Slashdot Mirror
Game Companies Face Hard Economic Choices
Hugh Pickens writes "The NY Times reports that the proliferation of free or low-cost games on the Web and for phones limits how high the major game publishers can set prices, so makers are sometimes unable to charge enough to cover the cost of producing titles. The cost of making a game for the previous generation of machines was about $10 million, not including marketing. The cost of a game for the latest consoles is over twice that — $25 million is typical, and it can be much more. Reggie Fils-Aime, chief marketing officer for Nintendo of America, says publishers of games for its Wii console need to sell one million units of a game to turn a profit, but the majority of games, analysts said, sell no more than 150,000 copies. Developers would like to raise prices to cover development costs, but Mike McGarvey, former chief executive of Eidos and now an executive with OnLive, says that consumers have been looking at console games and saying, 'This is too expensive and there are too many choices.' Since makers cannot charge enough or sell enough games to cover the cost of producing most titles, video game makers have to hope for a blockbuster. 'The model as it exists is dying,' says McGarvey."
As we discussed recently, OnLive is trying to change that by moving a big portion of the hardware requirements to the cloud. Of course, many doubt that such a task can be accomplished in a way that doesn't severely degrade gameplay, but it now appears that Sony is working on something similar as well.
When I worked at Atari/Infogrames, it was all about convergence with the Hollywood business model. Everyone was running around spending money like a Hollywood mogul. Takes only a few flops (*cough* Enter The Matrix *cough*) to send your business model into the crapper.
The solution is 2D games
Seriously.
The obsession with 3D pushes every cost through the roof. 2D artwork (in a lot of cases) is tons cheaper, and can be made to work on very low end machines. Good luck getting crysis to run on a laptop that didn't cost an arm and a leg, but it's very difficult to balls up a 2D game enough for it not to run on an integrated chipset.
The crysis devs even admitted that their main problem was a game that wouldn't run on so many PCs. 2D games not only run everywhere, but they are easier to understand from a control POV to newcomers to gaming.
They also reduce support costs a lot because if you aren't using cutting edge 3D techniques, you are less likely to get incompatibilities and inconsistencies with video card drivers and hardware.
Of course not all genres can work in 2D, but time and time again we see 3D bump-mapped pixel-shaded shinyness applied to games where it just isn't necessary.
Imagine World Of Goo in 3D. Would it be a better game? Of course not, it would be horrid, and would lack the charm and individual art style that makes a game like that so fresh and awesome.
Journalists and gamers need to finally realise that 3D, and high dynamic range lighting are not what makes a game fun. They make it expensive, and they can make it more immersive, but they do not contribute automatically to making a game fun, which is what it's all about.
DRM-free indie games for the PC and Mac: Positech Games
How much money does your current generation shooter's 3D assets (Including textures) cost to produce? Let's assume it takes a week to produce a high quality 3D humanoid actor, and another month to do motion captures and animations.
Lets break that down now: 1 month + 1 week = 25 work days, give or take. If we are not working overtime (because we are on schedule-- like that ever happens...) for 8 hours a day, which comes to 200 hours for a single employee in that time frame. If we assume that the dev crew has 3 employees assigned to this task, that is 600 work hours invested. If we tabulate this up with 'Crazy California Wages' (at least 20USD/hr), we get something around 12k to pay those 3 employees for 1.25 months, to produce and animate a quality 3D actor... (*ONE* actor)
What happens to this 12k asset after the game is released? It finds itself in a backup queue somewhere, drawing dust, and adding to corporate overhead, because that model and it's animations are 'yesterday's news'. (But dont anyone else DARE copy it!)
An absurdly simple solution to this problem is a creative development commons repository, into which obsoleted, or true public commons assets (Such as textures, models and animations from public sources) are shared between a consortium of interested corporations.
EG, only one partnered company need develop a 1957 Chevrolet classic, and the other partners can use that asset later with a very minimal licensing fee. In return, that company can draw from the wide selection of physique animated, havok physics boobie girl models and textures that will be in there, rather than having to make one themselves.
Such cooperation between vendors would enable high quality content to still be available, but would drastically slash artistic staff overhead.
Similar collaborations for AI behavior, and engine tweaks/modifications could be kept, allowing work to not be replicated many times between the interested parties, and would allow these companies to continue producing innovative plots, and environments, while drastically cutting the overhead costs.
Looking for a specific make and model of car? Check to see if a partnered affiliate in the consortium has already made one that will fill your needs-- Looking to resolve an issue with AI bots jumping out in the open and shouting "HERE I AM!!" when they should be doing pop-shots behind cover? Check the AI scriptlet repository to see if another AI programmer may have had insight before.
A game title is more than the sum of it's parts, and having a shared resource of stock parts would allow game companies to focus more heavily on game DYNAMICS rather than blowing all their budget on artwork, and technical issues.
However, I won't hold my breath that such an outbreak of common sense will happen any time soon, given the current trend to ever increasing levels of escalating aggression involving tactical IP portfolio warheads.
What did the cold war teach us about standoff stalemates where we have hordes of weapons cached away, "For security"? It leads to economic problems, mismanagement, and bankruptcy.
People never learn do they?
It's the Atari 2600 syndrome all over again. 2000+ games, the vast majority of which were cack. People just gave up buying and the whole market collapsed.
I want a list of atrocities done in your name - Recoil
From a purely economic perspective, where you can't sell enough units, and you don't make enough money to cover costs, you need to lower the price to drive sales and restore consumer confidence.
You see, there is a strange effect, I call the island of pricing stability.
On a graph of price vs units sold there is a sweet spot that extracts maximum net profit. Basic stuff. But to bolster the bottom line businesses often hike their prices in small increments. Short term this produces a bump to your bottom line as consumers tolerate the price rise, at least initially, which gets some smart guy who suggested it a bonus. Longer term sales take a hit as consumers make other choices, loose interest or merely spend less. Time wears on and your prices creep, overall you begin to loose gross revenue. It's not immediately obvious what is going on, it doesn't show up on short term graphs shown to the brass, nor obvious how to take corrective action (roll back that price change, cut costs, fast). Naturally everything from market forces to competition to alignment of the planets is blamed instead of potentially bad business decisions.
After a number of price increments, where the profits just seem to keep coming in and nothing is really going wrong, what you eventually reach is a island of stability in pricing. Even far above the sweet spot this is often a nicely profitable model, even if sales decline a little, cutting costs drives revenue back to the bottom line. It is even somewhat sustainable mid term provided reasonable scarcity is maintained, competition doesn't get the lead and demand holds out.
But there is one problem with this model. It's bollocks. This pricing island of stability is right on the edge of a steep slippery slope ready to be pushed off by competition or the slightest breeze of change from the market. Raise your prices further, for example, to try and raise funds for your lower than predicted bottom line, you can watch sales take a nose dive. In the overall picture, you just priced yourselves out of the market.
Now if you ever were looking for an example of the proverbial epic fail. How about a price rise when your sales are already failing in a struggling market with weary consumers that's hardly profitable for anyone anymore?
In the middle of a recession also? Surely this is madness.
After logging in slashdot still does not take you back to the page you were on. It's been that way for 20 years.
It's he same dilemma that faces Hollywood.
Yes they could develop small well-written movies, but they want to reach every idiot in the world, so they dumb-down the plot and boost-up the special defects. The game business has evolved into that same deadend. (sigh). Gaming was so much better in the 1980s when the graphics were primitive, therefore it forced programmers to focus on the fun. We got all kinds of off-the-wall ideas. Same with Hollywood, where you will find better movies in the "experimental" era of the 1920s and 30s.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall