Jason Schreier: The Video game industry is not sustainable

[Furisco]

But people loooooove these cinematic games with beautiful graphics, awful framerate and no depth... Of course games will take a long ass time to make and have a huge budget behind it with the publisher expecting a shitload of sales in return.
I don't see things changing anytime soon considering how much people love these games and complain about bad graphics when games don't look like real life or complain that it's too dificult when the game doesn't play itself.

Things need to scale back a little bit, but they won't.

 

[Captain of Industry]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

 

[Superking]

AAA development costs are indeed a problem, but enough to crash the industry? I feel like we have enough indie and mid tier developers right now to prevent such a thing from ever happening again.

 

[Ramuh]

I think we have to accept a lessening of AAA single player experiences, since most are focused on a sale of a game plus any kinda of micro transactions (i.e. lootboxes) they can fit in. This is facilitated usually by some form of multiplayer. The key they have learn is to wrap it up in a pretty bow like free to play games to sell to you. They are beholden to investors in their companies, who expect profits/dividends.

 

[Deleted member 5727]

Oh, sure it is, Jason. Let's everybody just relax.

 

[Deleted member 888]

I've been playing Andromeda recently as I got it dirt cheap and all patched up it's been decent! Just cleared Eos. The writing isn't as good as the earlier Mass Effects, and I don't just mean things like my face hurts. Overall, so far, it's just weaker in all departments for writing/characters. The characters are pretty damn generic and boring to be honest.

However, gameplay is better and also production values are still quite high. The later is relevant to this topic. A game that has taken 5 years to make, had a massive team and no doubt cost a decent whack, critically and commercially failing. Sure, this isn't sustainable.

Part of that is on EA though, as this project was mishandled and such an expensive and large franchise should have been in better hands. I think I'm going to enjoy my experience with this game more than I thought, but the point is I waited till it was dirt cheap due to its critical reception and feedback it didn't live up to the lofty heights of ME1-3. You can blow stupid amounts of money on graphics, voice acting, the engine, and open world and large helpings of content. However, in a SP game if your story and characters are lacking, as is the overall script, you risk people not buying. Some devs and pubs need to go back to remembering the basics of what counts most.

 

[ArmadilloGame]

AAA development costs are indeed a problem, but enough to crash the industry? I feel like we have enough indie and mid tier developers right now to prevent such a thing from ever happening again.

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I feel like a lot of people view the AAA industry as the video game industry. It may not be where all the games are, but it's where most of the money is. If it collapses (and I agree it's on a path to), video game investment may take a freefall. And without seed money, fewer and smaller games get made. It's a cascade effect of investment that would be felt hard throughout the industry.

Indies and first parties can build things back up, but the hit will be harder than some in this thread think.

 

[DarkDetective]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

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The margin is higher on digital games, so it definitely would help. Especially for first-party games, because console manufacturers own the storefronts themselves. It doesn't solve the problem tho.

Regarding trade-ins, I think most people who buy used games do it for the reduced price. If games go digital-only, they'll probably buy those games on sale (which they'll go anyway). The difference is that the margin goes to the publisher of the game instead of the store where that person buys the used game. However, that's just the demand side of used games. What will happen to the supply side? Clearly, those who trade their games buy games as consumables with a reduced price in mind from trading the games in, despite buying at a higher price. Will those people just buy the game at full price and that's it, if the game is digital-only? Will they wait for a sale? Or will they turn to pirating games because the games are getting too expensive? I don't know, but it doesn't solve the current problem of rising costs and stagnation on the demand side anyway. It only extends the life of the current model a little bit (maybe).

 

[Deleted member 2785]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

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That would be a terrible idea for the market.

A segment of the gaming audience relies on trade in credits or money from selling games they've finished in order to fund new purchases.

The market is hurt by a move to digital only far more than it is helped.

 

[TheLittlestHobo]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

Click to shrink...

I'm happy to take a risk on buying a physical game I might not like because I know I can trade it back in for most of the price and swap for something else. Can't do that with digital games so I wouldn't buy at full price.

 

[Ushay]

I don't buy it. Video gaming is the biggest entertainment industry out there. Plus digital buying habits are changing things already.

Studios close all the time, it's a natural (yet unfortunate) part of competition.

 

[Ogodei]

Is anyone in the industry floating the idea of increasing up-front prices on software? $60 first became the norm 10 years ago, but $60 back then is worth $70 today on inflation alone.

 

[ShiftyHermit]

While I agree that the current model for AAA has a ton of problems I think they are self inflicted by either the publisher, developers, or both. Reading Blood, Sweat, and Pixels only confirmed that there is a ton of mismanagement and wasted time relating to a lot of projects. I think the current AAA landscape suffers far more from that aspect.

