As I scan through various news articles this morning, the harbingers of doom are once again tolling their bells for the game industry. Midway has closed its corporate office officially, in preparation for the Warner-Bros. acquisition. The NPD is reporting that hardware sales have dropped to their lowest since 2000. Activision is seriously considering DLC for Transformers: Revenge of the Fallen. Well, enough negativity, you get the point.
If the headlines are to be believed, the game industry in and of itself is doomed. I’m certain we all know by now that Pres. Obama plans to enslave white people in America, the global economy is going to take the biggest downfall ever, and the entire world will become a big “third world country” overnight. I don’t think there’s much we can do about it, since we’re all just a bunch of lemmings ready to jump off the cliff because the media tells us there’s a wolf behind us, and most of us are too busy with our own lives to look over our shoulders and see if its actually true.
As if that weren’t bad enough, Cliffy B — sorry, young Clifford — seems to have abandoned his position as The Opinionated One. I’ve looked through his Twitter feed for the past month (who incidentally has 1/4 the followers of SG’s own Doc Adams…) and he’s giving us NO direction about what we should be doing for the game industry. He’s more concerned with making sure that we know “Keith Urban is a dick” and what television shows he’s paid to use Gears in to try and up the sales of Gears 2. Oh noez! Teh ecomomiez hitz Cliffy B, too? Yes Lawl Cats, apparently so.
Another interesting announcement has me intrigued, and got me thinking about the game industry as a whole. PAX has announced their lineup for the Independent Developers’ Showcase. Nothing new in and of itself, but with the economy having a slight downturn, now is the time for independent developers to really shine. Last year several great games were shown, including Maw, one of the XBLA favorites of the Pink Show and many SG’ers. With costs of making games going up for the big companies, the smaller guys have the chance to develop some great ideas and market them as minor titles. It may sound backwards, but think of it this way: if a major game developer has a development cost of $5,000,000 and a profit per game of $5, they need to sell at least 1,000,000 titles just to break even. An independent developer, on the other hand, could have a development cost of $50,000 and a profit of $2 per game, they only need to sell 25,000 titles to break even. These are completely made-up numbers, of course, but the idea is there (in business, its referred to as “economies of scale”).
There is a chance for these companies to shine, but that doesn’t mean they will. I know you can’t judge a book by the cover, but some of the independent titles being featured at PAX 2009 sound…well, lame. So where does this leave us?
The honest truth is, no one entirely knows. With everything going on in the economy, this could be bringing us closer to the idea of universal consoles. With universal consoles, there would be no more console wars. Companies like Samsung and LG, along with Sony, Microsoft, and Nintendo, could be producing consoles that would use a universal format disc rather than an independent format. This would save game developers money in development costs. As a web developer myself, I know how much of a pain it can be to format the same material for different browsers (don’t even get me started on Internet Explorer). In web development, a movement started that called for open web standards, meaning that individual browsers could still be produced, but they all handle content the exact same way. It has largely been a success, but Microsoft’s browser still refuses to play well with others. With a universal game format disc, consoles would be sold more like PCs, with pricing and product appeal based on features and user interface.
I know many in the industry have scoffed at the notion, and I’m not saying this is the future. Microsoft, Nintendo, and Sony would be highly reluctant to give up their market shares and make the transition into development houses. It would require a movement within the industry by developers themselves, and since most of them depend on the console makers to help get their games out, few of them would be ready to step up to the challenge of calling for an open standard. It would definitely decrease the price of game development, and while developers would probably lower their prices, in the same scenario mentioned above the development costs might drop to $3,000,000 with a profit of $5 (remember that we’re no longer paying licensing costs or royalties to Microsoft/Nintendo/Sony), that reduces the number of games sold to break even to 600,000. Oh, and remember how now anyone with a universal console can play your game? That increases the likelihood that you’ll not only hit your 600,000 copies, but exceed that number.
