. The use of new revenue streams in video games is exactly the same thing. I personally don't like DLC, but I understand that it helps pay the development costs of the big budget games I love and want. I would love it if games were all $10 or even free, but I know that I am buying products from large publishers that have a certain cost to create and a certain risk to the investors in those companies and therefore, I understand that games will cost more. Heck, I've been paying between $30 and $60 for games since the early 1980s, so adjusted for inflation it really isn't that bad compared to other consumer goods.

As for the comments from industry insiders, it's certainly true that some of them have complained about spiraling budgets. The same has been true in the film industry and television and every other creative industry. These same complaints cropped up in the 90s with PC gaming and in the early 2000s with the transition to more sandbox gaming and persistent 3D environments. Where I haven't seen these complaints is from successful large companies that make these big budget games. I think what you are really reacting to is that there is just more video game industry coverage available to the general public now than there was before, so the complaints seem stronger and more numerous.

The fact that some companies are pursuing these alternate revenue streams is not a complaint that games cost too much to develop, it's a recognition of the fact that they understand that as budgets continue to increase, retail prices have less flexibility and they need to seek other means of generating additional profit. You might think that the calls for an end to used sales or season passes and DLC are complaints (and frankly maybe some of the spokespeople for publishers have not been the most adept at explaining why these things are necessary), but in my mind it just shows that the industry is run by smart people who are creative enough to come up with solutions to the realities of the economics. The people financing hundreds of millions of dollars for games like COD and GTA to be developed expect a substantial profit for the risk they are undertaking and frankly, it's not the kind of situation where the public is going to be super receptive to scaled back games at this point, at least not on console platforms. As such, the industry will continue to evolve and while there may be some bumps along the way, I just don't see any signs that the industry is headed for a collapse or that budgets will be reigned in going forward.

[TonyTheTiger]

Heh, that's funny. I'm a lawyer, too, actually. I haven't found it an unusual term at all. One of my professors in school used it constantly and that's probably where I picked it up. Besides, it's called an "adversarial system" isn't it? I never interpreted that as implying anything outright antagonistic. Different strokes for different folks, I guess. Suffice to say that I wasn't implying that business transactions can't be friendly. Just that both sides have competing interests.


Indeed, just like most video game publishers want to keep making games, I want to keep buying and playing them.

There's a bit more too it than that, though, isn't there? We want to keep buying and playing them but we have standards we expect to be met by the people we're buying from. We decidedly don't want to keep buying things that RROD or have catastrophic bugs. So both sides come to agreements. We'll buy what you're selling for a fair price but you better sell us something that is actually worth that price. One problem with consolidation is that these things risk becoming more common when the majority of games fall under three or four giant publishing houses. And if the mid-tier publisher vanishes that's what we'll be stuck with.


As for the sweet spot, I believe what you are referring to is really supply and demand and market pricing. It's never a perfect compromise. I often pay more than I think I should for certain goods and I'm certain retailers sell them to me for far less than they think they should be able to. It's not a sweet spot so much as an acceptance on both sides that you can't get everything you want. The use of new revenue streams in video games is exactly the same thing. I personally don't like DLC, but I understand that it helps pay the development costs of the big budget games I love and want. I would love it if games were all $10 or even free, but I know that I am buying products from large publishers that have a certain cost to create and a certain risk to the investors in those companies and therefore, I understand that games will cost more. Heck, I've been paying between $30 and $60 for games since the early 1980s, so adjusted for inflation it really isn't that bad compared to other consumer goods.

Fair enough. I was using "sweet spot" to mean a transaction that both parties can live with, not necessarily one that meets both sides' personal ideal. As long as neither party feels outright cheated I think that qualifies as a "sweet spot." We can imagine a lot of situations where one side does feel cheated. The goal is to avoid that.


As for the comments from industry insiders, it's certainly true that some of them have complained about spiraling budgets. The same has been true in the film industry and television and every other creative industry. These same complaints cropped up in the 90s with PC gaming and in the early 2000s with the transition to more sandbox gaming and persistent 3D environments. Where I haven't seen these complaints is from successful large companies that make these big budget games. I think what you are really reacting to is that there is just more video game industry coverage available to the general public now than there was before, so the complaints seem stronger and more numerous.

The fact that some companies are pursuing these alternate revenue streams is not a complaint that games cost too much to develop, it's a recognition of the fact that they understand that as budgets continue to increase, retail prices have less flexibility and they need to seek other means of generating additional profit. You might think that the calls for an end to used sales or season passes and DLC are complaints (and frankly maybe some of the spokespeople for publishers have not been the most adept at explaining why these things are necessary), but in my mind it just shows that the industry is run by smart people who are creative enough to come up with solutions to the realities of the economics. The people financing hundreds of millions of dollars for games like COD and GTA to be developed expect a substantial profit for the risk they are undertaking and frankly, it's not the kind of situation where the public is going to be super receptive to scaled back games at this point, at least not on console platforms. As such, the industry will continue to evolve and while there may be some bumps along the way, I just don't see any signs that the industry is headed for a collapse or that budgets will be reigned in going forward.

It might just be that communication between publishers and consumers is at an all time high. That's true. We're getting a much less filtered view into the business than we did back in the days when EGM was the best news source. But I don't think the complaints about budgets and the alternative revenue streams are separate issues. Reason being, when the insiders do complain about money they usually do it to justify all these things. Cliffy B. brought up publishing costs in order to justify Xbox One's DRM. It always goes something like "games cost too much to make in a world that supports used games." So to me, when a guy like Cliffy B. says something like (I'm paraphrasing here) "we spend too much to publish games in the current market" my thought is "well, adapt to the market so you aren't spending too much." Cliff, on the other hand, has a different idea. He thinks, "we're going to continue spending this much and will just try to eliminate certain market forces like used games to make it viable." I happen to think that's backwards. If the realities of the world are rendering your business unprofitable, are we really better off changing reality instead of changing the business? I'm taking Cliff's word for it as far as production costs being a problem. I have no real reason not to. What I disagree with are the proposed solutions to that problem that are coming out of the industry. It all sounds like "We can't afford to continue doing business like we are. So you change to accommodate us."

[PreZZ]

Then what they need to do is make some of both so everyone gets what they want. I would buy SNES/PS1 style console RPGs every time one comes out.

Nintendo DS and 3ds are loaded of these 16-bit 32 bit era rpg's

[Rickstilwell1]

Nintendo DS and 3ds are loaded of these 16-bit 32 bit era rpg's

That's why I don't have any of the regular new consoles yet but have a 3DS. It would be nice to see more of what the 3DS gets on actual home consoles.

[Neb6]

I strongly disagree. In 1982, unless you had access to very expensive development hardware and a means of distribution, the chances of being able to release a commercially viable cartridge or disc based game was very minimal. In just the past five years, the widescale adoption of broadband, mobile devices and digital distribution has allowed thousands of new voices to enter the gaming industry to create niche games that can appeal to very narrowly targeted markets. There is not only a much larger variety of gameplay types available today than at any point in the past, but also a means for the creators of those games to benefit financially without risking much more than their time. As such, I think the video game industry is more healthy and vibrant than at any previous point in time.



In 1982, anyone with an 8-bit computer, an assembler, and descent programming skills could write a game. The old computer magazines are filled with ads selling games from smaller companies. Reasonably-sized project timelines and budgets made it viable. The notion that game development was largely unavailable to smaller developers until modern mobile devices came along is a fallacy. Sure, today we have digital distro. Back then they had mail-order.

There's a danger here of confusing number of games with number of gameplay types. In particular, I'm referring to the amount of variety offered from the major players in the industry. From what I can see, the actual types of gameplay are fewer each year than they were prior to the first crash. Think back to the arcades of the past and the variety of approaches to in-game mechanics and even the custom interfaces that went with them. What we're seeing now is a narrowing of types of gaming experiences due to the demand by investors to give them a proven product. And by that they're referring to something that has been proven to sell. Hence the same basic games with a change-up of characters and background scenery.

In other words, we could argue this point pretty much indefinitely (or until a truly comprehensive statistical report is compiled).



It simply means that charging a consumer $60 for a new big budget game may not produce sufficient profit in and of itself to satisfy the investors and shareholders in big publishers.


Heck, I've been paying between $30 and $60 for games since the early 1980s, so adjusted for inflation it really isn't that bad compared to other consumer goods.

Profit margin is the key thing to consider here. The profit margin on a game shipped on DVD is somewhat higher than one shipped on a diskette back in the day and is much higher than a cartridge-based game. Couple that with the increase in market size and I would hope that -- factoring in inflation -- it would be expected that the price of games be relatively lower than they were in the past. I'm not sure what other consumer goods you're using as a base for comparison, but it can be safely said that similar forms of entertainment like Blu-ray motion pictures are considerably less expensive than modern video games (as was mentioned in a previous post).

