I have always contended that making games is a business. This doesn’t mean that I like the decisions that companies like Activision make but I feel that at least their actions seem justified to them. They’re not out to deliberately harm or enrage their customers, they just want to make as much money as possible. That may mean pricing aggressively or introducing new incentives like EA’s “Project Ten Dollars” but I don’t believe these are done with any particular malice, they’re done because after market research they believe the majority of consumers will buy it.
So yes, creating games is a business albeit one that you and I have a heavy emotional investment in. However, even coming at the industry from this angle the current raft of closures and rumours of companies that are in trouble (like THQ) makes me sad, genuinely upset and concerned about the future of the industry that many of us have so much tied up in.[drop]I want to make it clear that I don’t think gaming will ever completely die, I think it’s now gotten to a point where it would be exceptionally weird if it collapsed entirely. It will certainly change and evolve, grow and shrink, and the way that games are made may change completely but I firmly believe that it will continue to exist. We may not like whatever games, and the industry in general change into, but it will still be there.
Snapping back to right now though, the problem seems to be one of giving and taking chances. We don’t know the financial situation of studios that go bust, typically the ones that do go under are either privately held or operate as part of a business unit within a publisher; for all we know, many of them may have been haemorrhaging money for years. However, it does seem that developers aren’t being given second chances sometimes, one poorly received game and that’s it, you’re done for.
The core of this is obviously in the scale of the games that we as gamers have come to expect from the industry now, we want huge titles with breath-taking production values and we seem to want this for all (or at least the majority) of games. Building games like this obviously costs money, vast stacks of the stuff. That money has to come from somewhere, and it’s usually from a publisher. Many of the closures we see, the money generally comes from the publisher that owns the studio.
The thing with handing someone a few wheelbarrows full of cash is that, typically, they’re going to want it back at some point. That means your game has to sell enough units to generate your own wheelbarrows full of money to take back to the publisher, if you don’t then someone is not going to be pleased.
Now that is, of course, understandable. If I was investing in a game I’d almost certainly want the money back, plus a good chunk on top. That is, pretty much, the point of investing. Where it seems to fall down is that games now cost so much to produce that one poor game can be enough for a publisher (or whoever your investors are) to declare your business unsustainable and pull the rug out from under you. The sheer quantity of money involved has made anything less than perfection seem like a non-option.
I think this is where the downfall of the current epoch of gaming will come from, we’re already starting to see elements of concentration around known quantities appearing. I mean, look at it from the perspective of those putting the cash into games. They have project A which is a series that those who follow gaming heavily, as well as some elements of the general public, are aware of. It will probably sell a few million copies without breaking a sweat. On the other hand, there’s project B, something that’s not been seen before with a more niche audience. Its sales are much harder to predict. In all likelihood, both games will cost a troubling amount of money, so which one would you fund in their position? Be honest now.[drop2]This is why developers like thatgamecompany seem like a likely future for the industry, niche titles with a much, much lower budget. Less of a risk, easier to fund, probably developed for less than the catering budget on Modern Warfare 3; why not go for it?
I honestly don’t know if we’ll continue to see more consolidation, more studios collapse under the economic pressures of creating games in this climate. I’m fairly certain that the production values we see in many games are starting to become unsustainable for anything that’s not a guaranteed seller but I don’t realistically know that, all I can do is hope that some technology comes along which drastically lowers production costs.
The future is not bleak though, far from it. We’ve moved from games developed by a team of one or two that were distributed by actually printing out the code, to studios made up of hundreds of people with games that you can pick up at the same time as you get bread in just a few decades. Whatever direction the industry takes next, I’m almost certain it won’t be one I’ll expect.