Where's the gaming industry headed?
For a few days now, a certain thought has been bugging me, and I'm worried about what future holds for the gaming industry. This is all armchair analisys, so I'm looking forward to my mistakes being pointed out - especially since I'm not painting a very bright picture.
As you might realise, games are extremely cheap for luxury entertainment. Compared to games, cinema is short for its high price, books are long for their low price, etc; no other thing costs you as little for the time you spend on it. Even the AAA $60 games are cheap, yet people will still complain about it - mostly because it's a cultural perception by now that $60 is a lot (even though that's actually cheaper than it was 30 years ago, due to inflation). Some of the super-cheap indies skew the perceived "appropriate" prices even lower, as well.
However, budgets for the bigger games are getting higher. Marketing costs increase because of said market being oversaturated. To stand out some of the AAAs might need to have almost half of their budget put into marketing, as is the case with W3 and GTAV,
for example. Development itself is getting pricier, too, though mostly for AAAs - VA for everything, 4K textures, super-detailed models and all that jazz has become the norm, and the ceiling is always being raised higher. The unionisation of game developers, while something I really hope works out because it's been long needed in the somewhat borked culture, will also result in higher costs to making games.
Indies don't seem to be hit by that as hard (hell, with ever better tools some of their development costs are getting cheaper), but their problem is of another sort. There're just too bloody many of them. Lots of them are great, sure, but the pool of people playing games grows slowly, and each given person has only a limited amount of time and money he can spend on games. I'd love to buy and play every excellent indie out there, but that just wouldn't work out - and it won't work out for most people, so they'd have to choose. The more are out there, the less chance that
yours is going to be chosen and bought. At least Steam is helping out with promoting a culture of "buy, never play".
Right now we can already see there are three main ways to be successful, whatever success means (probably staying afloat and not having all employes stressed out or poor).
- Make a game with a giant budget, a big part of which is marketing, hope that it works out. If it doesn't due to being crap, being overshadowed by another similar game that's just better that came out at the same time, or some other reason, then weep quietly in the corner. See Witcher 3 for a success story, Deadpool for a failure story.
- Be a studio of three bearded dudes in a basement who somehow luck out on making the next big hit that grows based heavily on word of mouth, less on marketing expenses. See Hollow Knight for a success story.
- Make a niche game that appeals to a stable userbase and uses a stable budget, and safely predict the costs and the revenue. Obsidian seems to rely on this; I've worked as part of the development team of Syrian Warfare, a game that heavily adopted that principle.
The first two are getting harder due to reasons I mentioned above. The third is getting harder because innovating without getting out of the niche is harder for each previous innovation, and getting out of the niche is risky.
So costs are increasing, prices are staying the same or decreasing, and where does that leave us? Some change focus to microtransactions, because those don't have a limit of spending per player and that helps make the game stay profitable, but even that's not a panacea - there's partially deserved backlash for that sort of thing and at some point it'll start noticeably affecting revenue. The rest... well, from my point of view, it'll either end up in a lot of studios closing, a increase in price per game, or some concerted solution among the big players that's better than those options but that will require them working together and probably a genius idea or two.
Oh, and gaming journalism doesn't really help, because the fixed scale (1 to 10, 1 to 5, etc whatever) employed by a lot of it doesn't mesh well with the human nature of "if it's as good as the previous one, it's not good enough", leading to 8+ being the only good score by now.