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Game Profitability Under Threat
The BBC has up an article looking at the dwindling opportunities for profit on games in the coming years. Soaring prices for game development, the increasingly-entrenched segmentation of the marketplace, and overwhelming emphasis on sequels means that it's looking increasingly dire for game development houses. While the success of the DS means that there's a wide market for games on that platform (witness Square/Enix's movement of the Dragon Quest franchise), the phasing out of the PS2 means that for the moment there is no 'leading platform' for game creation. The article talks about how the various game companies are responding to this challenge, as in Microsoft's reliance on exclusive deals and Sony's absorption of development houses into their infrastructure.
This is just a prelude to the games industry lobbying for more DRM, less content control, tax breaks or some other corporate-socialism handout.
Why can't we have socialism for the little guy? Why is it always handouts for the ones that need them the least?
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
This article starts off talking about how it's hard to turn a profit writing games, and then uses a "solution" that a hardware vendor is using to sell their consoles as an example. What's going on here? Where's the story that goes with the headline?
Companies will get their costs in line. Either it will turn out that increased costs from games going HD will be a myth or become a myth as tools improve (most likely), or smart companies will know where to make tradeoffs to get their costs down. Many studios will fail and go out of business, which has been par for the course for ages. Ideally, they'd figure out that marketing and licensing costs are the bulk of the budget and take the money from there, but I'm not holding my breath.
A game is not entitled to make money due to some intrinsic 'goodness' value. If I spent a billion dollar to make the greatest game ever, I would expect to lose money on this because I don't think you can physically sell enough copies to make up the development cost. This means even the greatest game ever is not worth spending a billion dollar on it. If you make a really cool game that no one bought, maybe it's not as cool as you thought it was.
This necessitates a change in the way games are made. One of the fundamental problems is that we're building games in bigger, shinier forms, without streamlining our method of production. As our graphical capabilities increase, we will be tempted to include more and more content into our games. That 900-polygon character that took an artist 1 week to create now takes 2 artists 3 weeks, what with technologies like parallax mapping.
I have believed, and still believe, that procedural content is the answer. There is a limit to how much manpower a development team can consume whilst remaining profitable, and IMHO we're already at that line. We need to start letting the machines figure out our content. This does not necessarily mean complete and full generation of assets by algorithms, but rather that our tools need to be streamlined as such. Software like ZBrush have drastically reduced (for the skilled user anyway) the amount of time required to build high-poly models. We need more tools like this for textures, for all other aspects of game development. We need to let go of the manual shift stick and build more powerful tools that will take more off our coders' and artists' hands.
This also means the segmentation between game developer and technology developer. For years we've seen some companies stick stubbornly to building their own engines, a costly affair. It should be clear to developers by now that, if you are in any way serious about graphical horsepower, you need to license an engine. Building your own engine from scratch is no longer feasible if you want to get your game done on-time and on-budget. The industry will, in time, become the playing field of dedicated technology developers who license their engines to developers, much like Valve and Epic are doing now.
The gaming industry is holding onto archaic ideals. It is like the car factory that insists hand-built is better, and refuses to mechanize any aspect of their production. It is now suffering the consequences, and like it or not they will have to change.
The article focuses on the typical console game, a high budget sequel/licensed product that needs hundreds of thousands of copies to make money. In this environment the little guy can't make money.
However, the introduction of online downloading has opened up another avenue for the small time developer.
Games take as long as you want to make them take, and cost as much as you want to spend on them. Minesweeper, as we all know, is fun. It takes about two days to fully design, test, add "alternate modes of play", make decent graphics for, include crude DRM, and add to an online store (I know because I've done it). Total cost? In business terms, about £300UK ($600US) including the rent on your office. Now admitedly, the total earnings were $15US with no real advertising, but the point remains: make a game on a movie budget and you have movie-style effects, plot and everything else. Make a game on a shoestring, and it's a whole different ball game.
I know this is a really crazy idea, but if companies want to be successful, maybe they should focus more on making innovative games instead of following a formula for making profit.
