Jimquisition: The Cost Of Doing Business
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Its less, since the platform holders get more money than retail sales, they want to incenticvise digital over retail. So the combine store take sunsidizing platform royalty into it, which likely meams the more a game sells the more they are saving in that amount of overhead, which scales with the price of the game, unlike retail.How much less we don't know likely because that's sensitive information platform holders don't want getting out, but it likely varies like any manner of promotion.
Since apples is already well known, we usually get comparisons to that, with rough and vaugue references that its 'comparable'.
From what we are able to duduce where looking at a range around only 80% of retail take, for 60 dollar games. And a 20% return is a biiiiiiiig deal.
I'm aware of all of this (except I don't know where Ubisoft ever said that 80 percent of its revenues were profit -- it often has a negative operating income), but I don't get how this changes anything. Your point is that Ubisoft said it is focusing on bigger games because those games do better and that forced some companies to leave because games were too expensive/risky for them to make? Isn't that exactly the point I've been making.
Yeah. I think the best chance for regulation is how giant internet corporations use personal data to target individuals -- especially minors -- for anything.
No guy. The only one here making up definitions here is you.
What I have pointed out, was a term from economic competition theory I found in a companies investment presentation, that is briefing their investors on their economic competition strategy.
I linked to anpage explaining what that term is as it's a being used in a competitive business context, which directly mirrors everything they are saying and lines up perfectly with the graphs they themselves made for the presentation. That graph is textbook predatory pricing and the supra pricing for recoupmemt.
The page I linked to has references citations and example directly mirroring what UbiSoft is showing in their material, dating back to the 1950's.
You have ass pulls. Really REAAAALLY bad ones too. Like attempting to muddy the waters by using the words and their linguistic meanings to say this is all a huge coincidence and is really about this completely unrelated thing that uses the same words.
To put this in an easy to digest metaphor, Im saying they claimed they painted the wall orange to their inveators but publically blame it on us, and pointed to a bucket of orange paint, an orange paint brush all in their garage, and showed they have orange paint on their fingers, and have a recording of them saying they painted the wall orange... And you come in screaming no no no no you're stupid by orange they clearly mean the fruit!!!! That's the only orange they have the fruit!!!
The onus for proof is on you, I have mountains of proof and citations in this thread dating back over half a century, and material straight from the mouths of the publishing house themself backing it up.
You do not have the luxery of a your word vs my word argument. You do not have appeals to emotion. You need to come up with proof that can prove ubisoft was lying to their investors for our sakes, and that the half century plus of competitive business tactics and theory about entry barriers in that context were fake, or that ubisoft actively does not know about or use competitive business theory and practices and that their use of a competitive business theory term in a briefing to their inveastestors about how their competitive business is performing is all a coincidence. You have a lot of work cut out for you and you are not cutting the mustard.
Its time to put up or shut up.
Where's your proof supporting your argumemt that is superior or comparable to mine?
Where's your proof at all?
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If you don't understand the concept of price elasticity of demand then I really don't see where you are coming from telling people that they don't understand economic definitions or are inventing things.
e:
And to respond to your bizarre and tortured analology, no.
I am saying the owner of the wall chose to paint it, and that the peopel who look at that wall picked orange because its a popular colour.
you are saying it was a cartel of paint manufacturers pushing orange against everyones wishes to stop green. And somehow the wall painted itself.
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Smaller game investments are falling out due to larger publishers taking up large shares of the available investment market. You can find plenty of information about extremely large companies and their respective markets, but mid-size to small investors are quickly becoming more scant as larger investments, again, push these out of the market.
https://www.motifinvesting.com/blog/new-reality-video-games
The growth rates of these large companies are abnormal (which is why they're seen as such great investment targets), and as a result they are far more attractive to investors who are looking for strong RoI. Again, it gets back to "mitigating risk", and this for investors means only approaching all but guaranteed payoffs.
https://www.investopedia.com/news/top-video-game-stocks-2017/
Companies like Blizzard are growing by 40% year on year and increasing their revenues to ranges which makes them, a single company, roughly 10% of the entire market. This uptrend and consolidation decreases opportunities for smaller investments.
Minecraft is nearly a decade old and while I'll give you PUBG, I would still argue that their gameplay is not all that innovative so much as contextualized differently. The games I've seen that I've really felt innovated a genre all have one thing in common, and it is that narrative is gameplay. Your VA-11 Hall-A's, your Papers, Please, your Undertales, your Journeys. They're games that tell a story using play, and that merging allows you to experience something in a more visceral manner. It uses the power of play to provide an experience that is not possible without it. Whereas, if you strip the paint away from games like Overwatch or CoD or even Pokemon, what you'll see is largely the same thing we've been getting for decades, with a few minor changes, often Quality of Life related. And that's my issue - it's why I'm concerned about innovation. I honestly don't think innovation in games is actually all that difficult, but modern games are so tied up in their audience that they often cannot (or will not) expand beyond them.
I wrote a paper that was on games and how people categorized them. One of the most interesting insights that we got from that research is that most people stated that Tetris is Tetris. What they meant by that is that they couldn't contextualize Tetris as being like anything else. Tetris was itself and other games simply imitated it. But here's the thing - FPSes and TPSes? Extremely easy to identify, people grouped them consistently and understood them as all being effectively the same, even if they looked different or played differently. This is what I mean when I talk about innovation. About games that, to most people's understanding, are themselves. More common contexts simply don't do it justice.
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LMFAO!!!! You have no idea what any of that means do you?
I will congratulate you though on your flailing by desperately scouring google for terms you can try to use. Its a step up.
Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price
Then problem is, in order for what you are saying to work videogames would need to be known to be completely inelastic, which is simply not true. See sales. Also, you have a lloooooot of trouble with this, these are not binary concepts, they contiguous.
Videogames are elastic, which is why they were able to use predatory pricing, by changing the quality/cost it took to make the games higher than their competition could afford, while keeping the price the same they didn't fall victim to elasticity of demand, where charging more would reduce sales.nslashing prices wouldn't have worked because it wouldnt have moved the market upstream, and a good portion of the competition was strong enough to go with it. They were not strong enough to massively increase overhead and keep the price the same.
Once predatory pricing has succeeded, you have made your market less elastic because your base no longer has that cheaper competition who can make experiences comparable to yours. And thus can find ways to charge more where they would have previously caused a loss of consumers. Like nickel and diming and loot boxes.
Of course if you go to fast before you have completely normalized/removed enough elasticity... You run into the slight road bump ea just hit.
But seriously though. Enough flailing, its time to put up. Where's your proof comparable to mine.
I didn't just pull those definition nout of my ass, like you did. I pulled them from UbiSoft's investor meeting transcripts and slides.
Nowhere in there will you see them whining about price elasticity.
So where's your proof?
Where is your proof straight from a massive publishers mouth about how crazy gamers totally self realized demand for bloated production values is killing them and thank god for lootboxes bring the thing keepim their head above the water.
Where's your proof?
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I've read your links but i didn't find anything about mid sized devs struggling to get investors (only some mentions of VR getting a lot of investment, i'm not sure why we dismiss that as not innovative, that space is evolving a lot and really quickly). Anecdotally, at least on PC and other digital spaces, mid sized devs are doing better again and we have multiple publisher like paradox, THQ nordic, Devolver ect. getting bigger again. I'm not nearly well informed enough to argue about investment opportunities of mid sized devs though.
I mentioned minecraft because of all the survival and persistent world type games it spawned. And i honestly think individual genres evolved a lot, especially if we go to the scale of your undertales and especially in terms of multiplayer. I don't really care if COD or Pokemon evolves tbh. Those franchises are dinosaurs and people like them. Others will bring change.
The difference is the context, you are in the 'whoa these poor publishers, damn those nasty gamers'
I am pointing out the very problems pointed out by that ec video, and more disgustingly the very things these publishers pr is whining about is the VERY desired effect of their successful predatory pricing and entry barrier raising campaign.
And yes, Ubisoft DID operate at a deficite.... From 2005 to 2007, as planned, and as is par for the course, for engaging in predatory pricing.
The payoff?
A gross margin of 80 fucking percent as of fiscal year 2016. It is much much higer now.
Investopedia what is a gross margin?
Gross margin is a company's total sales revenue minus its cost of goods sold (COGS),
divided by total sales revenue, expressed as a percentage. ... The higher the percentage, the more the company retains on each dollar of sales.
yyyyeeeeeaaaahhhhhhhhh......
The supplemental bullshit narrative is exactly that, a bullshit smokescreen. They were making money hand over fist, and now they are making money hand over fist like a fucking centipede. There is NO PROFIT PROBLEM from the increased costs of making games for these publishers. Its a provable LIE.
I don't even understand what you are trying to say.
You have an investors slide explaining that there are high cost barriers to entry to make AAA console games as 'proof' that there was a cartel of publishers to drive out competition, when it is an explanation to investors as to why they spend so much.
What counter proof are you asking for? For me to prove that costs have consistently risen with every single console generation and that that wasn't by secret conspiracy, but by regular market forces?
Because you are literally ignoring every single point I have given as to why those costs have risen as me 'not understanding' and 'mental gymnastics'?
There is a barrier to entry to making console games period and that barrier to entry is set by the platform manufacturers themselves, the publishers have no say whatsoever in setting that entry price.
There is a barrier to entry to making increasingly photorealistic games, and that barrier is set by consumer expectations and technological limits, neither of which the third party publishers have any direct control over.
Expectations as to production values are frequently set by the platform owners themselves, and they do so by exploiting their position as platform owners as they can undercut any production costs by waiving their own platform fees, and third parties have to compete against that.
Games are not inelastic and never will be inelastic because they are luxury goods; people don;t buy games because they think they are too expensive,. Period. It doesn't matter how many other producers get crowded out of the market in your fiction, there is no end point where everyone will buy COD for $200 base price and not think twice about it. That will literally never happen. Direct price rises will lead to direct sales shortfalls. That is literally why alternate indirect revenue streams are being implemented,.
Like... you keep telling me I don;t understand what definitons mean and how you 'pulled them' from the internet and from sales slides, and I am honestly sat here thinking I am talking to a crazy person, because you apparently have zero context or understanding of the terms you are using as 'proof' of this conspiratorial cartel - have you ever actually been taught economics in any form, or is all this just things you have pieced together off of the internet?
Guy, the term they had on the slide is a very specific term from economic competitive theory. I listed how that is used in practice with real world business, and showed exactly how it lined up with what ubisoft was showing, in particular the graph, which is a textbook example of a successful predatory pricing campaign.
These are very specific terms used within the very specific context of business competition. You can not just apply an out of context intepretation to something like a barrier of entry to a consumer like the price of a console, that is a completely unrelated concept that merely uses the same words.
I linked to the definition pages, where the terms from ubisofts slides were used.
https://en.wikipedia.org/wiki/Predatory_pricing
And linked to that predatory pricing page was this familiar term.
https://en.wikipedia.org/wiki/Barriers_to_entry
Right there on the slide, guy. that depicts a graph, of a successful predatory pricing campaign, and switch over to supra competitive pricing for the roi on the massive investment. They are not talking about the price of consoles for consumers. YOu do not multiply price of consoles, or paid online or by digital sales to get super cool profit margins. Thats nonsensical. This is a graph depicting the payoff, of a business strategy.