Speculation, sure, but is it possible? Absolutely. The idea of a console that acted as your gaming device, DVR, Blu-Ray player, and could connect to the internet to watch Hulu or Youtube isn’t that far off. Media Center PCs are giving many people (including myself) a bit of that reality now. We may never see an Xbox 720, Playstation 4, or Nintendo Thingy, but does it really matter? As long as the games are as good and you can save some money on your hobby, I think that at the end of the day the die-hard fans would find something else to fight about.
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I thought just came to me, dvd’s can play in xbox’s and ps3’s… So why can’ we have game discs that play in several game consoles??? It would save money in production and might give the npd numbers a boost, also all consoles could get the said game(S) released at the same time! No more delays!
You need competition for innovation. So there’s nothing new right now, like summers are ever filled with good games back to back. And during a recession? Forget about it.
I dunno if you take well to criticsm. But, your article just went a bit too long with statistics and hypothetical situations.
Kinda like IGN’s 10 page reviews.
In a perfect world we may have a universal console. Along with the abolishment of the monetary system. But we can only dream
Why would they only be making $5 per copy on a major game if you’ve already excluded development cost?
And isn’t the ‘Universal Console’ that you describe just a PC? Or do you mean a PC with standardized performance?
@Nonmelodic – exactly.
@Marco – You’re right, which is why opening up the market to more than three companies would breed *more* competition. During a recession is actually the best time to innovate, so that when the economy stabilizes you’ve got products for market and shows consumers that your company is stable. Scoff the idea if you want, but with consoles getting closer and closer to PC’s in design and functionality, it’s not that absurd. You might as well believe that Apple will run the iPhone on AT&T forever even when it becomes less profitable to do so.
@Jimbo – That’s all current consoles are – PC’s that are specific to one format so that games designed for them will run on them. If there were standards for universal consoles, it wouldn’t be hard to have versions.
bwahaha, Communist.
But no, really. a major issue: I don’t really think you want a Universal Console. All it does is breed exorbitant prices because ‘hey, nobody else has anything cheaper!’ *presses price jump button* Look at Standard Oil now. Look at Standard Oil pre-trustbusting. You really don’t want that. Moreover, it’d kill the different game franchises. No more Halo or Killzone, you’d have Wolfenstein, and that’s all the FPS you need. (horrible example, but you get the idea?) Who needs more puzzle games? They have Upeggle, it’s all good! $80!. See what I’m driving at?
I see what you are getting at OMG, but I do believe your reasoning is flawed.
For example, a recession is the WORST time for innovation as a whole. With less money to go around, developers both big and small tend to go with the safe bet, the games that are similar to what we already know. Also, gamers don’t have as much capital to throw around, so they also tend to go with the safe bet, games that might not innovate by they are almost positive they will like based on previous experience.
Indie developers will make innovative (and not so innovative) games regardless of the economic climate, but I have failed to see this innovation jump you claim in your article.
Regardless, it was an interesting read (if albeit a bit long winded). Hope to see some more articles out of you good sir.
P.S. So… when we going to record the next Gamer Academia?
First of all, that Cliffy B. banner on the top is exquisitely photoshopped. *pats on the back of *
Secondly, what you described would be great if and ONLY IF Sony, MS and Nintendo leave their egos in their homes.
Unless they followed what I just said, the one console future is very VERY far away
OMG we really silenced him!!!!!!!!!!!!!!!
@darkmonk – bad example, my friend, since 90% of the world’s oil is controlled by a monopoly (OLPEC) that sets oil prices at what it wants. It’s not even close to the same. That would be like Nintendo having the only console on the market. Competition usually breeds lower prices for consumers and higher quality. Its an economic fact. I don’t see how a universal console would have any bearing on original IP; you would just see it on more consoles.
@Kojin- historically speaking, companies who innovate during economic downturn do better. Gamers do have money, or companies could not charge the prices they do. If gamers weren’t shelling out $60 for a game on a regular basis, the prices would be forced to come down. Again, basic economics. As for GA 4- *sighs* let me see what I can figure out.
@Waisybabu – thanks, couldn’t agree more.
@psyco skull – yeah, you’re original.