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Only 80 Games A Year Will Succeed
0110011001110101 writes "Next Generation reports on the risks involved in game publishing and development. A report has been released suggesting that, in the next generation, as few as 80 games a year will turn a profit. Development costs in the next generation are set to rise from $3 -$6 million per title to $6-$10 million, with some cases surpassing $20 million." From the article: "Screen Digest's analysis shows that in the U.S. in 2004, titles based on licensed IP, such as Madden NFL 2005, sold 23% more units than titles based on original content. However, the short term revenue gains of licensed IP, does not necessarily translate into greater profits. Licensing costs are rising as IP owners become increasingly aware of the growing importance of the games medium."
Fewer than two or three dozen motion pictures will turn a profit this year. What's your point?
Information wants to be anthropomorphized.
Duke Nukem Forever?
Then there's the few examples like Napoleon Dynamite or Pi, that show you just how little money it takes to put an excellent story to the top of the charts and become insanely profitable. But of course the industries look at those as anomolies and go back to cranking out Batman Twelve with Tom Cruise and Lindsy Lohan.
Let's see some real innovative games, then I'll cry when only 80 a year succeed.
I'm Rick James with mod points biatch!
Could it be that the Madden franchise does well because it's one of the best sports titles ever made, rather than because there's a picture of a fat retired coach on the box?
GTA had no "license" to exploit, but I dare say it sold considerably better than the "Lord of the Rings" games.
Want to make a lot of money on a game? Design one that's fun to play.
Information wants to be anthropomorphized.
That is just way, way too much money. Something's gotta give.
Why, I can make you a really top-notch game for HALF that much! (Flash is ok, right?)
Game Company Database
"The author of the report, Marc de Gentile-Williams, said, "At 30 years of age, the games industry still suffers from an endemic lack of professional management compared to less mature industries such as the mobile telephony and the internet industries. "
Translation: Hire me! I'll make sure you have a few of those 80!
Only 80 [major release] games will be profitable. Dev costs of 3-6 mil, marketing costs up the wazoo, licensing costs eating up more of the pie... the game industry is turning into the movie industry.
TFA says that there is a lack of good management in the games industry, causing tons of bankruptcies etc. I say, great! I'd rather not have a static set of three game companies creating all the content. Besides, part of the reason that so many gaming companies drop off the face of the earth is that there is actual competition in the games industry... it's put up or shut up.
Whereas, in the movie industry, the consumer will put up with any schlock as long as it is one step better than the current competition (which changes frequently, due to short theater runs).
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
At times, this pays off quite well. Grand Theft Auto and other innovative games push the industry as a whole into new directions. Then there's the EA's who focus on management, process, and profits, and end up capturing a safe but stagnant part of the gaming market.
What the industry really needs is a way to keep development costs down, both technically and from a process standpoint. We need cheaper art development, better middleware, efficient distribution methods, and more. Things like Steam are highly contentious, but there's a chance that this changes the environment considerably. Looking at the new Elevation partnership, it looks like more development houses may become self-funded.
For the winners, there's some pretty huge profits to be made. The gaming industry will continue to mature and expand. The hard part will be keeping it fresh and lively, and not stagnating into a series of endless sequels with better graphics.
Maybe I'm not the target demographic here, but I know I didn't buy 80 games this year. And I won't have bought 80 by Christmas either. I consider myself a gamer. I play a lot. I own all three consoles and all but one current portable (the PSP). I bought, maybe, 20 games this year.
As long as I'm not hurting for a good game to play, I don't care how many succeed.
This number would mean a lot more if we knew which games were counted as successes (for example, it would make me sad if none of the games I bought were counted as successes), but I think it would stand to reason that most of what gamers like (quality titles in all genres) is what's selling. And what's selling is probably what's counted as a success.
e2 | LJ
It's already been mention in lots of other articles that Nintendo's revolution will be a lot cheaper to develop for since the focus is on gameplay and not on all the expensive shiny bits.
Sure, there will be a lot of games for the revolution that won't turn a profit, but with significantly lower development costs, there will also be a greater number of successes. With the revolution, hopefully designers will be rewarded with profits for good gameplay in whatever niche they are aiming for, rather than making a good game that fails because they had to spend way too much money to have it look pretty for the average consumer.
Given this, I have to wonder again at the possibility of lower budget games and their financial viability--okay, so you lose out on the "gimme eye candy" market demographic, and probably the "I buy the games the magazines tell me to" crowd, but with reduced development costs you don't have to sell anywhere near as many units to turn a profit.
Mostly I just think it's sad to see the videogame industry spiral into the same bland mire as much of the movie industry--avoiding risk and innovation, pumping huge budgets into a handful of games on the premise that a few will have huge sale numbers and hopefully keep the money flowing in at least as fast as it's bleeding away.