Lets further hammer this home:
Oh look, its a representative graph of what predatory pricing would look like MC is ubisoft look at that!!! Graph goes down then back up and into the sky!!! JUST LIKE THE GRAPH UBISOFT POSTED OF THE TOP 5 PUBLISHERS PROFITS!!! Wow what a coincidence!!! AC would be another large competitor who could afford to do it. But uh oh, AR and Q down there went straight out of business why did that happen?
Oh because this strategy is used to eliminate competition. Huh. Imagine that, all these people suddenly blinking into existence to support my made up arguments for me, thanks guys!!
How do they do it? By setting a price below its own average cost. Oh, so they could either slash prices from 60 dollar games to 40 or 30, or they could increase the cost and quality of their games by a scope thats more than the 60 dollars they cgarged, in order to eliminate competition... WAIT A MINUTE!!!! Increase costs beyond average price??? Gawsh, that sounds familiar!
You.
Have.
Nothing.
If you are going to continue to try to call bullshit on this, you need proof at least equivalent to this.
Or you're done.
Of course not. Well it depends on what you think of the industry, because with the difference of wealth income it may as well be.
Im comparing it to the top 5 publishers who came on top with the strategy of raising entry barriers. As shown, in ubisofts graph. In an amazing cosmic coincidence, it just happens to be EXACTLY these publishers who trot out the evil gamers and their unwarrented self realized super demand for ever increasing production values as the 'problem' they can only fix with loot boxes.
I would love to show you every publishers portfolio, but its almost like that kind of stuff is a little hard to come by usually (thanks Ubisoft!).
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I'm not understanding how that proves the point you are trying to make. Publishers spend significant amounts of money to develop AAA games because that is what is almost necessary to compete in the market. They need to hire more people which boosts the development costs. Most of the big publishers make these gigantic games because those types of console gamers are a known quantity and can market games effectively towards those consumers. It's just not worth the time, effort, or energy in creating smaller games for them because the RoI isn't going to be there like it is for games that have MTx. Just take a look at how many EA/Activision-Blizzard/Ubisoft games are created and sold every year compared to 15 years ago.
Its the same words because it is the same definition, and third party publishers get hit with it twice, at the consumer level and at the production level.
If you want to make console games, your market is capped at an absolute level by the numbers of that console that has sold. There is a coefficient of "active users", but the fundamental number underpinning maximum market size is consoles sold.
If you want to make console games, your cost floor is capped at an absolute level by platform owner development fees; this is both an explicit fixed cost in purchasing devkits, and an ongoing cost of certification fees and platform owner royalties.
These are both barriers to entry.
These are both either implicitly or explicitly set by the platform owners and not by third party publishers.
Other thread got locked because of derailment, so I guess I'll just post this one here, since it's where most of the discussion about the price of games is taking place. It offers up a lot of similar ideas that Jim's video has, but without the overblown Angry Joe-esque outrage.
1. You just underlined that word, if you were attempting to hyper link it, you failed, nothing happens when I click on it.
2. Those are barriers to entry, because you can use those words lingustically to describe the situation. Typically that is simply considered the normal cost of doing business, typical overhead. It is generally not considered in the same context as raising the entry barriers because its not weaponized, its standard for everyone as you demonstrated. Company A is charged the same price for a ps4 devkit, as company b. Company a can not force company b to pay twice as much for their devkit. Those entry barriers are not weaponisable.
Once you weaponise, or artificially raise entry barriers that can be weaponised well beyond what they should be, like say via predatory pricing, like say raising the production values of your games ridivulously high by spending tons on expensive approximations of effects the systems clearly cant do so you prebake it, you hire ridiculously expensive celebrities to voice act, and you spend more money to market the crap than other companies make in a year.... But keep the price at 60 bucks. Youre engaging in a strategy to eliminate your competition by raising entry barriers via predatory pricing.
A strategem to do that, is called raising entry barriers. Not entry barriers, we arent talking about just the entry barriers, we are talking about a company RAISING the entry barriers. We are talking about the strategy of raising the entry barriers, which I find it incredibly hard to believe you are actually having a hard time understanding. You are just muddying the waters. Why do gamers always resort to alt right tactics. Its not a good tactic, its not a good look.
