Sony has just recently announced the PlayStation4. Counting Nintendo's Wii U, it will be the second eighth generation game console. Sony is following the same business structure that they have since they entered the market. They're using the idea that sharper graphics, prettier pictures, and bigger games make the system.
There is nothing inherently wrong with
the idea of 'the more the better, the most the best' approach to
gaming. It is, however, becoming increasingly more dangerous. With
production costs of high budget games sometimes approaching up to
$100 million, the price of development is out of control. Developers
are having to sell exponentially more games, but are making less
money. Everything has gotten so big and bombastic, that it it really
is out of control.
Not even counting the steadily rising
costs of development approaching the eighth generation, in the last
ten years, there have been three major developers who have gone out
of business. All three of these companies buckled due to their own
business practices, and the steadily rising costs of production.
Acclaim Entertainment went out of
business in 2004, they were most successful from the late '80s to
early '90s, and were known for releases such as Spider-Man and Venom:
Maximum Carnage, The Turok Series, and WWF wrestling games. Midway
Games went out of business in 2009, they had been in business since
1958 releasing arcade machines. Midway is best known for many arcade
titles, such as, Defender, Joust, Robotron 2084, and Gauntlet. They
are perhaps best known for Mortal Kombat, a series that is still
going strong with recent outings. THQ Inc. went out of business in
January, 2013. THQ is best known for games like, Saint's Row,
Darksiders, and their WCW and WWE wrestling games.
All of these companies were quite
successful during their tenures. The problems don't end there,
though. Other companies that are still in business such as Capcom
and Square Enix are in dire straits, as well.
Capcom has been having issues for the
past several years with their longtime fans. The company keeps
promising one thing in one hand, and delivering something completely
different in the other. On top of this, due to “sudden and
significant changes in the operating environment of the Digital
Contents business”, Capcom has decreased their profit forecast from
approximately $1.13 billion to approximately $502 million; almost
half.
Square Enix has also been suffering as
of late. They are forecasting a loss
of approximately $100 million. They site the “sluggish Western
sales” of such titles as Sleeping Dogs,
which sold 1.75 million copies, Hitman Absolution,
which sold 3.6 million copies, and Tomb Raider,
which sold 3.4 million copies. The company had recently moved to the
strategy of selling these large scale, Western targeted games. The
huge loss has even caused the president of the company, Yoichi Wada,
to step down.
Bear in mind, this
is not even taking into account that these companies haven't turned
their complete attention to the eighth generation.
The
biggest problem that we're running into, is the fact that game
developers seem to think that every single title on their release
list needs to be a top tier, AAA, huge and bombastic, Michael
Bay/Stephen Spielberg caliber, blockbuster title. They're dropping
all of this money into the industry, where if you look at the
average consumer, and I'm using myself as the example here, they may
get, on the higher end., ten $60 games a year. That amounts to $600
a year spent on video
games. That's quite a bit of money for someone who doesn't make that
much to begin with. That's only also counting the high end
software.
If you factor this
with the fact that gaming is in fact a niche market, where there is
not a tremendous amount of room for expansion. This has been proven
time and time again, and Nintendo was even a victim of this fact with
the Wii. You're targeting these people with these huge bombastic
games, and there may be, and I'm estimating here, about 20 a year.
You're trying to make more and more of these games every year, with
development costs steadily rising the entire time. It can be said
that the riskier the road, the greater the profit. It also stands
that the more that you put on the line, the more that you stand to
loose. What this boils down to, is the fact that these bigger games,
are not necessarily the best approach. Recent history has taught us
that.
Looking at the fact
that we are in fact on the cusp of the eighth generation, it's clear
that companies are going to have to learn how to utilize this new
hardware. It's difficult to know when a new console cycle starts
where the money is going to be at. You have to roll the dice, and
see where your luck is going to fall. Even if you pump money into a
game, you're not necessarily going to see a huge return. From here,
costs are going to only keep rising.
No comments:
Post a Comment