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Incline Is the AAA Gaming Industry Crashing?

Kane

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blizzard is one of the few companies that actually still capable of producing good games.
 

Shadowfang

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No, not every youtuber talks out of his ass. Some people care for facts.
For the truth.

touché Sir McInternet. Will ye band of brothers also die on the glorious fields of forum posting with great e-hounoure?
I get it you like shitty youtube videos and i see you have a lot of common with Clever Noob.
Facts are for fools, wild generalizations are awesome and lets hope no one counter argues against me.
 

Kane

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No, not every youtuber talks out of his ass. Some people care for facts.
For the truth.

touché Sir McInternet. Will ye band of brothers also die on the glorious fields of forum posting with great e-hounoure?
I get it you like shitty youtube videos and i see you have a lot of common with Clever Noob.
Facts are for fools, wild generalizations are awesome and lets hope no one counter argues against me.

no, i just live in the real world and realize that youtube videos are hardly ever based on real number and that if I wanted proper R&D into a topic I would ring up the appropriate people instead of feeling like an internet hero when i point out that youtube user "game noob" has, in fact, calculated the downsizing of the games industry wrong, it wasn't in 98,67% as stated but 68,285930%.

nope sorry still not autistic enough to care. facts only matter to maybe two handful of people with real expertise in a topic, the rest gets regurigated mush that more often than not has nothing to do with facts and is at least incomplete. the overall picture is what matters in a message.

but you are of course free to continue your e-hounoureful fight for youtube user "slamboy" and his quest of pointing out that youtube user "game noob"s estimations to the hundredth percentile are dishonest and that this is all an evil conspiracy by youtube user "game noob" to bring the game industry down. by all means, go hog wild.
1320358901988.jpg
 

Shadowfang

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If you knew that the video was a shitty source of information why even post it in the first place?
For some Kool Kodex Kredits?

Did you even saw the whole Smudboy response video? It was not about how off by %
Clever Noob was of the values it stated. It was about everything he said were lies.
Clever Noob wanted to try and show us that the 80's video game crash was related to video games
quality at the time and that the same was going to happen now. But he failed miserably to demonstrate why.
He failed, because he was making almost everything up and when his version clashed with reality it stood up very poorly.

Smudboy response was not restricted to numbers (maybe that's how far you got into the video).
Yes, some of the numbers were off, and a lot of dates as well, but the relation to stocks, game quaility and the
game crash that is going inevitable to happend is false aswell.

You live in what? Reality? You think that there is going to be a video game crash and you think you
live in reality? You live in lalalala bullshit land. There is not going to be any crash like the ones you fap
about. If EA has to cut down its size to survive, it will. If it has to improve their costumer relationship
to survive, they will. Right now they are doing quite stable fucking their costumers in the ass with drm
and shitty games. We may hate their business practices but its working for them for now. They are probably
not going anywhere soon...

And by the way, i don't know what you think an autistic is but i am sure its nothing that goes in that
reality where you live in.
 

Ermm

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Industry is crashing so hard next Call Of Duty will break $1 billion revenue mark causing hollywood movie producers meltdown.

If it haven't already. Because Blops2 sold 15 million copies in the first month meaning $900 mln revenue

wat

I guess you haven't noticed massive lay-off's, closures etc. for every multibillion dollar COD.

Or maybe you try to hide simple facts from you conscience just as hard as Sony is trying to hide VITA's sales figures.
 

MetalCraze

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i didn't say that the masses will aquire some sophisticated taste. I say that publishers with a clear profile will make it through an eventual crash, while those who don't and just put out games on an assembly line will die.

No - the masses will not acquire any taste - and there will be NO crash as a result.

There always was a shitton of shit games and even harder cases of sequelitis than today (back in Goldbox days they changed only disc cover). Nothing crashed. Profits will keep growing.

Did you see Hollywood crash? There always was a shitton of movies that failed to meet the set goals. Hollywood just learned from this what sells and what not better. Crash is there when there's too much shit that people don't want.

I guess you haven't noticed massive lay-off's, closures etc. for every multibillion dollar COD.
You made it sound so horrible and yet for some reason each new CoD makes more sales.
The only layoffs were when Kotick cut out the middleman from Infinity Ward (e.g. useless directors that got money for no reason since they had jack shit to do with game development anymore) and some people left to form a new studio nobody cares about. Big deal.

Or maybe you try to hide simple facts from you conscience just as hard as Sony is trying to hide VITA's sales figures.
Facts like Blops2 selling 15+ mil and CoDMW4 coming out this year?



