Topic: Games Industry Death Watch 2010-present

[Kytim89]

The cost of current generation game development is still not cheap. Until this is fixed then I do not see Sony and Microsoft's next consoles being that much of a leap over the Wii U. The entire industry has a vested interest in driving down costs for their own survival.
 
Didn't EA say a while ago that either Dead Space 3 or Mass Effect 3 had to sell five million copies just for them to mae a profit?

I don't recall that final quote one way or the other (not saying it wasn't said, just that I don't remember it), but I definitely think development costs are already too cost-prohibitive for the long-term health of the industry. That said, I'm decreasingly convinced that most of the big publishers care, and I'm not certain that the smaller developers (are there even any mid-sized developers left?) have enough say on the matter to do anything besides go handheld-only or make indie digital games.

Unless the industry can bring HD development costs down then I see the high cost of making games helping to usher in the era of digital retail a whole lot sooner. The reason for this is the lower barrier of market entry, reduced costs to manufacture physical media (games, booklets, etc). Do you really think that EA gives two shits about Gamestop? The answer is no. If a developer like EA can save a billion dollars by going exclusively digital then they will do it. Why do you think that Nintendo is bending over backwards to make the eShop accomodate everyone.
 
If you want to know where the real competition of the next generation will be, and I have said it many times on this forum, look no further than services. Look at hoe Microsoft is positioning the 360 to be the world's number one set-top box. Look at the Wii U with its TVii feature. This is where the consoles will really compete. Add in a better online system as well.
 
Also, Sony and Microsoft will have their own versions of the Gamepad. The graphical leap between the PS3/360 and PS4/720 will be no different than between the Gamecube and Wii. All Sony and Microsoft will do is reconfigure the hardware to accomodate streaming to their own Gamepad, and some kind of Move and Kinect successor.

[MagicCow64]

I don't recall that final quote one way or the other (not saying it wasn't said, just that I don't remember it), but I definitely think development costs are already too cost-prohibitive for the long-term health of the industry. That said, I'm decreasingly convinced that most of the big publishers care, and I'm not certain that the smaller developers (are there even any mid-sized developers left?) have enough say on the matter to do anything besides go handheld-only or make indie digital games.

The games industry seems to be mimicking the form of Hollywood, where a handful of major studios release dozens of productions a year, with the expectation that most will lose money and the four or five hits will put them in the black overall. The problem is that this hasn't worked out too hot for the movie industry for the most part, and movies are much easier gambles for consumers to take. $12 bucks for a movie ticket versus $60 for a game is a pretty huge differential for that model. And movies have much longer legs, with DVD sales, cable rights and whatnot. The majority of game sales (for most titles) occur within a month or two of release, and then drop off a cliff. Not much time for word of mouth to revive something that slipped past the radar before it becomes something you have to dig through Gamestops or Ebay to find.

[TJ Spyke]

The cost of current generation game development is still not cheap. Until this is fixed then I do not see Sony and Microsoft's next consoles being that much of a leap over the Wii U. The entire industry has a vested interest in driving down costs for their own survival.
 
Didn't EA say a while ago that either Dead Space 3 or Mass Effect 3 had to sell five million copies just for them to mae a profit?

I don't recall that final quote one way or the other (not saying it wasn't said, just that I don't remember it), but I definitely think development costs are already too cost-prohibitive for the long-term health of the industry. That said, I'm decreasingly convinced that most of the big publishers care, and I'm not certain that the smaller developers (are there even any mid-sized developers left?) have enough say on the matter to do anything besides go handheld-only or make indie digital games.

Unless the industry can bring HD development costs down then I see the high cost of making games helping to usher in the era of digital retail a whole lot sooner. The reason for this is the lower barrier of market entry, reduced costs to manufacture physical media (games, booklets, etc). Do you really think that EA gives two shits about Gamestop? The answer is no. If a developer like EA can save a billion dollars by going exclusively digital then they will do it. Why do you think that Nintendo is bending over backwards to make the eShop accomodate everyone.
 
If you want to know where the real competition of the next generation will be, and I have said it many times on this forum, look no further than services. Look at hoe Microsoft is positioning the 360 to be the world's number one set-top box. Look at the Wii U with its TVii feature. This is where the consoles will really compete. Add in a better online system as well.
 