[Bojay1997]

In 1982, anyone with an 8-bit computer, an assembler, and descent programming skills could write a game. The old computer magazines are filled with ads selling games from smaller companies. Reasonably-sized project timelines and budgets made it viable. The notion that game development was largely unavailable to smaller developers until modern mobile devices came along is a fallacy. Sure, today we have digital distro. Back then they had mail-order.

There's a danger here of confusing number of games with number of gameplay types. In particular, I'm referring to the amount of variety offered from the major players in the industry. From what I can see, the actual types of gameplay are fewer each year than they were prior to the first crash. Think back to the arcades of the past and the variety of approaches to in-game mechanics and even the custom interfaces that went with them. What we're seeing now is a narrowing of types of gaming experiences due to the demand by investors to give them a proven product. And by that they're referring to something that has been proven to sell. Hence the same basic games with a change-up of characters and background scenery.

In other words, we could argue this point pretty much indefinitely (or until a truly comprehensive statistical report is compiled).






Profit margin is the key thing to consider here. The profit margin on a game shipped on DVD is somewhat higher than one shipped on a diskette back in the day and is much higher than a cartridge-based game. Couple that with the increase in market size and I would hope that -- factoring in inflation -- it would be expected that the price of games be relatively lower than they were in the past. I'm not sure what other consumer goods you're using as a base for comparison, but it can be safely said that similar forms of entertainment like Blu-ray motion pictures are considerably less expensive than modern video games (as was mentioned in a previous post).

In 1982, even a cheaper 8-bit computer like a Commodore 64 was $600. The Apple II cost $1200 and neither the Commodore or Apple II included disc drives, monitors, etc...In short, you had to be someone who was willing to invest substantial amounts of money in the equipment to even have the chance to start experimenting. Add the difficulty of actually selling a game in that era (i.e. buying blank discs and packaging, finding a distributor or fulfilling orders after taking out an ad, and the rampant piracy) and there was no real viable market for all but the biggest publishers.

You can say what you want about the volume of games released in the classic era, but there was just as much if not more derivative game making back then. I mean I recall being an Apple II owner in 1982 and going into Computerland and seeing a wall full of text adventure games, arcade conversions that were mostly Space Invaders or Pac-Man rip-offs and a tiny handful of original, creative stuff. As the 80s went on, there were entire companies like SSI and Avalon Hill that were literally doing graphic swaps and cranking out game after game. Ironically, it was EA that seemed to be the most willing to take risks in the mid-80s, but they to were following trends to some extent and you can look at their ads from those days and see a lot of derivative stuff.

My point is, there was always a lot of sequel making and derivative publishing because there were plenty of financial risks for game publishers in the classic era as well. If your argument is that the largest publishers today tend to focus on sequels or gameplay mechanics that are well proven, I suppose I will agree with you. Luckily, with PSN, XBLA and numerous other independent distribution platforms, there is plenty of variety in all genres of gaming, well beyond anything that was around in the classic era. Even publishers like EA and Sony have indie studios that make smaller games and Atlus, Sega and others are still around and filling the middle range of gaming while NIS, XSeed and Aksys handle the niche.

As for the inflation argument. Games don't have other means of generating revenue for the most part other than sales digitally or on recorded media. I mean sure, the occasional game has been licensed for a bad movie, but it's still pretty rare. As such, comparing them to a product like a DVD or Blu-Ray where that is really just a secondary revenue stream to a worldwide theatrical or broadcast release is not really accurate. Similarly, the entertainment value that can be derived from a Blu-Ray or DVD is far lower for many consumers according to the surveys I have seen. A game can be played for many hours where most consumers only watch a movie a few times total.

Adjusted for inflation, games that were $60 in 1982 would be the equivalent of $144 today. The market is bigger and media is cheaper, but everything else has gone up related to production from salaries to office space to equipment, so games really are a bargain IMHO.

[TonyTheTiger]

I'm not sure Sega and Atlus are the best examples. Both have had some pretty serious financial troubles lately. But that being said, I don't think we should be envying gaming's formative years. One of the reasons the two dozen or so genres we have today exist is because they actually work, having been sufficiently refined. It's wonderful that quality control is an actual thing these days.

[camarotuner]

I'm not sure Sega and Atlus are the best examples. Both have had some pretty serious financial troubles lately. But that being said, I don't think we should be envying gaming's formative years. One of the reasons the two dozen or so genres we have today exist is because they actually work, having been sufficiently refined. It's wonderful that quality control is an actual thing these days.

You mean Aliens Colonial Marines PASSED a quality control test? Huh, I might have to hang myself now.

