Financial Issues May Force Changes On Games Industry

krou writes "According to comments made at the Edinburgh Interactive conference, operating costs of making games are spiraling upwards, and there has been 'significant disruption' to the games industry's business model. Games are getting much bigger and taking longer to develop, the console market is fragmented, and the cost of licensing intellectual property has gone up. All of this, says Edward Williams from BMO Capital Markets, means that 'For Western publishers, profitability hasn't grown at all in the past few years and that's before we take 2009 into account.' Recent figures suggest game sales have fallen 29% over the last 12 months. While westerners still relied on putting games on DVDs and selling them through retail channels, 'Chinese developers focused primarily on the PC market and used direct download, rather than retail stores, to get games to consumers,' and the lack of console users 'meant developers there did not have to pay royalties to console makers.' Peter Moore of EA Sports said that significant changes will come in the future, particularly in electronic purchasing of games."

Comments

Not necessarily a bad thing

[Anonymous Coward]

I admit that I'm probably in the minority on this, but I haven't been happy about where the game industry has been going in the past decade.

The big budget phenomena has been the very thing that's lowering my enjoyment of games. IMHO, the obsession with graphics, sequels/IP and marketing (all big budget things) has detracted from the biggest part of games: gameplay.

Perhaps this will be an opportunity for the game industry to take a step back and reevaluate their approach to development. I, personally, would very much like to see developers choose a route of detail, gameplay and innovation rather than releasing the same game every other year with improved graphics.

But what do I know, my ideal game is Dwarf Fortress.

Good thing, too

[puroresu]

The cost of licensing IPs has gone up? Then stop relying on licensed IPs and start making compelling games that people want to play.

Every year there's a new Tiger Woods/NFL/WWE game, virtually identical to the last offering with a few player updates and token changes to the control system. Sorry, but I prefer actual depth over the latest and greatest graphics and accurate sports team rosters.

A lot of developers could take influence from the greatest pro wrestling game series ever devised. Concentrate on making a fun game and make it customisable enough that the player can change it to accurately represent a given league/company/tv show/movie/comic book (delete as required).

Consumers should change too

[interkin3tic]

It would be nice if economic troubles caused gamers themselves to be more selective about which games they bought. A few years ago when I worked at gamestop, most of the customers (children especially) seemed to buy games based ENTIRELY OFF THE BOXART. "Hey, I have a PS2. Hey, I enjoyed the movie 'fight club". Hey, this box which appears to have been the first game I picked up is Fight club for the PS2. That's GOT to be a good one!" Many people are apparently buying wii games at random, the effect being that most of the games for the wii are barely playable. Developers wouldn't make movie-tie in games if they didn't sell. It would be great if the economic troubles really put a damper on people buying games on impulse without reading a single review to tell if the game was halfway decent, or shovelware.

Then again, I'm pretty sure even if that 29% decrease were entirely due to throwaway games, the industry would still follow the path of least resistance. Maybe they'd just make ONLY worthless games.

While I'm making demands of millions of people who wouldn't change even if they did read this post, it would be nice if gamers were more supportive, or at least more forgiving, of games that try to do new things. A lot of "hardcore" gamers get very entrenched opinions about what a game should and should not be according to genre. It's like if moviegoers complained that a movie wasn't formulaic enough.

That's the way it's supposed to happen.

[psnyder]

This is the natural way it's supposed to happen.

Graphics
When SNES came out, the fact that it looked so much better than the NES added to the enjoyment. Now graphics are at a point where we can move characters around in something akin to what we'd see in a CG movie. We've hit a peek where cartoonish graphics can't really get much better.

Expansiveness
Next we have huge sandbox games. Again we've hit a peek, where the worlds are so expansive that by the time you've explored everything you're either addicted (like an MMO), or you've spent so much time doing the same things that the gameplay becomes repetitive.

Complexity
Then we've got games that take months to learn all the possible moves and combos.


Flair is no longer as important
So the old adage of more is better is no longer valid with video games. We've hit a peek in many areas where more is simply not necessary. Now we can focus specifically on what makes something "fun" besides the flair.

This is why the Wii is so popular. And as technology keeps getting better, it becomes easier and easier for independent developers to produce graphics, game play, and complexity that are passable, so that audiences will just focus on if it's fun or not.

Of course big game companies may soon be in trouble. A lot of their main commodities (graphics, expansiveness, complexity) are getting easier and easier to reproduce to an appropriate level. This makes what they produce less valuable. It's progress.

Sins of a Solar Empire

[Xelios]

Didn't Sins of a Solar Empire have a budget of just $1 million? Didn't the game sell more than 500,000 units? Wasn't it a good game? Maybe other developers should follow their lead, and for the record not every game has to be ported to all 3 consoles to make money.

Re:Looks like

[Ren.Tamek]

The delicious irony is that publishers and developers were the ones who decided to abandon the PC games market. There's 'too much piracy' there they say, throwing away millions in sales from the many loyal PC fans worldwide. Now they're telling us that console royalties are too much money? Well, I can't have too much sympathy there; they've pretty much made their own bed, and are complaining that they have to lie in it.