Industry Economics
Ongoing coverage on Industry Economics.
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A delayed next generation of consoles is "better for us", says The Blood of Dawnwalker director, as price rises continue to plague the industry
Konrad Tomaszkiewicz, director of The Blood of Dawnwalker, believes a delayed next-generation console launch would benefit developers like Rebel Wolves due to current component shortages and rising prices. He highlights the increased complexity and cost of developing for new hardware, suggesting that focusing on current-generation consoles is more manageable. The game is set to release on September 3rd for current-gen platforms, with future installments potentially targeting next-gen hardware.
Can co-development save the game industry?
This article discusses co-development as a potential solution to the game industry's economic challenges, highlighting how external studios can assist both large and small developers. CEOs from Blackbird Interactive, Sweet Baby Inc, and Wolfjaw Studios share insights on the practice's role in preserving professional employment.
The Console Market Is Cooked
The console market is facing significant price increases for both Xbox Series S and PlayStation 5 Pro models, driven by a global chip shortage exacerbated by AI development and data center construction. Changing player habits, with a shift towards mobile gaming, also contribute to market volatility. Industry analyst Mat Piscatella discusses these factors, alongside AAA development costs and inflation, suggesting a shrinking console audience as prices rise.
Opinion: Everything hurts and no one knows when the pain will end
The article discusses the ongoing financial struggles and mass layoffs within the game industry, attributing them to a combination of economic factors, executive mismanagement, and alleged abuses of power. The author, Bryant Francis, shares personal coping mechanisms for dealing with the constant stream of bad news and emphasizes the need for the industry to learn from past mistakes.
The Subscription Audit Gap: $3,000/Year Unwatched | TAG
This article highlights the significant financial burden of multiple gaming subscription services, estimating annual costs between $1,000 and $3,000 per consumer. It contrasts this with the ongoing instability and layoffs within the gaming industry, such as Embracer Group's struggles and publisher-wide redundancies, suggesting a lack of consumer-facing accountability in the current business model.
Steam Deck gets an insane price hike that makes Sony’s PS5 raise look generous
Valve's Steam Deck is experiencing a significant price increase of around 40% globally, attributed to rising memory and storage costs and global logistical challenges. This price hike is criticized as excessive given Valve's reported profits, especially when compared to the more apologetic price adjustments from companies like Nintendo and Sony.
GTA 6: The Billion-Dollar Behemoth That Could Crash the Industry
The immense development cost of Grand Theft Auto 6, estimated to be over a billion dollars, could significantly impact the gaming industry. Rockstar Games' investment raises concerns about its potential to destabilize competitors and set unsustainable financial precedents.
Ubisoft Killed Their Animal Crossing Competitor , Why It Matters
Ubisoft has canceled a life-simulation game that was inspired by Animal Crossing, without providing an explanation. This decision highlights a trend of major publishers becoming risk-averse, prioritizing games with massive profit potential over innovative or niche titles. The cancellation suggests a broken system where publishers are less willing to invest in games that don't fit the AAA blockbuster model, pushing more creative endeavors towards indie developers.
John and Brenda Romero reflect on the industry crisis
John and Brenda Romero reflect on the current crisis within the video game industry, noting the significant downsizing of their studio, Romero Games. Despite financial challenges, they express determination to continue game development.
AAA Game Budgets Regularly Reach $300m, New Report Claims
A new report indicates that AAA game budgets frequently exceed $300 million, with some titles like Call of Duty: Black Ops Cold War reportedly costing up to $700 million. These high costs are attributed to developer salaries and overhead, not executive compensation, and may explain industry trends like layoffs and long development cycles. In contrast, indie games like Mewgenics can be profitable with significantly lower budgets.
AAA video games regularly cost over $300,000,000 to make reveals insider
According to insider Jason Schreier, the development cost for AAA video games now routinely exceeds $300 million, a figure comparable to or exceeding most major film productions. This trend, primarily observed in Western development, is largely driven by escalating developer salaries and contributes to the current state of the industry, including layoffs and unpopular monetization strategies.
'This Is Unsustainable Madness': Modern Video Game Budgets Are Out of Control
Modern AAA video game development budgets on the west coast of America are reportedly reaching $300 million or more, primarily covering salaries and overheads. This unsustainable cost requires games to sell millions of copies at full price just to break even, putting immense pressure on studios and potentially impacting the industry's future.
Triple-A Game Budgets Now Over $300 Million, It’s Claimed
Game development budgets for AAA titles are reportedly exceeding $300 million, not including marketing costs, according to journalist Jason Schreier. This necessitates millions of sales just to break even, placing immense pressure on game sales figures. Games like Concord and Marvel's Spider-Man 2 are cited as examples of high-budget titles.
Blizzard vet Rob Pardo closed this year's GDC keynote by urging executives to cool it with the layoffs: 'The game team is more valuable than the game itself'
Former Blizzard executive Rob Pardo delivered the GDC keynote, urging industry leaders to prioritize retaining development teams over short-term gains, especially after successful game launches. He argued that the team's collective experience and ability to navigate development challenges are more valuable than the game itself, citing recent layoffs despite strong sales as a detrimental practice.
How the video games industry will finally destroy itself - Reader's Feature
This reader's feature argues that the video game industry is unsustainable due to a financial system that disincentivizes innovation and leads to conservatism and consolidation. The author suggests that increasing costs, reliance on finance capital over productive labor, and the rise of AI threaten the industry's long-term survival, potentially leading to a crisis similar to broader economic issues.
