Costikyan on Game-Industry Economics: They're Effed Up

[zmweasel]

The most recent update of game designer Greg Costikyan's bitchin' blog has a link to a PowerPoint presentation in which he compellingly argues that the video game industry is pretty much screwed: http://www.costik.com/digitalgenres.ppt

-- Z.

[maxlords]

Hmm...my PC can't access it for some reason :(

[thegreatescape]

One sentance summary: "At any time, 80+% of sales generated by top 10 games" :(

Im not sure by what he means on this particular slide either:
Revival of shareware
Broadband makes it feasible
In its heyday, it wasn’t that impressive: Doom sold 150,000 units as shareware, 1.5m at retail


Isnt shareware just a fancy name for demo (or slightly extended demo) ? Demos didnt go anywhere..
Other than that its a great read.

[slownerveaction]

Isnt shareware just a fancy name for demo (or slightly extended demo) ? Demos didnt go anywhere..
Other than that its a great read.

I believe what he's getting at is bypassing retailers in the distribution process. Shareware companies in the early 90s heyday didn't have proper distribution -- anyone who bought the full product would either download it straight from the company's website (or BBS or whatever since the WWW was in its early stages back then) or get floppies (maybe a CD if they were lucky) shipped straight from the developer.

So I guess he's saying that with broadband now so freely available, developers could take the shareware route again and distribute their own games through the 'net instead of hooking up with a big-time publisher.

[Dangerboy]

Isnt shareware just a fancy name for demo (or slightly extended demo) ? Demos didnt go anywhere..
Other than that its a great read.

Now a days that means it, but long, long ago shareware were full fledge games, many of which were what would not be considered 'homebrew' games. I fondly remember walking up and down a computer show a long, looong time ago (before CD-Roms were the norm) and seeing baggies upon baggies of user-end created full games on floppies that you could buy for like $5 or less. All with generic labels or MS Paint like covers.

No copy protection on them either, so if you thought something was good, you could copy it and pass it on to someone else, and on and on, hence 'shareware'. Granted, the creator loses money, but he/she gets his name and game out there, whihc was a big step into 'getting in' the industry, be it the high end or the low end of it.

Personally, I think Sega may have struck something wonderful with their $20 sports game era. I *hate* sports games, yet spent the $20 on ESPN for shits and giggles and loved the hell out of it. That's one extra customer they now have who's waiting for the next version.

If companies started taking chances like that on bigger titles, we might see a jump in game sales (why spend $50 on one game, when I can buy 3 for $60). Now granted, I'm not saying drop Halo 2 or what have you, but it could boost sequels that are defintely losing steam (GTA: SA as an example).

Working retail and having access to the higher up notes and such, I can tell you that power point was eerily dead on in a lot of cases, especially the '4 week' life span. I've seen *way* too many titles go form $50 to $20 or less in shorter time spans.

Very interesting read Z, thanks for the link.

Jason

[SoulBlazer]

I argued in another thread that the Internet HAS allowed for people and comapnies to pass their games cheaply to people online. It's a new golden age for PC players. I've gotten quite a few great games for $30 or less that way.

In about 10 years, when broadband becomes standard in every house, we could do the same thing with console games.

I don't agree with all the points in the article -- the gaming industry is STILL growing in sales and there will always be games available for everyone of all tastes -- but a shakeup of the industry, a small recession and not a crash, could really help. Actually, I think it's impossible for a full fledged crash to happen again like it did 20 years ago.

[kai123]

If companies started taking chances like that on bigger titles, we might see a jump in game sales (why spend $50 on one game, when I can buy 3 for $60). Now granted, I'm not saying drop Halo 2 or what have you, but it could boost sequels that are defintely losing steam (GTA: SA as an example).



Since when is the biggest selling franchise around losing steam? GTA is a money making machine so don't even say that it is losing steam. That is just crazy talk.

[Dangerboy]

Since when is the biggest selling franchise around losing steam? GTA is a money making machine so don't even say that it is losing steam. That is just crazy talk.

It's not when you work retail and all you keep hearing is that the game isn't making presell goals and such. I'm sure it'll pick up on walk in sales, but right now it doesn't have the pre-selling 'steam' it should. Even Madden was *half* the opening day business that it was compared to last year. <Shrug>

[Ed Oscuro]

Oh crap.

Too bad the industry's profits have to be more like movies (where one hit finances a couple later duds) and less like music (where you just throw some stuff on a CD, and let the label take all the profits). Well, actually, it's not at all like I say...but I don't suppose a crash would be a good thing. o_O

[lendelin]

I don't have Powerpoint and cannot open the text.

Just one Q, what is the meaning of this?:

"At any time, 80+% of sales generated by top 10 games."

[Ed Oscuro]

"At any time, 80+% of sales generated by top 10 games."
What it says..?

You mean to say that you don't believe it? Well, I would wish that it's wrong, but that's very close to the way it is. As for whether he's talking about PC games, console games, or both, that's a good question.

[Mayhem]

Yep... most revenue is generated by only a tiny fraction of the overall games available to purchase. Basically big hitters like Madden, GTA and so on. Most games are lucky to make the money back spent on making them...