Or maybe facts like posers shitting on AAA and then do a Day 1 Purchase of Skyrim eh?
 

taxalot

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I have already said it and I will say it again : the problem is not the games, but a lack of education and general stupidity. Give better schools, give art education, make them read better books.

Then, we will have better games, movies, and everything. Education is EVERYTHING.

Also, the industry needs to stop "going to crash", like it has for the last ten years, acording to bloggers and actually crash.
 

xilo3z

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If you knew that the video was a shitty source of information why even post it in the first place?
For some Kool Kodex Kredits?

That isn't even the worst part of the video (his understanding of the 80's game crash). His total lack of financial literacy and using the stock market as a "judge of quality" leading indicator (Hey guis, AAPL has lost 50% of its value-> cell phones are dying). I mean using his stock indicator "theory" ever since August, EA has been releasing top quality games as from Aug to date, EA has 50%, peaking at 60% increase a month ago, and S&P500 only 20%! Fuck all that macro and micro noise, EA is just quality, baby!

Here is a real financial out look on EA - Their net profit margin has finally recovered to 2007 levels, asset turnover, return on investment, return on equity, and return on assets are all at 5 year highs, and their inventory turnover is lower, but still almost at their 2003 peak. Their P/E is high when compared to the S&P, but are in line with the current industry averages. P/B is in line with S&P. Their forward P/E meets S&P average. The P/CF and P/S beat the averages. Not too bad. Not great.

Just from looking at P/XYZ's we can see they aren't capitalizing enough from sales. They don't need more sales, they need better margins. The fact is all of EA's ratios and performance are just now finally recovering to 2008 levels. The only thing EA needs to fix is their costs. They just need to keep selling the same shit they are now, but with less costs. When you're Price/Revenue, Price / Cash Flow is rocking yet P/E is 35+, something is up.

Wheres the revenue going? Easy - SG&A is above 30% total sales and R&D is above 30%. 60% of all revenue gone in expenses. In this case, if your gross margin is below 60% of sales, you're fucked. EA's GM has been below 60 since 2008 and is just now recovering. ActivBlizz's SG& and R&D are both below fucking 20! NOTHING ABOUT QUALITY. If EA had ATVI's expenses/margins then Riccitiello would still be there talking about how many Colombian strippers he's gonna do blow off of. As you can see this is not "drrr stock dropped games must have sucked drr they go bankrupt". Now I'm on my laptop so I don't have all my fancy shamcy DCF, Disc. Div models, Earnings disc., justified analysis spreadsheets, so this is basic stuff.

Riccitiello was preaching it since he took over and no one on the board wanted to do a damn thing. This is the same board that when Riccitiello went to them and said "lets create confidence in the market, lets all buy thousands of shares to show the public we are going to change it around" - no one on the board but him bought shares. He even said the boards mentality is "dump money into it and it will sell". The moment EA changes it's cost structure is the moment EA turns back into MegloRapeCorp™ and the industry is all the sudden "not crashing" anymore and all is saved....ha.
 

DraQ

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I'd say It'll be hard for the industry not to crash. Gamer population isn't growing as fast as budgets do and without increasing your budget you're falling behind the rest of the race, especially if you follow the trend of producing linear "interactive" movies that preclude most of content reuse.
The crash was postponed by long domination of current gen consoles (as with everything being multiplatform they dictate the pace), but since next generation is supposedly about to appear I wouldn't count on therre being long before most of the industry is left in rubble.

Smaller companies with less focus on AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA+++ titles will probably make it out alive, I also expect Beth to be left standing, because of different approach and heavy content reuse - they might incline, though, so it's not as bad as it seems.
 

Ermm

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I guess you haven't noticed massive lay-off's, closures etc. for every multibillion dollar COD.
You made it sound so horrible and yet for some reason each new CoD makes more sales.
The only layoffs were when Kotick cut out the middleman from Infinity Ward (e.g. useless directors that got money for no reason since they had jack shit to do with game development anymore) and some people left to form a new studio nobody cares about. Big deal.

Or maybe you try to hide simple facts from you conscience just as hard as Sony is trying to hide VITA's sales figures.
Facts like Blops2 selling 15+ mil and CoDMW4 coming out this year?



Or maybe facts like posers shitting on AAA and then do a Day 1 Purchase of Skyrim eh?

So what are you saying, COD can save the the gaming from crashing? How is COD affecting Sony's debt ''junk'' status? How is COD affecting Square Enix situation? How is COD affecting EA? What the hell does all of these companies have in common with COD, as you seem to imply? Dumbfuck.
 

Gozma

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xilo3z:You seem to know a lot about finance, can you explain what financial shit caused the '80s video game crash?

