Maybe we should stop ignoring gaming's screams for help.

[MysticSlayer]

Keep in mind, if a company wanted a $200 million net profit on a product but could only raise $150 million net profit, then they will say it underperformed, even if the game only cost $50 million after implicit costs were added (i.e. about $200 million in sales rather than $250 million). Sure, they made a hefty profit, but that still won't please the shareholders and anyone in the company looking for the massive bonus they were promised, as what those people receive will be less than what they were promised, and that is never an enjoyable experience.

But let's assume that a game is worth $50 a copy (most games are now $60). If development costs somehow reach a staggering $50 million, then they only need 1 million copies sold in order to break even, 2 million to get back double of what they invested. Even at that high development cost, it still only took 2 million to get back double of what they invested! In other words, if they were to sell 3 million copies, they'd not only have enough for bonuses for everyone, but they could have some left over to invest in the same development costs for the next game and help pay off debts from other projects.

The issue is not necessarily that consumers want too much. Though we probably shouldn't really clamor for all the AAA luxuries that we keep getting in our games, there simply is no excuse for why these people "need" as great of a return as they are hoping for. If it is to make up debt from other products, then they should have budgeted better for those products, and while there is always a risk involved with a game flopping, if you are already having financial troubles because of one of those flops, you don't bet on a game selling 5 million copies, as very few games ever reach that level of success.

If anything, publishers need to start recognizing that their current attempts at getting these massive returns are mostly futile. After all, most of us knew Dead Space 3 would never sell 5 million copies, and I'd almost bet 75% of the people who raised concerns at 5 million copies being sold don't have any business or economics degree--it was just common sense. The fact that gamers could see that disappointment before it ever happened while the business professionals couldn't see it coming shows that there is something seriously screwed up with the business strategies and goals of these companies, and I'm not going to take the blame for their ridiculous hopes and dreams. If anything needs to change, it's these companies' unrealistic goals and lack of prudent financing.

 

[Phishfood]

The problem isn't gamers being greedy, the problem is ridiculous mismanagement and bloated production costs.

-snip-

So no, it's not gamers fault. It's not even greed as far as I can tell, unless a lot of those budgets are vanishing into someone's pockets. It's just mismanagement and bloated unnecessary costs.

This last bit is what gets me. I'm ok with devs spending $100M making a game. If it then only sells 5M copies and makes a loss, well - that's business for you. What absolutely terrifies me is the amount of blame being passed to the consumer over this shit. I have not heard a single triple A say "well, we spent too much" or "perhaps we shouldn't have hired Billy Dee Williams, George Takei, Tim Curry, Jonathan Pryce and others - we could have made a game almost as good much cheaper" what I am hearing is "Piracy is killing us!" "second hand sales are killing us!" "people not paying $60 for the game then another $120 to get every gun gold plated is killing us!".

Worse is what I do see is FPS chasing CoD, MMOs chasing WoW. What I mean is where a dev clearly looked at CoD, WoW or whatever behemoth rules the genre and said "That game gets a lot of money, lets copy it exactly then we will get lots of money, right?" wrong. People don't buy CoD clones because they have CoD. They don't buy WoW clones because we already have a WoW. By default the existing game has a bigger community, so it is going to attract more players and the little guy is not going to get a look in. I didn't buy blops because I like CoD, I bought it because all my friends were playing and I wanted to play with them. In some ways, hollywood is having the same failure - sequel after sequel burying the original ideas, but at least the original ideas are still out there. When I got into gaming there were flight sims, space sims, racing sims, FPS, RPG, point and click, text games...now I feel there are "brown FPS", Need for Speed, The Sims and world of warcraft. I know it's not as bad as I make out here, but you tell me that we don't have a massive surplus of brown FPS compared to every other game ever.

So, what are we left with? well - to my mind what we have here is a very toxic industry. A sexist, ageist industry that thinks teenage males are the only demographic. An industry blaming it's customers for it's own failed budgets. An industry desperately trying to pin the blame anywhere but itself. An industry collapsing into a bland mess as they try and chase each other rather than actually come up with an original IP.

 

[Guitarmasterx7]

So developers spend way too much money making bland safe games and if they under-preform that's somehow the consumer's fault? What are you complaining about?