And no, prices are not strictly set by platform holders, they have a msrp, but its ALWAYS open to negotiation, and their are TOOOONS of examples that prove this, like ff6 being 80 bucks in the 90's.
This is why you will find a million things out there corroborating what I have said, from wikipedia, to economics lectures on youtube, because its a real thing. I can keep providing diversified proof until the cows come home.
You have not posted anything but your word and a burning desire to defend teh industry.
What I am asking for is not unreasonable. Show the same level of proof, that I had the respect and motivation to show everyone else here, instead of just having them rely on my word.
If you can't do that, I'm going to stop responding to you, because your circular arguing with nothing to back it up has become pointless.
Binary thinking. Gamers always with the binary thinking.
This isn't an either or man. Its not on or off. Its not mutually exclusive.
Its then opposite, if those thingsnwerent true, you wouldn't be able to pull off this strategy. It had to already exist and be accepted in its base form.
Its not that games were constant a price since the 80's and them WHAM!!!
If you remember games used to be thirty bucks, then 40, then 50, and then 60.
They want up to cover the increasing overhead of better graphics, sound and bigger games.
What changed was the RATE of this increase, it was a MASSIVE hike way bigger than any previously seen when put io context and ratio with prior generations. Its not that the thing happened, its the severity of it.
Suddenly you had the biggest studios using huge expensive machines to create shaders and solutions like global illumination that those systems could never pull off in real time, and then using those results the actually had to use time and staff to create, to prebake the effects into the textures, far out stripping the capability of studios who only had staff and time to only do what the systems hardware could actually do. You had them hiring super expensive celebrity voice actors, expensive composers, ridiculously expensive cinematography, motion tracking setups for animation... All kinds of uneccessary shit.
And on top of that, instead if charging 80, 100, 120 bucks that would offset the price increase they kept these super big super expensive games... 60 bucks essentially a massive price slash. Predatory pricing, raising of entry barriers. They ate through their profits for two years, until they ran enough competition out of the market.
The graph ubisoft posted exactly matches the graph that depicts this strategy, its a textbook example.
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The difference is the context, you are in the 'whoa these poor publishers, damn those nasty gamers'
I am pointing out the very problems pointed out by that ec video, and more disgustingly the very things these publishers pr is whining about is the VERY desired effect of their successful predatory pricing and entry barrier raising campaign.
And yes, Ubisoft DID operate at a deficite.... From 2005 to 2007, as planned, and as is par for the course, for engaging in predatory pricing.
The payoff?
A gross margin of 80 fucking percent as of fiscal year 2016. It is much much higer now.
Investopedia what is a gross margin?
Gross margin is a company's total sales revenue minus its cost of goods sold (COGS),
divided by total sales revenue, expressed as a percentage. ... The higher the percentage, the more the company retains on each dollar of sales.
yyyyeeeeeaaaahhhhhhhhh......
The supplemental bullshit narrative is exactly that, a bullshit smokescreen. They were making money hand over fist, and now they are making money hand over fist like a fucking centipede. There is NO PROFIT PROBLEM from the increased costs of making games for these publishers. Its a provable LIE.
You are important to me, and I'm glad you are able to use Investopedia. But an 80 percent gross margin does not mean that 80 percent of Ubisoft's revenues were profit. Cost of goods sold only relates to the costs of selling a product, but there are a ton of other costs. That's top-line stuff. Here's the bottom line from the exact same earnings report that you are citing:
The operating income was 169 million euros on 1.394 billion euros. That's 12.1 percent of revenues claimed as profit.