[SoulBlazer]

Has'nt it always been that way? :hmm:

Don't tell me that back in the earll 1980's the most popular and advertised games did'nt sell light years ahead of the ones that small companies pumped out just to make a buck.

Back in the classic days, there were not as many games being made, true, but there was still more then the market of the time could support. In other words, if A is the number of games released each year and B is the number of people who want to buy said games each year (the market), then A is greater then B.

Right now, we don't seem to have hit that equation again, and I'm not convienced that we will. A small slump, yes. Full scale crash, no.

[lendelin]

Has'nt it always been that way? :hmm:


Good Q! This is one of many I have about this statement. What are the authors implications and consequences of this statement for the industry?

If this statement should raise concern about the diversification of developers/publishers or even game quality, it would make more sense to look at marketshares of developers/publishers. Diversification of game offerings WITHIN individual developers/publishers is decisive. One average selling game or even flop doesn't mean much if the developer/publisher has a good selling game the same year.

Ubisoft had a big (undeserved) flop with Beyond Good and Evil, moved a decent but overall disappointing 800 000 copies of PoP, but is still doing well because the Clancy-games are 'in.'

...and there will always be a decent market for niche genres, niche publishers and niche developers of medium size.

The real probs have the smaller developers. In an expanding market with concentration tendencies of publishers and dramatic increases of development costs, they are in for a tough, tough fight. For lots of them it will be a struggle for survival in the next years.

How many sales or profits are generated by the top ten doesn't say a lot. Only two percent (!) of all books published in the US hit the magical marker of 100 000 sales, and they live very well with it for decades now.

[Keir]

How many sales or profits are generated by the top ten doesn't say a lot. Only two percent (!) of all books published in the US hit the magical marker of 100 000 sales, and they live very well with it for decades now.
Books are much less expensive to produce than games, and therefore have a higher profit margin. I don't think you can compare the two.

[Ed Oscuro]

My take on this is that we won't have a "crash," but we're probably in a slump which will go a bit deeper (depending on things...)

The state of the business is ensuring that there's no such thing as an assured hit anymore, and as a result almost all games will aim to be the best game of the year (or to fit snugly within some other niche, such as LE or budget releases, on two ends of the spectrum). I don't think any "from this point on" statements would make sense since the industry knows all this, but this means developers will be kept on rather tight leashes.

[Aswald]

If the industry keeps releasing the same old stuff, how can it expect to continue?

[Duncan]

Since when is the biggest selling franchise around losing steam? GTA is a money making machine so don't even say that it is losing steam. That is just crazy talk.

It's not when you work retail and all you keep hearing is that the game isn't making presell goals and such. I'm sure it'll pick up on walk in sales, but right now it doesn't have the pre-selling 'steam' it should. Even Madden was *half* the opening day business that it was compared to last year. <Shrug>

I'll second that. Presells are always hit-or-miss anyway, though. We sell tons of Halo 2 presells partly because there's the "limited" version and partly because there's guaranteed to be shortages, at least in the first couple of weeks. (Hell, it's still hard to keep original Halo in stock!) We also sold tons of Pokemon presells, but mainly because they came with a mini strategy guide -- and because it's Pokemon. :hmm:

To date, not one GTA:SA presell has moved out of my store. However, I suspect that's because Vice City just went to Greatest Hits price -- which means that GTA fans and late adopters may be getting their fix adequately at the moment. (Is it true, by the way, that Rockstar is pushing the release date back a week for the "PStwo"?)

As for the four-week lifespan, that's sadly accurate in a lot of cases. Castlevania for PS2 did just that. So did La Pucelle Tactics. It's also telling when semi-new games -- Driv3r, in this case -- go on an incredible sale price within weeks of release. Kind of like a pre-clearance, actually.

I don't think a full-scale crash is coming, but the big hardware blitz occurring during the next 24 months (DS, PS3, XB2, new Nintendo console, 64-bit PC hardware, other bit players like ApeXtreme or Tiger's new portable) may just cause a serious reorganization in the industry.

[zmweasel]

I don't agree with all the points in the article -- the gaming industry is STILL growing in sales and there will always be games available for everyone of all tastes -- but a shakeup of the industry, a small recession and not a crash, could really help. Actually, I think it's impossible for a full fledged crash to happen again like it did 20 years ago.

Costikyan didn't say that game-industry sales aren't growing. He said that game-industry sales are growing on a linear curve, whereas game-DEVELOPMENT costs are growing on an exponential curve, on pace with Moore's Law. Thus, the average game loses more and more money, since only a handful of games are best-sellers.

My favorite graf is this one:

"One reason for the high interest in mobile games (despite scant revenues): low budgets, short dev cycles, don't have to spend three years of your life on a fucking Scooby-Doo game that will probably die at the software store anyway."

-- Z.

[Fuyukaze]

I'm not sure if crash would be the right term for it but I do think the industry will have to change some of its curent trends. Sales being one of them. With staff for games sometimes reaching 100 (or more) the cost of the game can become very high. The amount of game sales needed to cover the cost can break companies. Its not that I think companies need to start making more crap games, but that they need to start worrying about the customers they have rather then trying to get new people into it. If you cant please what customers you have, how can you please new ones?