Are you complaining that the consumer isn't financially supporting publishers enough? Because if that's your point I disagree wholeheartedly. We're talking about an environment where it's common practice to slice a chunk out of your game and sell it for 10 bucks on day 1, and multiplayer-centric games ship with scheduled releases lined up for 3-5 map packs or characters that sell for 10-15 dollars each. Publishers wring the consumer dry. They're making easily enough back to justify the costs of improving the graphics and adding a feature here and there from game to game.

Are you complaining that the consumer supports boring safe games by buying "Call of Duty: subtitle for whatever the 15th game is called" in droves? That I don't disagree with, but I don't think you have the same problem with it that I do. Of course the support of the new and original is the most important thing, but Call of Duty is only hurting the industry the way it is because other publishers are trying to copy it. I think that consumers buying THOSE games is much more harmful than consumers buying Call of Duty itself. That said "let's make uncharted with a girl and use the name of an already established series for brand recognition" Tomb Raider's so called "underpreformance" is exactly the kind of scenario I like to see.

At the end of the day people buy what they like. Refined tastes are nice, but I don't really know what you expect. If publishers spend a lot of money making and marketing something that there's not a large enough demand for that's their own damn fault.

 

[Griffolion]

I'm personally prepared to let the market crash. We will all suffer, but the industry needs to learn the hard way. There is no other way forward, in my opinion, at this point.

Captcha: "I want control" - looks like Microsoft are doing captcha's, now.

 

[DrOswald]

I'm getting rather worried for publishers at this point.

They're trying to phase out used games, herd gamers into an easy-to-regulate online environment, and refuse to give up the useless war on piracy. Now they're raising game prices.

Before, it was easy enough to say "Bleh, greedy bastards". But then I finally sat up and took notice that something was VERY amiss when Squeenix came out and said "Tomb Raider has sold five million copies, and has underperformed."

No. I refuse to believe that publishers are "just greedy" at this point. That's like saying a kid who won't run in gym class is "just lazy" when there's bone sticking out of his leg.

There's something deeply wrong with AAA gaming nowadays, and we've been positively blind to it before. It's pretty difficult to remain blind to it nowadays if you actually examine the state of gaming now, with its insane development budgets, insaner marketing budgets, and the ludicrous costs it takes to put increasingly few new things in new games.

Want proof that games cost too much to make? There's five million underperforming copies of Tomb Raider there for you to look at.

We're stretching ourselves too thin. We want more, newer, better, flashier, and we want it all at the same price. Reading that sentence twice should reveal the problem. Gamers want more and more stuff in their games, but don't want to pay extra for all the more that they're getting.

I propose that we drop back to the year of Crysis. It looked very good, and stagnating for a year right around there would force developers to stop constantly overwriting their engines and actually start optimizing the damn things. Optimization would substantially reduce the costs associated with high-budget gaming, yet result in impressive technical advancements at a very reduced cost, keep the current audience, and maybe we'd get publishers who are willing to take a damn creative risk for once when a flop game is no longer almost a death sentence.

Gamer demands have put us in this mess, so I think it's fair that we're saddled with the responsibility of getting us out of it. Fortunately, that's easy to do: If nothing else, at least support RESPONSIBLE development, rather than the cutting-edge stuff. Remember how American McGee said that gamers need to realize that games cost a lot of money to make? He's right.

We've got to drive market forces towards a sustainable direction, or we WILL have a crash. Devs are spending exponentially more on logarithmic decreasing returns because that's what we want. It doesn't take a genius to figure out where that leads.

Your idea is almost right, but it misses the mark. It is not that gamers are demanding more and more stuff in their games, it is that publishers and developers think that by shoving more and more stuff in their games they can beat the competition and reach their stupidly high sales projections. This, in turn, increases development costs and pushes their sales expectations even higher.

Did you know that Super Mario Bros Wii sold 26.6 million copies? That Minecraft has sold over 11 million? Telltales "The Walking Dead" has sold 8.5 million copies. I could go on for a very long time but you will notice that the common thread here is that these games are not huge money pits like most AAA games. They did not spend millions of dollars inventing new technologies to improve real time hair physics, for example. Gamers do not demand the ridiculous amount of excess that developers and publishers get up to when trying to out do one another.