And no, I am not in the "woe is game publishers" camp. My thing is that games are expensive, and it makes sense that publishers are trying to find ways to maximize their profitability. And if they end up fucking up their games in the process, that's their problem. But if they end up making more money while alienating older fans, then oh well. These games just aren't for us anymore. We can yell that we don't like it and hope that they change, but all that we are yelling is that "this thing isn't for me -- make it for me!"
But regardless, we aren't even disagreeing anymore. You are saying that games are expensive to make because that was the desired effect of Ubisoft. And OK. Yeah. Exactly. The point is that they are expensive to make. This is always where people always say something like, "so quit blaming the gamers." And I have literally no idea what that has to do with anything. Does blame have any effect on the price of goods? We don't pay for products because it's our fault that they cost money to produce.
We can write a letter to Yves Guillemot and say, "sir, here you pointed out that you thought you could increase your profitability by building games with even bigger budgets. Since this was your idea, I think you should eat the cost of inflated budgets."
And Yves, in his delightful accent, will write back to us, "No."
He will probably add, "Gamers want these bigger games, and they will pay for them and then they'll pay for extra content on top of them. So no ... it's clearly worth the money to enough people that we don't have to eat the cost and can even make more money."
If that disgusts you, that's cool. I get it.
I'd say these are only very recent market occurrences and aren't really indicative of long-term trends. At least, I wouldn't be comfortable making that claim just yet. This growth of mid-size publishers may continue, but it's difficult to say given mid-tier publishers are themselves quite new to games.
I think we'll agree to disagree here. I think one of the reasons franchises like Final Fantasy were able to expand to what they are was because they were continually experimenting (at least, until recently).
User Banned: (3 Days) User has been banned for a continued pattern of hostility and for personally attacking other users.
You are important to me, and I'm glad you are able to use Investopedia. But an 80 percent gross margin does not mean that 80 percent of Ubisoft's revenues were profit. Cost of goods sold only relates to the costs of selling a product, but there are a ton of other costs. That's top-line stuff. Here's the bottom line from the exact same earnings report that you are citing:
The operating income was 169 million euros on 1.394 billion euros. That's 12.1 percent of revenues claimed as profit.
And no, I am not in the "woe is game publishers" camp. My thing is that games are expensive, and it makes sense that publishers are trying to find ways to maximize their profitability. And if they end up fucking up their games in the process, that's their problem. But if they end up making more money while alienating older fans, then oh well. These games just aren't for us anymore. We can yell that we don't like it and hope that they change, but all that we are yelling is that "this thing isn't for me -- make it for me!"
But regardless, we aren't even disagreeing anymore. You are saying that games are expensive to make because that was the desired effect of Ubisoft. And OK. Yeah. Exactly. The point is that they are expensive to make. This is always where people always say something like, "so quit blaming the gamers." And I have literally no idea what that has to do with anything. Does blame have any effect on the price of goods? We don't pay for products because it's our fault that they cost money to produce.
We can write a letter to Yves Guillemot and say, "sir, here you pointed out that you thought you could increase your profitability by building games with even bigger budgets. Since this was your idea, I think you should eat the cost of inflated budgets."
And Yves, in his delightful accent, will write back to us, "No."
He will probably add, "Gamers want these bigger games, and they will pay for them and then they'll pay for extra content on top of them. So no ... it's clearly worth the money to enough people that we don't have to eat the cost and can even make more money."
If that disgusts you, that's cool. I get it.
Well no, that's not all cogs only relates to.
Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good. It excludes indirect expenses such as distribution costs and sales force costs.
This covers the entire production cycle. And sense you don't have a sales force knocking on your door trying to sell you bubsy 3d... I don't think their sales force is super expensive in comparison to these costs.... And distribution costs are getng less and less and less.
What you posted is dubious because those numbers are AFTER certain profit income has been reinvested into other assets, lowering taxable income.
Obviously UbiSoft isn't sitting on all that taxable income, no business would, tax evading little bastards.