[Duncan]

"...a fucking Scooby-Doo game that will probably die at the software store anyway."

Yeah, also my favorite line. Licensed stuff is no longer a guaranteed seller either, except perhaps in the case of Game Boy Advance titles. Making a good licensed game has its rewards, of course -- witness Spider-Man 2 -- but it usually takes considerable word-of-mouth for those to become popular. The stigma of "movie game = shitty" seems to catching on with the general public, much to the industry's dismay.

[Sniderman]

It's funny. I'm not real familar with Greg Costikyan's contributions to the videgaming industry. But I know his name really well for the many hours I spent playing his pencil-and-paper RPGs "Paranoia" and "Toon." :D

[SegaTecToy]

The fact is that sales are growing but game development costs are exploding. I don't see a clear exit for this in sight.
A interactive medium is much more demanding than a non-interactive one. So the game business is in a worse situation than movies, books and other kinds of entertainment.

[Mayhem]

Ubisoft had a big (undeserved) flop with Beyond Good and Evil, moved a decent but overall disappointing 800 000 copies of PoP, but is still doing well because the Clancy-games are 'in.'

Right on the first count (brilliant game), wrong on the second. Post Xmas with the $5 deal with Rainbow Six, plus word of mouth has meant PoP has shifted close to 2 million units now worldwide and why Ubisoft have risked going with a sequel.

The big hitters have always occupied a largish slice of the revenue stream. Only problem is that slice has been getting larger year on year for quite a while. And as was pointed succintly out, overall revenue might be rising, but costs are rising quicker. And that's not good...

[YoshiM]

For those who are Powerpoint-less.

http://webpages.charter.net/pmode4/digitalgenres.htm

Excuse any formatting issues, I just published the PP presentation to web pages and didn't optimize.

Pretty interesting read.

[dethink]

thanks yoshi...

i think the biggest hurdle is dev time and the resources it requires...unless this is curbed, i think the industry (as far as console gaming is concerned) will be forced to adapt a massive online scheme, one in where there really only are about a dozen BIG games a year in terms of scope and sales, and that online revenues will help pick up the tab, and downloadable content will ease some of the dev time, by allowing the retail disc to be ready before everything the developer WANTED to implement is complete.

i think the xbox is already becoming the model of this - how many games are stil being played in LARGE numbers, despite not being huge sellers currently? project gotham racing 2 isn't flying off shelves, but is still one of the top 10 games played on live despite being out for quite a while, and bizzare is releasing updated content at $4.99 a pop.

i think the only way to counteract long dev times is to ensure the game itself has a long life. people are still playing halo (and it continues to sell well, and like someone on here said, is hard to keep in stock after 3 years) in droves...imagine if MS released a halo 1.5 disc after live was implemented that merely allowed online play and downloadable content. it would have sold like hotcakes. i have more than gotten my $50 worth out of that game - the cost per hour of entertainment is probably less than tiny fractions of a cent.

back in the NES days, you needed a drawer full of games to keep yourself occupied, no matter how good they were. you'd go batty trying to play duck hunt all day.

this gen, i have 6, and don't have time to play them all to 100% completion. games keep getting bigger and more in-depth, and i think it would behoove publishers to keep people sucked in to a "favorite" much like a MMORPG, and then offer things like downloadable content for a reasonable price. some people balk at having to pay extra for content/live, but for what you get, it really is cheap. PGR2 costs $40 by the time you figure in DLC costs, and there's enough there to keep you occupied for months if you really love the game.

except for this board, i bet a survey of gamers would turn up this: people are buying fewer games and playing them a LOT longer. look how long some titles have lasted in the PC realm due to the mod community. the console makers need to get wise to this, and learn how to profit from it.

any bets halo 2 will be played in large numbers WELL into the X2's lifespan?

[SoulBlazer]

Oh, Zach's quote made me remember something ELSE I was going to comment on -- anyone else notice just how, oh I don't know, BITTER the author sounds? LOL

[zmweasel]

Oh, Zach's quote made me remember something ELSE I was going to comment on -- anyone else notice just how, oh I don't know, BITTER the author sounds? LOL

Yeah, but I like listening to bitter old-school designers. :) Chris Crawford is another bitter dude who makes fantastic points about the game industry past and present. He's pretty much abandoned game design for the nascent field of "interactive storytelling," which he sees as holding much more creative potential than video games.

-- Z.

[Iron Draggon]

Two words:

No Limits

Homebrew coaster sim blows all others before it out of the water, and still rides on top to this day. Online only download, $25. Every coaster nut in the world owns this game now, and yet the industry almost completely ignores it.

Every new coaster sim that comes out gets compared to this game, and usually ends up getting dismissed as pure crap for not measuring up to it. It's become the industry standard against which all others are judged, and yet it was originally developed by just one guy working on it in his spare time after school. He has a small team of other developers helping him now, but at first it was just a one man show. His reason for doing it? He wasn't satisfied with anything that the industry had to offer at the time, so he made it himself.

