A Dismantling of the Entertainment Industry

[standing ovation]

When game makers come face-to-face with dwindling profits, nearly all of them hedge against loss by recycling success.

The result? A dismantling of the interactive entertainment industry.

Conservatism has a way of igniting the very fires they are trying to put out. And any collusion in this regard is likely to become an accelerant, say pundits at Oligopoly Watch.

As we have discussed before, the electronic game software industry has grown from a side interest to a major entertainment industry with revenues of over $10 billion a year. That makes it bigger than the theatrical releases of movies and means it will soon surpass the sales of music on CD and films on DVD. You might think that such a fast growing industry, getting increasingly sophisticated hardware feauturing excellent video and audio and lightning speed, would be full of [size=-2]innovation.[/size]

Not so, according to a [size=-2]recent Slate.com article[/size] by Luke O'Brien, entitled "Why there are no indie video games and why that's bad for gamers." (5/26/06). The author sees the game-makers stuck in a cycle of repeating themselves with louder and faster versions of the same basic games.

Part of the problem, he believes, is the oligopoly of the game publishers. A handful of publishers, such as Electronic Arts, Ubisoft, and Astivision and now dominate the industry. Independent game makers either get [size=-2]bought out[/size] and tamed or driven to bankruptcy. "The most successful indies get bought by the industry giants, where they often become casualties of consolidation."

Given the current costs of marketing and distribution along with the enormous costs in programming, buying rights, and even hiring known actors for videos and voice-overs, the game publishing oligopoly is becoming even more risk-averse than the major movie studios. As O'Brien states "the average Playstation 2 game cost about $8 million),After all, he argues, it's possible for an Indie movie like Saw or Fahrenheit 9/11 to get made on a small budget and bring in big bucks. These days, independent game releases, the article states, just don't have a chance.

The large amounts of money at risk mean that the [size=-2]blockbuster mentality[/size] is even [size=-2]bigger in the video game industry than at the movies.[/size] Small developers are forced to sell their games through the big publishers, but they take the development risk.

[size=-2]Several industry types told me that an indie studio will typically get a $5 million advance on 15 percent royalties. If the game has a wholesale price of $30, the developer must sell more than a million units to get out of hock. In other words, the game has to be a blockbuster, something on the order of Tomb Raider or Splinter Cell. The cost of the average PlayStation 3 game is expected to rise to $15 million-$20 million, plus another $10 million or so for marketing. That means indie developers, who already go bust with great regularity, will have even less wiggle room.[/size]

The problem with this situation is the death of innovation. When independent game studios could develop games on their own, they came out with lots of new concepts. Now the risk-averse studios want already proven winners, since there is so much money riding on them. Take, for example, industry leader Electronic Arts. As O'Brian notes that company "had a nasty case of sequelitis last year. I've looked at nearly 50 games that EA released last year, and I've yet to find one that isn't a rehash like NBA Live 06 or a movie tie-in like Batman Begins."

 

[mckmas8808]

Can you say over exaggeration? I bet Heavenly Sword with it's 3 years in the making with big acters playing in it probably cost 20 million dollars or less. How can the average game cost the same as Heavenly Sword?

 

[_phil_]

changing distribution model is THE big priority.

 

[nintenho]

changing distribution model is THE big priority.

Obviously, but only xbla and maybe wii will give any possible way for indie developers to release on consoles.

 

[Skrying]

Can you say over exaggeration? I bet Heavenly Sword with it's 3 years in the making with big acters playing in it probably cost 20 million dollars or less. How can the average game cost the same as Heavenly Sword?

You're probably very wrong. Art assets from HD based games is very expensive. Heavenly Sword probably cost around $35~$40 million to make.

 

[mckmas8808]

You're probably very wrong. Art assets from HD based games is very expensive. Heavenly Sword probably cost around $35~$40 million to make.

WHOA! DeanoC can you confirm?

 

[pc999]

changing distribution model is THE big priority.