That 12% over last year is not the totality of the profit they made, its what they decided to get taxed on and sit on in the bank. And 12.9% increase in liquid cash in the banks very very good. Now imagine year on year growth on that for the past two years. Yeah. Remember its not 12.9% its an increase of 12.9%.
Their gross profit margin is a very clear indication of the wealth they are bringing in.
Companies who are struggling to meet the costs of doing business, like they claim, are not sitting at a fucking 78% gross profit margin. They are sitting at a negative one.
They didn't just raise production prices they purposefully destroyed almost every damn thing I enjoyed about this fucking hobby so they could have even more money than the shit tons they were already making and replaced it with mind numbing homogenous shit that all practically plays the same, all practically plays itself and constantly asks for more money so I can get shit that used to be free, and is utterly worthless compared to the asking price.
What I want is these mother fuckers to be held ACCOUNTABLE for their bullshit and that just happens to be YOUR job.
Well judging by your verified status, as a games journalist. And until you get blacklisted for doing that.
Then again for all I know you might just be the press release guy.
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The advertising budget was not Agents of Mayhems problem
Think of how Yakuza 0 became a surprise hit last year way after the fact. I'm pretty sure basically nobody bought it at launch because of Horizon and Resident Evil, but people went back to it after the fact. Nobody has any want to return to Agents of Mayhem.
Why should the consumer care about the shareholder? You need to convince consumers to buy your games, not shareholders. I'm sure he actually doesn't care one way or another about them, just that companies appealing to shareholder interests to justify prices to consumers is hot nonsense and it speaks to cultural problems in the market that some people think such an argument makes sense.
I'm still struggling to see what we're even arguing about with game development costs.
1. High game dev costs killed off the major independent developers already... You can't turn that back.
2. Ubisoft, EA, 2K, Activision, and Bethesda are all doing pretty good... Not sure any of them will go under or there will be a "crash" or anything.
3. Linear AAA single player games aren't made anymore because they're not as popular as open world or multiplayer games, this would happen regardless of cost.
4. Multiplayer or open world driven games don't need lootboxes or garbage to make money as they'll already make money. Linear single player games can't be monetized that well at all...
5. Publishers will try to make as much money as possible as that's the entire goal of a modern American business (though you can argue it wasn't like this prior to the 70s)
I'm confused about what we're even talking about with game dev costs... It feels like we're in 2008 when things were starting to go bad instead of 2018 where things already went bad and now we're in the aftermath.
1. High game dev costs killed off the major independent developers already... You can't turn that back.
2. Ubisoft, EA, 2K, Activision, and Bethesda are all doing pretty good... Not sure any of them will go under or there will be a "crash" or anything.
3. Linear AAA single player games aren't made anymore because they're not as popular as open world or multiplayer games, this would happen regardless of cost.
4. Multiplayer or open world driven games don't need lootboxes or garbage to make money as they'll already make money. Linear single player games can't be monetized that well at all...
5. Publishers will try to make as much money as possible as that's the entire goal of a modern American business (though you can argue it wasn't like this prior to the 70s)
I'm confused about what we're even talking about with game dev costs... It feels like we're in 2008 when things were starting to go bad instead of 2018 where things already went bad and now we're in the aftermath.
Loool... did you miss the list of linear AAA single player games released in just the last year. Yes, there are less AAA linear SP games, but they still exist.
Crash is probably a bit of a misnomer, thinking on it. I'd say it's more accurate to say that investment interest is funneling upward and that makes it more difficult for those not at the top of the pile.
Isn't Sterling's point that devs have no one to blame except themselves for creating a situation where games are bullshit arms races?
Why do we live in an age where selling 7 million copies of a game, generating 420 million dollars of revenue, is considered bad? Or why is it so hard for EA to make a profitable Star Wars game, where they lose money even though they made 400 million in revenue?
I think it's the weird corporate apologist aspect of games journalism particularly that Sterling doesn't like. As if gamers are supposed to feel bad for EA or Ubisoft for having to spend hundreds of millions of dollars making video games.