Weak game pitches that do not have a defined concept, core story, gameplay shouldn't be greenlit. I know that movies and video games differ greatly but I think the industry would benefit if they went more to a script model. Have the core script of the game laid out before approval and starting production, unless the developer can produce it's own ip.

I know these are only a couple of issues faced in the grand scheme of things, but why wouldn't you try and make the system better, if even marginally.

 

[Avatar Korra]

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.

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This is what I wondered if the industry ever unionized. I think workers rights takes priority. But makes me think under the current system, unionization would end AAA scope games. Or we wouldn't be seeing releases every 2 Years. They would be further apart.

And that's not taking into account this article and all the problems already existing.

 

[dead souls]

Is anyone in the industry floating the idea of increasing up-front prices on software? $60 first became the norm 10 years ago, but $60 back then is worth $70 today on inflation alone.

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$70 would be absurd, $60 is already more than 99.9% of games are worth.

 

[Kyzer]

Why make a $15M AAA game when you can make flappy bird with lootboxes

 

[Slev]

Is anyone in the industry floating the idea of increasing up-front prices on software? $60 first became the norm 10 years ago, but $60 back then is worth $70 today on inflation alone.

Click to shrink...

Issue is there is literally too much competition to allow an increase in price. There are more games than ever before for a consumer to choose from. If your game is priced higher than everyone else's then you're gonna have a bad time. Only company I could see getting away with it is Rockstar with RDR 2. People will buy it regardless of the price. The difference is with the volume of day one sales they will have they don't need to price it any higher.

 

[enty]

I swear it's like we're living in a conspiracy theory. Every industry person says "Yo making games is expensive" "I'm tired of getting laid-off / my friends" "$60 games aren't sustainable" and everyone outside of the industry refuses to hear it.

Dunno, indie games are cool and people should probably look to get into smaller scope projects. Or just raise the price of bigger projects. Whatever, it's not like people who play games are just going to stop playing games.

 

[Kyzer]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

Click to shrink...

Less people would buy it

 

[Kamolahy]

I often wonder if there's enough investment in the tools and process. Maybe that will never amount to being enough to balance the cost and labor that goes into games? If the consumer base can prove once and for all that overly produced games are not the only way for publishers, maybe we have a chance.

 

[Yesterday]

This is why I hope the 3DS continues to be supported. It's the last bastion of sub HD game development

 

[Nirolak]

That would be a terrible idea for the market.

A segment of the gaming audience relies on trade in credits or money from selling games they've finished in order to fund new purchases.

The market is hurt by a move to digital only far more than it is helped.

Click to shrink...

I imagine there would also be a lot of potential customers who would never see a digital only game. Isn't there still something like 10% of the market that doesn't put their console online, and over half don't even have PS+, suggesting they might not be heavy online functionality users?

 

[Neonep]

I'm not against game prices going up $10 or $15. I think it's crazy that games are still $60. Think of how game development has advanced over the past 10 years and how much more it costs to make games. Yet the price can't be adjusted for inflation even. Crazy.

 

[ArkhamFantasy]

I'm not against game prices going up $10 or $15. I think it's crazy that games are still $60. Think of how game development has advanced over the past 10 years and how much more it costs to make games. Yet the price can't be adjusted for inflation even. Crazy.

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They sell so many season passes, special editions, and MTs that the intial price doesnt mean nearly as much as it did 10 years ago.

 

[Shin]

I'm not against game prices going up $10 or $15. I think it's crazy that games are still $60. Think of how game development has advanced over the past 10 years and how much more it costs to make games. Yet the price can't be adjusted for inflation even. Crazy.

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It's being off-set by microtransactions, DLC, season-pass, editions, etc etc so it's not surprising.

 

[Neonep]

One thought I've also had is that how about the gaming industry just cut out retailers. Now this isn't fully thought out, so don't kill me. How come Sony or Microsoft make the console available only through their online store, same for the publishers, sell directly to the customers through their own websites.

 

[DontHateTheBacon]

Do you guys think that AAA single player games would do better in a digital only environment where people couldn't buy the game and trade it in? Just curious what everyone's thoughts are on this.

Click to shrink...

I don't think so. Taking away consumer rights will only anger segments of the consumer base.

This year I have beaten 32 games. If I couldn't buy/trade/rent games, I would have likely beaten about 8-10.

Taking away opportunities for people to play your games doesn't seem like the right idea.