Cue the imitators:

Scream Machines

Another homebrew coaster sim that has become the only real competition. And once again, the industry still almost completely ignores it. Online only download, $25. Most people who own No Limits eventually end up owning Scream Machines too, but No Limits is still #1, Scream Machines is #2. The only industry produced game that even comes close to these two is called Hyper Rails. A collosal failure that still has yet to fulfill all the promises that the developers assured all the fans would be delivered upon after it's release.

The moral of the story? Watch the independents to see how it's done. Small teams consisting of as little as just one man and no more than 6 people are kicking the industry's ass in this genre, and the industry can't even live up to their own promises, much less meet or exceed the offerings of these indies.

I know that coaster sims are still a niche market at best, but this is just an example. If things like this can be done with great success in a niche market, what do you suppose would happen if they were done by the industry, in a highly successful and well established genre? The potential boggles the mind.

[thegreatescape]

The moral of the story? Watch the independents to see how it's done. Small teams consisting of as little as just one man and no more than 6 people are kicking the industry's ass in this genre, and the industry can't even live up to their own promises, much less meet or exceed the offerings of these indies.

But what happens when they try to compete with the industry at their own game (assuming coaster sims are hardcore and nothing like sim coaster) and make a game with mass appeal (i.e "profitable"). Youll need to sex up the game engine, hire artists, etc which costs money, which leads to increased sale price.

[Iron Draggon]

Dude, most people who play No Limits are so hardcore, they act like it's real coaster designing software, and they're designing real coasters. In fact, it's become so popular among coaster enthusiasts that alot of coaster sites post No Limits recreations of actual rides with their info on the actual rides, and some real coaster manufacturers go so far as to release No Limits versions of their concept rides and/or future installations to test the public's interest.

No Limits (independent sim) is here:

http://www.nolimitscoaster.de/

Scream Machines (independent sim) is here:

http://www.wounded-heart.com/

Hyper Rails (industry sim) is here:

http://www.3dgamearena.com/

See why the independents are winning? If an industry sim attempted what the indies are doing, they'd want way more than just $25 for their efforts!

[zmweasel]

The moral of the story? Watch the independents to see how it's done. Small teams consisting of as little as just one man and no more than 6 people are kicking the industry's ass in this genre, and the industry can't even live up to their own promises, much less meet or exceed the offerings of these indies.

I know that coaster sims are still a niche market at best, but this is just an example. If things like this can be done with great success in a niche market, what do you suppose would happen if they were done by the industry, in a highly successful and well established genre? The potential boggles the mind.

* The coaster-sim genre was firmly established by a commercial product, RollerCoaster Tycoon, in 1999, and built upon by SimThemePark. NoLimits (with no space, according to the game's own website) expands on an existing genre, as opposed to breaking new creative ground, and most developers are concerned that it's all but impossible to attempt the latter in today's corporate environment.

* NoLimits is a simulator, while RollerCoaster Tycoon is a game. The former appeals to coaster junkies, while the latter appeals to mainstream gamers.

* Indy-game publishing for the PC does nothing to address the problems facing the larger and much more profitable console-gaming industry, where the manufacturers necessarily control the publishing process.

* A one-to-six-man garage developer can't produce a sports game or action game or RPG with the audio/visual production values or deep gameplay that gamers have come to expect in those genres--and I certainly don't foresee extremely focused niche products as the salvation of gaming.

-- Z.

[SegaTecToy]

Maybe the good thing that hardcore players should do is stick to the PC market and forget about consoles. Consoles are going to be sequel-plagued, mainstream playing machines and PCs will be used for groundbreaking, innovative games self published by creative people.

After all if PC people have cash to expend a grand on new hardware they have money enough to maintain their own market. And PC players are much more hardcore than any other people. More companies will do as ID or Valve: "Give them the tools and they will build it"

To each his own.

[Iron Draggon]

Actually, the coaster sim genre was firmly established by Disney's Coaster in 1993, so even Roller Coaster Tycoon was building on a previously established concept. And by Chris Sawyer's own admission, all he did was apply the roller coaster idea to one of his previous games, Transport Tycoon. But in reality, what he really did was just blatantly rip off Theme Park, and expand on it's ideas. And wasn't Chris Sawyer pretty much just a one man show when he created Roller Coaster Tycoon? RCT was such a huge success because it was more of a theme park management sim at a time when such an idea was a groundbreaking new concept in an existing genre. (micromanagement sims) The whole franchise is only just now becoming more of a true coaster sim by finally allowing you to ride your rides when RCT 3 debuts on November 2nd.

The history of the true 3D coaster sim is much more interesting though. As I said before, it began with Disney's Coaster in 1993. Then it sat dormant until 2000, when a little $10 budget game called Roller Coaster Factory came out.

RCF became such a huge success that it immediately spawned a whole slew of sequels and imitators. 3D Roller Coaster Designer came out later that same year, and was the spiritual sequel to RCF, produced by the same developers.

The first independent offering worthy of mention arrived next, early in 2001.

Ultra Coaster:

http://www.reactorsoftware.com/

It made some coaster sim history by becoming the first modable coaster sim.

