Only 80 Games a Year Will Succeed

[Evil Avatar]

Next Generation online has posted an article, Report - 'Only 80 Games a Year Will Succeed' (http://www.next-gen.biz/index.php?option=com_content&task=view&id=1621&Itemid=2), taking a look at a report published by Screen Digest, suggesting that it will get harder and harder for game publishers and developers to make a profit.

A new report on the risks involved in game publishing and development has been released suggesting that, in the next generation, as few as 80 games a year will turn a profit.

Development costs in the next generation are set to rise from $3 -$6 million per title to $6-$10 million, with some cases surpassing $20 million.

Those are the findings of a new report from Screen Digest called Games Software Publishing: Strategies for Market Success.
Thanks Shacknews (http://shacknews.com/).

[DeadPixel]

75 of which will be EA's sequels to crappy titles.

[Cupelix]

There has to be a way to reduce production costs on games. I know that most of that money can't be going to the developers (you know, the ones doing the hard work), because otherwise more developers would be rolling in cash. I'm sure the fact that games have taken longer and longer to develop factors into this greatly - the real question is why are good games taking so long to make nowadays?

[Demo_Boy]

Dammed expectations! thats why

[Demo_Boy]

The thing I dont like about this article is that it stands to be a self fulfilling prophecy. Like publishers will say OMG only 80! I read it on the inerweb so it must be true! Hurry up and cancel Katamary Damarcy, Beyond Good and Evil, and ...

[phantomhitman]

next generation opens the door to new things
takes longer to model and texture 3d items due to the fact that poly counts have gone throught he roof. each item could have mulitple maps (diffuse, bump, reflection) and possibly different deformations (racing games were cars crach)

animation takes longer due to the fact you can use more keyframes to make smoother moves. they can also handle more lifelike character rigs for more emotions

coding time goes up to show off what the game can do. wether it be physics, lighting, game code, ai, or whatever

since all of those can be acco,mplished the story or gameplay can be more detailed. it takes longer to develop that story/gameplay and try to throw in some innovative thigns along the way. all in all, time is money......

[Roc Ingersol]

We all wanted gaming to be bigger than Hollywood right?

Welcome to Hollywood's development problems.

[Varsity]

I read it on the inerweb so it must be true! Hurry up and cancel Katamary Damarcy, Beyond Good and Evil, and ...
If you've got a time machine, publishing videogames is hardly the best use of your day. ;)

[agentgray]

80!

I can't even afford 5!

[DigitalFirefly]

That's about the same as movies. There's probably 80 movies a year that make their money back (if not less).

[mfpantst]

80 ngames a year is more than one game a week, by the way.

[Rafer]

We all wanted gaming to be bigger than Hollywood right?

Welcome to Hollywood's development problems.

Yeah I think I've read somewhere that no Hollywood film since Star Wars has turned a profit.

[megaman]

Y do most news topics on gaming news sites have a ''thanks <another gamin newsite>'' at their bottom? Is it because these sites just keep sharing watever news they get or they just steal it off of eachother?

[derjester]

Difference between Hollywood and games. Hollywood has the initial release which almost never makes money. The it had DVD release. Then the directors cut. Then the box set, then the ultimate collectors edition, then the ultimate director collectors edition with bonus coaster.
Games have a single release, a single sale. Until revenues from preplayed games start benefitting the developer/publisher it's going to be fairly steep to make money on a game.
Also Game Makers stay fully staffed all year long. Except for Wideload games. It's like paying all the actors, grips, cameramen, camerawomen, powder girl, scriptwriter, casting director, agents, etc. for 5 years strait instead of hiring them on a contract to do what they do. In my opinion gaming needs to take on the business model to be more successful.

[Dabombpizza]

Yeah I think I've read somewhere that no Hollywood film since Star Wars has turned a profit.
You have been reading lies, since if that were true the entire film making industry would have imploded.

[Roc Ingersol]

Yeah I think I've read somewhere that no Hollywood film since Star Wars has turned a profit.
When it gets down to the part where they might have to pay the plebes their promised royalties - not many games have either.

[Roc Ingersol]

Hollywood has the initial release which almost never makes money.
That's not true. The whole 'no profit' thing comes from the way they do accounting. Important people get their cut of proceeds long before they're called 'profit'. Actual points of profit are monkeypoints -- like tech shares in 2002.
But many many films will take in more than they cost in their initial release, even after the important people are paid.
(don't underestimate the international market)

Games have a single release, a single sale.
expansion packs, collector's editions, bonus packs, warchests/blister packs and sequels.

Sure, Hollywood has sequels. But nowhere near the number the games industry has. Not even Disney films get as many sequels as even moderately successful games do.

Until revenues from preplayed games start benefitting the developer/publisher it's going to be fairly steep to make money on a game.
No-one gives hollywood a cut of PVT sales.
First sale doctrine. Unless the big media companies get special exemptions for digital productions, get used to it.

In my opinion gaming needs to take on the business model to be more successful.
There, we agree.

[Magnanimous Gnome]

Well at least it has the development costs for the average game right there in that article. Hopefully this means that I can stop seeing posts where people claim that games cost 100+ million to make - a gross exaggeration.

Still, this is bad news, but it's what happens when people want prettier and prettier graphics. EA will survive, and the last few decent developers remaining will just be swallowed up by EA, Ubisoft, Activision, and Microsoft.

[RMan]

There has to be a way to reduce production costs on games.
Sure there are, but I do not believe that production costs are the problem, the real problem is that games are so big in terms of consumer cost and play time (in short, very high commitment products) that consumers will only buy a certain number of them, no matter what the average production values/costs are. You have to know that there's no technical reason that games should costs so much to develop, especially with the newer generation, the powers that be are raising production values in an effort to reduce competition and strengthen IPs.

[derjester]

expansion packs, collector's editions, bonus packs, warchests/blister packs and sequels.

Sure, Hollywood has sequels. But nowhere near the number the games industry has. Not even Disney films get as many sequels as even moderately successful games do.

From what I gather it's normally only successful games and franchises have sequels. Expansion Packs, CE, etc, I also only see for successful games. I don't think I've ever seen Xpacks released for games that bombed. I just don't see publishers taking chances on games that didn't make money.

Honestly, I'm just going off of what I've seen and heard. Diakatana didn't generate a sequel, or a collectors edition did it?

[MadHiro]

I almost call bull on this. Sure, let's say development costs have been increasing at such-and-such a rate for the past couple of years. That means in a hundred years, video games will cost SIXTY QUIDRILLION dollars to make. ZOMG.

[bean19]

Definitley interesting information, but nothing new. They are already looking at ways to maximize profits and limit costs. Middleware, reusing art and engines in sequels/expansions, digital distribution, multi-platform releases, stylized art vs. more expensive near photo-realistic art, additional funds through micro-purchases, merchandising, and MMO business modeling just to name a few. I'm sure they'll come up with even more advances and innovations to combat this problem. Lots of really smart people make their livelihoods answering these questions.

[Eric_T_Cheng]

Games have a single release, a single sale.

*cough Half-Life cough*

[Captain Awesome]

75 of which will be EA's sequels to crappy titles.


lol :D

[RMan]

Hopefully this means that I can stop seeing posts where people claim that games cost 100+ million to make - a gross exaggeration.
While the 100+ is a clear exaggeration, this only talks about development costs, not a game’s overall budget (IOW, this isn’t publishing/marketing costs, which would often be more than the game’s development budget). I do think there’s going to be a lot of broken hearts in the next generation, but I’m not too worried about it. Worst case scenario is a ton of games scrape by or fail, and the industry just stops spending so much money on the games, fortunately it’s not like the old days where retail and expensive manufacturing costs were the only way to make a game (referring to the old cartridge days).

[DaXIthR]

I think people are going to be pretty reluctant to purchase legal copies of games via download.

This is not good news, regardless of how you slice it.

The industry is selling more product at hire prices to the same people. That's why their revenue is increasing. The indsutry is not growing.

I hate to be sensationalist, but when I see stuff like this I really wonder what the chances are of another crash.

[Dr.Acula]

next generation opens the door to new things
takes longer to model and texture 3d items due to the fact that poly counts have gone throught he roof. each item could have mulitple maps (diffuse, bump, reflection) and possibly different deformations (racing games were cars crach)

Actually, higher poly counts might make it easier in some cases for modelers, because they no longer have to spend countless hours trying to fit an artificially low poly target number. When Doom3 was developed, they made ultra-high poly models, and then took images of them to use as skins to place on the low-poly models they optimised for the game.

Deformations aren't modeled by hand, and while they are complex, things like deformation and physics are being bought off-the-shelf by most developers and can be dropped into games fairly painlessly.

Texture artists are probably being given a lot more work, but then again, is it easier or harder to create something realistic without having to worry about resolution?

[Kelegacy]

Stop jumping into next generations until it is cost effective to do so? Market GOOD games better? I see enough commercials for Big Mutha Truckers, but none for Shadow of the Colossus, few ever for Psychonauts, and zilch on many other overlooked games.

[TheKeck]

*cough Half-Life cough*

My thoughts exactly.

(What, no Half-life, I wasn't bad talking you. No, please, don't hit me again. I love you Half-life. I have no problem waiting for Aftermath, Half-life.)

[lowlevel]

It seems to me that more troubling than the rising cost of development is the ridiculous amounts of money that the "uber-publishers" (you know who they are) rake in.

A direct-to-consumer distribution model would effectively cut the costs on games.

Lower-priced games = more money to purchase games = more games purchased = more "successful games".

