Rising Costs And Falling Companies

Rising Costs And Falling Companies

THQ is facing financial crisis, Blizzard just dropped 600 employees, and now GAME won't be carrying Mass Effect 3 on release day next week. To look at it all in one, an individual wouldn't be remiss in saying that the gaming industry is experiencing some hard times. Is it the economy, still weak-kneed, eating at the confidence of would-be consumers? Are the releases less appealing, failing to draw in the numbers to which the gaming industry has grown accustomed? Rather, is it something else entirely—a symptom of self-same industry's rapid expansion?

The goal when furthering any business always seems to be bigger, better products and, in entertainment, more (and prettier) explosions. Compare the visuals of today to what we had fifteen years ago, when polygons first became the medium du jour for gaming graphics. After their awkward, gawky phase (which coincided nicely with gaming as a whole's awkward, gawky adolescence as it came into the mainstream consciousness), three-dimensional visuals turned into an artistic stomping ground, enabling sweeping constructions and intricate environments that could be freely explored. Cameras improved, gameplay became more visually rewarding and varied, and the consumers rejoiced. They and the executives behind these titles agreed: keep going, make it better.

Each console generation in the optical age has introduced a new medium. In the PlayStation days, CDs were enough (and the smaller and more expensive carts that Nintendo used for the Nintendo 64 both scared off third-party developers and made for gimped ports of titles with extensive FMV or serious space requirements, if they made it over at all. Final Fantasy VII famously found a new home on the PlayStation). Following that, DVDs and, with the PlayStation 3, Blu-Ray. And, though the last hasn't caught on with the fervor of its forebears, it is proving its necessity, as the paltry 9.4 GB offered on a dual-layer disc is no longer enough to contain some of the more grandiose titles developers envision and realize. Even with multiple discs, sacrifices in quality are sometimes made.

Rising Costs And Falling Companies

And that's the big concern: quality. These high-resolution textures are expensive, with regard to space on disc, certainly, but also financially. Making a big-name game today is generally a multi-million dollar project. But, if a game is to have mass-market appeal, it needs visuals that blow the player away; it needs to have spectacle, a campaign geared toward its target audience (note: must also have a target audience; this is crucial), and probably a multiplayer component as well (with notable exceptions). All of this means spending money to find out what the target audience wants in a game, whether through surveying them or gathering focus groups, and putting in an absurd number of man-hours to make sure that everything doesn't just look great, but is fully functional. Making games isn't cheap, if you want them to be popular, and it takes a lot of people.

Or does it?

The latest counter-example is Minecraft, but the indie game scene, in general, has exploded in recent years with the advent of digital distribution, taking multiple steps out of the production chain. No need for physical manufacturing or distribution channels: just the code and somewhere for people to pay for it and it can be sent directly to them, to be enjoyed immediately. Interesting, then, that the prices don't drop for digital copies of games, but generally remain consistent with their physical counterparts (exclusively digital products are, generally, an exception). They'll likely go on sale more often, and for a greater discount, but the majority of people who buy Skyrim through Steam are going to spend the same $60 as a person who gets the DVD version from GameStop.

Further, that $60 is a premium over the $50 that was standard last generation. When the price point was first announced, it was called (probably not officially) an HD-tax, to offset the increased cost of high-definition game development. For some perspective, the budgets of games are getting into blockbuster movie territory, approaching (and possibly exceeding) the $100 million mark. Developers aren't as public with these numbers as the film industry tends to be, but it certainly takes more money to make a game than it did in the past.

Should it? Have games "matured" too fast and become overly expensive to produce in a market that doesn't support it? Look at the studio closures over the last few years—Bizarre Creations and EA Visceral in 2011 alone. There have been staff cuts at major studios like BioWare and Ubisoft, even when their titles sell well and are ostensibly successful. Further, the aforementioned lack of Mass Effect 3 at GAME is due to the company receiving unfavorable credit terms from EA. One of the biggest brick-and-mortar gaming retailers in the UK can't carry releases from the largest publisher in the world because they don't actually have the money to buy them and need to get the games on credit? And they can't manage that?

Is that poor management? Is it the fault of digital distribution and online retailers, who don't need to staff multiple real-world locations with customer service representatives, and have enough copies on hand to meet demand at multiple points of sale?

Is it the developers' fault, for catering to demand and pushing to produce increasing spectacle at greater and greater cost, while selling their product to retailers at poor margins?

Rising Costs And Falling Companies

Is it the console manufacturers' fault, for pushing new technology on the masses that raise their expectations, urging developers to make full use of the systems' capabilities?

Is it our fault for having those increased expectations, and driving the sales of expensive productions?

It's most likely a combination of all of these, as well as various other poor business decisions. It's particularly interesting that only now, half a decade after the Xbox 360 and PlayStation 3 introduced the masses to high-definition gaming, is Nintendo starting to take a plunge into that same realm with the Wii U. Are they behind the curve, or has this more leisurely pace given them an unanticipated advantage?

I leave you with this: A game does not need to be a tremendous production to be engaging, entertaining and enjoyable or to sell a million copies. It needs to be fun to play, and it needs to have something about it that hooks players and compels them to come back, to sink their time into it. It needs to have an initial appeal, yes, but that doesn't have to be its visuals. Minecraft and Super Meat Boy immediately jump to mind; neither possesses mind-blowing visuals, but both have sold superbly.

In many ways, games do relate to movies. This year's Oscar winner for best picture had a budget of $15 million. Avatar, which didn't win best picture in 2009, had a budget of $250 million. Think on that.

Shelby Reiches
Contributing Writer
Date: March 1, 2012

*The views expressed within this article are solely the opinion of the author and do not express the views held by Cheat Code Central. This week's is also purely a work of fiction*

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