Could we could see a video game crash similar to what happened in 1983, in the somewhat near future?

[Video Games Are Dumb]

it is, but when most people talk about it, they assume it was all games, not just consoles. its worth stating that it was just console just to clear that myth up.

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That's not quite true. Though consoles were a self contained crash, arcades also suffered from negative reputations and even some local legislation. Sure, they still existed and many were popular. But you weren't going to find Pac-Man cabinets in grocery stories like you used to.

 

[Tokklyym]

Maybe a big publisher will break up and sell off and a couple of big name franchises will stop releasing annually. Maybe AAA games become so cumbersome and costly there are less and less every year. Maybe one of the consoles doesn't survive the next gen.

Not a crash.

 

[eathdemon]

That's not quite true. Though consoles were a self contained crash, arcades also suffered from negative reputations and even some local legislation. Sure, they still existed and many were popular. But you weren't going to find Pac-Man cabinets in grocery stories like you used to.

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yes, but pc games were not only doing fine, but growing, and thats what I meant.

 

[Tokklyym]

That's not quite true. Though consoles were a self contained crash, arcades also suffered from negative reputations and even some local legislation. Sure, they still existed and many were popular. But you weren't going to find Pac-Man cabinets in grocery stories like you used to.

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This is a great observation. In Canada there were a lot of video game bi-laws that took cabinets out of stores and restaurants. Arcades were the only place to play games, along with maybe pool halls and bowling alleys.

 

[SMD]

The games industry is too global to suffer a crash like the one in America. You might see a reconfiguration rather than a crash, where the transition from traditional games publishing and platforms to new ones provides opportunity for new market leaders to emerge.

 

[Deleted member 5864]

Activision, the company that just paid a CEO 15 million, is doing bad ?

No ... everyone is doing pretty good and games are breaking records as we speak

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That was the CFO. The CEO is getting around twice that.

 

[Stouffers]

Not with Nintendo farting up the place with reasonably budgeted goodness.

 

[Pokemaniac]

Video games are too big for anything as big as the 1983 crash to happen again.

I do think certain segments, particularly AAA, are at a pretty high risk of a crash right now, though.

 

[Deleted member 10629]

The PC alone will prevent that from happening, if such thing ever happened.

 

[hibikase]

The 1983 crash was caused by the assumption that consoles were a fad. There's literally nothing about it that would apply to today's industry.

 

[bionic77]

The 1983 crash was caused by the assumption that consoles were a fad. There's literally nothing about it that would apply to today's industry.

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The 83 crash happened because most games on consoles were shit. Quality control was horrendous.

Gaming today is nothing like it was back then.

If a crash happens (I don't see that happening) then it would be for a entirely different reason than in the 80s.

 

[Hyun Sai]

Yes. Apex is even killing the video game industry.

 

[Z-Beat]

I don't think so. Gaming's a much more stable and regulated market than it was back then. You'd have a rough time overloading official platforms with crap.

 

[Amauri14]

No that's not happening. They are still making millions in profit, is just like always they all are setting unrealistic expectations.

 

[Pyro]

I think if it were to happen (and I don't think it will), it would be a relatively small crash, nothing like '83.

As investors expected return increases in tandem with always rising budgets, perhaps the bottom will fall out and a company will shutter or drastically restructure itself as investors pull out deciding it's not worth it.

 

[Pixels]

I think things like Game Passes and Streaming of the future are real threats to profitability.

 

[MrMephistoX]

These companies aren't losing money. They're just not making as much money as their investors are (unrealistically) expecting. That's why the stocks are tanking.

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Ding ding ding. It's the parasitic effect of venture capitalism: it destroys everything you love and moves onto the next host. Further studio consolidation and closures are going to continue to happen though just like the film industry.

 

[Deleted member 17210]

I don't think so. Gaming's a much more stable and regulated market than it was back then. You'd have a rough time overloading official platforms with crap.

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There's tons of shovelware today. The idea that an abundance of shitty games causes a crash was always just a theory and an excuse for first parties to gain more control.

 

[Z-Beat]

There's tons of shovelware today. The idea that an abundance of shitty games causes a crash was always just a theory and an excuse for first parties to gain more control.