Then came my personal favorite, Disney's Ultimate Ride series late in 2001. A total of 3 games were produced for that series, and all within just one year. Ultimate Ride, Ultimate Ride Coaster Deluxe, Ultimate Ride Disney Coaster. A couple of guys at Disney had seen how RCF basically just blatantly ripped off the original Disney's Coaster, and improved on it by adding a second coaster type. They also noticed how 3D Roller Coaster Designer had broken alot of new ground by introducing theming objects and clever ways of customizing the game's environment to produce new environments, in addition to fog effects and other features. 3D RCD had blown all the theming doors wide open, and Disney expanded on that concept in spades. They even noticed how Ultra Coaster enjoyed quite a following due to it's modability, so they designed their games in a similar manner, to make the ultimate customizable coaster sims. Multiple coaster types, multiple themes, multiple environments, and endless possibilities for keeping it all interesting, with user created mods.

No Limits finally arrived shortly after the original UR, after 2 years of waiting in extreme anticipation for it. Everybody knew that this one was gonna rule.

That's everybody including Pantera Entertainment, the developers of RCF & 3D RCD, who basically blatantly ripped off No Limits and released Hyper Rails.

Next was the first official sequel to RCF, Roller Coaster Factory 2, in 2002. It was quickly followed by a spiritual sequel, Maximum G Force, later that same year. And that game quickly became an official sequel, and was rereleased as Roller Coaster Factory 3 in 2003. Coaster sims had become a very hot genre. After Disney's enormous success, everybody began imitating UR, and adding similar features from it into their own games, including all the independents. The UR series paved alot of new ground on it's own, but it still was obvious that it heavily borrowed from earlier efforts and simply expanded upon them.

Finally, then came Scream Machines, an independent sim that had been in development for so long that it was almost completely redesigned before being released, in order to compete with everything that had come before it, in rapid succession. Basically it's the same thing as No Limits, but with alot more of everything. It also broke alot of new ground for the genre, being the first 3D coaster sim to allow terraforming of the environment, among other things. Yes, this idea was blatantly ripped off from RCT, but no one had ever done it in a 3D coaster sim yet. It also borrowed the theming idea from UR, and it used a method of changing the look of the environments similar to 3D RCD's method. These ideas were such a huge success that No Limits introduced it's own terraformer, and began to incorporate theming as well. And thanks to some inspiration from the UR modding scene, both No Limits and Scream Machines added the ability import your own 3D models.

At last, this brings us now to the upcoming Roller Coaster Tycoon 3, which for all practical purposes might as well be called Ultimate Ride 2. It's blatantly ripping off everything that it can from the UR series, and trying it's best to pretend that it's just expanding on RCT & RCT 2, however anyone who's ever played any of the UR games sees far more similarities to UR than RCT.

So you see, here we have the independents becoming so successful with their efforts that the industry is borrowing from them, as well as each other, and they in turn are beginning to borrow from the industry, and each other too. Whatever someone else does, everyone else has to copy it and expand on it, or the players will gripe about it being inferior and go back to playing all their old favorites. And it may still be mostly a niche market right now, but the coaster sim genre is still a very young and rapidly growing genre, so it's still evolving itself through alot of experimentation among the industry, the independents, and the modders. But the independents and the modders are still the ones doing most of the experimentation, and the industry are still the ones doing most of the copying. So alot of the high polish that you see in the industry's games is only because of all the care and attention to detail that goes into the efforts of the independents and the modders. Honestly, if it weren't for them, we coaster sim fans would still be playing the original Disney's Coaster. The industry's interest in expanding the genre didn't even start until the independents and the modders got fed up with their efforts and began to push the envelope themselves. That's when we finally saw all the highly polished industry efforts arriving, and of course all the inevitable cheap knock-off "me too" titles attempting to cash in on the coaster craze.

So yeah, as far as coaster sims go, garage developers making niche products are very much the salvation of the coaster sim enthusiast, and they're mostly responsible for the industry finally taking notice and developing some games that are more along the lines of what coaster sim enthusiasts wanted to see. So if just a few guys could do that in their spare time for one genre, they could do it for any genre, and they do. Have you heard about GTR yet? It began it's life as an EA F1 series mod, but by the time it's released later this year, it's gonna be the racing sim to end all racing sims, and it looks like it just might accomplish the previously unimaginable feat of defeating the reigning king, Grand Prix Legends, an industry produced sim from over 5 years ago. Consoles are not the be-all end-all of gaming by a long shot. They're just the mainstream, and as such, they are hopelessly mired in apathetic mediocrity. Just like the coaster sim genre was before it's revival by Chris Sawyer & RCT.

I may not know much, but I know my PC coaster sims like an encyclopedia, and I just wrote a book on them in this post, so if you wanna learn a few things about how the entire gaming industry became what it is, see above. Mass marketing has been the death of the industry once before, as seen in the great crash, so I don't necessarily trust the industry to know what's best for gamers. I have alot more respect for the independents and the modders, and the smarter developers who really listen to them and pay attention to what they're up to, not the bean counters who pump out all the knock-offs and "me too" titles just to make a quick buck from an already proven formula.

[zmweasel]

Whew. You sure know your coaster sims. (Although calling a decade-old niche genre "young" is stretching.) But you don't seem to realize that they have very little to do with the big, gloomy picture painted by Costikyan.