This so-called "emphasis on sequels" doesn't seem real to me. I see the big companies pumping out sequels (EA being the most obvious), but I don't think they are doing it because it's what consumers want, only that it's easier to re-vamp a game than it is to come up with a new one. At least some people I know have gotten smart to this system, and if a new EA game comes out, they'll wait for the sequel cuz they know it's coming. Similarly, I buy every other FIFA game, since there isn't much of a difference between any two consequtive titles (not that there is that much more of a difference between any 3, but at least you get a graphics boost). The emphasis on sequels isn't something that is demanded by the market, it is created by the publishers. As a contrast to the EA games, consider Final Fantasy, where each game not only provides a different world, but a different style of gameplay, mini games, character development, etc. I know it's hard to change a sports game from year to year, but if you can't make anything new, maybe you shouldn't spend a lot of money making the same thing.
In a market where most games are just clones with different graphics, what do the companies expect? Come up with something innovative instead of remaking the same tired games. Katomari Damacy for $20 anyone? Innovation and a low price in box. So what if the graphics sucked. If you can't compete with the Gears of War in the graphics department, don't try.
As we look back at the most popular games, they are rarely sequels. Innovation is the key.
I've been waiting for this for a long time. Maybe we can get something besides yet another sequel, a movie spin-off, or a blatant rip-off of another game. Perhaps they'll have to settle for plot and gameplay (or at least just gameplay) instead of stunning graphics and no substance. As a proud new owner of a Wii (yay!), I have to say the graphics are good enough, maybe not a match for the XBox 360, but the games are fun. This matters most of all. Of course, new ideas are a risk, while sequels are a known quantity with an established market. I think that's how the marketing goes...
Sure I'm paranoid, but am I paranoid enough?
And perhaps it would be wise to stop developing new ones in crowded genres. There are games released every week that I would probably enjoy playing but I rarely get around to doing so, either I don't have the hardware or I'm still happily playing something else.
I don't think there can be a single person who played (I mean really played, not just for 25 minutes) every good, enjoyable, game that came out last generation on all three consoles plus the equivalent time period on PC and GBA, there just aren't enough hours in the day.
I can imagine that an FPS fan with a lot of time and money might have played every good FPS, but for the majority of us who like several genres and will play a really good game even if it's not the kind of thing we usually look for then it's just not realistic to keep up (particularly if you have a job).
This not only increases profits per game (not for the industry overall, obviously), it provides bigger player pools for online games and it cements us together better as a culture - I've had discussions with fellow gamers where the only games we found in common are very old things like Tetris. That would never be the case with films, books, music or tv.
That IS the flaw in the model. We the buyers don't DEMAND that, we just WANT a game with some FUN, decent gameplay and a relatively stable release. Instead we get the same fscking crap, redone with better graphics but lacking the fun, the fact that the developer spent 3 times as much remaking a crappy game, and 5 times as much advertising it, is not the consumers fault. Make a great game and you won't HAVE to advertise it...viral word of mouth will do it for you...
IMHO the game industry is falling into the same trap the music industry has, spending MORE producing less, and losing any sort of incentive to take a chance on an unproved game type or style, then blaming the loss of profit on pirating....
errr....umm...*whooosh* *whoosh* Is this thing on ?
The cost of making a game in the major categories is staggering when you look at what you're up against. But invent something completely different that's just fun to play and you can open up a whole new market. You can't win by making a new FPS, increasingly accurate physics and polymesh technology.
You're going to win because your game is just plain fun.
It doesn't cost a lot of money to make a game fun, it just takes a fun idea. If you insist on remaking the same games because you're afraid of loss, you've just painted yourself into a nice corner.
There seems to be this belief that HD games are somehow inherently more expensive to develop. PC's have supported "HD" for years and game development costs haven't spiraled out of control. Games are getting exceedingly expensive to develop because developers are becoming overly ambitious. Endless sequels are merely a symptom of a larger problem. Sequels exist as a means to reduce costs and to cash in on a popular franchise. This certainly isn't a recent thing: look at the endless Street Fighter clones.