And those are just examples of mega hits. There were many, probably hundreds, of games over the past 7 years that had modest budgets and were huge successes. Because they were not reaching for the impossible, because they resisted the temptation of excess these games made a very strong return on investment. Games like Dark Souls, Super Meat Boy, and Anomaly Warzone Earth.

You do not need to sell 10 million copies of a video game to be successful. You need to make more money than you invested to be successful. This requires restraint. This requires budgeting. It requires finding that sweet spot where you get the maximum return of quality for minimum resource input, which is what AAA publishers are ignoring to their own detriment.

 

[lacktheknack]

Your idea is almost right, but it misses the mark. It is not that gamers are demanding more and more stuff in their games, it is that publishers and developers think that by shoving more and more stuff in their games they can beat the competition and reach their stupidly high sales projections. This, in turn, increases development costs and pushes their sales expectations even higher.

Did you know that Super Mario Bros Wii sold 26.6 million copies? That Minecraft has sold over 11 million? Telltales "The Walking Dead" has sold 8.5 million copies. I could go on for a very long time but you will notice that the common thread here is that these games are not huge money pits like most AAA games. They did not spend millions of dollars inventing new technologies to improve real time hair physics, for example. Gamers do not demand the ridiculous amount of excess that developers and publishers get up to when trying to out do one another.

And those are just examples of mega hits. There were many, probably hundreds, of games over the past 7 years that had modest budgets and were huge successes. Because they were not reaching for the impossible, because they resisted the temptation of excess these games made a very strong return on investment. Games like Dark Souls, Super Meat Boy, and Anomaly Warzone Earth.

You do not need to sell 10 million copies of a video game to be successful. You need to make more money than you invested to be successful. This requires restraint. This requires budgeting. It requires finding that sweet spot where you get the maximum return of quality for minimum resource input, which is what AAA publishers are ignoring to their own detriment.

That was one point I was trying to make. I just think that gamers are partially responsible for communicating to AAA that extending beyond their financial limits is something we want.

For evidence, read Gamespot comments. While anecdotal, an alarming amount of gamers I personally know fit the bill as well.

 

[DrOswald]

Your idea is almost right, but it misses the mark. It is not that gamers are demanding more and more stuff in their games, it is that publishers and developers think that by shoving more and more stuff in their games they can beat the competition and reach their stupidly high sales projections. This, in turn, increases development costs and pushes their sales expectations even higher.

Did you know that Super Mario Bros Wii sold 26.6 million copies? That Minecraft has sold over 11 million? Telltales "The Walking Dead" has sold 8.5 million copies. I could go on for a very long time but you will notice that the common thread here is that these games are not huge money pits like most AAA games. They did not spend millions of dollars inventing new technologies to improve real time hair physics, for example. Gamers do not demand the ridiculous amount of excess that developers and publishers get up to when trying to out do one another.

And those are just examples of mega hits. There were many, probably hundreds, of games over the past 7 years that had modest budgets and were huge successes. Because they were not reaching for the impossible, because they resisted the temptation of excess these games made a very strong return on investment. Games like Dark Souls, Super Meat Boy, and Anomaly Warzone Earth.

You do not need to sell 10 million copies of a video game to be successful. You need to make more money than you invested to be successful. This requires restraint. This requires budgeting. It requires finding that sweet spot where you get the maximum return of quality for minimum resource input, which is what AAA publishers are ignoring to their own detriment.

That was one point I was trying to make. I just think that gamers are partially responsible for communicating to AAA that extending beyond their financial limits is something we want.

For evidence, read Gamespot comments. While anecdotal, an alarming amount of gamers I personally know fit the bill as well.

This is still developers fault, and I will explain why.

Gamers do like to freak out about how they would love for their game to have everything in it. We are nerds, by and large, and nerds love nothing more that to drone on endlessly about things they love and how they could be even better. Publishers know this. It is their job to make sense of all the noise, prioritize, and create reasonable budgets. They are failing to do this. Just because there are a thousand people on gamespot talking about how awesome it would be if every game had realistic hair physics does not mean it is worth spending millions of dollars putting in your game.

