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BBC Ponders Another Games Industry Crash
weirdguy writes with a link to a BBC article that poses the same question asked by journalists every couple of years: is the games industry headed for another crash? "Yes, gamers are snapping up the new generation of games consoles — Microsoft's Xbox 360, Nintendo's Wii, and Sony's Playstation 3 [PS3], but at huge cost to the industry. Hardware makers are losing hundreds of dollars on every console sold, and games publishers face an "increasingly difficult environment, as rising development costs and small user bases [mean] that return on investment in next generation games development is unlikely to be achieved before 2008," according to media analysts Screen Digest. More importantly, though, the video games publishers are facing a revolution of their business model."
Nintendo figured out the secret to not losing money. They make money. Crazy I know.
Nintendo doesn't take any loss when someone buys the Wii.
Microsoft and Sony are losing hundreds of dollars on each system sold, while Nintendo makes a profit on every console. This just seems like a sky-is-falling article that doesn't take into consideration the massive growth of the online and casual markets, as well as the huge growth of portable.
The main problem stems from the fact that there is just a constant deludge of first person shooters and racing games. The Xbox 360 is by far the worse offender in this regard. There seems to be little else on the platform worth looking at.
The other issue is that the cost of development is becoming so high now that devs are less willing to take risks on new IPs and gameplay styles. Look at Clover Studios - They made Viewtiful Joe, Okami and God Hand, all great games that did nothing but cause the company to fold.
I wouldn't be surprised if as this console generation moves on developers make more money from the smaller downloadable games on Playstation Network, etc. than from the big box retail ones.
THE HONOUR OF THE KNIGHTS - CC Licensed Sci-Fi Novel
There will be no Video Games Industry Crash. However, we may see a dramatic shift in the industry.
What we are seeing is the end of hardcore dominance of the industry, nothing more or less. The perceived demands of the hardcore are insustainable, driving companies to make consoles that lose them money in order to gain some ill-defined future benefit. Whether it is the companies or the hardcore themselves that are to blame for the previously shrinking industry is uncertain and largely irrelevant.
What we are seeing is the introduction of video games as a true form of mass media. Talk to anyone on the street and you will be hard pressed to find someone in this nation who hasn't read a book, watching a movie, or viewed a painting or photograph. What's more, each of these forms of media has subsections that cater to particular tastes. Video games have not been mass media because they didn't reach everyone, only an elite few who knew what was going on. Now the "casual" gamers and even those who do not game at all have been targeted, and they will be the driving force in the future.
Right we are in transition, and it's confusing people. Depending on the person, some hardcore gamers are afraid that the Wii and DS are the harbingers of the end. Will games like Guilty Gear, Counter-Strike, and Armored Core survive in an industry focused on the majority? Having been catered to for decades, the prospect of losing attention is frightening. However, the fear is unwarranted. Despite the fact that games like the Sims, Bejeweled and all manner of "casual" games have invaded and perhaps dominated the PC, we still see games such as Supreme Commander, Hellgate: London, and the odd MMORPG tax video cards in SLI and quad-core CPUs.
In the future, the majority of games will be like summer blockbuster films. This is not bad, because the volume of games will increase such that we will still see the same number of "hardcore" titles, including AAA ones.
There will be no crash, but there will be a paradigm shift/revolution.
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Ah, the perennial "is another game crash around the corner?" article. Always a good bet if you can't think of anything substantive to say.
The answer, of course, is no. The "game crash" of '83 marked the end of the game fad. Electronic games had become a novelty, and virtually anything would sell...and then the novelty wore off. And like the end of any fad, what was once cool became decidedly uncool for a time.
But something is only a fad once. Videogames are now just one more form of entertainment, competing with movies, TV, music, etc. The industry is transforming. Improved technology has driven up the cost of development, so that game production is more and more characterized by the same hit-driven economics that is typical of the entertainment industry as a whole, posing new challenges for the industry.
But at least we don't have to worry that everybody is going to simultaneously lose interest in videogames.
The BBC article seems pretty well thought out, and only mentions the word "crash" once, under a picture of Burnout Revenge. For the most part, it's an article about the alternative revenue sources that have been rising up to defray the additional costs of development, including advergaming, Korean-style online accessory sales, and cell-phone game tie-ins. They even go out of their way to point out that total game sales are expected to rise by 800 million dollars this year, even if the console transition will make it difficult to break even on a next-gen only title.
This isn't the worlds most accurate article about the state of costs and revenue sources in gaming, but it's a good overview of how things probably look from within a large publisher.
The ______ Agenda
Heres something which really caught my eye: Players will be able to create new levels for games and share them online. "Users could create revenue for games," says Mr Barton. "The potential for this is absolutely enormous". Step 1. Community makes maps, mods, skins etc.. for a game.
Step 2. Publisher claims it as there own IP
Step 3. Profit
This really annoys me. They can go **** themselves if they think I'm going to spend 40 hours programming something interesting for a game I enjoy just to have them take it and make money out of it to subsidise the inadequacies of their retarded business model.
Hole?
They spent roughly 4 billion on creating a console empire.
Biuying a console empire would have cost a lot more than that.
Put it out for the PC first or as a flash game on the web.
Once you are making some money from it get an office and then a Wii Developers kit.
Sort like what the creators of Bejeweled did.
The really big question is will Nintendo offer something like the XBox Marketplace for cheap downloadable content?
Once you start producing software for a living the cost of tools is really a pretty small expense. The real savings that the Wii offers over the PS3 and 360 is the cost of artwork and developer time. The Wii is just a super GC so if you have developed for the Gamecube the Wii will seem pretty much like the same old same old. The PS3 is nothing like the PS2 and the 360 is very different from the XBox.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
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You should check out The PC is Not a Typewriter or The Mac is Not a Typewriter for more bad computer habits that make designers cringe.
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