Jason Schreier: The Video game industry is not sustainable

[Ragona]

I found this tweet worth discussing:



So recently we've had a couple of studio closures (Visceral, Runic games, CCP) and of course the recent debate about AAA publishers shift to multiplayer service games with ingame transactions (lootboxes etc.)

Without falling into hysteria, there seem to be alot of issues with the industry being brought to daylight in the recent years:
- Flood of releases vs. slowly growing userbase
- Monetization issues of increasing AAA costs
- Crunchtime and other workplace related issues

I think its no secret top talent can earn much more in different industries, while also maintaining a healthier life/job balance. If the industry shifts further towards mass production of service games and the art and passion aspect of game development moves towards indie space, how does the industry keep top tier talent?

 

[Lego Killer Moth]

I believe that we're heading for another industry crash within the next 10 years.

 

[Bandage]

Not as long as budgets keep ballooning like they are.
Team size, development time, resources are all out of control.

 

[Sir Guts]

Sure its not but lets not forget that there're big companies that have been in this game for 30+ years and they're doing great. Sadly the victims of closure are the small studios that can be laid off quickly and easily no matter how talented they are. Its sad to read a closure of a good studio at the end of the day

 

[KZXcellent]

Things need to scale back.

 

[Thatguy]

AAA development might not be sustainable in its current form. But games themselves? Videogaming is a bigger industry than any other form of entertainment last I heard. Lots of players still making big profits.

 

[legend166]

I sorta agree with him. The current strategy of squeezing more money out of a shrinking userbase works great in the short term (for a few players) but I can see it coming back to bite in the long term.

 

[Danzflor]

This is very much true, and affects everything sourrounding the industry. Let's not forget all the times in the past decade where game journalist work for pennies (most of them free out of pure passion) and they job was discredit or not even credited at all.

 

[Patryn]

I fully expect the AAA industry to implode in the next 5-10 years.

 

[Heckler456]

I believe that we're heading for another industry crash within the next 10 years.

Click to shrink...

What kind though? The last one happened because no one cared anymore right, and profits plummeted or something? Meanwhile, Sony's killing it with like 700% increased profit.

 

[panama chief]

Maybe it's time these companies start consolidating. It's an idea I don't like much, but seem like the only way to go. Help each other out. Work on mid sized games.

 

[Ex Lion Tamer]

Does anyone know the budget of Breath of the Wild compared to games like Horizon or The Witcher 3? Just wondering how much less it would cost since it is on much more inferior tech yet is still considered one of the greatest games of all time. I have a feeling the budget would still be quite large though.

 

[The_Land]

AAA development might not be sustainable in its current form. But games themselves? Videogaming is a bigger industry than any other form of entertainment last I heard. Lots of players still making big profits.

Click to shrink...

Exactly. Video Games are not going anywhere.

 

[JazzmanZ]

Maybe not a crash but I can see AAA gaming coming to a halt for some studios

 

[Omnistalgic]

I would say society is not sustainable...

U.S debt keeps growing..

I can't go back to school without taking out a loan that would cripple my savings to payback.

Industries keep getting gobbled up by bigger ones.

Taxes, political issues, unemployment, standard of living...

So yeah, I'd say a lot of things aren't sustainable, but the Crash is needed first. Games can't go anywhere, I play them to not worry about all this other stuff lol

 

[Deleted member 5593]

Single player AAA games? Yeah that's obviously on its way out. Only indies can remain afloat in that sector when that time comes.

Mobile games + GaaS multiplayer games will probably keep getting funded.

 

[Lego Killer Moth]

What kind though? The last one happened because no one cared anymore right, and profits plummeted or something? Meanwhile, Sony's killing it with like 700% increased profit.

Click to shrink...

Yeah, I don't think that what happens will be nearly as drastic as the Atari crash. However, I can see some major players going under, and some commonplace business practices being reconsidered.

 

[Indy in the Fridge]

Get ready for skeleton crew studios taking 6 years to pump out a "AAA" title. Companies will reduce employee numbers and encourage crunch before they ever evaluate another area of the budgets.

 

[Eolz]

I disagree, but only because this is a really large and vague statement.
Some productions aren't sustainable, some are. Doesn't matter the size of the production itself.

 

[Blyr]

I wouldn't say the industry is unsustainable, but AAA may very well be. Only time will tell, but I can see many of the current publishers continue chasing the pie in the sky, eventually leading to their downfall, while the current smaller publishers slowly rise and take their places. It's a slow, natural order of things. Isn't Devolver Digital growing larger and larger each year? I believe they're publishing an increasing amount of games, it seems to only be a matter of time before they slowly become a AA publisher, or larger.