We say "we like good graphics" and they spend millions dollars on developing cutting edge particle physics that no one even notices. They never stop to think just how good is good enough. They don't budget. They don't do a realistic cost/benefit analysis. They just throw stupid amounts of money at the problem and hope it works out. This sort of shit does not fly in the real world. It does not work. You cannot ignore the law of diminishing returns and expect to do well in business.

They are asking they wrong questions and then misinterpreting the response. They are failing spectacularly at market research. It is not our fault Square Enix decided it was worth it to spend 300 million on Tomb Raider because gamers like to talk about how many polygons make up Lara Croft's ass.

 

[Rob Moir]

We're stretching ourselves too thin. We want more, newer, better, flashier, and we want it all at the same price. Reading that sentence twice should reveal the problem. Gamers want more and more stuff in their games, but don't want to pay extra for all the more that they're getting.

I don't want "more" or "flashier" - I do want "newer" and I want "better". If a "AAA" game refuses to address my needs and I therefore don't buy it, why is that my fault?

While I'd agree that there are problems in the game industry, I might suggest they're more of a symptom of a medium that's struggling to mature - the "AAA" games that try to be all things to all people generally fail because that's very difficult to do well, and the problem with games developers and publishers saying "huh, doing *x* didn't work last time, perhaps if we just did it again a bit more the next time..." instead of actually thinking about what they're doing.

Games that have a voice, know who they're selling to and take the time to find out what that group *actually* want are doing better than big budget titles... I'm simply not excited by the majority of new games out there today. So far this year I'm really looking forward to Watch_Dogs and maybe GTA 5 because those kinds of "free roaming" games are a genre I enjoy.

I've got no interest in paying over the odds for a "next gen" QTE game (RYSE), I don't enjoy the COD type games that much and I'm not interested in tht titanfalls or killzones of this world, I'd rather be playing Deus Ex. I admit that I might be fussy and a non-typical gamer to boot, but if a gaming company wants to produce games I want to play then I have money for them. I'm even prepared to pay more for a game if I think it's worth it... how about that?

Gamer demands have put us in this mess, so I think it's fair that we're saddled with the responsibility of getting us out of it. Fortunately, that's easy to do: If nothing else, at least support RESPONSIBLE development, rather than the cutting-edge stuff. Remember how American McGee said that gamers need to realize that games cost a lot of money to make? He's right.

I think that most of us who are at all interested in games already know they take a lot of money to make. It's also easy to see a lot of waste in games. It's not our responsility to figure out how to balance things out and how to get out of the rut the industry is in, it's the job of the game publishers to do that. It's our job to buy the games we like and to not buy the games we dislike; voting with our wallets, if you like.

This is no different to what's going on in movieland; moviegoers who are interested in movies as a craft already know that they cost a lot of money to make and value movies that genuinely try to do interesting things but there are also people out there who are interested in nothing but an endless stream of superhero sequels and endless "reboots" due to lazy scriptwriting. The games industry is not alone in its troubles.

 

[lacktheknack]

I'm also not sure I want Tomb Raider at this point, because it feels that buying it is supporting the crash of video games, which I don't want to do.

If we all just bought Tomb Raider it would make enough money and we wouldn't be supporting an industry crash.

Checkmate.

...That's a dumb statement, and you know it.

If we ALL have to buy Tomb Raider to justify its massive budget and avoid a crash, that's a certifiably bad thing.

 

[COMaestro]

I have a lot of friends in game development and one of them wrote out the following FAQ once when asked about the cost of creating a game. I found it an interesting read and it really does explain where a lot of the money goes. This is from the developers point of view, so realize when it comes to a publisher who dumped a bunch of money to cover all these costs and needs to cover all its expenses and still make a profit, the numbers likely double.


"So let?s get started. It is REALLY hard to explain this without going into a ton of detail, but here?s how it works in the simplest possible explanation (and this is still really long):

Ignoring for a second how hard it is to make a good game, let?s just focus on how much it costs to make all the ?things? (assets) that go into a game. We?ll assume that everything you try goes right the first time you try it, that you make no mistakes and get everything done precisely on time.