By no means are developers ambitious in terms of unique gameplay. Rather, they're putting excessive amounts of effort into exploiting the latest graphics techniques, developing expansive storylines and introducing increasingly complex control systems. What I think they're trying to do is provide a more cinematic experience. They're trying to reproduce movies in a video game format. Hence the obsession with overly realistic graphics and the cinematic-type presentation. It's inevitable that games inspired by film will also command movie-sized budgets.
Needless to say, this doesn't necessarily translate into entertaining gameplay. I think many developers have lost sight of what constitutes good gameplay. However, I don't think they care. The average consumer is easily impressed by the cinematic patina contemporary games exude. Let's face reality, developers keep producing these games because they sell. The Wii demonstrates that there is a desire for something else. But Nintendo doesn't possess some sort of holy grail of unique gaming. The unique controller can only go so far. Many others have offered unique and compelling gameplay. PCs, outside of the FPS, RTS and RPG clones has offered tons of neat games for years.
Look at what indie developers are producing. And many of them are exploiting high resolutions to their fullest extent. Some of these games look phenomenal. Some have a unique visual style which enhances gameplay. I inevitably am drawn back to the Wii as compared to the other platforms. There is this prevailing opinion I see that expects the Wii to somehow solve all these problems. It won't. The system is hindered performance-wise and the controller while great for some games is nowhere near as flexible a device as some believe.
I predict that within a few years Nintendo will introduce an HD-capable Wii. I think it will be a smart move for Nintendo, but it will also mean anyone who currently owns a Wii and then gets the upgraded model will have likely spent $400-$500 on the two systems. Suddenly the pricing won't all that different from an Xbox360 or PS3.
I don't expect most large developers to change their ways. They may occasionally offer something different but the for the most part we'll see more of the same. Perhaps we'll see the game industry work more like the movie industry. Ultimately, the problem lies with the nature of business and the lack of consumers who can think independently.
It's the culture that they've cultivated.
I have a nephew that's 10 years old. Last time I saw him he was a toddler. His family flies into town and I ask if he likes video games and he says yes and figure a bonding moment is afoot.
At the time I was playing Megaman X 8. He thought it was kind of neat, but declined to play it. He pretty much declined to play anything in my library. I said a few things about the titles I had and what makes soandso a playable and good game, and the answer I got back was:
"It doesn't look real enough."
The industry has been favoring these amazingly realistic graphics and sound and marching upwards faster and faster with budgets but not taken such a big priority with gameplay. Ultimately it comes down to a lot of developers not caring much about it. You can't quantify gameplay in a screenshot or a one-liner on the back of a box. When video games started to be "cool" (let's be honest with ourselves: the cool kids weren't playing NES) was when graphics were starting to look "pretty good". The industry focus on eye candy has resulted in them painting themselves into a corner.
Literally. The diffused-reflection bump-mapped floor looks really really great. Too bad it's not any more fun to run across it.
More Twoson than Cupertino
Wha, huh? Are you saying there was no differnece in buying a PS1 and PS2 at launch (total $600) than buying a PS3? There is a massive difference between buying a console, then it's successor for x dollars than simply spending x for 1 console. Not everyone needs to buy the successor (or the original) to enjoy the vast library of games.
Also where did that actually come from? It seemed like a weird aside to your argument.
If you want to fix politics, eliminate campaign funding. Completely. No commercials. Only a slice of time on PBS (that's a purpose that PBS was originally designed for - a medium to reach everyone) with other stations also giving time as needed, such as for debates. (It's in their charters)
If you don't eliminate campaign finance, you continue to support the buying of politicians by business interests, and it shouldn't surprise you that those politicians place the interests of business ahead of their constituents.
The cesspool just got a check and balance.
Many studios still develop their engines and tools themselves, they even start from scratch with each game. Artists don't have experience with the tools, there's no proper documentation, everything is unstable, things often have to be redone to work with new technology. It's ridiculous if you look at it from a distance.
Using licensed technology is a way out, but it forces you to do things in a certain way that may influence the game in many ways you don't expect.
Solid reusable tools are going to be more and more important. Scripting language support is also good but often a bit overrated; proprietary languages often suck. Using a single language such as Java or C# for everything is better. The performance hit is negligible and all the trouble with constantly keeping the interfaces up to date is gone.