OK, I'll be the first to admit that it's a formula based on a great amount of supposition, but that's all you find on "t3h inn3rn3t" right? :D

[bskeillor]

Maybe this is Nintendo's chance to get back into the home console game. Would you rather make a game for the GBA / DS, or the PSP? The former is definately cheaper and easier, while the latter has more of a development cycle and is much more expensive. I think the Revolution will be less powerful, but much cheaper to develop for than the PS3/XBOX. But then comes the question of the user base, and whether there is enough to warrant making a Revolution game. It's a vicious circle.

[netcraazzy]

What about the opportunities that exist with the new Xbox live arcade or valve's steam? Maybe only 80 AAA class games will meet their mark for expected profits but I suspect there will be many low budget games for ever 1 AAA title that manages to turn a decent profit.

I think the new business models that are starting to appear thanks to micro payments and online distribution are going to play a major role in the coming generation.

[pacmanfever]

it would be nice if the article mentioned how many successful games there have been in past years so that we had some context for what 80 really means.

[RMan]

I think people are going to be pretty reluctant to purchase legal copies of games via download.
I think you're wrong, the hardcore gamer may be put off by not having a physical CD, but the casual gamer can be swayed VERY quickly by an attractive price and easy purchasing. I could explain more fully, but this may convince you faster: Ring-tones, multi-billion a year industry.
I hate to be sensationalist, but when I see stuff like this I really wonder what the chances are of another crash.
That's what I was hinting at earlier, I don't think so. There's enough ways to market products now that I don't think this will happen.

[mister_slim]

Until revenues from preplayed games start benefitting the developer/publisher it's going to be fairly steep to make money on a game.
That's not going to happen. There are some interesting ways to get around it though. For example, with Xbox Live multiplayer could be sold separately. Buy Gears of War for $40, single player only, and then charge $20 to download multiplayer. The download's not transferable, so someone buying it used would have to buy the multiplayer again. As a bonus, the retail price compression would make new copies more attractive relative to used copies.

Similar things could be done with Nintendo's back catalog on the Rev, or the rewards program they have in Japan and Europe. Reward people who purchase games new.

[Kelegacy]

I think you're wrong, the hardcore gamer may be put off by not having a physical CD, but the casual gamer can be swayed VERY quickly by an attractive price and easy purchasing. I could explain more fully, but this may convince you faster: Ring-tones, multi-billion a year industry.



Ring tones. What the fuck? My phone is programmed for Yankee-Doodle-Dandy or some sea shanty. Why people pay money to customize, and then customize, and then customize again is beyond me. If I had to pay for my desktop wallpapers, I'd be sticking with the standard Windows XP background with the green hills and blue sky.

[bryan]

Ring tones. What the fuck? My phone is programmed for Yankee-Doodle-Dandy or some sea shanty. Why people pay money to customize, and then customize, and then customize again is beyond me. If I had to pay for my desktop wallpapers, I'd be sticking with the standard Windows XP background with the green hills and blue sky.

Seems to me you missed the point entirely.

[Kelegacy]

Seems to me you missed the point entirely.
D'oh!

I shouldn't be allowed to reproduce. Really.

[bryan]

Nothing wrong with tangents, I thought going off on a tangent was part and parcel of of EA discussion.

I feel the same way you do. I just grab free stuff off the net, even if I do have a fancy schmancy phone.

[F3nyx]

80 successful games a year? Sounds pretty decent to me. I can't remember any year in which there were more than a half-dozen games that I thought were worth buying.

[phantomhitman]

Actually, higher poly counts might make it easier in some cases for modelers, because they no longer have to spend countless hours trying to fit an artificially low poly target number. When Doom3 was developed, they made ultra-high poly models, and then took images of them to use as skins to place on the low-poly models they optimised for the game.

Deformations aren't modeled by hand, and while they are complex, things like deformation and physics are being bought off-the-shelf by most developers and can be dropped into games fairly painlessly.

Texture artists are probably being given a lot more work, but then again, is it easier or harder to create something realistic without having to worry about resolution?

good points, and misinformed ones too.

Alot of games jumped onto higer res texture maps and i have to say i do not like any of them. The modeler still has to make 2 different models, a super high polycount (with highres textures also) and a lower res model to put it on (with lower res textures taken from teh hig res model). The deformations I am mainly talking about are break away and damage models (environments take damage or cars lose parts), not so much when a characters arm bends the mesh deforms. All of the current games using damage models had to code their own stuff because nothing was available. In the future it will be easier, but right now they had to do the r and d of it and develop it. I agree with texture artists getting alot more work because the new systems can handle, and store, the textures.
The end result is still a ton of time into developing more and more games and pushing the envelope and yadda yadda this and yadda yadda that.

[mister_slim]

80 successful games a year? Sounds pretty decent to me. I can't remember any year in which there were more than a half-dozen games that I thought were worth buying.
How many of those games worth buying were successful, though? How many of the devs are still around?