And it wasn't "mass marketing" that triggered the early-'80s crash. It was an overabundance of unlicensed crap on store shelves, plugging up retail channels so the good stuff couldn't get into consumers' hands. Nintendo's lockout technology was by far its greatest contribution to the financial health of the console-gaming biz.

-- Z.

[lendelin]

Thanks, Dan (YoshiM), I was really curious to read it. You have a heart for us powerpointless guys. :)

I just read over it quickly, maybe 5 minutes, there are so many quirks and simplifications, I don't know where to start. :) I respond later and pick just the two main mistakes and show how simplistic and irrelevant these numbers are for the points made! (they are not irrelevant for other issues, though, but the conclusions drawn are ridiculous)

I was pretty point on in my first post w/o knowing the text, the guy overlooks completely the MICROECONOMICS!! WAKE UP! :) Don't use aggregate data and come to conclusions about business pressures of individual companies and the future of the industry! Look at profitshares, marketshares at the level of individual companies, and their DIVERSIFICATION of game offerings and their profitshares! You'll get a very different picture. :)

You know, if I were in the audience of that guy, my first Q would have been a simple common sense Q: how do you explain that the game indusrtry is still alive and well? If cost development is exponential and sales are linear, the industry should be dead by now for over a decade. Oh, I forgot, he gives a hint how to survive in this environment:

"Industry consolidation –The more titles you publish, the better your chance of having a hit to carry the firm."

Wow, what a surprise! Diversification is the answer. (read my first post) Amazing insight, almost all other industry branches know that and do it, and I learned it in my German Economics school when I was 17 years old. But did he apply this diverse game offerings to his gloomy 'Loss per game' statistic over the last 19 years? Of cousre not, this might be a bit too optimistic and realistic. Maybe the same level of profi- and marketshares based on diverse game offerings should be applied for the last ten years with the possibility that nothing changed and the dependency on 'hits' isn't something new at all? Of course not, the results might be not gloomy and the prospects not dim enough to make a little splash.

I'm sorry for the irony, I'm too old not to become ironic when I encounter pseudo-research with a couple of graphs to make the case of questionable assumptions and implications. :)

...and all the other 'implications' ...god...gimme a break. :) If a guy finds it surprising and discovers that "perhaps (!) art and business are inseparable in commercial form" I say ask Rembrandt. He discovered that 350 years ago, and every little painter in ancient Egypt discoverd it as well.

God, when I'm typing I'm typing, right? :) It is some useful and good information, but absolutely nothing new, mostly stereotypes are confirmed with some non-relevant numbers and figures for the cases made; and other implications for the industry are just convenient and questionable stereotypes we discussed already here on a higher level.

I may have been powerpointless, but not as pointless as this powerpoint file.

[Ed Oscuro]

* A one-to-six-man garage developer can't produce a sports game or action game or RPG with the audio/visual production values or deep gameplay that gamers have come to expect in those genres--and I certainly don't foresee extremely focused niche products as the salvation of gaming.
Now wait a second. A/V, I'll agree without reservations. Gameplay though? Lots of folks play NetHack; though that's been worked on for a LONG time and has seen a lot of involvement (to say the least). You're right - six guys don't often do it - but the indies, be they garage bands or game developers, aren't forced to churn out a hit. They can take as long as they please, and that gives them an edge.

Salvation of gaming? I think anybody who's followed Flash pop culture in recent times has had tons of fun with short'n sweet indie productions. Gunbound has seen, well, nearly unbounded popularity. These games aren't going to turn the industry around, and that's not what they're about. As long as it's a fun way to kill an hour, people will continue to spend time with the free, independent projects.

[zmweasel]

Now wait a second. A/V, I'll agree without reservations. Gameplay though? Lots of folks play NetHack; though that's been worked on for a LONG time and has seen a lot of involvement (to say the least). You're right - six guys don't often do it - but the indies, be they garage bands or game developers, aren't forced to churn out a hit. They can take as long as they please, and that gives them an edge.

NetHack is a great example of hive-mind programming, but it's hardly a good example of innovative design, and what I perceived as one of Costikyan's major points is that increasingly effed-up game-industry economics are preventing creativity in commercial products. And in a month where I'm reviewing The Nightmare of Druaga (dungeon hack), Choro Q (super-deformed racer), Samurai Warriors: Xtreme Legends (umpteenth game in the DW franchise), and Technic Beat (rhythm/music), I'm the choir and Costikyan is the preacher.

-- Z.

[Ed Oscuro]

NetHack is a great example of hive-mind programming, but it's hardly a good example of innovative design...
Dat true. I can't stand it. I guess my point doesn't address the overall issue, does it? These projects take a bit of a chunk out of the 'proper' games market, but that's about it.


And in a month where I'm reviewing The Nightmare of Druaga (dungeon hack), Choro Q (super-deformed racer), Samurai Warriors: Xtreme Legends (umpteenth game in the DW franchise), and Technic Beat (rhythm/music), I'm the choir and Costikyan is the preacher.
Dear god. How many Druaga games are there so far? Six? (One to three, that wierd Dragon Warrior-esque Super Famicom title, and?)