 

[ArkhamFantasy]

One thought I've also had is that how about the gaming industry just cut out retailers. Now this isn't fully thought out, so don't kill me. How come Sony or Microsoft make the console available only through their online store, same for the publishers, sell directly to the customers through their own websites.

Click to shrink...

Look at matts post, and the reaction to the xbox ones original vision.

 

[Neonep]

I don't think so. Taking away consumer rights will only anger segments of the consumer base.

This year I have beaten 32 games. If I couldn't buy/trade/rent games, I would have likely beaten about 8-10.

Taking away opportunities for people to play your games doesn't seem like the right idea.

Click to shrink...

Yeah, I agree. I feel like you should always have the option to purchase your media the way you want to. It's like a business, you want to be able to accept cash, checks, money orders, credit cards, and debit cards just so that the customers can pay any way they would like.

 

[TeddyShardik]

Well, the thing is basically built on exploiting its workers and customers, at least the big scale side of it. It's crazy to me it has been going for so long.

 

[Black Knight]

I only hope more games companies walk the same path as Nintendo

Nintendo has a very smart & creative ways to profit, and they still make critically acclaimed games, and without the need of microtransactions

Let's see Assassin's Creed Origins for example, I would say the costs of developing the game and marketing it is about 100-150 millions dollars, but does we really need Assassin's Creed Origins graphics level? No, is the 4K necessary for the players to have a fun in any game? No, can we play a game with the same graphics level as Super Mario Odyssey & Zelda BoTW? Yes!

The more the companies focusses on the technical aspects of their games, the more the development costs increases, it's possible for games to reach CGI graphics level, but that would only destroy many studios IMO.

 

[Neonep]

Look at matts post, and the reaction to the xbox ones original vision.

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What I mean is say for example you wanted to buy Monster Hunter World. You can only pre-order it and purchase it only from Capcom's website. Then they can still do physical and digital and for the physical they can just initiate the whole release day guarantee thing that bestbuy and amazon have. Just a thought though.

 

[ArkhamFantasy]

What I mean is say for example you wanted to buy Monster Hunter World. You can only pre-order it and purchase it only from Capcom's website. Then they can still do physical and digital and for the physical they can just initiate the whole release day guarantee thing that bestbuy and amazon have. Just a thought though.

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Amazon makes up like 5% of the market iirc. Stores are still important right now, they also help market games.

 

[Neonep]

I only hope more games companies walk the same path as Nintendo

Nintendo has a very smart & creative ways to profit, and they still make critically acclaimed games, and without the need of microtransactions

Let's see Assassin's Creed Origins for example, I would say the costs of developing the game and marketing it is about 100-150 millions dollars, but does we really need Assassin's Creed Origins graphics level? No, is the 4K necessary for the players to have a fun in any game? No, can we play a game with the same graphics level as Super Mario Odyssey & Zelda BoTW? Yes!

The more the companies focusses on the technical aspects of their games, the more the development costs increases, it's possible for games to reach CGI graphics level, but that would only destroy many studios IMO.

Click to shrink...

Also one thing about Nintendo is that their games rarely drop in price. You'll be hard pressed to find BOTW discounted right now yet you'll see games that came out well after that already discounted. Hell their are 3DS games that came out years ago that are still full price.

 

[Neonep]

Amazon makes up like 5% of the market iirc. Stores are still important right now, they also help market games.

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But at the same time videogames are bigger than ever and people aren't gonna stop playing games or anything. They'll just buy it from where they need to buy it from.

 

[ArkhamFantasy]

But at the same time videogames are bigger than ever and people aren't gonna stop playing games or anything. They'll just buy it from where they need to buy it from.

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Publishers dont give up chunks of their revenue to middlemen unless the middlemen are necessary. They'd love to ditch retailers but they arent in a position to do that yet.

 

[Black Knight]

Also one thing about Nintendo is that their games rarely drop in price. You'll be hard pressed to find BOTW discounted right now yet you'll see games that came out well after that already discounted. Hell their are 3DS games that came out years ago that are still full price.

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Yeah, and I think they're doing a great job at making games that holds their value even after years, Super Mario Galaxy still selling like a new game, and the price never dropped to less than 19.99$, and we're talking about a game that released 10 years ago, which is impressive!

 

[Raptor Jesus]

As soon as they AAA industry gets off sequalitis the better we will all be.

How many times can you remake the same FPS set in WW1/2?

 

[ArkhamFantasy]

The brilliance of Nintendos game design isnt hust their art style, its the fact that they're games incorporate their level designs and assets into the gameplay mechanics.