Also, Sony and Microsoft will have their own versions of the Gamepad. The graphical leap between the PS3/360 and PS4/720 will be no different than between the Gamecube and Wii. All Sony and Microsoft will do is reconfigure the hardware to accomodate streaming to their own Gamepad, and some kind of Move and Kinect successor.

The main cost for retail is unsold copies sitting there. Digital is still nowhere near big enough that most devotees can afford to ditch retail (nor would most gamers want them to). They would lose a lot of sales and exposure.

[Kytim89]

I don't recall that final quote one way or the other (not saying it wasn't said, just that I don't remember it), but I definitely think development costs are already too cost-prohibitive for the long-term health of the industry. That said, I'm decreasingly convinced that most of the big publishers care, and I'm not certain that the smaller developers (are there even any mid-sized developers left?) have enough say on the matter to do anything besides go handheld-only or make indie digital games.

The games industry seems to be mimicking the form of Hollywood, where a handful of major studios release dozens of productions a year, with the expectation that most will lose money and the four or five hits will put them in the black overall. The problem is that this hasn't worked out too hot for the movie industry for the most part, and movies are much easier gambles for consumers to take. $12 bucks for a movie ticket versus $60 for a game is a pretty huge differential for that model. And movies have much longer legs, with DVD sales, cable rights and whatnot. The majority of game sales (for most titles) occur within a month or two of release, and then drop off a cliff. Not much time for word of mouth to revive something that slipped past the radar before it becomes something you have to dig through Gamestops or Ebay to find.

This is one reason why I see game developers going exclusively digital sooner or later. Think of it this way, for example, EA is hesitant to put their games on the Wii U, however, by putting their games exclusively on the Wii U's eShop then they know for sure that the hardcore games who will buy their games either way will buy the games, and the word of mouth generated by digital content is a whole lot more secure than having you games discounted in a bargain bin somewhere in Gamestop.

[TJ Spyke]

Going all digital will result in far fewer sales, and less money. And they don't lose much money at retail, retailers get about $7 from a $60 game. Going digital will cost them a LOT of sales that they would have gotten from retail. EA being reluctant to put games on Wii U has NOTHING to do with digital sales. Word of mouth from digital sales is lower than retail. The most that will happen in the next 10 years is releasing both retail and digital. The cons off all-digital far outweigh the positives.

[broodwars]

I'm not saying developers shouldn't put effort into presentation, but you can't deny that it's a very risky proposition when a developer with a proven track record slips up once and is effectively destroyed by it.

"Proven track record"? Alright, I'll show you a proven track record.  Remember that list of games Eurocom made this generation that I posted earlier? Alright, here are their Metacritic scores for the dominant platform they released on:

Pirates of the Caribbean: At World's End (360) - 58
Beijing 2008 (360) - 60
The Mummy: Tomb of the Dragon Emperor (PS2) - 38
Ice Age: Dawn of the Dinosaurs (360) - 68
G-Force (360) - 68
Dead Space: Extraction - 82
Vancouver 2010 (360) - 54
GoldenEye 007 (Wii) - 81
Rio (360) - 60
Disney Universe (360) - 66
GoldenEye 007: Reloaded (360) - 72
007 Legends (360) - 45
Harry Potter for Kinect (360) - 56

It seems to me they had a track record of putting out mediocre (and often licensed) product with the occasional flashes of quality, and we KNOW that Dead Space Extraction totally bombed in the market so even one of their better-reviewed games didn't sell well.  So yeah, it wasn't just "one slip-up."  It looks to me like a mediocre developer went under because they couldn't make good games this generation

[shingi_70]

Going exclusivly digital because they want the hardcore to pick up their game is a bad idea. Look at it this way even in the retail space Sony has done nothing but pander to the hardcore gamer all of their games barring a few this gen have bombed hard.  Microsoft used mainstream games and services and has done pretty good this generation.

But were going to see how good an all digital console will do next year. Other than Durango and Orbis, both the Steambox and Oyua are probably coming out next year as well.


Also I remember the quote from EA being that they expected dead space to sell around Call of Duty numbers (10 million copies day 1). It won't happen and I'm expecting the game will still do good (1 million the first month) but it will be considered a flop because EA doesn't have its expectations in check.

[TJ Spyke]

Steam box and Ouya are not consoles, they are gimped PCs. Ouya will at best be very niche.

