Recession - the best thing for the games industry?

[weemadando]

This is just ramblings from my blog, but I'm cross-posting here to get some feed-back from you guys on just how crazy I actually am...

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OK, time to get into some controversy. Is a recession the best thing for the games industry at the moment? We've seen the stats that show that industry sales are going against the traditional recessional downturns for luxuries, but will this last once things actually do get really tight?

I'll put this out straight away - I haven't had any formal training in economics for a few years and even then, I really haven't specialised in it to any great extent. But then again, it seems that having zero ability to understand economics is a prerequisite for world leaders nowadays, so it's not like I'd be talking out of turn.

The conventional thinking has always been that as money becomes tighter for people they would shrink away from spending on luxuries, something that seems to be defied by the recent stats. But I ask the question - how conventional are the people who are spending the most money? I know that my gaming budget is quite high - I try and budget to get at least one game a fortnight, usually at full price. Many others will also partake in such buying habits. In fact, I would wager that a goodly proportion of the income of gaming industry comes from those of us who work full time, probably don't have children and may or may not have a spouse/partner. In other words - those with plenty of disposable income. We are the ones who are more likely to purchase a game at full price in a launch window. Sure, there are the nagging kids who use their pocket money - but they will certainly be more immediately effected by the tightening family budget. And even then - a parent in that tightening budget scenario is likely to encourage trade-ins, purchasing of second hand games and rentals above purchasing a brand new copy.

Thus I would put forward that those who have the greatest real purchasing power in the games economy are the ones who are least likely to really feel the pinch of a recessional economy. But this isn't really my point.

I am certain that if things continue going the way which they have been trending we will see a definite change in the overall turnover in the games industry. The hardware sales will likely be the first to take a hit given the significant costs involved in purchasing the hardware (and just as often the HDTV to go with it), and consequently we will likely see a plateauing in software sales as there will no longer be the rapidly expanding market to sell into. Should these trends continue, it would rapidly reach a point where the potential market for a game is going to be small enough that break-evens are no longer certain. So what would this mean for the industry, and why would it be a good thing?

My hope would be, given this situation, that we'd see a change away from the Hollywood "one blockbuster covers our losses on all the other crap" model which the games industry is moving towards. Instead, my hope would be that we'd see a lot of the filth dredged out of the bottom of the meme pool. How would shovelware cope with a recessional market? With the declining sales base, and consumers likely to become increasingly selective in the application of their hard-earned, shovelware may face a dark future. It is likely that reviews of games would become critical (possibly leading to the creation of that mythical "new games journalism" which those "respectable" writers at places like Rolling Stone always crap on about), for the outlay for a fullpriced game would become such a significant financial event that people would want to be damned sure of the quality of their purchase. The downside of this is we would likely see many repeats of the Gamespot/Eidos debacle and the Ziff Davis/Ubisoft tantrum where negative press is greeted with indignance and infantile outbursts.

But the main change which I would anticipate in the move away from the blockbuster model is towards sustainable development costs for all titles. What if you were to be buying a new game for your 360 or PS3 at a pricepoint significantly below the current full price? And I'll use Bully as a demonstration here - what if it was an excellent game, but with graphical standards well below the current gen? Would you accept that - a sacrifice of graphical fidelity on the altar of affordability? Where else could fat be trimmed from the development process - would people accept "speech bubbles" instead of voice acting? How about relying on user-soundtracks instead of licensed/original music for the most part? All of these things could help trim those development costs to allow games to be made for less and, in theory, retail for less. After all - not every game has to be GTAIV with tens of hours of content, amazing graphics, sound and writing with a price tag to match.

I think that the key here is developing an understanding with the publishers and probably moreover with the game buying public that not every game needs to be a full-priced Michael Bay inspired masterpiece. People are willing to get less when they pay less and perhaps that "mid range" is what they should aim for to keep themselves in the black in the face of the "R-word".

I must say that EA and some other publishing houses are very prescient in this respect with the move towards free-to-play with pay-for-bonus games coming in on the horizon with an additional ad supported model incorporated. Hopefully things like Battlefield: Heroes and the proposed re-model of Company of Heroes into a free-to-play game will lead the charge here. If Sony and Microsoft were prepared to investigate new methods of dealing with these concepts through their stores and online services it could be a way for them to guarantee themselves a massive revenue stream and player base through the darker economic times. Just imagine something like Battlefield: Heroes on 360 or PS3 as a free game. The pay-for-bonus system can be worked in through Marketplace or PS Store, but having a free game like that to appeal to the player base would give either console a great boost.

In relation to Marketplace and PS Store, I would definitely envision that DLC would reprice itslef into oblivion. After all, in a recessional economy people who are paying full price for a game are going to be less than pleased that they would have to pay to get what should have been in there to start with in some cases. Perhaps we may even see something remarkable happen with sequels becoming available for download via these venues for released games. Look at Tomb Raider Legend and the DLC packs for Anniversary. Look at how Vegas 2 could well have been a big update pack for Vegas 1. This kind of electronically distributed expansion pack is the first step towards the creation of an on disc engine and resource pack for DLC games. That kind of future is pretty out there, but it is something that I think we are moving towards, especially as the budgetary belt is pulled tighter and tighter.

The essence of my ramble here has been to point out a number of ways in which I think a recession could really help the game industry pull itself back into shape. Whether its a remodel of the distribution and sales models, or a fundamental shift in the approach to development - if even some of my hopes (masquerading as predictions) come through then we will likely come out the other side with a much better model. After all, look at what the thirties did for Hollywood.

[Uraniun235]

One possibility is that, in an effort to maintain the viability of high graphical fidelity, the big publishers like EA may attempt to build a common library of certain textures, models, and other art resources so that the wheel does not need to be re-drawn with every bloody production. That's where a huge amount of the cost comes from these days. I would imagine this library would carry licensing costs, but with the right model it could still be a powerful asset.

How about relying on user-soundtracks instead of licensed/original music for the most part?

I doubt we'd see a total abandonment of developer-provided music, especially when music can be critical in establishing mood. Now, for some games it doesn't really matter, but for some it's really vital. I think with those games the bigger development would be a reliance on synthesized music... but then, really high-quality synthetics are pretty good, and video games have had synthesized music for a long time anyway, so I doubt we'll see much quality difference.

In this age, even a current high-end game can get away with just hiring a composer and renting some synthesizers for awhile. I doubt it's that large a proportion of the cost.


I don't think we're going to see a spurt of "innovative" titles from big publishers desperate to "save money". Rather the opposite, I suspect; big publishers will more than ever crave the safe, the tried and true, the formulaic. Indeed, if hardware stagnation is - as you say - to become such a major factor in development, we may see publishers turn increasingly to raiding old IP for re-releases and rehashes and remakes. Similarly, just about every publisher already has FPS engines and art assets to their name - rearranging the pieces into a "new" single-player campaign would be very inexpensive to accomplish.


But then, I don't think we're ever going to see any renaissance of the 'gaming industry' - it is just as bureaucratized and managerial as any other branch of the Mass Media. And, just like Movies or Television or Music or Books, the Games will have their occasional ultra-popular blockbusters and their quality masterpieces, and the other 95% will consist of shoveled shit.

[weemadando]

The "core of engines/resources" thing is something that I really feel has huge potential. Right now, Valve if they so wished could probably release a shitload of Source based properties as DLC for The Orange Box.

I just envisage a system for some publishers where you buy say, "The Eidos Game ROM" which has their core engine onboard along with a shitload of common textures, sounds etc. Then, you just download the additional code, models, scripting and other errata for the next Hitman, or Tomb Raider or whatever game you want to play. EA is moving away from this though in allowing developers to actually make engines suitable for what they are developing (after the renderware apocalypse), but for some I can see it being a real help.

As for the music thing, of course in a game like Bioshock of Halflife, original scores are key to developing the atmosphere, but do you really need that mountain of licensed tracks in Burnout: Paradise (of which only about 4 are worth it). There are a lot of games that have shit soundtracks that would have had development costs cut if they'd just done the "custom soundtracks only" thing.

[Death from the Sea]

I dunno about you but I spend the $$$ on a game to keep me from going out and spending more elsewhere.

[Sarevok]

The "core of engines/resources" thing is something that I really feel has huge potential. Right now, Valve if they so wished could probably release a shitload of Source based properties as DLC for The Orange Box.

I just envisage a system for some publishers where you buy say, "The Eidos Game ROM" which has their core engine onboard along with a shitload of common textures, sounds etc. Then, you just download the additional code, models, scripting and other errata for the next Hitman, or Tomb Raider or whatever game you want to play. EA is moving away from this though in allowing developers to actually make engines suitable for what they are developing (after the renderware apocalypse), but for some I can see it being a real help.

As for the music thing, of course in a game like Bioshock of Halflife, original scores are key to developing the atmosphere, but do you really need that mountain of licensed tracks in Burnout: Paradise (of which only about 4 are worth it). There are a lot of games that have shit soundtracks that would have had development costs cut if they'd just done the "custom soundtracks only" thing.

While I agree with the graphics and sound part I think you are not entirely correct about engines.

I am a complete novice. But every engine from Quake 3 to Irrlich that I have tried are difficult to reuse. It is easier to write your own gameengine from scratch than to understand and modify a million line piece of work. Using a pre existing engine like Quake will get you a Quake clone. Modifying that to support say a Mechwarrior sim will be extremely difficult. Not saying it can be done but after the time and effort spent it will be as expensive as any other game using licensed renowned engines today. In short there is a good reason why there are not game development kits floating around.

[Darth Raptor]

I dunno about you but I spend the $$$ on a game to keep me from going out and spending more elsewhere.

QFT, and my ability to remain content without leaving the house helps insulate me from rising food and fuel costs to boot.

Then again, I'm still playing on last generation's consoles and a positively ancient PC. I suppose that advantage would evaporate rather quickly if I had to have a widescreen HD TV, a bleeding edge gaming rig and sixtyfuck dollar games the day they come out.

[Zixinus]

What about the indie market? Their games are cheap as they do not require to follow "the standard", they make their own soundtracks, sometimes do not even require voice acting, they rarely rely on uber-hardware.

[Glocksman]

I think that the key here is developing an understanding with the publishers and probably moreover with the game buying public that not every game needs to be a full-priced Michael Bay inspired masterpiece. People are willing to get less when they pay less and perhaps that "mid range" is what they should aim for to keep themselves in the black in the face of the "R-word".

My understanding is that's exactly how Hollywood stayed afloat during the Depression.
They pumped out a lot of low budget 'escapist' pictures that made money even if the box office wasn't blockbuster, along with a a few large budget flicks that were so good, they tempted large audiences into seeing them.

Personally, I'm willing to pay about $25 or so for a good PC game.
Much higher than that, and I'm simply going to pass, 8800GTS card or not.

[Sarevok]

The best solution for the game industry would be to realize it is not hollywood and concentrate on making games again instead of interactive movies. Choosing 3-4 endings is not "freedom" nor is walking along a railroad line witnessing scripted events "epic" and "atmospheric".

[Lagmonster]

I'd be willing to say that I spend more time playing free web-based games like Travian and Kingdom of Loathing, and freeware games like Soldat, N, and Battleships Forever than I do on big commercial games.

I've also got a lot of mileage out of the indie game developer community; things like Starscape and the plethora of light-cost games out there that you see at the IGF awards are always worth their weight in big-budget titles.

If anything can fill the void of the 80$ game, it's the indie developers.

[Julhelm]

The best solution for the game industry would be to realize it is not hollywood and concentrate on making games again instead of interactive movies. Choosing 3-4 endings is not "freedom" nor is walking along a railroad line witnessing scripted events "epic" and "atmospheric".

Blame Cinemaware for spawning that hideous phrase back in the 80's.

[Zixinus]

If anything can fill the void of the 80$ game, it's the indie developers.

Oh, I agree. I've am more interested in the indie market then almost any mainstream game. Developers nowadays seem to be only capable of creating so much hype that even they should know better.

The best solution for the game industry would be to realize it is not hollywood and concentrate on making games again instead of interactive movies. Choosing 3-4 endings is not "freedom" nor is walking along a railroad line witnessing scripted events "epic" and "atmospheric".

What would you call "free"?

[Sarevok]

What would you call "free"?

A game that does not artificially create "cinematic moments" game devs seem so fond of. Instead great moments arise naturally as part of the gameplay. Consider Deus Ex and Half Life 2. Deus Ex is hardly a perfect game. Yet consider this. You are sniping soldiers from top of a building. If this were Half Life 2 you would follow a rail road path that would lead you to this building. Then you would find a sniper rifle conveniently waiting for you. Enemies would spawn and rush you untill you get a checkpoint. In Deus Ex you were on top of the building because you chose to, if you felt like rambo you could have engaged augmented supersoldiers and robots on the streets below. To get to the rooftop you had to battle deadly soldiers and evade military robots. The tense moments of evading the enemy skillfully so you get here in one piece worked. Now you can finaly relax and pick them off with impunity. You achieved something through your actions. You feel truly "cinematic" as you pick off the enemy like some action movie hero.