[TonyTheTiger]

You know what, though? That's still a more functional game than many you'll find from the 70s and 80s. Of course garbage still gets through for one reason or another. But the early years of gaming was like the wild west. For whatever its faults both past and present, Nintendo was smart enough to realize that complete anarchy was not the right solution. One thing I will say about today's market that I don't think can be criticized is that through mobile gaming and the likes of iOS and Android we've struck a nice balance between low barrier to entry and competent infrastructure.

[Neb6]

You know what, though? That's still a more functional game than many you'll find from the 70s and 80s. Of course garbage still gets through for one reason or another. But the early years of gaming was like the wild west.


I don't think we should be envying gaming's formative years. One of the reasons the two dozen or so genres we have today exist is because they actually work, having been sufficiently refined. It's wonderful that quality control is an actual thing these days.


I think there are plenty of examples of good and bad titles in both generations of games. I've been going through stacks and stacks of modern games and there are tons of crappy ones in there. So I'm not really sold on the idea that quality control is all that much better today than it was back then. I will concede that QA/QC must be a lot tougher now due to the sheer complexity of the projects. As for narrowing of genres based on 'what works', there were numerous approaches to gameplay developed in the late 70s and early 80s that were extremely playable. And for quality control, the early 80s Atari, SEGA, and Williams games were phenomenal.

A few of the games that certainly pass the QA/QC test with unusual control system and/or game mechanics that come to mind are ones like:
Robotron
Joust
Spy Hunter
Paper boy
Marble Madness
TRON (flight stick and spinner combination)
Discs of TRON (same, but with a vertical axis on the spinner)
Tac/Scan
Major Havoc
Tempest
Star Trek: The Strategic Operations Simulator
Gravitar
Mr Do's Castle
Tutankham
Crystal Castles
Time Pilot
Q*Bert


Did many of these really need to be filtered out or refined to the point where we have numerous very similar treatments on:
Fighting games, 3rd person RPGs, 3rd person action, FPS, racing, music interaction, top-down shooters, side-scrollers, platformers (with the last three unfortunately becoming increasingly rare)?

And what about something we've never seen before?

All this processing power and sophisticated development tools today. So many possibilities...

[TonyTheTiger]

It isn't so much that there weren't fantastic games back then. There were plenty. Just that today when you buy a game, for the most part you don't have to worry too much whether or not it will actually function. And if you do end up with one that's just so terribly broken, there are more avenues of recourse than ever before. Steam actually gave refunds over The War Z. Not to mention the benefit of the Internet acting as an early warning system for these things. In the past, it could really be a crapshoot. Even the NES had a lot of games that barely qualify as functional software.

As for the less common genres, a lot have found their place on unconventional platforms. A game like VVVVVV? Probably not something you'll find on a GameStop shelf but it exists in spite of that. Angry Birds? Cut the Rope? These are pretty much the modern equivalent of the "weird" games like Marble Madness and Paper Boy. The concept isn't gone. In fact, it came back. Accessible platforms like Steam and iOS have made games like this a lot more common than they were a couple generations ago. I think bloated budgets have in general caused problems for mid-level gaming but low end gaming is better than ever.

[MarioMania]

Microtransactions feels lazy

What happened to earning it in games, Like going to try to get 1st like in GT6 and getting the Cash in Game to get the car

[Tanooki]

Damn right we hit a new low barrier for quality versus distro/price but it comes at the costs of actually owning your property which is to me more awful because once a company decides to drop support you can kiss your proper...I mean long term rental goodbye.

Microtransactions now those are only partially lazy. In the case of 3DS Bravely Default from Square, it's all about being lazy and it's 100% optional which is a good thing. The larger part is microtransaction is just another word for DLC and that there is about sheer unmitigated greed and taking advantage of sheep who don't catch on. Why bother releasing an entire game anymore as it was for decades when you can put up 80% of a game, then charge $15, $30, hell full price ($60) for all the additional data to make that game 100% which is a pure scam. They defend it saying they're giving people more bang for their buck in the game but it's pure smoke and mirrors. You know what people used to call that...making a sequel. Your game is loved, you reuse the engine, make another 18-24mo down the line with all the customer feedback put to it to make it a better title.

[gbpxl]

This article hasn't aged well. Gaming has been an extremely profitable industry for the last 5 years with no signs of slowing down thanks to the massive success of mobile gaming and online competitive gaming as well as streaming platforms

[Niku-Sama]

I think we need to change gbpxl's level thing from Pac-Man (Level 10) to Forum Necromancer

[gbpxl]

Are you saying that because I have a pile of corpses in my house that I've been using to practice my black magic on? Or because I post in topics that havent been relevent in decades? actually forget that first part. you didnt hear anything