If you?re an average development studio in a place like Los Angeles or San Francisco, it costs a lot just to keep your doors open and your lights on (rent, insurance, employee benefits, power, government fees, bank interest, etc). But let?s ignore that and just assume that all costs $0.00 somehow.

Normally you have to look around for a while and try to get a publisher to pay you to make a game for them. During this time, you?re making no money and every month you?re still paying bills. But for now, let?s assume that somehow you already have a game deal, so you have $0.00 losses before you even start.

A note: the publisher has people working for them who cost money, too. For the sake of our example, let?s assume they don?t exist and cost $0.00.

So now you?ve got a deal with a publisher where they pay you a certain amount of money each month in exchange for you making a game for them. Usually, the amount you get changes every month (it costs more to make a game in the middle and at the end then it does at the very beginning), but let?s assume that somehow you?ve already done all that cheap pre-production work for $0.00 and all you have to do is the expensive production work.

Development deals of this type usually pay the development studio a generic amount of money per month for every employee that the developer has that is actively developing the game. Anyone your company has that isn?t a developer, like HR, IT, Lawyers, QA Testing (sometimes), CEOs, CFOs, CTOs, etc? don?t count in that amount that you get. So for the sake of this example, we?ll assume that every single person working at your company is a developer.

According to the 2011 Game Developer Magazine salary survey, the average salary for the four most basic development roles: Design, Programmers, Art/Animation, and Audio is about $81,000 per year (or about $6,750 a month). Remember also that this amount is probably including money the developer doesn?t get that goes to state and federal income taxes, social security taxes, or benefit deductions (which can take about 30%-40% of that number away).

Now you need to figure out how many developers it takes to make your game. This depends on how big your game is and a number of other things. These days, it can take hundreds of people to make a big-budget AAA title, but let?s take a smaller one: We had around 70 developers (probably more) actively working on Ratchet and Clank 2, so we?ll go with that number.

70 developers at the average of $6,750 each will cost you $472,500 per month that you?re making the game.

How long does it take to make this game of yours? That depends on the game you?re making. These days, it can take 2-3 years to make a AAA high-quality game, but the shortest time I?ve ever personally seen it done (factoring out pre-production) was about 9 months for Ratchet and Clank 3. Voila! It just cost you more than $4,250,000 to make all the things that go into your game!

Well what if we imagine that the game your company is making is an inexpensive phone game or a facebook game? You could make that with a team of maybe 10 people with 3 months (not counting pre-production time) if you?re really booking it. That?s more than $200,000! And remember, this is all JUST to pay your employees to make the things that go into your game.

Keep in mind that, as I already pointed out, this is not including any extra costs incurred besides those employees making things that go into your game ? extra costs such as Marketing, Customer Support, Publisher QA, Certification, User Testing, Packaging, Shipping, Servers and IT, PR, Human Resources, Taxes, Government Fees, Accountants, Lawyers, Retailer/E-Retailer costs, and so forth (Gamestop or the Apple Store get about 30% of the sticker price).

All of these (and the countless other things I didn?t mention) bring a ton of value to the table, and are worth spending money on ? so you can imagine how expensive things can get once you get out into the real world, but this might help explain a part of it."

 

[lacktheknack]

This is no different to what's going on in movieland; moviegoers who are interested in movies as a craft already know that they cost a lot of money to make and value movies that genuinely try to do interesting things but there are also people out there who are interested in nothing but an endless stream of superhero sequels and endless "reboots" due to lazy scriptwriting. The games industry is not alone in its troubles.

I'm not addressing derivation.

Blockbuster movies regularly make half a billion dollars nowadays, and even the more unique films still turn profits fairly easily.

http://boxofficemojo.com/

Tens of movies at this point have taken over a BILLION dollars, easily overcoming their comparatively small budgets.

However, the first "Big Hit" of 2013 (Tomb Raider) in gaming was a flop, something unheard of in movies. That hardly seems analogous to me.

 

[Chris Tian]

snip for space

I think the big problem is that we are at a strange point in AAA-Gaming. There is now more money involved like ever before, the decision makers and big suits at most developers are these manager types that come along with that type of cash, but they have no clue about games.

They tend to treat games like its one big market, so everything gets budgeted and marketed to compete with the biggest games out there and whatever is trend at the moment.