Why do we live in an age where selling 7 million copies of a game, generating 420 million dollars of revenue, is considered bad? Or why is it so hard for EA to make a profitable Star Wars game, where they lose money even though they made 400 million in revenue?
I think it's the weird corporate apologist aspect of games journalism particularly that Sterling doesn't like. As if gamers are supposed to feel bad for EA or Ubisoft for having to spend hundreds of millions of dollars making video games.
Pretty sure this is exactly his point. People just seem to get off on major tangents in this thread ;).
You are by far the most unhinged and unstable individual I've encountered on ResetEra. Seek help.
I feel the main problem with AAA games is in general the corporations that run/own the devs. A corp does want to make some of the money, they want to make all of the money. Even if a game is profitable is a failure, if they didnt bet earnings estimates, sells figures etc etc (incert hitman and tomb raider HERE). Superbunnyhop https://www.youtube.com/watch?v=SFKnv1YzI3k did a story about game corps creating shell companies as tax havens.
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Of course there it is.
When, in the history of ever, has a small handful of special interests destroying the vast majority of competition in their market EVER been good for the consumers in that market? How is a lack of competition good for the consumer?
How does that, in any way shape or form, argue against ANY of the information proof and documents I have put into this thread?
How does me being pissed about what their business model has done, to the games I can enjoy, in any way shape or form, mitigate or undo the fact that they did these things? Are currently doing these things, and their pr is actively trying to blame the consumer base, for their own purposeful strategy that was a huge success?
Not devs, publishers.
The biggest publishers started the arms race knowing the dev studios had no way of keeping up with their deep pockets, they raised production values to ridiculous levels, where games would need to be priced at 80, 100, 120 bucks to make sense for these smaller studios, but kept the price at 60 bucks, its a tactic called predatory pricing, and is used to artificially raise the entry barriers to compete in the market to drive less wealthy but talented competition out of business, where the can then choose to scoop them up on the cheap and milk their properties, before throwing them in the trash.
Heres a graph of basically what predatory pricing does to the market:
Without getting to much into it, what we are looking at is mc or ac, either one works fine for the purpose of this.
This shows what happens when you start predatory pricing. You are burning through money by charging way less than a product is worth. You can either slash the price of the current product, or raise the production values of the product making it far more expensive, but keeping the price the same.
As you eat through your money, the graph starts going down, however during this time, your competition is forced to try to 'keep up with the Jonses' cause now these products, that cost the same as yours, have way better graphics, cutscenes, and celebraty voice actors. They can do that, but in order for them to stay in business, they would need to charge what it actually costs, so they can make enough money to keep the doors open. However, the market is elastic, which means raising the prices results in lower demand ESPECIALLY when a lower priced alternative is on the market. So they chose to keep the prices the same and try to ride it out. As they start going out of business, the bigger incumbents can scoop them up and milk their properties. As there is less and less and less and less competition, the market becomes less elastic, so they can start charging more, or supra pricing to recoup the money they blew on predatory pricing, this can be done by directly raising the price of the product, or by indirectly raising the cost of the product with subtle small charges, 'impulse' buys, or in this case, microtransactions.
This is the graph Ubisoft posted at their investors meeting of the top 4 publishers, what we are looking for, is a line that goes down for a few years, and then shoots up, like shown above:
This is cold hard fact, there is no denying or dismissing this.
The raising cost of games is a natural process that happens organically, however that process was weaponized to shoot those costs up waaaaaaaayyyy higher than in any previous generation and clearly higher than any business had anticipated, using their experience from their past decades of doing business in the market. They couldnt keep up, that was by design.
That is why jim is pointing it out, it was a purposeful business strategy that was wildly successful, devastating to the market and to anyone who enjoys more than the tiny amount of genres they decided to churn out non stop, or how they choose to handle those genres.
And they then have the gall to have their pr try and blame the people who have a problem with this for it.
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