[tendoboy1984]

Going all digital will result in far fewer sales, and less money. And they don't lose much money at retail, retailers get about $7 from a $60 game. Going digital will cost them a LOT of sales that they would have gotten from retail. EA being reluctant to put games on Wii U has NOTHING to do with digital sales. Word of mouth from digital sales is lower than retail. The most that will happen in the next 10 years is releasing both retail and digital. The cons off all-digital far outweigh the positives.

Going all digital worked for the music industry, book industry, and the movie industry. Apple's iTunes changed the music industy forever, giving music labels an incentive for monetizing MP3's. Netflix brought streaming via subscription to the masses. And Amazon's Kindle made eBooks more popular than ever.

So if digital worked for those industries, why couldn't it work for gaming? Oh wait, it already is working. Again, look at Apple's iOS devices and the App Store. Look at what Sony, Microsoft, and Valve are doing. Steam is the main distribution service for most PC games these days. The future of Xbox will be moving to the cloud, if that leaked document is any proof. And Sony bought Gaikai for similar reasons. There's also PSN and Xbox Live, which have proven to be very popular with consumers and publishers.

[lolmonade]

Going all digital will result in far fewer sales, and less money. And they don't lose much money at retail, retailers get about $7 from a $60 game. Going digital will cost them a LOT of sales that they would have gotten from retail. EA being reluctant to put games on Wii U has NOTHING to do with digital sales. Word of mouth from digital sales is lower than retail. The most that will happen in the next 10 years is releasing both retail and digital. The cons off all-digital far outweigh the positives.

Going all digital worked for the music industry, book industry, and the movie industry. Apple's iTunes changed the music industy forever, giving music labels an incentive for monetizing MP3's. Netflix brought streaming via subscription to the masses. And Amazon's Kindle made eBooks more popular than ever.

So if digital worked for those industries, why couldn't it work for gaming? Oh wait, it already is working. Again, look at Apple's iOS devices and the App Store. Look at what Sony, Microsoft, and Valve are doing. Steam is the main distribution service for most PC games these days. The future of Xbox will be moving to the cloud, if that leaked document is any proof. And Sony bought Gaikai for similar reasons. There's also PSN and Xbox Live, which have proven to be very popular with consumers and publishers.

None of your examples are proof of concept for all-digital:
 
 

• Barnes & Noble has as large and comprehensive paperback/hardback book sections as they ever had
• Go to your local Wal-Mart, Best Buy, or Target, and you'll find a nice selection of mainstream music CDs.
• DVD & Blu-Ray sections are just as large as they have ever been at your retail stores.

I will agree with the notion that these industries have finally started at least offering the option of either physical or digital product, but none of them have taken the plunge to all-digital. 
 
Will there eventually be a transition to all-digital for everything including gaming?  Absolutely, but not until the later generations of people and people like myself who want those physical copies stop being a large segment of the buying market.
 
 

[nickmitch]

The future of Xbox will be moving to the cloud, if that leaked document is any proof. And Sony bought Gaikai for similar reasons. There's also PSN and Xbox Live, which have proven to be very popular with consumers and publishers.

I wouldn't say that companies investing in a concept necessarily means that the concept is already successful.

[broodwars]

The future of Xbox will be moving to the cloud, if that leaked document is any proof. And Sony bought Gaikai for similar reasons. There's also PSN and Xbox Live, which have proven to be very popular with consumers and publishers.

I wouldn't say that companies investing in a concept necessarily means that the concept is already successful.

What are you talking about? I remember vividly when the Wii Vitality Sensor took the world by storm, just as the massively popular Virtual Boy did.

[noname2200]

Steam box and Ouya are not consoles, they are gimped PCs. Ouya will at best be very niche.

Not to be ironic here or anything, but aren't consoles also basically gimped PCs?

[TJ Spyke]

No, they are dedicated game machines. Ouya and Steambox will literally just be PCs that are stripped down.

tendo, as lol said, NONE of those industries are digital only. With music, 99% of all music is still in physical format too. Same with books and movies. Digital only is a flawed strategy that is YEARS away from even being viable. Cloud gaming is especially flawed because no one wants to be prevented from playing their games due to Internet being down and many areas don't have broadband yet.

[noname2200]

I'm failing to see the difference. Consoles are just PCs that have been streamlined to make playing games easier; no need to worry about individual specs, etc. If Ouya and Steambox run on similar principles, what does it matter if the games they play could also be played on a normal PC? In fact, don't Ouya games have to be tailor made for the system, a la home consoles?

[TJ Spyke]

Ouya is a joke. For one thing, the company is encouraging people to pirate games on it (which will not get more developers to support it). There are a whole host of reasons Ouya will fail, but I won't get into that. As for Steambox, I don't see the market for it. The people who would buy it likely already have the capability to play their PC games on their TV (it's not hard) and a casual gamer will not go through the effort.

[tendoboy1984]

Ouya is a joke. For one thing, the company is encouraging people to pirate games on it (which will not get more developers to support it). There are a whole host of reasons Ouya will fail, but I won't get into that. As for Steambox, I don't see the market for it. The people who would buy it likely already have the capability to play their PC games on their TV (it's not hard) and a casual gamer will not go through the effort.

But Steambox is essentially a home console for Steam games. It's more convenient than playing on a PC because  the hardware is optimized to play those games without any tweaking.

[TJ Spyke]

It's still a PC. The people who would use the Steambox already have Steam and have PCs optimized for PC gaming.

[tendoboy1984]

No, they are dedicated game machines. Ouya and Steambox will literally just be PCs that are stripped down.

tendo, as lol said, NONE of those industries are digital only. With music, 99% of all music is still in physical format too. Same with books and movies. Digital only is a flawed strategy that is YEARS away from even being viable. Cloud gaming is especially flawed because no one wants to be prevented from playing their games due to Internet being down and many areas don't have broadband yet.

A majority of music is purchased digitally (through iTunes, Google Play, Amazon, etc.). Movies and TV are moving to the digital realm as well, with services like Netflix and Hulu. TV is already a digital format (cable, satellite), so it doesn't really compare.


Gaming on Xbox Live Arcade, PSN, eShop, mobile devices (etc.) is convenient because everything is stored on the device itself.


Whether you're streaming or downloading, digital entertainment is here to stay. Like it or not.

[TJ Spyke]

It will be many YEARS before any significant things are digital only like you claim they already are.

Also, as of 2011 only about 20% of songs were purchased digitally and fewer purchased whole albums. The number is higher when you factor in free streaming services like YouTube and Pandora, and illegal downloads, but the fact remains that most music is still purchased in physical formats. Even fewer movies and TV shows are purchased digitally. So you are wrong in claiming they are all or mostly digital, and more wrong in saying games should copy them.

When you get to cloud services, that is even further away since there are too many negatives.

[shingi_70]

Have a sinking feeling that if Sega doesn't get its act together it might end up on this list next year. They don't have much slated for next year and I have a feeling their major title will flop (Aliens, I am expecting decent wii U numbers).   

I think they need to go back to the well and start reinventing their old franchises for the retail and digital space. (Being mid range in both cases)

The streets of Rage DD demo by Ruffian Games that leaked a few days ago looked pretty promising to bring back Beat em ups.

Sega going into 2014 should try and have keep their current Mantra (a few retail titles a year and mostly digital). In a just word their line up would look like

Retail
Sonic 2014 (keep following the colors and generations model)
Next Yakuza game
A proper single player Phantasy star
The next Total War game or what every is done by that dev
Football manager
Virtua Fighter 6

Digital
Mostly new IP and sequels to stuff like strets of Rage and toe jam and earl.

[Kytim89]

It appears as though EA will be excluded from the NASDAQ starting december 26th.
 
http://www.theverge.com/2012/12/16/3773242/nasdaq-100-drops-rim-netflix-ea-adds-facebook

[nickmitch]

The Netlfix move surprise me. They were on a bit of an upswing after the whole price jump debacle. (What was the name of the DVD company going to be again?) I guess it just wasn't enough of a turnaround. RIM might've been overdue for a bump.
EA isn't the most surprising. I think investors would be scared of investing in gaming companies with the whole "social/mobile gaming is the future!" mantras and the poor financial performance by companies who are solely in that space.

[Kytim89]

This is why I think that EA is not going to welcome a new Playstation and Xbox and the higher development costs that go go along with it for a very long time. They may support the systems out in the open, but behind closed doors they would rather milk this generation for wha it's worth.

[TJ Spyke]

Being delisted doesn't mean they are doing bad, just that they are not among the 100 most profitable.