Perhaps they mean there will only be 80 profitable console games or big budget titles per year, but there will be plenty of mobile phone and web-based games (even more than there are now) that are produced with meagre sums and turn a reasonable profit.
I guess in this sense, the gaming industry once again parallels the movie industry. You end up with a small pool of mega-studios producing the blockbusters each year while an ocean of indies, hobbyists, and wannabes fill the niche markets.
Only 80 games? That's pretty damn good. The movie industry is lucky to get 1 good movie a week or about 50 a year. I bet the TV industry has even less overall. Does the music industry put out 80 really succesful albums a year?
If the game industry can "only" put out 80 successful games a year and I only play 12-24 I will remain one happy gamer. Heck I may even pick up 1 or 2 unsuccessful games.
I wonder how many "break-even" games they make a year?
http://www.kubuntu.org/
I have my own little indie game company, and I'll produce 2-4 profitable games this year alone, sure we measure our costs in tens of thousands of dollars, but we don't spend more to produce a fun game than we need to. And like the big boys, we develop a lot of our own IP, and then license our tech to bigger companies looking for a cheaper solution. It is amazing how many hours you can waste playing a game where the entire graphics budget was $20k for some custom 3d models done by an artschool kid.
:)
The big boys are suffering from being too big. They spend all this money to keep up with the Jones's throwing more and more tech into the same boring games over and over again. And because it costs so much to produce all that content, you end up with a never ending stream of bugs and patches, and support costs. At somepoint the whole structure collapses under its own weight, and ceases to be fun.
The last two games I've played for fun were Black & White 2 and Darwinia... I terms of pacing, game play, and interface the games tried to do the same thing, but Darwinia actually did it right. Both had clunky interface flaws, but Darwinia's interface suffered only from its intentional quirkiness (a nod to real world OS process management) while B&W2's suffered from intentional crippling (buying broken gesture support, poor palette layout, etc).
Like indy film to hollywood, there is still hope for games.
the little guy
The truth is that the real problem isn't (necessarily) what types of games that are being developed, but that developers are producing their games in a very foolish manner.
As much as people 'rag' on Nintendo for using the Mario franchise in 'all of their games' the reality is that it saves Nintendo a ton of money when developing a game; a big chunk of the models, textures, animations, sounds and music can be reused which reduces the cost of developing a new game. I would guestimate that Nintendo probably spends half as much making a Mario Party / Mario Baseball / etc. game than another company could.
Another thing you will notice when you look at Nintendo's games is that they are very focused in scope and do not needlessly add features (for the most part); for the most part Nintendo creates games that are either a really strong single player game (Zelda/Mario/Metroid Prime) or a really strong multiplayer game (Mario Party), the games that are both usually have the same core gameplay shared between their single player and multi-player components (Mario Kart / Mario Tennis / etc.).
Now what does this mean to smaller developers. First off I would say you have to know the scope of your game, don't try to make a better single player FPS than Half-Life 2 combined with a better strategic FPS than Counterstrike with a better Arcade FPS component than Unreal Tournament 2004 (You will spend a lot of money and produce a bad game). The second thing I can say is, being that you can't produce 12 similar games to save on content costs, developers really have to start sharing content; there needs to be a library of models / textures / animations that is well maintained, free and constantly updated so that developers do not spend all of their money trying to reproduce the content someone else has already produced. I know, it sounds goofy; kind of like haing programmers spend their spare time producing an operating system where the source code is shared that will be freely distributed (obviously no one will go for that).
So, maybe 80 games a year will be profitable. But how many will be profitable because they have a hype machine pushing them, and how many will be profitable because they are actually fun to play?
There number one goal is value: for the players *and* the developers. By keeping costs down, smaller companies can afford to develop for them, and maybe even *gasp* take some risks. I'm looking forward to their library. Having smaller companies willing to take a risk and make a genre bending game can only help you, but if the chance of success is so small and development costs are so high, many companies may not be willing to give it a go.
A big misconception about HD, though, is that by supporting it games will look good. This is patently false. The revolution will be able to output at DVD level qualities. I've yet to see a game that convinces me I'm watchign a DVD and not playing a game. All HD does, is output more pixels so you can see your crap visuals more sharply. A theoretical game for some system in the future that outputs at 480p and convinces me I'm just watching a movie on my home DVD player will blow away your average viewing public more than Call of Duty 2 for the 360 does. I'm sure the Revolution would have an easy time outputting a big red square at HD resolution, but that's not the point. With the hardware we've got, we haven't even maxed out the visuals on standard definition!
So, keep it cheap, and focus on making convincing textures, lighting, and physics (the things that really matter), and not just spewing out more pixels. The Revolution is where it's at!
I understand that life's not fair, just why is it never unfair in my favor?