The thing is, games are not one big market, but several smaller, overlapping ones, just like movies. If some director wants to make a romantic comedy, hes not trying to do that with a Transformers-type budget and he will not try to market it to the Trasformers-audience.
On the other hand no sane studio would greenlight a sequel to a horror-movie, wich is more like a shoot-em-up actionflick. But you see stuff like that quite regularly in gaming.

Additionally they don't really get what makes a good game, they rely on focus testing and press for things like better graphics, lots of big set pieces and tacked on multiplayer.

I think publishers will sooner or later start to really understand their medium, they have to because thos devs and publishers are the ones that are going to make good and sucessfull games in the long run.

 

[chadachada123]

snip

Watch this. Trust me. It will make basically everything clear.


The short answer is that AAA publishers are ONLY trying to make "hit" titles that sell millions, and are investing hundreds of millions to do so. That might work for dude-bros and casuals, but the gaming market at large doesn't really care that much about how many millions is spent on development.

Gaming is ending up like the film industry, with hundreds of millions spent on fluff, while low-budget films can end up being massive hits.

The solution is to *stop buying overhyped fluff,* but, sadly, with places like IGN hyping up that crap, casuals/dude-bros are replacing "gamers" as the primary consumer of AAA games.

They also don't realize that trying to appeal to the WoW or CoD audience is relatively useless, because WoW and CoD fans are too busy PLAYING WoW AND CoD.

As far as development goes, EA(, etc) seems to think that having twice the number of developers means that they can half development time. Which ends up making buggy pieces of shit instead of real, high-quality, polished games.

 

[HannesPascal]

A big problem is that publishers want huge sales/income, when they should focus on getting a big profit. The bigger the budget the more you can do with the game (like shiny graphics) and the more sales you will get. But the bigger the bigger the cost of making your game, and the when you increase the budget of a game after a certain point the cost will increase more than the income. Thereby a game with few sales can go with more profit than a game with many sales.

 

[gmaverick019_v1legacy]

hair has some fancy tress fx bullshit added to it.

it is fucking GORGEOUS though probably my favorite graphical effect in the last decade, the rest of graphics could be on low for all i care....dat hair jiggle.

I think a bigger problem though is the kind of marketing budgets the publishers spend these days. It's fucking insane to spend 50+ million on marketing the third or fourth game in a series when everyone who cares is already well aware of it. Games are bought based on word of mouth and reviews rather than TV ads and billboards, about time publishers realized this.

i do fully agree with this though, the fucking marketing and bullshit is insane these days, let your damn game speak for itself and fucking optimize your budgets, it's insane the amount of money NEEDED to break even sometimes for game budgets.

 

[Arslan Aladeen]

Isn't Call Of Duty one of the most successful franchises this generation? Doesn't that game look kinda crummy in terms of graphics and tech and just the amount of money being put into it compared to some of it's competitors, namely Battlefield? Who's saying we want more, shinier, better graphics? Yeah, there is a problem, and it's the publishers not knowing their audience and spending way more than they should on features that no one actually wanted or needed.

 

[Rob Moir]

I'm not addressing derivation.

Blockbuster movies regularly make half a billion dollars nowadays, and even the more unique films still turn profits fairly easily.

http://boxofficemojo.com/

Tens of movies at this point have taken over a BILLION dollars, easily overcoming their comparatively small budgets.

However, the first "Big Hit" of 2013 (Tomb Raider) in gaming was a flop, something unheard of in movies. That hardly seems analogous to me.

"Big Hit" flops are 'something unheard' of in movies? Seriously? Tom Cruise's oblivion was a box office flop, World War Z was looking very questionable for a while, to name just two.

And your "tens of movies" thing - you're cherry picking... you're putting the best of the movie scene up against what you claim is the worst of the gaming scene... I bet the averages across several titles are a lot closer (in relative differences between the losses and wins, not actual dollar amounts, obviously).

And Hollywood *does* have its troubles too, I'd say.
http://www.philstar.com/supreme/2013/03/09/917343/how-hollywood-murdered-movie-magic
http://www.deadline.com/2013/04/movie-attendance-likely-drop-2013-fitch/