Video game market could collapse according to this article.

[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."