We also hear of more and more smaller indie studios and increased success with smaller titles, with a studio like Larian putting out Divinity Original Sin 2, which is being touted as one of the best RPG's of all time (which I'd be inclined to agree) and I could see them slowly over time rising to fill a AA or AAA place in several years time. It's the circle of life. The old will die, and the new and young will rise.

 

[TyGuy]

Doom and gloom has been a forecast forever. Studios close all the time.

 

[TreIII]

AAA development might not be sustainable in its current form. But games themselves? Videogaming is a bigger industry than any other form of entertainment last I heard. Lots of players still making big profits.

Click to shrink...

This.

AAA (and higher) was due for a shake up, anyway. Meanwhile, there's still some companies at the "mid-tier" (like Koei Tecmo) that continue to be very profitable in their own niche, let alone how indies are doing.

Either AAA finds a way to adapt, or it'll eventually fall to the wayside and be replaced by the next thing that finds itself at the top of the food chain.

 

[Plumpbiscuit]

I just shake my head everytime somebody says the industry is headed for a crash, it's the biggest money making entertainment industry for fuck's sake.

 

[Bandage]

Does anyone know the budget of Breath of the Wild compared to games like Horizon or The Witcher 3? Just wondering how much less it would cost since it is on much more inferior tech yet is still considered one of the greatest games of all time.

Click to shrink...

Mid last year they reported BotW would profit at roughly 2 million sold.
So probably not a huge budget, but certainly one of the largest Nintendo has seen.

 

[mutantmagnet]

Sure its not but lets not forget that there're big companies that have been in this game for 30+ years and they're doing great. Sadly the victims of closure are the small studios that can be laid off quickly and easily no matter how talented they are. Its sad to read a closure of a good studio at the end of the day

Click to shrink...

Get real. News breaks when large studios close, not small ones, unless they are being lead by a very high profile developer on the same level of Kojima or Levine.

 

[Interested Observer]

So-called AAA development mightn't be sustainable. But there are tons of Indie and smaller devs who are making some top class games and they aren't going anywhere.

Obviously I don't want anyone to lose their jobs but if AAA games went away overnight, I would still get a massive amount of enjoyment out of this hobby.

 

[Interficium]

Gamers: If you don't make a game on par or better than the Witcher 3 we will wait until it's 75% off.
Also Gamers: AAA is out of control! The industry needs to scale back!

 

[XaviConcept]

Its a bit of an overreaction. Some policies have been there since the 80's so it IS sustainable. Just because you find these things out now doesnt mean they are new.

AAA games need to focus on tool and engine creation in order to lower costs, new generations of management need to rise up and take power from leaders who have never made games and we need to keep exploring new areas of development in order to reach new audiences.

More people than ever before want to make games and more people than ever before want to play them. AAA may get the headlines, but its not the majority of the industry.

 

[Deleted member 4552]

It's absolutely sustainable.

Practices may or may not be, but video games make money hand over fist, and where there is money to be made...

 

[kpaadet]

Aren't most of the big publishers along with the 3 platform holders doing great? Sure some studios close and people get fired from time to time but how is that unique from any other industry?

 

[GUNDAM STARDUST]

The industry is oversaturated and there are a shit ton of games. Not all can be successful. The industry is fine but entry is a risk. The big guys are eating. Uninspired titles that can't capture the people won't be profitable. It's just like the movie industry.

 

[Chae3001]

The industry will change, most certainly. I just don't see things completely collapsing. It's going to be a lot harder to get classic AAA single player games without some sort of multiplayer element. Solo play is going to be an increasingly indie experience, where it's going to take artistry and skill to tell a great story, versus brute force mo-cap and massive art teams creating photo-realistic vistas.

 

[Viewt]

As someone who dipped their toe in and ran, as fast as I could, away from it, you really need to LOVE it to justify the lifestyle burden of working in that industry. Why on earth would you take less money to work in such an overwhelmingly dysfunctional environment, unless it happened to be your life's passion? I admire those folks. That's real dedication. But I love work/life balance too much.

As someone who just likes to play games from time to time (I don't think I've been more than a casual player for 8+ years), it's a strange thing to consider. I feel like I'm enjoying the end product more than I have in years, but yeah, doesn't seem sustainable when so few business models actually work. So much of it is dependent on happening to get that lightning in a bottle fusion of great reviews and enough word of mouth to (however briefly) dominate the discussion. Yeesh, that kind of pressure is insane.