I've read stuff like Atari printed 3 copies of ET for every Atari 2600+5200 in existence, I guess on the idea that it was going to push new system purchases, which sounds to me like some kind of shirt-tearing massive overcapitalization bubble was going on where lots of people were trying to pile into financing a small industry that couldn't support so much investment. Places like Atari ended up making insane bets to find any way to spend enough money to justify their capital.

I don't think there is going to be any kind of disorganized crash again but there could definitely be a slow AAA necrosis as more places get pushed out of AAA and capital looking for video game investments gets channeled into few and fewer companies and fewer and fewer paradigms, with bigger and bigger attempts to buy out a certain market segment (like I guess the multiplayer military shooter) with capital investments.

But hey, maybe shit like phone games that steal money from senile grannies will stick around and overtake AAA...
 

Data4

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I don't think the industry itself will crash, rather big publishers. If that's one in the same, then, well... Kickstarter has taken off. Developers are taking advantage of it, and a significant amount of gamers are taking notice. Publishers have a chance to reverse their downfall by seriously paying attention to what's going on with KS. Ubi has, if M&M:X is any indication. Maybe the big publishers will realize that a variety of game genres are better suited for individual games, rather than this homogenized crap they've been spewing the last 10 years. Or not.

Should the fall happen, I won't mourn the loss. Smart developers will carry on.
 

DalekFlay

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Like America, the middle-class is vanishing. The rich and poor will be around for a long time.
 

Kane

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If you knew that the video was a shitty source of information why even post it in the first place?
For some Kool Kodex Kredits?

because it is entertaining. i don't make a science out of it.

obviously gamenoobs analysis isn't good. here is why:

a) it's a youtube video
b) gamenoob has no hands-on experience in the industry what-so-ever
c) it's a youtube video

this is all blatantly obvious to me and I didn't even need to make a fucking analysis of a youtube video that is longer than said video itself to realize that.

he raises some good points though that I endorse, namely: don't buy shitgames. one word. shitgame.

and there will be NO crash

depends on what you think a crash looks like. the industry has already crashed a couple of years ago if you ask me. so many independent or semi-independent studios that have been gobbled up and squeezed dry in the last years. the field is as diverse as the different types of maggots swarming a rotten corpse.
 

DraQ

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I've read stuff like Atari printed 3 copies of ET for every Atari 2600+5200 in existence
Now, I don't know all that much about finance, but would risk a guess that completely clueless suits - oblivious of even existence of any sort real world stuff underlying calculations that led them to such absurd decisions - in positions of power were to blame.

Now, current generation of suits - you know, those guys who don't see difference between developing and marketing fucking bleach and developing and marketing entertainment porduct, or those who didn't see ToRtanic despite virtually everyone with about two functioning knew what's going to happen as soon as they learned about ToR being in development - doesn't seem that much brighter.
 

Shadowfang

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because it is entertaining. i don't make a science out of it.

obviously gamenoobs analysis isn't good. here is why:

a) it's a youtube video
b) gamenoob has no hands-on experience in the industry what-so-ever
c) it's a youtube video

this is all blatantly obvious to me and I didn't even need to make a fucking analysis of a youtube video that is longer than said video itself to realize that.

he raises some good points though that I endorse, namely: don't buy shitgames. one word. shitgame.

There are good youtube videos with good analysis but thanks for the fallacy.
You dont need a 30 minutes of bullshit to say "don't buy shitty games, lets make the industry crash!"
There are several youtube videos with the same message, with the same EA bashing and that make perfect sense without any fantasy bullshit added to it.
But no, you had to go for the shittiest one and now you say:
"Oh well guys, you know youtube... ehehe youtube and its youtube quality."

depends on what you think a crash looks like. the industry has already crashed a couple of years ago if you ask me. so many independent or semi-independent studios that have been gobbled up and squeezed dry in the last years. the field is as diverse as the different types of maggots swarming a rotten corpse.
And it was smudboy who was hung up on semantics.

I think i know what happened. You posted this video thinking it was good.
Havoc then posts a response on showing how shitty, false and wrong the whole thing really is and what do you do?
You take it personally. What do you do then? Defend the video? No its hopeless. You try and dismiss the smudboy's response by making the same stuff Clever Noob did.
Making stuff up.
Its not your fault that the video is shitty but don't try to convince me that all of youtube videos are like this.Yes, youtube may have low standards on average, but this
one is really low.
 

Gurkog

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The video brought up some interesting conversation points, but I am almost surprised by the level of :butthurt: in this thread. Then i remember this is the Codex, where people go apeshit over anything and everything.
 

Ranselknulf

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I doubt there will be a video game crash on par with the 80's crash.

I do think a great deal of failure is on the horizon though.
 

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