Development practices in the gaming industry are still very primitive compared to, say, web development. It is only a matter of time and some more failed megalomanic projects before this improves.
Publisher = Record Label
Development house = band
Same business model.
Oh... but this is Slashdot. Surely most /.ers will agree that this requires heavy government regulation - I mean, come one, we can't let the market fix this.... can we? Only an anarchocapitalist would believe that Adam Smith's invisible hand could fix this. To reiterate, come on.
Don't worry about the mule, just load the wagon.
Innovative games are for profit. They don't compete in the same arena as the other games, and come at the market sideways. If you want a WWII FPS, there are hundreds on the market and you have to put a lot of time, money and effort in differentiating yourself. You want a Dancing game? There are much fewer. You want a Guitar game? Even less. These companies don't try to impress you with xyz above the competition, they create a new market where they set the rules.
There is lots of profit to be made when you set the rules.
Beyond Good and Evil, for example?
how to invest, a novice's guide
Innovative games are for profit.
It kinda sounds like you are saying that as a counter, which implies that I don't think innovative games are for profit, although my whole point was that innovative games might be able to make a better profit than standard formula games. I was trying to contrast the innovative games with games that follow a formula like almost every EA sports game. Not sure if you were trying to counter, but I thought I should clarify my point in case it wasn't clear.
As for the rest, I definintely agree with you. However, there is still room for innovation in any genre (at least any I can think of at the moment). Consider the multiplayer FPS game where you could fly planes and helicopters while also running on the ground, or go back to the first game that allowed players to use vehicles. These innovations helped set those games apart. But more to your point, innovative games do get to set the rules (or innovations on well-established games change the rules), which can lead to a more profitable game.
I'm sure World of Warcraft is turning a profit.
Graphics is a bruteforce problem. Throw more artists, programmers and hardware at it and eventually you get something pretty. The problem is fairly well understood and instances brilliance (HDR, Bloom, Pixel shading, etc..) can be replicated. Most of the time it links back to math. Giving some framework to think around.
Gameplay is much different. Throwing more designers won't nessacarily make the game more fun. No amount of hardware will make somethign instantly fun (sex toys are a notable exception). Many innovation seem out of place in other venues and every accuses you for ripping an idea off. And math doesn't determine is something is fun so you have a ironically more artistic thought proccess to come up with innovative gameplay.
Given these graphics will always advance steadily while gameplay waits for the occasional genius to spurt once in a while.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
i wont believe that theres a video game market crash until netcraft says so.
Make a great product, and you won't have to advertise it...
Commodore's winning strategy.
http://outcampaign.org/
Interesting post (and a shame it wasn't modded so) That said, I'm curious how you would explain the success of the Nintendo Wii?
I'd say Nintendo's marketing directed to non-gamers for the system is a brilliant move, and the motion sensing is innovative enough to get conventional gamers interested.
;)
That said, my nephew isn't interested in one. Which is good since that's at least one person who won't potentially get their hands on it from the shelf before I do.
More Twoson than Cupertino
Which is? Using the Internet, it's possible to develop and market an original franchise to be sold on the Windows, Mac, or Windows Mobile platform using sweat equity arising from hobbyism. What is the counterpart to sweat equity for developing someone else's franchise or for developing anything on platforms other than Windows, Mac, or Windows Mobile?
Yeah, seriously. If there are at least 8 million people playing this game on PC and Macs, why do people keep insisting that PC is dead, and whinging about the lack of a "leading platform"? Whatever. I swear, some people have such a bizarrely myopic obsession with consoles that it's like they're wandering around with bags over their heads.
http://en.wikipedia.org/wiki/Dojin_softThis is your answer. http://www.escapistmagazine.com/issue/44/12Here is an article about it. Games like http://www.youtube.com/watch?v=kofnEdB8BlcTouhou Soccer, Melty Blood, http://www.youtube.com/watch?v=y1KxdbhLU0kImmateri al and Missing Power are great.
I don't think many game companies have the balls to make a game lile Touhou Soccer.
i wonder how the developers feel about BGE's market performance. it was slightly broader target audience than most games, but still mostly a gamers game. great stuff though.