I really feel like the industry hadn't adequately prepared for the jump to HD. Some combination of assets needing to be so much more intricate (and therefore costly) and a narrowing scope of interest onto "AAA releases."

Hope it works out, video games.

 

[middlegray]

Outlandish expectations for game sales keeps ringing in my ears--the Square Enix and EAs of the world wanting 9 million installs of a mid-tier game and laying off teams if such goals aren't met, is a house built on sand.

 

[John Omaha]

No way, we need our OMFG cutting edge next-gen Avatar quality graphics no matter the consequences.

 

[Htown]

I believe that we're heading for another industry crash within the next 10 years.

Click to shrink...

Nah, the industry is too well-established for that to happen.

At worst we'll see a significant scaling back on the race for bleeding-edge graphics and billion-dollar production values.

 

[Vadara]

Even if the game industry does crash, AAA will be back. There'll always be room for gaming's equivalent to summer blockbusters in film--who knows what those'll look like in a decade though.

 

[Deleted member 249]

I would amend that to 'the western AAA gaming industry is not sustainable'

 

[HardTimesFamilyPride]

Been saying this for years. Maybe I won't seem so crazy for caring about how sustainably a studio or publisher runs their business anymore.

Maybe it's time these companies start consolidating. It's an idea I don't like much, but seem like the only way to go. Help each other out. Work on mid sized games.

Click to shrink...

Consolidation is not healthy for an industry either, and can be a sign that disaster is imminent.

 

[Panther2103]

Extremely long development cycles with insane budgets for voice acting and huge teams are going to probably go away for a while at some point, but I can't see things gaming related crash, it's too hot right now.

 

[Paul]

Doom and gloom. This is the beauty of the market though. It selfcorrects. If there are too many companies making games and not enough customers, then some companies will close and those people will have to do something else. Market will sustain what it can sustain, as always. It will never crash completely, unless everyone finds a different hobby.

 

[Skux]

Sounds like fearmongering. The causes of the 1983 crash were tied up in industry-wide events. A few studios closing is not going to bring down the whole thing.

If anything, video games are in a better spot for the future than the film and music industries.

 

[L Thammy]

I think the industry will survive in some form or another, but the arms race and open world numbers game might collapse. Larger games will become more a tool to create franchises; they'll make their money through less costly spinoffs and such.

 

[Interficium]

Gamers are very anti-crunch-culture and "devs should unionize!"

Until the first story comes out that <insert AAA game here> doesn't have something like HDR mode because it would have required crunching or overworking the dev team. Then it will be "they hate their customers" and "lazy devs" all the way down the line.

 

[H.I.V.E.]

I would amend that to 'the western AAA gaming industry is not sustainable'

Click to shrink...

This.

 

[Crayon]

Bring it on. Videogaming will survive and be better for it.

 

[Netherscourge]

Loot Boxes will save us.

 

[raketenrolf]

I just thought about this lately. So many new releases every week for every platform. Rising cost of High Budget titles. Many big games don't feel like a polished "complete" product to me but more like patchwork. Probably because hundreds of people are working on game at a time.

So many overlooked games. I even skip some games because I think I can get a better experience with a similar (as in similar mechanics) game.

 

[Ex Lion Tamer]

Mid last year they reported BotW would profit at roughly 2 million sold.
So probably not a huge budget, but certainly one of the largest Nintendo has seen.

Click to shrink...

Thanks for this info. Would be interesting if more companies were willing to slow down on cutting edge graphics etc to keep budgets from ballooning because clearly a game doesn't have to be cutting edge to be revered or even sell in the millions but its a very precarious line that only a few companies like Nintendo are adept at managing.

 

[mutantmagnet]

Mid last year they reported BotW would profit at roughly 2 million sold.
So probably not a huge budget, but certainly one of the largest Nintendo has seen.

Click to shrink...

Yeah but keep in mind historically Nintendo has been noted in the industry for having the highest return per employee for decades. Their management is very smart and experienced at doing this.

OTOH that's not the only way to be successful, Ubisoft has the largest headcount out of any studio and they don't nearly get as much bad mouthing from employees like EA or Take 2. That's partly because Ubisoft does have something resembling a respectable benefits package inspite of their huge size. At the same time this huge size I feel has tainted how Ubisoft has designed their biggest games along a very similar template.