Xtreme Legends...there's another winner of a title. Still, someday I'll look back on these games fondly. I love innovation, but not so much that I dislike a good retread now and then...well, judging by what's out there, that would be "all the time."

Innovation. What's left for the current generation, really? Galleon tried...sort of...with that movement system, and look where that landed it. Probably more than three full-page ads in XBN, and it still isn't doing well (for good reason). That Konami voice-recognition game? Fatal Frame? I'm surprised Steel Battallion turned a profit in the U.S. - are things with crazy pack-in peripherals a way for industry giants to keep people interested (Rez included)?

[lendelin]

It's late, and I don't have the energy anymore to go into details of the 'substantial' reasoning of the lecture.

But just ask you this and follow common sense: would it surprise you that the vast majority of games with losses are carried by publishers which also make incredible profit with smash-hits? It wouldn't surprise me. If aggregated cost increase is exponential (I'd like to see also distinctions between costs) and aggregate sales increase is linear (I'd like also to see distinctions of sales), then this spells absolute doom...UNLESS...UNLESS...compensation of the costs come from somewhere!

Loss per games statistics in general say absolutely nothing about the points made. Distinctions are very important, not only for statsitsics, but also for qualitative substantial reasoning. If there is no distinction between big, medium-size and small developers (definitions are pretty easy to do) in the loss per game graph and cost development graphs, you cannot come to conclusions about situations of different developers which this lecture does. In other words: don't avoid distinctions when it comes to identify the problem, and then introduce the distinctions when consequences and implications are discussed for the different kind of developers you don't have data about. You risk drawing conclsusions of a problem you didn't correctly identify in the first place.

Don Quixote fought against windmills, we shouldn't.

Usually the case for this kind of 'analysis' is that it applies only to a small section of the discussed subject matter, I suspect that some points, by no mans all, apply for medium size developers, by no means to the bigger and smaller ones.

[zmweasel]

Have you considered writing Costikyan with your thoughts? His email addy's greg@costik.com. He also knows much more about the game industry than you seem to realize, so you might wanna check out his resume first.

-- Z.

[lendelin]

He might know a lot about the game industry, but his reasoning doesn't make sense. To know about the game industry isn't by far enough to venture into economics, otherwise great game developers and journalists could run successfully game companies, and that is the exception and not the rule.

References to pedigrees aren't a substitute for substanbtial reasoning either, even if he were familiar with economics (which he certainly isn't). Good substantial reasoning by common sense guys can put the best expert to shame. (happened cerationly to me, and it is a feast becasue we sometimes don't see the forest when we analyse single trees)

It is pretty simple: he doesn't distinguish enough to make his points. (about costs, dvelopers/publishers, and profits) He used some graphs, and then speculates.

If I presented some aggregate, most generalized data about money given to politicians per year and would draw conclusions about legislative output of different areas, different polticians in very different situations, even speculate about campaign influences by difffernt interest groups distuinguishing between Senators and members of the House, I'd be laughed at.

and yeah, I read his blog and his accomplishments, I'm not impressed by his accomplishments to a dgree that I wouldn't critisize him, but the blog is certainly very informative (!) and a great read.

[lendelin]

btw, instead of me writing him, just write him and give him the website addy of this thread. :) An already great and informative site like Digital Press can't have enough well informed members.

(I'm serious about the Digital Press site. It is really a great and informative site with lots of knowledgeable and intelligent guys)

[Iron Draggon]

Whew. You sure know your coaster sims. (Although calling a decade-old niche genre "young" is stretching.) But you don't seem to realize that they have very little to do with the big, gloomy picture painted by Costikyan.

And it wasn't "mass marketing" that triggered the early-'80s crash. It was an overabundance of unlicensed crap on store shelves, plugging up retail channels so the good stuff couldn't get into consumers' hands. Nintendo's lockout technology was by far its greatest contribution to the financial health of the console-gaming biz.

-- Z.

LOL Coaster sims are my life! It's my alltime favorite genre. I was a beta tester for all 3 games in Disney's Ultimate Ride series, and I've been making MODs for those games for the last 3 years, so obviously I'm a little biased towards the independents and the modding scene, but Disney was a joy to work with, and they really listened to the fan's input on those games alot.

BTW, I would say that a decade old genre that sat dormant for over 5 years is still a pretty young genre, even though the original Disney's Coaster was quite popular in it's time. It wasn't until after RCT that the niche was busted wide open and the genre exploded all over the scene to what it is right now.

But what I meant by "mass marketing" is exactly what you said. Isn't that what mass marketing is? Cramming your product down the people's throats whether they want it or not? It still goes on now too. cough "Acclaim" cough

Now as for the indie game productions, some of you guys don't seem to realize just how many of the big name games produced by the big name developers now started out as indies. There are many examples of very popular games that ended up being big name licenses by the time they were finally finished, because their demos had caught so much of the indutry's attention. Unless you follow the indie scene very closely, there's alot of games that you'd never know were actually indies when they first began.

And then there are games like Combat Mission. Look at what happened to it. It was an online only download for years before it finally took off into all the realms of the mainstream, and now it's a very popular franchise making alot.