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ET ain't the only game in that hole

 

[Aftervirtue]

The PS Classic fiasco says maybe... lol

But in actuality the gaming industry has what I would call "blue chip" companies and franchises. Mario, Pokémon, Zelda, Final Fantasy and so on, they will withstand whatever short term recessions happen to the industry.

 

[Kill3r7]

Not likely but the circumstances could change where it could become reality for a short period of time at least at the AAA level.

 

[DOA]

although we see same issues happening here (failing management, that causes waves of jobs losses), there are still many other companies, that will keep the industry floating, and successful.

instead of one major system, like the atari in the old days, now we have several systems, which are actually selling quite well, and we always have the PC and mobile as backup, for developers to invest in (systems which don't depend on any specific company)

 

[Detail]

I don't think a crash in this old sense of the word will happen but I do believe that we are going to see companies like EA (the worst offender) being forced into making drastic changes to current IPs and releasing more original IPs going forward.

The problem is, a lot of franchised games such as Battlefield, FIFA, Fallout etc are suffering from fatigue because of lack of innovation or just poorly implemented ideas, micro transactions and loot boxes have also got major pushback in anything but the FTP space as well and I think the obsession with companies and trying to squeeze these models into full priced games is actively harming their products imo.

 

[Outtrigger888]

Look at last gen and how many studios got shut down it was an enourmous amount. New studios open, all three consoles are having success in sales or services. Gaming is in for the long haul

 

[Yasumi]

I wouldn't be particularly bothered if AAA crashed for a few years.

 

[Halabane]

I don't know but I have been thinking about this.

Probably not a crash but correction in the industry. Yes I know today they are making money. The question is will it keep going. That's all stockholder want to know. Some of what I speak of is over the next ten years not next year. This is all about stocks. Games are just a commodity to stock holders, which is what this all about, its not about gamers.

Already seen some of the old names disappear (Lionhead, Bizarre,Acclaim,long list) and some have headed for the exits (F$%^ Konami...oops they are doing quite well business wise, a record year, thanks for asking ). The stock market has learned that there is only so much growth in video game stocks. Guaranteeing great returns and increases year over year is hard (EA, Activsion/Blizzard). Its insane they even tried for so long.

There are other things in play too. Not going to happen next year but longer term. When you start to realize there will be fewer young people to play games versus how many older folks there are out there (baby boom bubble and some Asian countries not having kids, think what has been happening in Japan for many years for a declining population, that is going to happen here and China soon). If the big demographic is young people for the gaming business with fewer of them buying is not going to help attract stock holders. Stock holders will go elsewhere. Probably senior health care and funeral homes. Govt. debt and money the baby boomers will be taking out of stocks (which will decrease values) and Social Security to pay for old people diapers will take all your free cash any way. :(

In case you think I am BS you: Some fun facts from the US census: "By 2030, one in five Americans will be 65 years and older ,by 2035, we project that older adults will outnumber children for the first time in U.S. history ( 2030: 21% of the US will be 65, today its 15%", We are also living longer so they will be taking money out of the system for longer). https://www.census.gov/content/dam/Census/library/publications/2018/demo/P25_1144.pdf The report also says the only reason the US won't have a population decline is because of immigration, not because of natural births. Fun reading! For China: https://www.bbc.com/news/world-asia-china-46772503 There goes the mobile market!

The crash was mainly because of stupid business moves by Atari (why it was called the Atari Shock). Unlike 1983 there really are only 4 or 5 choices. Back then there were probably more than dozen. So that at least means you have a less fragmented customer base. Which means it won't be so bad as '83 but it will change. We could easily lose one console. If one of them left would it matter? Again not this next generation coming but the one after that (2027?). The games would just go to the one that is left, it would create a bit of a monopoly which I don't think anyone wants so maybe hope that all that consoles do well and stay. Maybe that would keep things profitable enough for investors.

What you will have left is a few AAA companies that will make the big shooters and sports games. MMOs...I don't know what will happen to them, maybe old people will want to play them. Then you will have a small bunch of AA games devs making action games. The RPG and Puzzles will be made by small indy developers who if they sell 50-100k units more or less can make a living.

Not hoping bad things happen but just not seeing outside money wanting to support this type of activity for the returns they are going to get. Especially with all that sweet wheel chair customization business just sitting there. If loot boxes and other revenue streams are not acceptable by gamers the only thing left is to raise prices or leave the industry like Konami or what they are doing right now in downsizing their businesses. At some point that effects content. Which then effects sales. So gaming is not going away, its just going to get 'right sized'.

The population stuff is based on numbers so thats going to happen. What investors do? Is any ones guess. But change is in the air.

Oh and yeah I am sorry what my generation ( I am at the end of baby boomer age) did to all of you, specially the kids. Really wasn't my fault I tried but ... yeah...sorry. Remember to vote.

 

[Xx 720]

I don't think so but the industry is definetly changing. Between digital, free to play, subscription and mobile, the market for buying a game full price at retail is shrinking. This February you have games like Metro and Far Cry going against Apex (free), Anthem ( available w cheap subscription), Crackdown 3 ( cheap game pass sub), not to mention perennial free games like Fortnight.

 

[Kudo]

Nope.

 

[SprachBrooks]

I swear people have been discussing the 'next videogame crash' for the past 10 years, when in reality - at least looking at balance sheets - companies are making more money than ever.

 

[Frunkalicious]

It depends on how the next financial crisis will hit the games industry. It will absolutely have an impact and a bunch of big publishers collapsing is for sure within the realm of possibilities, since most are publicly traded companies.

But even so, I think indie games will be around no matter what, even if we could end up stuck in the 9th gen for quite some time.

We'll know within a decade how it all plays out. Yay!

 

[Eoin]

We've literally just had a crash similar to 1983.

When people ask about a repetition of 1983, they're normally considering some kind of industrial apocalypse, but as many other posts have covered, 1983 wasn't like that. 1983 was a sudden severe and consequential slump in one market sector. So on the understanding that we're not actually looking for an industry-wide collapse, but a very rapid decline in a portion of the market, it's easy enough to see that there are modern equivalents of that.

The handheld market had a total scale of ~235m units in the days of the PSP and the DS. Total 3DS + Vita sales will probably top out at ~100m. As of now the only handheld selling in worthwhile numbers is the Switch and that's partly a console. Even if the Switch is enormously successful, it's unlikely that 100m people will be using it as a handheld. So the market for dedicated handhelds has gone from 235m down to at most 40% of that amount, and most likely even lower. That's an enormous decline that's largely limited to one specific segment of the market, which is what happened in 1983.

 

[Kaeden]

We've literally just had a crash similar to 1983.

When people ask about a repetition of 1983, they're normally considering some kind of industrial apocalypse, but as many other posts have covered, 1983 wasn't like that. 1983 was a sudden severe and consequential slump in one market sector. So on the understanding that we're not actually looking for an industry-wide collapse, but a very rapid decline in a portion of the market, it's easy enough to see that there are modern equivalents of that.

The handheld market had a total scale of ~235m units in the days of the PSP and the DS. Total 3DS + Vita sales will probably top out at ~100m. As of now the only handheld selling in worthwhile numbers is the Switch and that's partly a console. Even if the Switch is enormously successful, it's unlikely that 100m people will be using it as a handheld. So the market for dedicated handhelds has gone from 235m down to at most 40% of that amount, and most likely even lower. That's an enormous decline that's largely limited to one specific segment of the market, which is what happened in 1983.

Click to shrink...

Just a curious question since this has come up a few times, did the OP make you think I questioned if a total collapse would happen? If that's how people took it, that's not what I was asking at all. Was simply asking if it could be similar, in that some companies would go bankrupt and global sales would fall off a good bit for maybe a year or two.

 

[nextJin]

I don't believe so, there are still QA and testing done across the board. Yea some titles slip through but the biggest problem will be increase costs in development.

Either games will get more expensive, GaaS will become mainstream or console manufacturers will have to develop lower cost initiatives for indies and A-AA developers.

Maybe 5% off the top for digital games sales or something for indies.

 

[Bioshocker]

Not really. If anything it should've happened when smartphones and tablet became each man's posession (obsession), but instead of being the end of AAA console games, it just made the industry even bigger and more diverse. Of course certain companies may die, but that's just the way market economy and capitalism works.

 

[Majukun]

the crash came mainly because the business model was hilariously bad,so i doubt it will happen again.

 

[Barrel Cannon]

Companies back then were treating game creation a lot different than the huge publishers today are.

 

[khamakazee]

There are less publishers but I don't think a crash is coming. What I do think is game development will cotninue the model of GaaS for the AAA titles.