Why?You can get DVDs on stores at 10-20 euros and the size/package is the same (or are you putting royalitys here, althought PC games suffer from the same, as long as I know).

Althought I agree that probably there is to much midle man, but I dont know if there is more than in movie/music.

One of the problems is probably that prices are too high (HW+SW) stoping it from being mass market (I know many people that buys DVDs and CD and dont buy games just because it costs at least 3x more, I for myself almost only buy "outdated" games but cheap).

Other one being what Nintendo is trying to do that if they cant do that then those how play will still a smal number and because of that there is small market and by consequence less people that will like indie games.

The other is that we still love great gfx.

Ultimate till the day we get processural worlds (can be offline) made by cheap (yet man made gameplay/art), things will only get better by mass market IMO. Hopefull we will get both and get really cheap and mass market games.

(BTW any one know the costs of Megatexture for QW:ET?)

 

[Shifty Geezer]

Althought I agree that probably there is to much midle man, but I dont know if there is more than in movie/music.

These are slightly different though. Music doesn't require anything like investment of computer games. A couple weeks of writing and recording is all that's needed for an album, and costs can be carefully controlled. For movies there's a lot more by way of revenue stream. First you get the cinema takings, then DVD sales and TV licensing, plus a far larger user base than console games. It's possibly books that are the closest market to video games at the moment, with a costly distribution method as the only income.

 

[standing ovation]

Can you say over exaggeration? I bet Heavenly Sword with it's 3 years in the making with big acters playing in it probably cost 20 million dollars or less. How can the average game cost the same as Heavenly Sword?

Well, Heavenly Sword must be an average game.

It's almost cliché to say, "It's all about content." But these articles begin to articulate why this is so -- and that is the point I was trying to get across.

In the entertainment industry -- be it movies, videogames or whatever -- artistry does more to change the landscape than technology. HDTV won't make or break movie sales, but a lack of good titles will.

The paragraph you are talking about is more profound than monetary figures. It's about an institution that has systematically barred small developers from the marketplace. To put it bluntly, it is the digital equivalent of sharecropping. Not only that, this institutional ill is rigging the industry for failure.

Indie developers are a wellspring of creativity. As such, they'll need to gain access to the market if the industry is to grow.

Until this issue is resolved it really doesn't matter what happens on the hardware end, be it copious capacity like PlayStation 3 or enviable ingenuity like Wii. What matters is where artistry (or a lack thereof) will take the industry.

 

[mckmas8808]

Well, Heavenly Sword must be an average game.

It's almost cliché to say, "It's all about content." But these articles begin to articulate why this is so -- and that is the point I was trying to get across.

In the entertainment industry -- be it movies, videogames or whatever -- artistry does more to change the landscape than technology. HDTV won't make or break movie sales, but a lack of good titles will.

The paragraph you are talking about is more profound than monetary figures. It's about an institution that has systematically barred small developers from the marketplace. To put it bluntly, it is the digital equivalent of sharecropping. Not only that, this institutional ill is rigging the industry for failure.

Indie developers are a wellspring of creativity. As such, they'll need to gain access to the market if the industry is to grow.

Until this issue is resolved it really doesn't matter what happens on the hardware end, be it copious capacity like PlayStation 3 or enviable ingenuity like Wii. What matters is where artistry (or a lack thereof) will take the industry.

Seriously man artistry to me seems very very fine. If you want something different play Braintraining, Locoroco, Okami, or Spore. Indie devs just might have to resort to handhelds or XBLA or the PS3 download system and sell their game for $5-$10.

 

[TheChefO]

Well, Heavenly Sword must be an average game.

It's almost cliché to say, "It's all about content." But these articles begin to articulate why this is so -- and that is the point I was trying to get across.

In the entertainment industry -- be it movies, videogames or whatever -- artistry does more to change the landscape than technology. HDTV won't make or break movie sales, but a lack of good titles will.

The paragraph you are talking about is more profound than monetary figures. It's about an institution that has systematically barred small developers from the marketplace. To put it bluntly, it is the digital equivalent of sharecropping. Not only that, this institutional ill is rigging the industry for failure.