The point that I was trying to make is the reason the economics of the industry are so messed up is because they pump so much of their money into doing trade shows and press releases and hyping the shit out of their crap, advertising, marketing, etc., and so little of their money by comparison actually goes into the development of a quality product. They've become so obsessed with "the bottom line" that they will release pure rubbish that's absolutely overrun with bugs, just to meet their projected release dates on time. Now why is "the bottom line" so all important to them that they are willing to risk their reputation and the success of their game by releasing an obviously unfinished product on time, just to say that it came out on time?

Equally alarming is the latest trend of using the general public as their beta testers, preferring to piss off and alienate all the early adopters, which should be the people who they go out of their ways for the most. Just so they can save a few bucks on some decent QA, and not have to delay the release? It's insanity. No independent and no modder in the world is gonna release something before it's finished, just so they can get their product out there, without slapping disclaimers all over it stating that it is a work in progress. If the industry is gonna operate itself like that now, the least they could do is show the same amount of respect for the gamers themselves, their bread and butter, and clearly label all their bug-ridden "on time" releases as works in progress! That's a big part of the reason why the future is so bleak for them.

They have far too much reliance on their so-called budgets and meeting their release schedules now to be paying as much attention to QA as they should, and this is apparently how all those crap games manage to make it all the way through development without a single soul realizing that the game is pure crap and barely even playable! If they do know it, they obviously just don't care, and it seems to me that they are shooting themselves in the foot, just to save their asses, which are doomed anyway if they keep it up like that! They've become too big for their own good and lost all touch with what it was that made them become so successful in the first place. The same thing even goes on with every independent who ends up making the bigtime. Quality goes out the window, and mediocrity becomes the norm.

There's just too much of everything out there now, and far too many big name developers who are far too focused on "the big picture" to even see what the gamers really care about anymore, and that's why we have so many companies that seem to have their heads completely up their asses, who are so far out of touch with what the gamers want that it makes us wonder why they even stay in business, much less how they manage to.

That's what I mean by watching the independents to see how it's done. They stay in touch with their fans, they listen to what they want, and then they try their best to do it for them, no matter how long it takes, rather than whining and complaining about how they have to get this thing pushed out on time so they can wrap it up and move on to the next piece of crap that's just gonna end up in the bargain bins and fading away into obscurity before it's even been available for 6 months. It's this kind of "junk marketing" that's killing the industry, and they don't even have enough sense to give a damn about it, if they even see it at all. They're too focused on the money.

[thegreatescape]

Lendelin if the powerpoint presentation was full of those charts, graphs and statistics you craved then none of us would be talking about it due to the utter lack of excitement they bring ;) :P


Re: Iron draggon

They've become so obsessed with "the bottom line" that they will release pure rubbish that's absolutely overrun with bugs, just to meet their projected release dates on time.

Valve, 3d realms, john romero, Id and several others would probably disagree with you there LOL
First of all, i'd say your overestimating the bugginess of games these days, and second of all, it takes a lot more effort to test a 2gb+ free form adventure game than a 4mbit side scrolling platformer. Nobody can really afford to test a game as much as they want anymore because it costs money, and because with games like that you can test forever. Longer test = less profit.

[zmweasel]

btw, instead of me writing him, just write him and give him the website addy of this thread. :) An already great and informative site like Digital Press can't have enough well informed members.

(I'm serious about the Digital Press site. It is really a great and informative site with lots of knowledgeable and intelligent guys)

I'm not the one who vehemently disagrees with him, so I'll allow you to extend the invitation to come to these forums and defend his opinions, informed by more than two decades of extensive industry experience, against a long-winded German economist. I'm sure he'll jump right on it.

-- Z.

[kevincure]

Hey, I'm an American economist and I don't think Costik is spot on with everything he says. But he does nail the point about developers. I can't understand how the external developer/publisher style relationship has continued for this long. The failure rate of game developers is enormous. When researching developers on the Playstation, I found that the vast majority of PSX-era developers have either folded or been consolidated. If Warren Spector can't even keep his place afloat, the rest of us are in trouble.

The exponential growth of game development costs will not continue - we're reaching the point (with PS3/XB2) where additional graphics are overkill. Further, I expect middleware (especially physics middleware) to continue to improve, and I know Sony is emphasizing an enlarged library for next-gen development.

Smaller developers will be forced to develop mainly for handhelds until they "prove" that they have the potential to be an id/Westwood/Bioware. Publishers will have to be more selective in what games they release - Acclaim's failure has nothing to do with the economics of the game industry.

Also, small team development is not dead. How about Devil Dice (Xi), a huge hit in the last generation? How about Eyetoy Play/Groove? DDR? These games were all made with very small teams. As far as I know, id has a staff in the low teens working on Quake III; I'm not sure how big they are now, but they're certainly not employing 200 to make Doom.

[lendelin]

Lendelin if the powerpoint presentation was full of those charts, graphs and statistics you craved then none of us would be talking about it due to the utter lack of excitement they bring ;) :P



LOL...I think you hit the nail on its head! :)

[lendelin]

[...informed by more than two decades of extensive industry experience, against a long-winded German economist.

-- Z.

I give you two short-winded comments on your personal attack:

1. I'm not an economist.
2. :roll: