ECGC 2011: Is the Gaming Market About to Crash?

[sticks435]

2nd Keynote by Mark Cerny. He says games need DLC/Nickle and Dime schemes and/or social intergration / new gen of consoles or gaming will crash again.

http://www.tomshardware.com/news/Ma...icoot-Sonic-the-Hedgehog-Farmville,12590.html

 

[Martimus]

If they are spending $50M on each title, of course it is going to take a lot of income to make that sunk expense up. The problem is that the high cost is becoming the norm, instead of the exception. Not every game is going to sell enough to make up that kind of investment.

 

[CPA]

Looks like he's talking about the console side of things more than the PC or smartphone side.

 

[SunnyD]

Nickle & Dime things aren't to prop up the market, they're to boost corporate profits. Game revenue is up, not based on DLC/etc. The profits they make from DLC/etc. is all icing on the proverbial corporate cake.

 

[novasatori]

This is like what you see in government.

There's nothing wrong with ballooning development costs, we need to pay more for our games.

We can afford it, we must pay it.

 

[Schadenfroh]

Yes, bring the next video game crash. Let the current titans like EA, Atari (Infogrames) and Activision be wiped from the face of the earth and allow indy developers to rise from the ashes of Madden roster updates and Call of Duty milking.

 

[SMOGZINN]

If they are spending $50M on each title, of course it is going to take a lot of income to make that sunk expense up. The problem is that the high cost is becoming the norm, instead of the exception. Not every game is going to sell enough to make up that kind of investment.

Pretty much. The game industry is starting to face the same problem the movie industry has been facing for the last 5-10 years. Production costs are still increasing, but they have hit the price ceiling for the product. Increase price any more and you lose sells to the point that you make less money. What now needs to happen is that the productions companies (both game and movie) need to streamline process and find places to cut costs. Unfortunately both industries have found stop-gap income streams to delay this for a while yet, movies with DVD licensing gimmicks, and games with DLC, top this off with each industry having a boogie man that can blame on the declining profit and we see each industry is headed to disaster. Putting your head in the sand and nickel and dimeing your customers will only get you so far.

 

[rivan]

Yes, bring the next video game crash. Let the current titans like EA, Atari (Infogrames) and Activision be wiped from the face of the earth and allow indy developers to rise from the ashes of Madden roster updates and Call of Duty milking.

:thumbsup:

I'd be willing to bet that if they'd drop the slavish devotion to ever shinier graphics and focus on gameplay, they'd help their bottom line.

Games spanning the gamut - from indy-developer Worlds of Goo to juggernauts like WoW - should easily demonstrate that many players value gameplay over (or at least as much as) graphics.

 

[Anteaus]

It won't crash. If the economics aren't workable to keep the status quo, they will simply change gears and make less expensive games. It has happened in the past. While high production values cost money, money alone doesn't make a good product.

Personally, I think PC gaming will grow due to the revenue generating capabilities of front ends like Steam. They are moving more product on a daily basis now than they used to move in a month. There is also a new trend of moving older PC games in volume. Games that would have otherwise been scarce or out of print are now being brought back to life in digital distribution creating new revenue streams that were unheard of 5 years ago.

 

[Patrick Wolf]

Bull, consoles will endure and if the current gen dies the industry will adapt. For PC, Steam is the saving grace. The only drawback is pirating is still a substantial problem. Making the product completely digital saves tons since there's no material or physical distribution costs. And even better you eliminate 2nd hand sales. This should allow games to be sold cheaper making them available to more customers. That will also turn many pirates into paying customers since most pirates are pirates because games cost too much initially.

 

[Ray_Rogers2019]

Bull, consoles will endure and if the current gen dies the industry will adapt. For PC, Steam is the saving grace. The only drawback is pirating is still a substantial problem. Making the product completely digital saves tons since there's no material or physical distribution costs. And even better you eliminate 2nd hand sales. This should allow games to be sold cheaper making them available to more customers. That will also turn many pirates into paying customers since most pirates are pirates because games cost too much initially.

I prefer owning a physical/manufactured copy over digital.

 

[Lonyo]

Bull, consoles will endure and if the current gen dies the industry will adapt. For PC, Steam is the saving grace. The only drawback is pirating is still a substantial problem. Making the product completely digital saves tons since there's no material or physical distribution costs. And even better you eliminate 2nd hand sales. This should allow games to be sold cheaper making them available to more customers. That will also turn many pirates into paying customers since most pirates are pirates because games cost too much initially.

Steam is the saving grace for publishers who want to maximise their profits.
For consumers it's a nightmare.

 

[IndyColtsFan]

Interesting article, but I think he misses the point. IMO, he is focusing on the development costs and business operations side of the industry and only touched the true issue briefly -- the quality of the games. People are tired of buying roster updates or paying $60 for COD 4,000, when the only new features are gimmicks. One of the big reasons of the crash of 83 was that the market was flooded with poor games and while the mechanisms theoretically exist to avoid some of that today (ie, console makers grant licenses), I personally haven't seen a console game that I would pay full price for in quite some time. The only one on the horizon for me is Uncharted 3.