Indie developers are a wellspring of creativity. As such, they'll need to gain access to the market if the industry is to grow.

Until this issue is resolved it really doesn't matter what happens on the hardware end, be it copious capacity like PlayStation 3 or enviable ingenuity like Wii. What matters is where artistry (or a lack thereof) will take the industry.

Agreed - While digital distribution will allow indie devs a method for introducing new/innovative games, it will take a system set in place to enable them to do this and to do it well. Personally I think MS is in the drivers seat on this topic. I just hope they take us to where we as gamers want to go.

On a similar subject, what do you all think about the games industry today? Are you happy? Sad? Inspired? Depressed? Personally I'm dissapointed at the lack of quality available. By that I don't mean good games. I mean quality of art that can stand up to the best that Cinema has to offer. Quality voice acting/storytelling/environment (set)/characters/ and visuals to match. On the visuals they're getting close. On the rest they're woefully inadequate. Sure there may be a title here or there. But the vast majority of what we consider blockbusters are jokes when put up against even an average movie.

We are partly to blame for this I feel because we have not demanded it. Sure there are still many games that could be done without hitting this level of quality and in fact would be hindered by it. But for those striving for cinematic excellence they fall far from the target.

To remedy this I say there should be a new class of games which do compete toe to toe with the best of hollywood. In reality we cannot expect a game which has the quality to rival a blockbuster film but would last you 4-5 times longer and is a much richer experience to cost the same or even close. The initial investment for this class of entertainment would be enormous. I couldn't take a guess but judging from what I'm seeing on the market today and the cost figures associated I would say probably in the 100m range. For this I say you could justifiably charge $100 or so for this premium experience. Or as this may be a huge sticker shock for a lot of people, they could deliver the content in a very tried and true method, use advertisements to offset costs. If gamers don't like this idea, deliver the content in "episodes".

What do you guys think? Is there a need for "premium class games"?

 

[pc999]

These are slightly different though. Music doesn't require anything like investment of computer games. A couple weeks of writing and recording is all that's needed for an album, and costs can be carefully controlled. For movies there's a lot more by way of revenue stream. First you get the cinema takings, then DVD sales and TV licensing, plus a far larger user base than console games. It's possibly books that are the closest market to video games at the moment, with a costly distribution method as the only income.

Actually music can be a huge investiment in the production and mrketing side of things. But is both have more changes of being proffitable althought I really belive that games could b too (see for example in Korea(?) here Starcraft games are broadcasted on TV and do a lot of sucess) one can think in more way althought they would benefict a lot of bigger market. In relation to book I am not sure if it is a good comparition as I personally dont think it is really a mass market (and it is sad).

Anyway a good seller on games is one that sell 1M+ games yet that on music, books and DVDs (althought Idont know numbers it is my guess) that is at least averange numbers, so mass market should help a lot.

Anyway like I said I think that good tools will (may?) help things dramaticaly.

 

[Shifty Geezer]

What do you guys think? Is there a need for "premium class games"?

No. The market for $100 games isn't there (how well did NeoGeo do?) and you'd still need 1 million buyers to get that $100 million investment back, with no profit! Games aren't movies and shouldn't be thought of as such. Improvement in voice acting and story-telling don't need lots of investment, but games that are story-based and more involving like film are not most people's cup of tea. 'Interactive Movies' are mostly considered boring, and as long as you have repetitive game elements that make a game a game, there's not much room for stories. The best place for that cross-over type game is the true adventure, like Sierra or LucasArts, without any of the action gaming elements. The two are too disparent to work together IMO, like fine cuisine and cheap beer, or chocolate on mashed potato. Some things only work when not mixed.

 

[fearsomepirate]

You're going to see tools and content middleware catch up. For example, if you're making a low-cost game, you could get the "1001 Guy Swinging A Sword Animations" and "More Dirt, Stone, Wood, and Grass Textures Than You'll Ever Need" packages from a middleware provider instead of spending big bucks to do it yourself. Why isn't someone selling car models? It's not like '68 Charger looks all that different from one game to the next already, and that difference will be smaller next-gen.