Everything in Mario exists for a reason, everything can either be climbed, jumped on, or used in some way, theres no wasted space.

Compare that to your average AAA game that makes expensive assets that only exist to be looked at.

 

[Neonep]

Publishers dont give up chunks of their revenue to middlemen unless the middlemen are necessary. They'd love to ditch retailers but they arent in a position to do that yet.

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Yeah that's the issue. I personally don't like the current state of games though. Micro transactions, advertising and promoting DLC before the game is even released, etc. This has got to change at some point.

 

[lingpanda]

That would be a terrible idea for the market.

A segment of the gaming audience relies on trade in credits or money from selling games they've finished in order to fund new purchases.

The market is hurt by a move to digital only far more than it is helped.

Click to shrink...

How do you explain the PC market and Steam? It appears to sustain itself just fine.

 

[Black Knight]

The brilliance of Nintendos game design isnt hust their art style, its the fact that they're games incorporate their level designs and assets into the gameplay mechanics.

Everything in Mario exists for a reason, everything can either be climbed, jumped on, or used in some way, theres no wasted space.

Compare that to your average AAA game that makes expensive assets that only exist to be looked at.

Click to shrink...

Well said, and they moved to further levels with Zelda BoTW & Mario Odyssey, so you can interact with every single thing in the game level design

 

[Guymelef]

I only hope more games companies walk the same path as Nintendo

Nintendo has a very smart & creative ways to profit, and they still make critically acclaimed games, and without the need of microtransactions

Let's see Assassin's Creed Origins for example, I would say the costs of developing the game and marketing it is about 100-150 millions dollars, but does we really need Assassin's Creed Origins graphics level? No, is the 4K necessary for the players to have a fun in any game? No, can we play a game with the same graphics level as Super Mario Odyssey & Zelda BoTW? Yes!

The more the companies focusses on the technical aspects of their games, the more the development costs increases, it's possible for games to reach CGI graphics level, but that would only destroy many studios IMO.

Click to shrink...

It's funny because we are hearing "does we need next gen graphics? fun this, fun that" since Wii days but now you bring here BOTW.
And I bet you that we will show people saying "do we need next gen graphics as AC Origins 2 on PS5? Look how beautiful is BOTW 2 on Switch 2"

 

[ArkhamFantasy]

How do you explain the PC market and Steam? It appears to sustain itself just fine.

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The PC and the mobile market are different from the console market and have their own issues. You will see alot of developers that have to come out and say that their games aren't going on sale for <X> amount of time because so many people wont buy a game at full price. And the overwhelming majority of mobile gamers dont actually spend any money on games.

 

[Ogodei]

$70 would be absurd, $60 is already more than 99.9% of games are worth.

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Presumably a rise in headline price would demand a commensurate cutback in the content-gutting that goes on in the name of monetization. But remember that "cheap games" have really only been a thing since the 6th generation (since the 5th still had the N64 kicking around). Inflation-adjusted, games used to be more expensive than they are today.

This is a 2013 article so it's a bit dated on inflation but gives a good idea of where things stand. Folks paid the equivalent of $90 a pop for Super Mario Bros 3, for instance.

http://www.ign.com/articles/2013/10/15/the-real-cost-of-gaming-inflation-time-and-purchasing-power

 

[Freshmaker]

Presumably a rise in headline price would demand a commensurate cutback in the content-gutting that goes on in the name of monetization.

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That would never happen. It'd just be $70 with an that swill added in on top.

 

[Deleted member 2785]

DLC, MTX, all that stuff... it would still be happening if games cost $5, not $50 million, to make.

People are buying the heck out of MTX... look at any earnings call.

Y'all have to stop thinking MTX is in place because games are expensive to make.

That's complete and utter nonsense.

MTX is here because it's fairly easy to implement and the market buys lots and lots and lots and lots.

Stop thinking there's some trade off to be made.

I imagine there would also be a lot of potential customers who would never see a digital only game. Isn't there still something like 10% of the market that doesn't put their console online, and over half don't even have PS+, suggesting they might not be heavy online functionality users?

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Yep, this is big too. There are other reasons as well, but in a world of MAU an ARPU, limiting addressable markets is a silly thing to do.

 

[Deleted member 21601]

Maybe scaleback on the stories and focus on gameplay? Should be a lot cheaper that way.

 

[QBizM]

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

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Think it'll be much, much sooner than that. The greed is overpowering the creativity and people will get bored of the same old at some point.

 

[Deleted member 2785]

Think it'll be much, much sooner than that. The greed is overpowering the creativity and people will get bored of the same old at some point.

Click to shrink...

Don't hold your breath.