 

[Veliko]

No it isn't about to crash. I think videogame journalism is though, an article like this appears every other month.

 

[CPA]

I prefer owning a physical/manufactured copy over digital.

I think you are in the minority.

 

[OptimumSlinky]

The industry is stagnating because everything is controlled by massive publishing companies who are obsessed with name-brand franchises and forcing developers to churn out full-productions annually. I think the majority of industry issues would resolve themselves if publishers would just slow the f@ck down. DLC is a powerful tool that's being underutilized. In my opinion, Gearbox did it right with Borderlands. When the game was a hit, rather than just rush straight into Borderlands 2, they put some effort into their DLC (new quests of decent length, new items). This allows the both continue the franchise, recoup their costs, but doesn't require massive amounts of investment into development. If done properly, it also allows the community to build around a game and enjoy it for a solid period.

I just think the Activision model is too fast. You play Modern Warfare 2, and then a year later Black Ops is out, and then MW3 a year after that. And the DLC is garbage. They're map packs. No new Spec Ops missions, no new campaign expansions. It's a low-quality product rushed for a quick buck.

Modern games are expensive, with high-production values, engine costs, etc. We get it. So rather than rush ahead, distribute the costs. Microsoft and Sony recoup their costs on console R&D by selling the damn things for seven or eight years. Epic licenses their Unreal Engine, iD used to do the same with their iD Tech to regroup their development costs. Rather than rush from sequel to sequel, they focus on smaller, quality expansion packs running off the same tech. Then again, the last three Call of Duty games have basically run on the same engine, so I'm not really sure how they're racking up such a bill producing them (marketing aside).

 

[Ray_Rogers2019]

I think you are in the minority.

Well thank fuck I am.

 

[stahlhart]

Well thank fuck I am.

Me, too.

 

[stahlhart]

"The only constant I've seen over the last thirty years is change", he told the audience.

 

[Fallen Kell]

:thumbsup:

I'd be willing to bet that if they'd drop the slavish devotion to ever shinier graphics and focus on gameplay, they'd help their bottom line.

Games spanning the gamut - from indy-developer Worlds of Goo to juggernauts like WoW - should easily demonstrate that many players value gameplay over (or at least as much as) graphics.

Saddly, the game companies don't want to admit this. It is much easier to slap on some shiny new graphics on an existing game design then come up with new gameplay.

But I have to agree that gameplay survives the test of time, while graphics do not. I will happily still play Super Mario Bros. 1,2,3, Mike Tyson's Pounchout!, Contra, and several other 20+ year old games today. It's not due to their graphics, it is because they are fun games with good gameplay.

 

[SMOGZINN]

The industry is stagnating because everything is controlled by massive publishing companies who are obsessed with name-brand franchises and forcing developers to churn out full-productions annually.

The reason for this is that those names are solid revenue streams. It does not seem to matter how bad a Modern Warfare game is, or how similar it is to the last one, or even what the reviews say. Put out a new version, hype it with enough marketing dollars, and it will be a hit.

Why take a chance on a new product that may or may not make a profit when you have an old product that with minimal work you can re-release and practically guarantee a profit from?

 

[paperfist]

$50M per title seems absurd, are they paying for on site fluffers or something?

 

[Liet]

Steam is the saving grace for publishers who want to maximise their profits.
For consumers it's a nightmare.

On the contrary, I LOVE the convenience of a massive digital distributor with an equally massive games catalog, and I've been gaming since the 80s. Going to Gamestop (or whatever it was called back then) was a pain in the ass!

Also, Steam is wonderful for indy devs who have amazing products but no resources to market them. How can you argue otherwise?

 

[Blitzvogel]

Sorry to sound like a downer, but I hope it crashes. Out of a crash, humility and wisdom will be gained. Yes, our platform of choice (PC) will suffer some with a drought of more high end games that otherwise would've been available since they would be multiplatform titles, independent games and PC exclusives will still have a home with services like Steam and D2D able to keep things going, allowing us PCers to get our fix still. Poor, consolers will get left out in the dust, boo hoo, and I'll just say, "hey, plenty here on PC!"

 

[boozie]

Bull, consoles will endure and if the current gen dies the industry will adapt. For PC, Steam is the saving grace. The only drawback is pirating is still a substantial problem. Making the product completely digital saves tons since there's no material or physical distribution costs. And even better you eliminate 2nd hand sales. This should allow games to be sold cheaper making them available to more customers. That will also turn many pirates into paying customers since most pirates are pirates because games cost too much initially.

Pirates are not a substantial problem for the gaming industry.

At all.

I don't condone it, but developers blaming pirates for large quantities of lost sales is laughable.

If you think of how many people have banlisted certain games due to "draconian DRM", it's quite funny how it probably works out to much more lost sales than the amount of pirates that would have bought the game anyways.