I thought the current/ending-gen hit a sweet spot with 3D graphics. They look pretty much fine. Obviously, they could look better, but they're like SNES 2D in that they often just plain look nice. I wouldn't mind at all if we saw some lower-priced titles with approximately that level of graphical fidelity. They need to create a sold $20-$40 video game price bracket.

 

[TheChefO]

No. The market for $100 games isn't there (how well did NeoGeo do?) and you'd still need 1 million buyers to get that $100 million investment back, with no profit! Games aren't movies and shouldn't be thought of as such. Improvement in voice acting and story-telling don't need lots of investment, but games that are story-based and more involving like film are not most people's cup of tea. 'Interactive Movies' are mostly considered boring, and as long as you have repetitive game elements that make a game a game, there's not much room for stories. The best place for that cross-over type game is the true adventure, like Sierra or LucasArts, without any of the action gaming elements. The two are too disparent to work together IMO, like fine cuisine and cheap beer, or chocolate on mashed potato. Some things only work when not mixed.

Shifty - I think I may be miscommunicating my idea here.

First NeoGeo isn't comperable because the game cost of $200 was based on expensive media. Also I don't think anyone was/is comparing Neogeo games to the movies of it's time.

The comparison to movies is not meant to be a direct one rather a quality of content one.

Halo, GRAW, Oblivion, MGS (all of them), were all great games. All had good production value and when compared to other games of their time are considered great. But they all fall short in authenticity. They all strive to compare themselves to reality existing or imagined, but fall short on one level or another.

ex: GRAW
The good - intro, environmental look/feel, animations, fx, sound, story (yeah fell apart a bit but well get to that). Aside from a few things here or there, overall all of the above was great and will stand up to the test of time well.

The bad - the cutscenes voice acting, voice acting in general, character/character creation, cutcsene animation, cutscene graphic quality, the story at the end (fell apart horribly).

When going through the missions in this game, the "bad" ruins the effect of "being there" and takes you out of the experience that they worked so hard in the other areas to create and effectively nose dives what could have been a truly great cinematic experience.

There are exceptions to this rule and of course not all games are going for realism/psuedo realism. But the ones which are, need to be pushed over the edge to captivate in all aspects and not be trimmed here or there. How we get to that point I don't know. Do we ask for $100million budgets and hence ~$100 games or are there workarounds through in game ads or is episodic gaming needed to deliver this level of interaction. I don't know how we get there. But myself, as a long time gamer would happily pay $100 for a truly great experience from top to bottom rather than be stuck with the same "oh it's great, but if they would have only done x" $50-60 games.

 

[TheChefO]

You're going to see tools and content middleware catch up. For example, if you're making a low-cost game, you could get the "1001 Guy Swinging A Sword Animations" and "More Dirt, Stone, Wood, and Grass Textures Than You'll Ever Need" packages from a middleware provider instead of spending big bucks to do it yourself. Why isn't someone selling car models? It's not like '68 Charger looks all that different from one game to the next already, and that difference will be smaller next-gen.

I thought the current/ending-gen hit a sweet spot with 3D graphics. They look pretty much fine. Obviously, they could look better, but they're like SNES 2D in that they often just plain look nice. I wouldn't mind at all if we saw some lower-priced titles with approximately that level of graphical fidelity. They need to create a sold $20-$40 video game price bracket.

Good point about using a "library" for game content which doesn't need to change. I'm surprised this hasn't been done already at this stage of multimillion dollar budget games with content creation costs going through the roof with no end in sight. Not that this detailed content is a bad thing but there are much more efficient ways of going about it which need to be addressed as an industry and not as a company or worse yet, single game.

 

[mckmas8808]

Shifty - I think I may be miscommunicating my idea here.

First NeoGeo isn't comperable because the game cost of $200 was based on expensive media. Also I don't think anyone was/is comparing Neogeo games to the movies of it's time.

The comparison to movies is not meant to be a direct one rather a quality of content one.

Halo, GRAW, Oblivion, MGS (all of them), were all great games. All had good production value and when compared to other games of their time are considered great. But they all fall short in authenticity. They all strive to compare themselves to reality existing or imagined, but fall short on one level or another.

ex: GRAW
The good - intro, environmental look/feel, animations, fx, sound, story (yeah fell apart a bit but well get to that). Aside from a few things here or there, overall all of the above was great and will stand up to the test of time well.

The bad - the cutscenes voice acting, voice acting in general, character/character creation, cutcsene animation, cutscene graphic quality, the story at the end (fell apart horribly).

When going through the missions in this game, the "bad" ruins the effect of "being there" and takes you out of the experience that they worked so hard in the other areas to create and effectively nose dives what could have been a truly great cinematic experience.

There are exceptions to this rule and of course not all games are going for realism/psuedo realism. But the ones which are, need to be pushed over the edge to captivate in all aspects and not be trimmed here or there. How we get to that point I don't know. Do we ask for $100million budgets and hence ~$100 games or are there workarounds through in game ads or is episodic gaming needed to deliver this level of interaction. I don't know how we get there. But myself, as a long time gamer would happily pay $100 for a truly great experience from top to bottom rather than be stuck with the same "oh it's great, but if they would have only done x" $50-60 games.

NO! Nobody wants to buy a game for $100.

 

[TheChefO]

NO! Nobody wants to buy a game for $100.

I'm not speaking of a traditional game with it's traditional pitfalls of mediocrity. A bit more indepth. see above.

 

[Skrying]

I'm not speaking of a traditional game with it's traditional pitfalls of mediocrity. A bit more indepth. see above.

Dude, it would just simply never work! You're crazy with even throwing such an idea out there! Budget means NOTHING at all for the quality of the game. You think throwing a whole lot of money is going to make the game instantly better? It simply does not work that way.

You also have to consider the fact that no publisher would never take any chances with such a high budget. The game would have to sell extremely well, therefore you must target everyone (read: doesnt work) to even hope to get close to start making a profit.

The "premium" game idea is a terrible one.

Also, the idea of content from middleware suppliers is very old, and is used very often. Look at Oblivion, ever take a gander at the back of the box and see all of those names at the bottom? Those are middleware applications, tons of them that are stiched together to make the game. Premade textures are very commmon and reused often because art assets are the most expensive part of game development.

 

[TheChefO]

Dude, it would just simply never work! You're crazy with even throwing such an idea out there! Budget means NOTHING at all for the quality of the game. You think throwing a whole lot of money is going to make the game instantly better? It simply does not work that way.

You also have to consider the fact that no publisher would never take any chances with such a high budget. The game would have to sell extremely well, therefore you must target everyone (read: doesnt work) to even hope to get close to start making a profit.

The "premium" game idea is a terrible one.

Also, the idea of content from middleware suppliers is very old, and is used very often. Look at Oblivion, ever take a gander at the back of the box and see all of those names at the bottom? Those are middleware applications, tons of them that are stiched together to make the game. Premade textures are very commmon and reused often because art assets are the most expensive part of game development.

I work as a graphics designer and have pride in what I do. I realize there are many things that could be done better but have to be cut back due to time constraints/budget. If a big enough company could alleviate those constraints and liberate developers to their true Vision of what their "game" could be, I would be all to happy to pay double for a truly inspired piece of art instead of the shovelware flooding the marketplace today.

WRT content library - you don't get it. High resolution content which is downsampled for current use but still viable over the next ten years for everything from cities to people to cars to every little detail within said cities. Having this library available for all involved will alleviate the majority of this content creation from these budgets. In games that aren't realistic or based in fantasy land, these libraries would be useless. But generating their own high resolution libraries of these fantasy environments would also be useful for their own and potentially other franchises. This is hardly done to this extent today and would be a huge budget/time saver for our industry. And yes I've heard of speedtree, they aren't great.